Mindfulness for More Effective Supply Chain ManagementDr. Paul Pittman, PhD, CFPIM, CSCPDr. J. Brian Atwater, PhD, CFPIM

Visual Awareness Clip

Mindfulness versus Mindlessness

Mindfulness - paying attention in a particular way: on purpose, receptivity, non-judgmentally, and full engagement in the present moment.

Mindlessness - when attention and awareness capacities are scattered due to preoccupation with past memories or future plans and worries; this, in turn, leads to a limited awareness and attention to experiences in the present moment.

Scenario 1- Tragedy of Flight 6

UPS Airlines Flight 6 was a cargo flight operated by UPS Airlines. On September 3, 2010, a Boeing 747-400 flying the route between Dubai International Airport and Cologne Bonn Airport developed an in-flight fire, with the fumes and subsequent crash resulting in the death of the two crewmembers. The aircraft had departed Dubai International earlier, but returned after reporting smoke in the cockpit. It was the first fatal air crash for UPS Airlines. The crash caused an examination of safety procedures protecting airliners from cockpit smoke

Tools for Mindfulness

• Systems thinking pyramid• SC Prioritization matrix• Framing for success• Appreciative inquiry

Systemic Thinking Pyramid -Dig for Deeper Understanding

Events

Patterns

Systemic Structures

UPS Flight 6 fatal crash

Observation Solution

Landing plane with smoke in the cockpit.

Patterns• In 2006, a UPS cargo plane made an emergency landing at Philadelphia International

Airport, following a fire. In that case, all crew members escaped unharmed. • The cause of the fire was never determined, but the recommendations from the National

Transportation Safety Board included advice about the transport of lithium-ion batteries.• In 2010, a Boeing 747 cargo plane operated by UPS Airlines developed an in-flight fire and

crashed in an unpopulated area in Dubai. Both crew members were killed.• In the subsequent investigation, the FAA highlighted the fact that a large quantity of

lithium-ion batteries had been on board.• In 2011, an Asiana Airlines cargo plane carrying 880lb (400kg) of lithium batteries crashed

into the Korea Strait, killing both crew members. • On January 16, 2013, an All Nippon Airways (ANA) 787 made an emergency landing at

Takamatsu Airport on Shikoku Island after the flight crew received a computer warning of smoke present inside one of the electrical compartments. ANA said that there was an error message in the cockpit citing a battery malfunction. Passengers and crew were evacuated using the emergency slides. According to The Register, there are no fire-suppression systems in the electrical compartments holding batteries, only smoke detectors.

• Malaysia Airlines flight 370 was also reported to have been carrying 440lb of lithium-ion batteries in its cargo, adding yet another theory to the mystery surrounding its disappearance last year.

Systemic Thinking Pyramid -Dig for Deeper Understanding

Events

Patterns

Systemic Structures

UPS Flight 6 fatal crash

Observation Solution

Landing plane with smoke in the cockpit.

Multiple air incidents involving smoke & fire.

• Install fire detectors• Cockpit ventilation

and hoods. • Fire proof shipping

containers.

Lithium batteries are a common thread in all incidents.

• International packing guidelines for batteries.

• Design of lithium batteries for heat safety.

Group Exercise 1 – The Oil Leak

• Read the Oil Leak story.• Discuss at your table how this problem

would be described from the perspectives of event, pattern & systemic structure.

• Determine the solution that would fit each level.

• Share group findings.

Systemic Thinking Pyramid -Dig for Deeper Understanding

Events

Patterns

Systemic Structures

Oil is on the floor

Observation Solution

Clean up the oil

The press leaks often • Dedicated clean up crew

• Bucket under leaks

Deeper Reflection

After further reflection the plant manager asks why

the press is leaking. The operator noted the problem was in the main

drive flange as a result of defective gaskets. Furthermore, the operator noted these gaskets commonly fail, but we got a great deal on them. Puzzled she asks how this is such a great deal? After further research she revealed that the purchasing department was able to save 50% if they bought a 5 year supply.

