During dinner at a recent supply chain conference, a senior executive asked me about the latest thinking on how to improve global supply chain performance. Without hesitation I whispered, “Have you tried the sardine strategy yet?” Anticipating the puzzled look, I continued: “For schooling fish, staying together is a way of life. Fish in a school move together as one.”
For schooling fish, the “move as one” trait is innate. Separation means likely death. For global supply chains, misalignment –failure to move as one – means poor service, high inventory, unexpected costs, constrained growth and profits, and loss of market share.
The purpose of this book is not to convince anyone of the importance of supply chain management (SCM). That case has been well made many times in many industries since the first edition of Supply Chain Excellence was published in 2003. Even then, only the first two paragraphs of the book’s introduction argued the “why” of SCM. The rest was about the “how.”
While using the methodology of this book on roughly 100 supply-chain projects around the world, “how” has been further refined into a series of processes to achieve the highest levels of supply-chain alignment: moving as one.
Here are the 15 most common contributors to supply chain misalignment. Which ones are relevant to you?
Fifteen Common Causes of Misalignment
1. Lack of a Technology Investment Plan
A chief information officer deflected pressure to install the latest and greatest advanced planning system – making the case that simply having state-of-the-art tools was not a good enough reason to put her entire company into the kind of upheaval that such implementations create. As she watched the rapid evolution of web-based applications, event management tools, and demand-driven advanced-planning systems, she found herself without a clear technology investment plan that supported the company’s business strategy.
2. Little or No Return on Investment (ROI)
A company bought its Enterprise Resource Planning (ERP) package during the vendor’s end-of-quarter push to meet sales goals. The deal included all the latest add-ons – things like customer relationship management, transactional processing, advanced supply chain planning, event management, and web portals providing self-service for customers and suppliers. Now the executive team is looking for an answer to a deceptively difficult question: When will a return on investment start to show up in the earnings statement?
3. Isolated Supply Chain Strategies
Three executive vice presidents – for sales, marketing, and operations – assembled their own well-articulated strategies for developing supply chain competence within their departments. Then they invested in application technology, manufacturing processes, and product development – all with measurable success. Now what’s missing is a comprehensive blueprint that combines their individual efforts to drive profit and performance across the entire company.
4. Competing Supply Chain Improvements
A company’s top executive for SCM assembled a dozen of his brightest managers for a structured brainstorming process – resulting in a list of 45 high-priority projects. But when the managers began implementation, the results were not encouraging. General managers were being asked to support multiple initiatives that used many of the same financial, human, and technical resources. Goals seemed in conflict. They needed to align their objectives and prioritize projects to make good use of the available resources.
5. Faulty Sales and Operations Planning
The vice president of operations for one of the companies had serious cash-to-cash problems and declining customer satisfaction – all resulting from raw materials shortages, mismatched capacity, poor forecasting, and inventory buildup. The challenge was to address the planning and forecasting issues and put the balance sheet back in shape….
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