In the words of former General Electric CEO Jack Welch, “Change before you have to.” This saying has a wide range of applications, from corporate management to product R&D.
And naturally, it strongly applies to supply chain management when it comes to disruption. The problem, however, is that the very desire to manage disruption can lead to falling right into its trap. Most managers have an attitude that wants to avert said disruption at all costs, whether it is from a natural disaster, a labour strike or a factory fire.
The bad news is that disruption is inevitable and whilst it can comes in the forms mentioned earlier it’s often not like this at all. As a result, you and your entire organisation, your suppliers and stakeholders, will all pay a steep price for the lesson you will learn once the damage has been done.
Some might shrug this off and say that it’s just simply part of business. But guess what? Self-disruption is also a thing in business and do you really want people asking you why you didn’t do this when you had the time and the space? Further though, self disruption, can cost you far less than when disruption hits your supply chain with a broadside.
Think of it as similar to a vaccine. Vaccines are essentially substances that emulate viruses in order to train your immune system to respond. However, they generally have no harmful effects compared to an actual infection.They are there to protect you in case you are exposed to the original virus.
Likewise, self-disruption is in a similar vein. Jack Welch’s famous quote urgently sums up why managers (including supply chain leaders) must initiate self-disruption. The price for weathering through today’s many unseen forms of real disruption are too high in comparison. Self-disruption is how you can make progress and advance your supply chain at a lower cost.
Here are some examples:
- Product Cannibalisation
It’s funny that so many still think that product cannibalization is some absolute taboo (even now, in 2018)! One need only look at Silicon Valley giants to see why effective product cannibalisation is more of a norm than it was in the previous century.
The rationale against market cannibalisation is the risk of a newer, untested product ends up eating the profitability of a successful one. That rationale no longer suffices in an age where there are competitors in every corner just lining up to test their own market offerings against yours. A plan to mass-produce your current line could be a major loss should someone finally come to create something better, with better value for your current customers’ money.
We live in a high-speed age where information circulates wildly, including the aggregate knowledge that it will take to outstrip the ‘superiority’ of your product. It is better that you start finding ways to improve your product yourself instead of letting someone else do it for you. You already have all the resources to test your current product for deficiencies and explore possibilities for improvement. Take advantage of this!
- Adopting More Labour-Saving Technologies
The adoption of improved manufacturing technologies seems like a nice way to get ahead of the competition but at the risk of it displacing your workforce. That, by itself, may seem like a solid case of self-disruption but managers understandably hesitate for fear of worker backlash.
However, even that doesn’t have to be the case anymore as upskilling is still an option. It pays to remember that improvement is not just limited to products but also applies to employees. And from an employee’s perspective, it also benefits them. Instead of quitting the job and possibly heading back to school to learn new competencies, they can learn to operate the new technology even as it is being implemented.
This really is a chicken and egg issue, because exactly how long do you think your best employees will stay in a ‘lead- following’ company.
It is part of the reason why tech giants such as Google are opening campuses of their own. Technology is advancing at a rate that can render old ways of thinking and doing, redundant. Self-disrupting your supply chain with a combined approach of upskilling and upgrading is a sound strategy for riding this turbulence. (Unless of course, you would rather competitors render both your current technologies and workforce obsolete.)
- Transparently Address Problems
Lastly, there is also the classically wise decision to intensify efforts to solve already existing problems in your supply chains. This is already a major step in a time where many other companies are still in denial about their own inefficiencies.
Don’t wait for the proverbial writing on the wall to appear. If anything, write it yourself for everyone to see. Let them know what is going to pass if they keep at their current rate and how different the ideal state of your supply chain actually is from where you are now and what you plan on doing to move it there asap!
Are you courting a shortage by putting all your resources in one depot? Start setting up alternatives before it happens. Has there been a suspiciously high increase in attempted breaches upon your software infrastructure? Start calling in a cybersecurity detail and get to the bottom of it.
What exactly are you doing with all that data you are collecting in your supply chain? If you dont know, find out and find someone, trained, who can help you collect it, clean it, analyse it, use it and sell it.
Finally, we are not only speaking about external issues, like better satisfying customers, providing competitively superior offerings to the competition, we are also talking about internal planning and governance processes. Are you still using spreadsheets for your annual planning process? Is this working for you or might it be time to consider some of the more advanced continuous daily, weekly and monthly planning options which are available in today’s markets to ensure that you are proactively managing risks, threats and opportunities.
Overall, self-disruption is simply good, solid strategically appropriate forward-thinking. Waiting for external factors to come in and force a change is no longer enough, because by then you are already well behind. Start making changes today before you need to and use the wise words of Jack Welch, ‘change before you need to’, as you and your organisations new mantra before it’s too late!