Role of Learning Organisation Concept in Improving the Performance of Supply Chain Companies

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Table of Contents

Introduction
Five Disciplines of a Learning Culture
Organisation Learning Culture in Supply Chain Companies
Evaluation of learning in an organization
Integrated Supply Chain Management
Organisational learning and performance of supply chain companies
Conclusion
Reference List

Introduction

The learning organisation concept refers to an organization’s ability to promote learning and development (Nzuve & Omolo 2012 p. 46). The concept gained momentum after the publishing of “The Fifth Relationship” by Peter Senge in 1990. Therefore, to address poor organizational performance, organizations must introduce a systemic approach to change.

A systemic approach establishes links between various elements in an organization (Nzuve & Omolo 2012, p. 46). A systematic approach, on the other hand, only provides a simple cause and effect perspective.

The learning organisation, therefore, facilitates learning of all stakeholders in the organisation and thus ensures that the organisation experience continuous transformation. Continuous transformation is critical to an organisation’s success where the organisation adapts to emerging technological trends and also addresses all stakeholders’ needs.

A supply chain, on the other hand, consists of all parties involved either directly or indirectly in fulfilling a customer’s request (Sunil & Meindl 2004, p.1). A supply chain consists of raw material suppliers, manufacturers, wholesalers, retailers and customers.

All the above stakeholders are critical to the success of an organisation. Successful organizations incorporate knowledge management geared towards ensuring that all the stakeholders work towards satisfying the final consumer wants (Sunil & Meindl 2004, p.1). The following is an in depth discussion of the role of learning organisation concept and supply chain companies.

Knowledge management is a key component in supply chain companies. The company should ensure that all stakeholders’ activities are geared towards enabling the company realize its objectives. As such, all stakeholders should that either good or services delivered to the organisation optimize the customer’s utility.

Five Disciplines of a Learning Culture

There are five important disciplines of a learning culture that applicable in an organisational context (Senge 1990, p.367). The first discipline is personal mastery. This refers to an individual level of skills and knowledge. Individual skills and knowledge are heavily influenced by personal goals.

An organisational culture should stimulate individuals towards achieving their goals. Achievement of personal goals is characterised by an increased desire to improve an individual’s skills through acquisition of new knowledge. This promotes a learning culture in an organisation and promotes increased innovation at the organization. The second discipline is mental models.

This refers perception of the organisation amongst the employees and other stakeholders (Senge 1990, p.345). Perception of the organisation’s internal mechanisms especially among employees is an important factor. In an organisation that promotes a learning culture, employees are most likely to be highly innovative.

On the contrary, where an organisation’s internal mechanisms are rigid and bureaucratic, employees are most likely to adopt a systematic approach to problems. This curtails employee creativity and thus affects the organisational performance.

The third discipline is shared vision. This is the harmonisation of organisational and personal goals. A learning culture provides a basis from which the above set of goals are harmonised. Therefore, individual effort and innovation is geared towards realising the organizational objectives. This enhances the organisation’s image and improves performance.

Similarly, for a supply chain company, a shared vision forms a basis from which the company interacts with other companies in the chain (Zhou & Benton 2007). As such, other companies in the supply chain are in a position to understand the company’s objectives and requirements. This helps establish a healthy relationship between different companies in the supply chain.

Team learning is the fourth discipline. Team learning encompasses building group capacity as opposed to relying on individual talents (Lichtenstein 2000, p. 50). This is achieved through transforming conversational and corrective thinking skills into reliable intelligence which to contributes highly to a learning culture.

Therefore, individuals are encouraged to contribute to group tasks which are a basis from which they can enhance their skills. Team members are in a position to learn from each other as they are gifted in various fields (Wheatley 1999). System thinking is the fifth message. System thinking entails perceiving the organisation’s operations as one system.

Therefore, in the event that a single operation is affected, all other operations in the organization are affected. This approach is important as solutions generated to solve different problems in the organisation take into account needs of all departments. This contributes to learning culture in an organisation where increased consultations are done before a decision is reached (Zhou & Benton 2007).

This is also relevant to supply chain companies. Disruption of operations in one company disrupts the whole supply chain. Therefore, companies should understand the impact of disrupted operations on other companies.

Organisation Learning Culture in Supply Chain Companies

An organisation’s learning culture encompasses development individuals, teams and overall organisation (Nzuve & Omollo 2012, p.46). Companies should encourage individual development through increased innovation amongst employees in the company.

Innovation amongst employees is driven by several factors. Among these factors is provision of inquisitive environment where an employee is in a position to challenge product development systems at the organisation. This could be as a result of newly acquired knowledge (Lichtenstein 2000, p. 50).

The organisation should have mechanisms through which employees are in a position to share ideas with colleagues and other stake holders. Similarly, feedback mechanisms should be established where the employee knows the status of his or her proposal (Hafeez, Rodriguez-Falcon, Abdelmeguid & Malak 2000, p.220).

This is part of the learning process where the employee is in a position to incorporate some of the suggestions provided by managers, suppliers and customers. Therefore, in cases of product development, the final product addresses the needs of all stakeholders.