Systemic Thinking Pyramid -Dig for Deeper Understanding

Events

Patterns

Systemic Structures

Oil is on the floor

Observation Solution

Clean up the oil

The press leaks often • Dedicated clean up crew

• Bucket under leaks

Purchasing wants to save $

Recognizing the impact of decisions in other areas.

Scenario 2A lightning bolt strikes a semiconductor fabrication plant which causes a fire. Thanks to good safety procedures and a fast acting work crew the fire is put out quickly with very little damage. Unfortunately, the clean rooms have been compromised. Customers of this plant are notified that their supply will be disrupted for about a week. If you were a customer, what would you do?

Scenario 2 – The DecisionsHere is how two major customers of this plant, which happen to be in the exact same business responded. Customer 1 checks its safety stock of semiconductors and decides it can wait out the slight disruption. Customer 2 works to identify alternative ways to get the semi-conductors.

In the end it took the semiconductor fabrication plant 6 months to get back to full scale production. As a result Customer 1 is forced into a partnership with another organization to stay in business. During the same period Customer 2 thrives and in the end actually increases its market share.

Tools for Mindfulness

• Systems thinking pyramid• SC prioritization matrix• Framing for success• Appreciative inquiry

Three Guiding Questions & Tools

1. What can go wrong?

2. What is the likelihood of it happening?

3. What is the impact if it does happen?

Three Guiding Questions & Tools

1. What can go wrong?

– Cause and effect diagram

Using C & E Diagrams to AssessWhat can go wrong?

Supply Chain Risk

External Risks

Internal Risks

Supplier RiskPolitical/Government Risk Transport Risk

Design Risk Planning Risk Labor Risk Equipment Risk Organizational Issues

Example C & E DiagramSupply Chain Risk

Organizational Issues

Low Collaboratio

n

Conflicting Performance

Metrics

Functional Structure

Competition Based Culture

Cost Focus

Group Exercise 2 – Using C&E to ID ‘What Can Go Wrong’

• Each table will be assigned 1 branch of the C&E Diagram.

• Based on your experience and expertise brainstorm at least 5 potential underlying causes

• Use the 5 Whys method to drill deeper into each underlying cause.

Three Guiding Questions & Tools

1. What can go wrong?

– Cause and effect diagram

2. What is the likelihood of it happening?

– Failure Mode & Effect Analysis (FMEA)

Failure Mode & Effect Analysis (FMEA)What is the likelihood of it happening?

1. List causes Supply Chain Failure (C&E Diagram)2. Evaluate severity3. Estimate likelihood of occurrence4. Estimate the ability to detect5. Assign a risk priority number (RPN = S O D)

– Focus on the items with the highest RPN– Consider ways to reduce the S, O, and D scores for

each cause of failure.6. Develop Contingency Plans

Risk Priority Numbers (RPN's)

• Severity– Rates the severity of the potential effect of the failure.– 10 indicates that the effect is very serious and is “worse”

than Severity = 1.• Occurrence

– Rates the likelihood that the failure will occur.– 10 indicates that the likelihood of occurrence is very high

and is more likely than Occurrence = 1.• Detection

– Rates the likelihood that the problem will be detected before it causes a problem.

– 10 indicates that the failure is not likely to be detected before it causes a problem and is “worse” than Detection = 1.

A FMEA Example

Calculate the RPN score for the causes identified on your group’s C&E branch.

