When managing a supply chain, the specific strategies being used for excellence vary from industry to industry. However, there are always common factors that ensure the effectiveness and success of each one.
Knowing what these are can help you from getting lost in the face of possible emergencies and disruptions. It will also assist you in formulating preventive measures against any future problems in the chain. Doing so will ultimately improve the quality of your business according to your industry’s standards.
Strategy #1 – Know your supply chain
A supply chain is made up of material/product flows, information flows and financial flows. Do you and your team know and understand each of these separate process flows? When you have issues do you innately understand the root cause, which flow was inherently broken and what needs to be done to ensure the issue never occurs again? Do you and your team all know where the critical grey areas are, what to do when someone critical is away, who is their back-up and how the back-up knows what to do when?
Strategy #2 – Know the key players and influencers in your Supply chain
Today’s supply chains are not only national but regional and often global. They cross borders, oceans, continents and time zones. The tyranny of distance is real. They involve many individuals, many functions, many organisations and many cultures. You must know the key players and influencers in your supply chain and don’t think that face timing, skyping or teleconferencing once or twice a week is enough. You must have met them personally, developed rapport and only then are you in a position to work with them remotely with any level of success. Oh yes,and do make sure that any messages you are communicating at your level whatever level that is are reinforced up and down the organisation, just so that your important supply chain messages don’t get lost in the organisational noise.
Strategy #3 – What gets measured gets done
So you all have the same level of commitment, share the same understanding of the supply chain and will do whatever it takes to get the quality product to the customer in the agreed way? Not quite.Think again.
The best you can do is to have a consistent set of agreed metrics that guide every action and if you are not getting the results you want, then recheck whether you are measuring the right things. Metrics don’t need to be complicated. They can be very basic.
Strategy #4 – Link the metrics to individual roles and performance
So often I find that we have sets of wonderful amazing metrics for our SC and strangely when I look to see who is absolutely accountable for these metrics it turns out, No one is accountable!
If you cannot track your metrics or delivery of aspects of them to individuals, well your supply chain wont work because the individuals in it are being rewarded for doing different things! There is always a natural conflict in supply chain between functional goals and objectives and cross functional goals and objectives like getting the quality product delivered to the client in full on time with no order taking or invoicing issues.It’s going to take a committed team being rewarded and recognised for taking the right actions.
Strategy #5 – Dealing with Outsourcing
Many functions in our SC today are outsourced and this often means dealing with third parties or even fourth level parties with differing sets of values and goals. Make absolutely sure that every company you are dealing with has an agreed set of deliverables. It’s simple but often never stated or even summarised in volumes of contracts or agreements. Make absolutely sure that there is a simple 2 page schedule that says clearly what are they doing for you by when(at what level of quality) and what are you doing for them (by what level of quality.) These should then be measured by them and reported back to you. They need to be self measuring, self reporting and self correcting. Importantly when there is a critical break down they need to be advising you of what has happened and how it will be repaired not the other way around.(You need to have a way of independently validating what you are being told.) You don’t want to be spending your valuable time or that of your resources monitoring contractors, subcontractors, distributors, agents, or outsourced operators of any kind, who are quite capable of monitoring themselves and are knowledgeable enough about you to know that you value continuous improvement, self awareness and self improvement both individually and organisationally. And just one more point on this, make sure that you hold all outsourced operators to the highest standards from day 1, you can always relax but unfortunately you cannot go the other way, it just doesnt work!
Strategy #6 – Connecting your Supply Chain to the Organisations Plan
Do you have an S&OP process in place? The SC is so amazing that it just carries on. When you are there, it carries on, and when you are not it carries on. (What a great reminder of our own importance!) So how do you make sure that when you want it to behave differently that it actually does? This is an age old question in supply chain, because more often than not, the supply chain strategy is not the one that the business wants it to be doing. It’s usually been doing what it’s currently doing for so long that change becomes difficult. Make sure you understand the organisational strategy and can articulate how the business supply chain is actually aligned with that strategy. An effective S&OP or S&OE depending on your industry is the all-important vehicle to do this.
So, in summary, these 6 items are the cornerstone of an efficient supply chain.
While there is really no one-size-fits-all strategy for achieving business excellence, a good strategy to start with is one that addresses pitfalls that are common to all industries. Consider trying the strategies described above and start working your way to an effective supply chain today!
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