Knowledge at team level encompasses incorporation of new team management techniques and also instituting mechanisms that can be used to capture knowledge emanating from interaction between team members (Hafeez et al 2000, p.220). Each team member’s input should be valued where other members contribute towards enriching the original idea.

Therefore, such an idea is presented to stakeholders including line managers and customers. Feedback from these stakeholders enables the team to alter it’s the idea to suit the needs of all stakeholders (Hafeez et al 2000). In the same way, learning organizations establish mechanisms through which information gathered from interaction between team members is captured and stored.

Such information is invaluable to the company. This is because such information is part of the organization’s knowledge base and thus can be referred to in future.

Learning at the supply chain level encompasses inter-company transfer of knowledge. A company can promote a learning culture within the organisation at either individual or team level. However, such organisational knowledge could be undermined by practices of some of the companies in the supply chain. (Hafeez et al 2000, p.221).

For example, a company that encourages continuous product development has to ensure that quality raw materials are supplied to the company. Therefore, the company’s management is obliged to share some the company’s knowledge with the company’s suppliers (Lichtenstein 2000, p. 50).

This ensures that the suppliers are in a position to improve the quality of the raw materials. This ensures that the company does not compromise the quality of its products which could affect sales and ultimately wholesalers and retailers in the supply chain.

Inter-company cooperation is achieved through setting up inter-company teams. Team members from different companies within the supply chain are in a position to share knowledge. Increased knowledge sharing amongst such companies improves the supply chain operations.

However, in the order for this aspect to remain fruitful, inter-company knowledge sharing has to be integrated in the company’s culture (Miles & Snow 2007, p 350). This ensures that employees understand the importance of information sharing amongst the companies.

Evaluation of learning in an organization

Organisational learning can be evaluated using several approaches. One approach that can be used is use of an Organizational Learning Profile (OLP) survey (Cors 2003, p.12). This survey measures four elements in an organisation namely achievement mindset, learning practices, inquiry climate and information-sharing patterns. Achievement mindset refers to the employees’ desire to meet both personal and organisational goals.

This relates closely with Senge first discipline, personal mastery. Inquiry climate refers to the environment provided to employees thus they are in a position to experiment and innovate around existing educational models.

Learning practices refers to the provisions at the organisation that act as catalysts towards learning in the organisation. The main tool of data collection in the above survey is a questionnaire. The questionnaire contains thirty four items. A six point Likert scale is used which forms the basis of analysis (Pace 2002, p. 463)

The second approach is the use of the Dimensions of Learning Questionnaire (DLOQ). The questionnaire accesses the characteristics of learning organization.

The questionnaire contains fifty five items which are divided into seven major parts (Pace 2002, p. 463). The above approaches can be used to establish learning in an organization. Information from such surveys is critical in making decisions such as establishing an integrated supply chain.

Integrated Supply Chain Management

Increased competition has resulted in companies seeking strategies to improve their bottom lines. One strategy that companies have adopted is integrated supply chain management. The main goal of integrated supply chain is to enhance utility for the customer (Stevens 1989, p.5).

The global financial crisis in 2007-2008 for example affected both household and company income. Increased levels of unemployment resulted in decreased household income. Therefore, most households were faced by increased budgetary constraints and thus were forced to review their consumption habits.

More companies are breaking inter and intra organization barriers and establishing supply chains. This is driven by increase economic uncertainty and thus companies need for increased efficiency their supply and distribution network (Done 2011, p.7).

An integrated supply chain is built on increased asset, data and information coordination (Done, 2011, p.7). This ensures increased efficiency in the chain and reduced operational costs.

There are several elements that are essential in the process of integration. An organization or company is expected to institute supplier competence requirements. This refers to the operational level at which the suppliers are expected to perform. Organizational and technical competency among suppliers ensures that quality raw materials are available at the right time (Awad & Nassar 2008, p.2).

The organization is therefore obliged to assist the supplier meet the above requirements. Inter organizational knowledge entails enhancing the supplier organizational and technical competency in order to meet the above requirements. A team from the organization can be used to transfer knowledge on methods of improving efficiency in other companies.

Similarly, any knowledge on innovation that would benefit the supplier can be incorporated. Data and information sharing is also part of integrated supply chains. This refers to the inter-connectivity between organization’s employees (Awad & Nassar 2008, pp.5)

Also, easy access to customers and other partners in the supply chain is critical towards success on the chain. Data formats across companies in the chain should be similar as this facilitates fast and efficient data transfer (Bessant, Kaplinsky & Lamming 2003, p. 168).

Similarly, firms should strive to find common ground where data interpretation is similar across all companies (Awad & Nassar, 2008, pp.5). Firms should share all information that affects the operations of other companies in the supply chain. This entails a systemic approach to problems facing one company and effects on the company’s and other supply chain companies operations.

Culture and change is also taken into account in integrated supply chains. As pointed out above, for cooperation to be successful among supply chain companies, employees have to understand the importance of cooperation. Companies in the supply chain have different organizational culture.

There is need for harmonization of the organisational culture as it forms the basis for inters organizational activities (Zhou & Benton 2007, p. 1350).