Threat Severity (S) Occurrence (O) Detection (D) RPNExcessive Transport Cost 2 2 2 8

Increased Gov't Regulation 9 8 5 360Material Quality Problem 9 3 3 81

Shipment Delays 2 8 5 80

Supply Chain Vulnerability MapPr

obab

ility

of O

ccur

renc

e

High

Low

Severity of Disruption

HighLow

Excessive Transport

Cost

Shipment Delays

Increased Government

Regulation

MaterialQuality

Problems

Three Guiding Questions & Tools

1. What can go wrong?

– Cause and effect diagram

2. What is the likelihood of it happening?

– Failure Mode & Effect Analysis (FMEA)

3. What is the impact if it does happen?

– BOM source mapping

Scenario 3– Using BOM to Create Vulnerability Map

Scenario 3– Using BOM to Create Vulnerability Map

Skate Board

Deck

Truck (2)

Wheel Assembly (4)Baseplate (2) Pivot Cup (2)

Kingpin (2)

Rubber Bushings

(2)Axle (4)

Hanger (2)

Wheel (4)

Rubber/plastic Color/graphics

Bearings (4)

Spacers (4-8)

Locknut (4)

Grip Tape Mounting Bolts (8)

Maple Plywood

Group Exercise 3 – BOM Source Mapping for Pen

• Create a BOM of the pen at your table.• Identify which of these components and respective

sources may be most vulnerable.

Scenario 4 – The Call Center

A company selling unassembled furniture has a support line to help customers having difficulty putting together their products. Recently, the number of complaints about excessive wait times on the help line have increased. The manager in charge of the support line put together a team to address the problem. She begins the first meeting by saying “Customers are being put on hold for too long. How can we fix this?”

Tools for Mindfulness

• Systems thinking pyramid• SC Prioritization matrix• Framing for success• Appreciative inquiry

Using Framing to Guide Mindfulness

• Craft a story that describes a current situation you want to address.• ID the main element/focus of the story• How could you change the story by focusing on a different

element?• Key Questions:

– What assumptions are you making that constrain what you are considering?

– If we deny those assumptions what is possible?– What are the obstacles to denying that assumption & how do

we overcome them?

Scenario 5 – The Yogurt Supplier• A company that produces and sells yogurt just introduced an Organic

Yogurt. The company decided it wanted to use innovative packaging for the new product to catch the customer’s eye. After an extensive search the company selected a new overseas supplier capable of providing a decorative form of packaging at low cost. Due to a variety of factors the actual landed cost of the packaging was much higher than anticipated. In addition, the supplier has missed several deliveries. Because of these missed deliveries the Yogurt Company

has incurred stock outs at some of its biggest customers. Consequently, the purchasing department has decided to search for a more reliable supplier.

1. What are the main elements of this story?

2. What is the primary assumption in the above scenario?

3. If we deny that basic assumption, what other possibilities emerge (i.e other

explanations for the situation)

4. Identify at-least 2 other possibilities that could be addressed here?

Tools for Mindfulness

• Systems thinking pyramid• SC Prioritization matrix• Framing for success• Appreciative inquiry

Scenario 6 – The Pizza War

The manager of food services at a public university, had the wind taken out of her sails. She had decided

that, due to the success of her pizza service, the time had come to expand pizza-making operations. However, the university president recently announced plans to increase the size of the student center which included an expanded food court. The expanded facility would now permit and accommodate food-service operations from three private organizations: Dunkin' Donuts, Taco Bell, and Pizza Hut. Until now, all food service on campus had been contracted out to private organizations such as her pizza business.

Appreciative Inquiry• The art and practice of asking questions that

strengthen a system’s capacity to comprehend, anticipate, and heighten positive potential.

David L. Cooperrider & Suresh Srivastva

Problem Solving• Felt need, identification of

problem(s)• Analysis of causes• Analysis of possible solutions• Action planning (treatment)

Appreciative Inquiry• Appreciating, valuing the best of

what is• Envisioning what might be• Engaging in dialogue about what

should be• Innovating, what will be

Mindless versus Mindful

Mindless Thinking

•Problems just happen•Things are as they appear•Random events•Advocacy•Blame orientation•It’s not my responsibility•Victim

Mindf

ul Thinking

•Problems can be predicted•There is always more to the story•Dynamic complexity•Inquiry•Solution orientation•How can I help•Challenge