I have been on the trail of the illusive supply chain strategy for over 30 years. Just when I think I am getting close to a supply chain strategy, it vanishes and the search begins anew. Why is something that is so needed, so difficult to find?
As a supply chain consultant who has been working with clients to improve their supply chains for a long time, I have only found a few companies that have a documented, multi-year supply chain strategy that guides their supply chain management improvement initiatives. If a strategic plan is critical to aligning initiatives across all supply chain functions to optimize and integrate these functions, shouldn’t every company have a strategic supply chain plan in place?
What prevents companies from developing and improving a supply chain strategic plan? We need one, but how do we develop one? Why don’t we have a plan today?
Our Business is Always Changing
Why would we spend time on a multi-year supply chain improvement strategy when our business changes daily, weekly, monthly? I have heard this statement from executives across multiple industries for decades. Change is constant in business, but does it mean that you do not have to plan your business? Without a plan that integrates a company’s supply chain functions, integration and true optimization will just not happen. It takes a great deal of effort to plan and execute based on an integration strategy; however, the business results are exponentially improved.
Supply Chain Management is not valued like Sales and Marketing
Our company values a sales strategy and a marketing strategy, so supply chain management needs to react to what sales and marketing want to execute. Again, I have heard this reasoning hundreds of times. Sales and Marketing is the dog and supply chain management is the tail. The dog always wags the tail, not the other way around. Companies like Walmart and Amazon have sales and marketing strategies but also have, integrated supply chain strategies. These market leaders beat their competition by having more efficient and effective supply chains exceeding customer expectations at a lower price.
It’s Difficult to Create and Approve the Plan
It is impossible to get everyone together to create a strategic plan because everyone is too busy running their supply chain functions. We like the fact that each supply chain function competes with one another for capital improvement money. If we put a strategy together, who would approve it? The list of reasons as to why companies do not have a strategy is endless.
How do we break down the barriers and remove the excuses as to why our company cannot develop a supply chain strategy? See next week’s blog for what it looks like and where and when to start.