Conflict Resolution

Conflict ResolutionWhat is conflict?Interparty Conflict

A process that begins when one party perceives another party has or is about to negatively affect something the first party cares about.Causes of conflictImbalance in interests, power and resources between peopleConflict of Interest- Difference in ideologies or ideas and beliefsPoor CommunicationLack of ClarityViews of conflictTraditional View of ConflictAll conflict is bad and to be avoidedInteractionist View Of ConflictEncourages some level of conflictKeeps the group viable & criticalConstructive conflictsResolution-Focused View of ConflictLong term impacts of conflictDevelop resolution strategies

Types of conflict resolutionProblem solvingSuperordinate goalsExpansion of resourcesAvoidanceSmoothingCompromiseAuthoritative commandAltering the human variableAltering the structural variablesConflicts in Infrastructure Design projects- An ExampleCommon Issues and the Stakeholders

Impact of the issuesVicious Circle of Conflicts Handling conflicts The Dos and Don'tsSALES vs SUPPLY CHAIN The Eternal battleTypical approaches ( Poor Sales Professional )Typical responses ( Rational SCM professional )You try with everything (escalator /elevator speech)DisinterestedThe importance of the order w.r.t margin, revenue.They are curbing inefficiencies, sporadic fulfillment is a major costCustomer will sufferWhy did you promise?SalesStrong drive for numbers w.r.t volumes & revenuesHuge effort to rope in a new customerThe promises made w.r.t delivery schedule has to be keptCustomers are ruthless kings tolerance level is zeroSupply ChainMaterial available in plant or other depot: YesThey wont agree to shipAsks for Forecast, the greatest ammunitions against sales

You want to bang his head, but we give it a technical name: CONFLICTANALYSIS - SOURCES OF CONFLICTPerceptions/Orientations of the two functions :

Sales: short term gainsgives in to customers whims & fancies, high inventory to avoid stock outsperformance measure Revenue/VolumeSCM: long term gains, no customer focus, optimum inventory to avoid excessperformance measure - OTIF

Both the functions are working in silos Biases existMisalignment Lack of trustResolution Reconciliation is coordinationBetter Communication Consensus in Forecasts All of the functions are actively engaged in each step of the process, Ensuring commitment and compliance Cross Functional teams If people in sales, supply chain do short cross- functional assignments, Better understanding of the functional group More versed in the overall delivery to a customer.

Overall respect for each function Common incentive plan A common incentive plan tied to specific customersAligned metrics could create better harmony.

Cross functional training and development People from supply chain function spend a day with a salesperson, Giving them a sense of what the sales job is all about. Better understanding between the two functional groups

R&D Vs Investment (Cost)Research & Development:

Important for innovation

Provides competitive edge Early mover advantage

May lead to forays into new unexplored market

Investments (Cost) Control: Limited resources

Research team is traditionally not business focused => Not aligned to firms short term agenda.

RnD investments may at times outrun their utility. Cost recovery might not be feasibly after a point of time.

ANALYSIS : SOURCES OF CONFLICTPerceptions/Orientations of the two functions: Cost Control: Short term gainsPerformance measure Revenue / VolumeR&D: Long term gains, No customer focus - Futuristic

Both the functions are working in silos Biases existLack of communicationInherent difference in key focus areas

Proposal : IRR approach An industry exampleInternal Rate of Return (IRR) approach to value measurement looks at R&D returns at a whole R&D business level rather than as a portfolio of assets. In doing so, we have forecast, in revenue terms.Resolution Reconcile & coordinateBetter Communication Consensus in Forecasts All of the functions are actively engaged in each step of the process, Overall respect for each others function

Cross Functional teams Dedicated cross functional personnel become part of both teams Better understanding of the functional group training, sensitizing, guidelines and frameworks

Key points (based on proposal)Use IRR simulation to quantify the impact of key value levers on R&D returns.R&D cost efficiency and success rate

In the end.What did we learn?

Say Thank You!!!!!!

Be a better listener.

Be Creative

HAVE A NICE CONFLICT.