The Next Big Thing in Supply Chain

image via: http://www.jeffbullas.comUnderstanding the pulse of modern day supply chain complexity, as it exists across various industries, is a powerful thing.  It allows for benchmarking, trend-spotting and establishing a good idea of the current state of what most businesses are facing.  Keeping this in mind, we decided to reach out to some key C-level and senior level players across different industries in an effort to compile their views on their supply chains and supply chain complexity that they experience.  The results not only reiterated some of the beliefs that we held going into the survey but also added some additional gravity to what we already felt was a market need.

Supply Chain Complexity

The first question posed to the various executives in fields ranging from automotive to medical goods, was around the statement “My supply chain is complex.”  We asked our participants to indicate how well this statement represents their business.  Out of those polled, 87% felt that they either agreed or strongly agreed with that language.  For us, this validates the need for supply chain complexity management work for organizations.   Our answer to the questions around successfully managing this complexity is the concept of Supply Chain Advancement.  It’s a business methodology that drives improvements in all parts of a business by focusing on supply chain performance and supply chain centric decision making.  Basically, if executives and leaders view their decisions through the lens of their supply chains the ability to add, remove and respond to complexity is greatly improved.

Supply Chain Components

Next, we asked our responders to identify which of the following elements existed in their supply chains: suppliers, inbound transportation, manufacturing, distribution and customers.  The results indicate that suppliers, inbound transportation, distribution and customers exist in at least 90% of supply chains and that manufacturing exists in over 70%.  What we can take away from these results, is that most supply chains involve many of these components.  And, in order to be in real command of their supply chain, leaders must manage these different components in tandem; similar to a maestro conducting an orchestra.  Supply Chain Advancement promotes this type of systems thinking. We advocate breaking down the traditional silos between components and understanding how each member of the chain and support its downstream customer in concert.

Additionally, the leaders in our survey were asked to respond to their level of agreement with various statements containing aspects of their supply chain.  The results indicated that the vast majority of executives agreed or strongly agreed with the statements that they are “not afraid of business complexity but don’t like unpredictability” and that they “need to reduce business complexity and see results of supply chain activities.”  Both of these items communicate the importance of understanding when it comes to supply chain complexity.  If well-prepared, and proactive, decisions directing the different activities in the supply chain can be made with a higher level of confidence.  Supply Chain Advancement advocates stability, waste elimination and predictive management.

We were interested see that there was a split on those polled around beliefs centered on the need for leadership structure reorganization in order to reduce business complexity.  Over half of those polled felt that reorganization was not necessary.  Our philosophy is that a complex supply chain doesn’t necessarily need a complex org structure to oversee it.  The key is that the organization can maintain visibility of their resources, components and processes.  Additionally, management systems are critical to drive the appropriate supply chain behaviors across the different components.  Leader responses echoed this with the 92+ percent of the group agreeing that their management system should drive and require cross-functional decision making.   These systems help fight the battle against the transactional waste and misalignment between the different functions.

Supply Chain Results

Finally, there were resounding agreements from our responders to the two statements: “I need to see results from process improvement initiatives” and “I need concrete measurable, and sustainable results from corporate strategies.”  Results, results, results.  That’s the name of the game.  The important thing for organizations to focus on is to make sure that they are aware of the purpose and principles of their measurement systems and these systems ultimately lead to action.  Supply Chain Advancement is designed so that improvements in the supply chain are cascaded down from the strategy, and strategy is influenced and updated at the response of improvements. These two activities are connected and should feed progress in each other. 

The results demonstrate that executives both see and acknowledge the complexity of the modern day supply chain.  Moreover, we have to be prepared for it and respond in a thoughtful and productive way.  As technology continues to leap forward and customers evolve, our supply chains must be ready to evolve with them.  The world is getting smarter.  So must our supply chains.  Lets advance together!

Posted by Clint McCrystal

Training and Development Manager at LeanCor | I am an individual with many interests, and I like to leverage both my creative and analytical skills.

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