Supply chain education

Supply chains and all the processes and systems that support them are very complex. People who don’t work directly with these processes and systems often have incorrect ideas about what can and cannot be accomplished by them. And it is the supply chain leaders’ responsibility to make sure that the people who depend on the supply chain understand its capabilities and limitations.

Here are some facts that I have found are often misunderstood:

  1. Supply chains don’t like variability. Sudden changes to demand or planning disrupt them, and these disruptions drive up costs. Planning and communication in advance is essential for making supply chain operations successful and profitable. There is a cost to serving every customer need exactly the way every customer expects.
  2. Strategic changes most often require supply chain changes. Buying product via importing it vs. buying it domestically requires very different strategies and practices, which need to be set up and tested before going live.
  3. Not all parts of your business benefit equally from supply chain practices. Highly seasonal businesses often require shipping outside the normal processes, so the cost saving for these products can be substantially lower than for commodity products that can be shipped in consistent quantities year-round.
  4. You will get better performance from your supply chain if you collaborate with your supply chain partners. Those who work in supply chain know that the purpose of the processes and systems is to support the business. Let them know how they can support you. If you demand that they accommodate to your business needs, you may find that they will support you – but only as far as they have to.
  5. Your suppliers have supply chains too. Before product ever arrives in your facilities, it has already gone through your supplier’s supply chain. If the supplier’s systems and processes are poor, you won’t be able to make up for this by building a better system for yourself. It may be to your advantage to share supply chain expertise and practices with them to improve both companies’ performance.
  6. Supply chains are strategic. Wal-Mart, Home Depot and Amazon have proven that improving supply chain processes and systems can dramatically improve corporate performance. Good business planning should include supply chain partners. Without them you may be building wish lists rather than plans.
  7. Supply chain reporting and tracking can help both you and your suppliers increase customer service and build business. Every supply chain has systems or processes that can be improved, or that need to be reviewed regularly as business grows and changes. Share as much as you can with your suppliers and help them see where they need to improve rather than using the data to beat them up when they don’t perform.
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  • By Hansel on January 16, 2012 at 16:51

    Superb website…

    […]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[…]……

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