Thought Leadership Article

Supply chain orchestration – people are needed to play the music

It’s easy to think supply chains consist of co-ordinated processes, enabled by cool IT, through which needed products flow smoothly with occasional storage to the end consumer. Great in theory but it takes the right people doing the right things at the right time to make end customers happy.

My cycling partner bought a mountain bike recently. Well, actually a new frame. Sourced via the Internet; paid via PayPal; delivered on time by courier. Perfect logistics. He was pleased with the look, light weight and his better, faster, cheaper deal. Until the local content programme dropped him – he couldn’t source any components locally to fit the frame. Anyone want a new frame? This may remind you of the Arms Deal discussions a few years ago. This supply chain looked good on paper but, untrained; my buddy made a classic mistake – one dimensional execution in a multi-dimensional, complex, connected value chain.

In any profession, individual skills are acquired through education. Then skills need to be ‘felt’, and become intuitive through experience of use (often bad) to be of value. Many executives today know, you can buy a degree, or even just say you have one, but this doesn’t mean you have the implied skill. Even if you educate yourself through college and certify, you only gain the right to try out your knowledge and learn how to use your new skills. What works, what doesn’t, what adds value, what wastes? It’s not a case of ‘I paid for the course, now where are my muscles’.

Successfully managing supply chains and logistics is complex, where individuals with different skills work as a team passing the ball, constantly communicating to keep on plan. Execution is a finely tuned, responsive teamsport to achieve the joint goal – on-time-in-full delivery at minimum supply chain cost. Just like the Bokke, repeatedly practicing this sport hones skills to increase personal and team effectiveness. Training and coaching are what takes theory and innovation (the education part) to execution excellence. Sometimes the best university degree is not as important as practical experience ‘behind the shop counter’.

The basics in our environment is to think SCOR:

PLAN …then
SOURCE - MAKE - DELIVER … execution
RETURN … well even the best plans and execution can go wrong.

Let’s sort some classic misconceptions.

First: Government employees of the ‘Supply Chain Department’ please note: even if you don’t manufacture products in a factory, you cannot just be ‘procurement’ – the SOURCE part. Products and services are only sourced because some guy down the line (the supply chain) needs them, so you still have to DELIVER. And if someone packs it in a box, or labels it, you actually are doing the MAKE as well.

So Rule Number 1: Procurement alone does not equal supply chain – never! So a team of skilled individuals need to source, receive, check, store, advise, pick, pack and deliver effectively.

Second: Intellectual logisticians please note: It is possible to optimise plans forever but typically, if PLAN takes more cycle time than execution (SOURCE or MAKE or DELIVER) you won’t have happy customers. So Rule Number 2: Perfect customer service is not possible without orchestrated execution – so action please. A perfect musical score with musicians sitting ready and waiting requires a conductor to co-ordinate and motivate individual execution to deliver the magic.

Third: Executive and operations managers please note. Never underestimate how important the right blend of skills and experience are to enable effective cross functional SCM and logistics. Not everyone comes with both, so train and coach everyone to understand the basic needs of every other area and how best ‘I can serve you’ for the best team or supply chain result. To create a sustainable winning team of young and old, don’t forget Rule Number 3: Knowledge in itself is valueless if not applied, learned from and shared.

Written by: Doug Hunter
Date: 15 October 2015
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