For many years now, our supply chains have been recognized as a source of strategic, competitive advantage. That is, to effectively deal with our competitors businesses should instinctively engage in best practices in our supply chain.

At least, that is what I thought!

There are, however, some industries who are just discovering this now, some 30 years on!

So where is your supply chain up to specifically and is it time for new ways of thinking to be installed?

Outdated definition of a supply chain

I have worked in organisations that thought their supply chain was their logistics network only. When they wanted an optimization of their supply chain, they thought it only meant fixing their truck operations without including or ‘upsetting’ in their terminology, any of their entrenched silos or their functional leaders.

Why would they think that making their supply chain stronger and more powerful would upset the incumbent leaders in their organization? Why is this a one or the other option?

If these leaders are so great why is there even a need for a discussion on strengthening the entire supply chain or value chain? Why haven’t they already done this themselves – Isn’t it their job to ensure that their function is supporting the entire corporation?

How can providing a better service to customers be perceived as less important than disrupting the status quo if that status quo is NOT providing an exceptional service to customers and placing the maintenance of that customer base at risk?

And why is disrupting the status quo so ‘undesirable’ if their customers are not being served in a superior manner in the first place?

What do you think? Can you see the delusion in this? It’s not about upsetting anyone. It’s about making the end to end supply chain work efficiently and effectively to add extraordinary value to the organisation!

Many supply chains have already been disrupted but pretend that all is well.

I have worked in a handful of organisations now that have proudly discussed the creation of an independent, third party platform that sits between them and their customer base! (This third party would even include their competitors!) This platform would redirect supply from this company to its competitors. This company has already been disrupted and they didn’t even know it.

Have you already been disrupted and are you pretending it just isn’t happening?

Is this just another example of The Emperor’s New Clothes? Are we the only ones who can see this?

Don’t you just want to yell – Wake up! Be Alert! These are treacherous waters in which you are now swimming!

Your supply chain has a different objective or goal from one week to the next.

We have all seen this before: last week we were focusing on inventory reduction. This week it’s lowest delivered cost. Next week it’s warehouse closure, and then opening, and then centralization, and then decentralization… And then, you name it, yet another objective every week!

If your supply chain is operating like this (e.g. focusing on a different goal every week; causing the entire organization to become internally disrupted; being unable to know what to do from week to week), then you need a supply chain strategy which supports the corporate objective.

It makes zero sense to be focused on different and often competing objectives every week. You need a way of addressing all of these on an ongoing basis to keep your supply chain at its lowest delivered cost in it’s unique target market segment while keeping it efficient and effective.

Not knowing the full potential of your Supply Chain

Do you know what your supply chain is capable of? (No, not just on a good day.) Do you really know what your supply chain was built to deliver?

Many companies still don’t know what their supply chain can actually do in terms of delivered cost and volume throughput. They continue to work on small tweaks from week to week and year to year to gain ‘improvement’ and report that as an achievement! It’s not an improvement or an achievement if you are delivering well below what the supply chain was actually built to deliver in the first place and you just have not bothered to find out!

You need to know what your supply chain’s base capability actually is and then ensure your initiatives are all focused on taking your supply chain to the next level relative to its overall capacity and capability.

Not knowing about Demand Driven Supply Chain

Ever heard of the supposedly latest thing in supply chain? You know, the Demand Driven Supply Chain?

No?

It’s actually not that new. Great global companies and many multinational brands like Du Pont and Coke have been doing this forever. (How other companies not do this in this day and age is still beyond me!)

Companies need to start understanding demand now and then, say, three years hence. Build supply chain optimization to lowest delivered cost in those three years. Create scenarios for the board. Let them select and then develop a plan to get there, with supply chain targets in place all along the way.

It’s so simple.

But of late, it’s a major discussion to get companies to actually do it. That is despite the fact that it more than pays for itself after one year!

And yet, what are they doing instead of this? They are making to store and making to the DRP plan, which only means building inventory and losing sight of client demand.

There is little planning with the customers needs in mind. If you don’t know what your customers needs actually are then, how can you possibly plan for them!? You need to start strategizing with your customer needs in mind. And if you don’t know what these needs are anymore, then it’s time to find out. And everyone has customers, as well as end users. If you are a supplier well along the distribution channel, and your end users are several links in the chain beyond your customers, make sure you can still understand your end user market. This will serve you by ensuring that you are never distracted from your end users through lack of transparency in the supply chain.

Try to achieve a Supply Chain lowest delivered cost with little knowledge of it.

if you don’t know what your supply chain is built to do, how can you deliver the lowest cost position and also meet customer needs effectively and in a superior way to your competitors? You cannot! (And working harder doesn’t make it any more doable, working on the right things does!)

Volume-Only S&OP – Does this even exist?

The S&OP that doesn’t use financials. (Yes, this is called a volume-only S&OP – unimaginable yet true in 2018!)

And for a further ridiculous development, there is the S&OP that has no connection to the global strategy. (Oh yes, let’s just keep doing what we do, and never bother having any reconciliation to the global direction!)

The parent has been bought and sold twice now and still, the supply chain does nothing different!

Poorly implemented systems/technology

I have worked with every supply chain system imaginable and most of them have only been partly installed and of course don’t work properly or well or meet the needs to the buyer.

My work has been in fixing some element that they don’t have working and need to be working or that they didn’t know wasn’t working and needed to be repaired.

Today we still have rooms full of people whose only jobs are actually transposing data from one computer system to another without any sign of compatibility (yes, even in 2018)!

And yes, this is what some still call the Supply Chain Management of 2018!

Now, if some or all of these ‘miserable mishaps’ are regularly occurring in your supply chain and you’d like to quickly address them and move forward in your supply chain, then I look forward to the opportunity to be involved in working with you and your teams.

Why now? Because now is the time for leapfrogging, changing the game, creating new and different supply chain models that generate value for organisations and customers in environments where the competition and their directors, consultants and advisors are clearly asleep on the job!

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And of course, if you would like more information or to discuss more ways how to drive greater innovation into your supply chains, please just book for a Complimentary Consultation with me.

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