Dynamic Buffer: Think Self-organized Teams

This is part of my blog series on using the principles of Demand Drive MRP and its five primary components. This particular blog focuses around Dynamic Buffers, or in the marketing sense, Self-organized Teams.

Over the course of time, group and individual traits can and will change as new suppliers and materials are used, new markets are opened and/or old markets deteriorate, and manufacturing capacities and methods change. Dynamic butter levels allow the company to adapt buffers to group and individual part trait changes over time through the use of several types of adjustments Thus, as more or less variability is encountered or as company’s strategy changes, these buffers adapt and/or are adjusted to fit the environment.

The above is from the Orlicky’s Material Requirements Planning 3/E. written by my recent podcast (Is Orlicky’s MRP relevant today? Think DDMRP) guest Carol Ptak and Chad Smith of the Demand Driven Institute.

In the book they discuss three types of adjustments:

Recalculation: These are typical automated adjustments based on usage or occurrence.
Planned: Based on seasonal/historic fluctuations or strategic such as new product introductions.
Manual. Occur when dramatic changes occur such as environmental or new regulations may be imposed that no amount of planning could overcome.

This holds true when you think about sales and marketing. These adjustments are necessity in matching your Work in Process (WIP) or customers/prospects to the internal resources needed to support them. Most specifically you have to have the flexibility in your teams to support these adjustments. When you can’t deliver on the resources required it is not different than not being able to get a part out the door. Rush orders disrupt production flow. High variability disrupts sales flow. So how do you adjust for this flow, dynamically?

The first thing we need to do is really define self-organizing. Self-Organizing does not mean you walk down the hallway and grab people as you need them but rather this description from Jeff Sutherland where he quotes:

Takeuchi and Nonaka clearly explain the fundamental concepts so often missed by management and teams new to Scrum. The discussion of self-organizing teams is a good example:

A new product development team, consisting of members with diverse backgrounds and temperaments is hand-picked by top management and is given a free hand to create something new. Given unconditional backing from the top, the team begins to operate like a corporate entrepreneur and engage in strategic initiatives that go beyond the current corporate domain.

Within the context of evolutionary theory, such a group is said to possess a self-reproductive capability. Several evolutionary theorists use the word “self-organization” to refer to a group capable of creating its own dynamic orderliness.

The creation and, more importantly, the propagation of this kind of self-organizing product development team within Japanese companies represents a rare opportunity for the organization at large to break away from the built-in rigidity and hierarchy of day-to-day operations. It is quite difficult for a highly structured and seniority-based organization to mobilize itself for change, especially under noncrisis conditions. The effort collapses somewhere in the hierarchy. A new product development team is better suited to serve as a mote for corporate change because of its visibility (“we’ve been hand-picked”), its legitimate power (“we have the unconditional support from the top to create something new”), and its sense of mission (“we’re working to solve a crisis situation”).

So in the sales and marketing sense, to create a dynamic buffer, you must empower the team concept. Very difficult to do in today’s sales and marketing arena. There is high resistance due to traditional policies and compensation structure, especially of your star sales performers. But as Kiichiro Toyoda said, “Each person thoroughly fulfilling their duties generates great power that gathered together in a chain, creates a ring of power.” Can you afford not too?