Logistics integration involves supply chain companies with many departments. Therefore, such companies need to ensure activities within the organisation are well coordinated (Awad & Nassar, 2008, p.6). This reduces inefficiency which could affect other firms in the supply chain.

Also, information and data coming from such companies should be harmonized to ensure consistency in relations with other firms in the supply chain. Internal consistency in operations in such firms can be achieved through a systemic approach in problem solving.

Organisational learning and performance of supply chain companies

The main objective of an integrated supply chain is to ensure that the customers get a quality and affordable service or good. Key indicators of performance among supply chain companies can be divided into three major categories. These categories include market place measures, productivity measures and non-productivity measures (Lummus, Vokurka & Krumwiede 2008, p. 57).

Market place measures include profitability and market share. Productivity measures include average unit manufacturing time and delivery lead time (Lummus, Vokurka & Krumwiede, 2008, p. 57). Non productivity measures, on the other hand include, customer satisfaction.

Integration of the learning organisation concept in supply chain companies has several benefits. Increased knowledge sharing is helps companies prepare for contingences and thus avoid losses (Ingram & Baum 1997, p.76).

For example, where a raw materials supplier shares knowledge of probable decline in supply, such information is critical. Other organisations in the supply chain are in a position to adjust production levels (Ingram & Baum 1997, p.76). This development is also communicated to the wholesalers and retailers. The final consumer is also aware of the shortage and thus prepares for probable price adjustments.

Inter-organisational activities promote cultural tolerance (Wheatley 1999, p. 40). This is because interactions could involve employees at different levels of management in their respective companies. Senior management employees are in a position to pick up dispute resolution skills from interactions with junior employees from other companies.

This improves their efficiency in their position thus contributing significantly towards development in the organisation (Stevens 1999). Information sharing amongst companies informs other aspects in the company including marketing strategies. A company is in a position to increase its profitability through reduced cost per unit.

The company is therefore in a position to offer customers competitive prices for their products (Stevens 1999). An improved cost per unit measure is complemented by increased efficiency in the company’s production activities. Suppliers are, therefore, supply commodities in good time ensuring that the production process remains uninterrupted.

Conclusion

The modern business environment is technology driven and thus need for increased innovation. Similarly, companies need to formulate strategies aimed at improving their performance. Supply chain companies establish relationships with different partners in the supply chain. In order to remain successful, supply chain companies have been forced to incorporate knowledge management.

Supply chain companies need to integrate the learning organization concept in their operations. Apart from the concept helping supply chain interactions in the chain, the concept can be used to mitigate some risks associated with supply chain. These risks include abuse of knowledge shared.

A learning organisation encompasses increased interaction between employees of all levels of management. As a result, employees are usually privy to the type and level of information to share. A learning organization encompasses reduced bureaucratic barriers thus employees express ideas and concerns.

Reference List

Awad ,H, & Nassar, M 2010, Supply Chain Integration: Definition and Challenges. Web.

Bessant , J, Kaplinsky, R & Lamming, R, 2003, ‘Putting Supply Chain Learning into Practice’, International Journal of Operations and Management, Vol 23 No. 2, pp 167-184.

Cors, R, 2003, What is a Learning Organisation? Reflections on the Literatur Practitioner Perspectives. Web.

Done, A 2011. Supply Chain Management: A Conceptual Framework, IESE Business School, Navarra.

Hafeez, K, Rodriguez-Falcon, E, Abdelmeguid, H & Malak, N, 2000, Knowledge Management in Supply Chains. Web.

Ingram , P & Baum , J1997, ‘Opportunity and Constraint: Organizations Learning from the Operating and Competitive Experience of Industries’, Strategic Management Journal, Vol 18, pp. 75-98.

Lichtenstein, B 2000,’Generative knowledge and self-organized learning’, Journal of Management Inquiry, Vol 9 No.1, pp. 47-54.

Lummus, R, Vokurka, R & Krumwiede, D 2008,’Supply Chain Integration and Organizational Success’, Sam Advanced Management Journal, Vol 3, pp. 56-63.

Miles, R & Snow C 2007,’Organization theory and supply chain management: An evolving perspective’, Journal of Operations Management, Vol. 25 No. 2, pp. 459 463.

Nzuve, M & Omolo, E 2012, ‘A Study of the Practice of Learning Organization and its Relationship to Performance among Kenyan Banks’, Problems of Management in the 21^st Century, Vol 4 No. 45, pp. 45-56.

Pace, R 2002, ‘The Organizational Learning Audit’, Management Communication Quarterly, Vol 15 No.3, pp. 458-465.

Senge, P, 1990. The Fifth Discipline, Doubleday, New York.

Stevens, J 1989,’ Integrating the supply chain’, International Journal of Physical Distribution and Materials Management, Vol 19 No. 8, pp. 3-8.

Sunil, C & Meindl, P, 2004. Supply Chain Management, 2^nd ed, Pearson Prentice Hall, Upper Saddle River.

Wheatley, M1999. Leadership and the New Science, Publishers Group West, Berkeley.

Zhou, H & Benton, W 2007, ‘Supply chain practice and information sharing, Journal of Operations Management’, Vol, 25 No. 6, pp. 1348-1365.

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