There's been a lot of talk about how important it is for supply chain to get a seat at the company's decision-making table and be viewed as adding value to the overall organization. But many supply chain and logistics organizations are still struggling to get the internal respect they deserve. One company that has been able to crack the code is Hilti, a Liechtenstein-based company that sells construction products.
At Hilti, logistics used to be seen as a support function that did not play as important a role in the company's success as the sales, marketing, and finance functions. To change this perception, the logistics organization created a talent development program centered on entrepreneurship, which is an essential part of Hilti's overall corporate culture.
The resulting "Hilti HiPe (High Performing Team and Entrepreneurship) program" created a structured career development plan that focuses on sharing best practices and developing skills that are not part of logistics' traditional purview. The program succeeded in earning logistics professionals inside the company greater respect, and it recently received one of SCM World's "Power of the Profession Awards." SCM World, which describes itself as a "cross-industry community of senior supply chain professionals," is now owned and managed by the analyst group Gartner. SCM World recently named Hilti HiPe its 2017 Talent Partnership of the Year. According to SCM World, this award recognizes talent initiatives that have developed supply chain capabilities across the value chain and have driven value internally and/or externally. (More information and a list of other winners can be found here.)
The HiPe Program consists of the following six interrelated blocks, according to Hilti's Roeland Baaijens, executive vice president global logistics, and Juergen Grabherr, vice president of finance and business development for global logistics:
1. Global collaboration: The global logistics organization encourages collaboration and learning across the corporation. For example, three times each year the company brings together logistics experts from different regions to identify and define best practices.
This part of the program was particularly impressive to the SCM World community. "Bringing 150 of its global leaders together three times a year to define best practices and work on issues and opportunities together takes time, money, and commitment," said Beth Morgan, vice president, content operations, for SCM World. "But the impact on Hilti's business in terms of cost savings and innovation is a clear indicator of the importance of collaboration and that putting in this effort is worthwhile."
2. Diversity and inclusion: Hilti believes that as a global company, high performance can only be achieved by having a multicultural organization that operates cross-functionally. To accomplish this, the organization uses diversity training and mentoring to increase awareness, change behavior, and support its people.
3. Learning beyond function: The Global Logistics group trains its employees in topics beyond their own area of expertise, including marketing, sales, and finance. According to Grabherr, this training enables Hilti's logistics professionals to speak the same language as their business peers and helps them to create customized solutions that solve specific customer problems.
4. Structured career development plans: The organization follows a structured plan that identifies its employees' strengths that should be leveraged and areas where more development is needed. It also requires the management team to spend at least one day four times a year focusing on their employees' career development.
5. Leadership journey: Current and future leaders are trained in leadership skills such as change management, situational leadership, and various types of leadership and management models.
6. Entrepreneurial business partners: The ultimate goal of the program is to have employees who see themselves as "entrepreneurial business partners" with their peers in other functions. Employees are encouraged to take ownership of and drive cross-functional initiatives that create a direct impact on revenue.
The program has made a big impact on employee morale, according to Grabherr. "It energizes our people," he said in an interview. "It is challenging but inspiring, and it brings our people to completely new levels regarding creativity and innovation."
The program has also led to quantifiable business benefits, he said. Since creating the program, Hilti's logistics organization has reduced inventory by more than 20 percent and has delivered solid year-over-year cost savings while increasing service to its customers.
This success has given logistics greater credibility across the organization. According to Baaijens, logisticians and supply chain professionals at Hilti are now empowered to challenge general managers and play a leadership role. As an example, he points to a video taken during one of Hilti's sales organization meetings in Korea. Here a logistics manager uses Lego building blocks to teach sales teams about how stock-keeping unit (SKU) management and rationalization can have positive benefits on sales. This presentation led to significant policy changes in the region.
"No longer is it a case of sales asking logistics to jump and we say, 'How high?' " Grabherr said. "Now we take an active part in strategy formation, and we have a reserved seat at the table."