The Supply Chain at the Center of Companies’ Strategy
Supply Chain Management is a major topic for companies in regards to client performance and service levels. History has shown that the best manufacturers and retailers in the market have placed the Supply Chain at the center of their strategy creating competition not only between the product or service but the ability to execute. Regardless of being a Fortune 500 company or a small local bakery, Supply Chain optimization is a critical mission. A few years ago, a special “Supply Chain Prize” was awarded to a French mom-and-pop ice cream store based on their ability to connect end-to-end physical and information flows, from the customers to the suppliers including their production capabilities.
We could consider the first Supply Chain objective is being able to apply “good sense” when doing business and delivering the best product service in the most efficient way. However, the bakery on the corner could apply basic Supply Chain Management processes to manage their costs while major companies need to optimize their Supply Chain Management processes and tools to survive the very competitive market.
The Origin of Supply Chain Management
When referring to Supply Chain Management as the “New Art of Competing,” we are referring to a constant, adaptive and agile methodology that improves overall operations on the field. The first concepts of Supply Chain appeared in a book by Dr. William Muller from the University of Gottingen in 1811. During this time, Dr. Muller was referring to war logistics as not only the “transportation” of weapons, ammunitions or other military elements, but also as the factor that lead to efficient operations on the battle field, i.e. a global tactic to win the battle. 100 years later, Glasgow Herald publishes an article that describes the need for an “unbroken supply chain” to be efficient during the “Balkan operations” in order to optimize the soldiers travel from the Military Base to the Battle Field, stopping twice for supplies. Thus proving Supply Chain Management was not discovered and invented by Manufacturers or Retailers, but by Military Strategists.
Good Sense and Military Sciences for the Right Art
If Supply Chain Management is based on “good sense” and “military sciences,” we could link it to the “Art of War” by Sun Tzu; a book that is 2500 years old, an all-time best seller and still relevant today. Managers from around the world are reading it in hopes of applying some of these elements to their decision process. “The Art of War” describes the best practices for winning a war without being there; it describes an efficient way to plan, evaluate, prepare and operate by minimizing the risk within a strict discipline. Sun Tzu’s main objective was to minimize “economic losses;” can we apply Sun Tzu’s principles to today’s Supply Chains? “The Art of War” begins by explaining how to assess the situation because fighting and competing must be based on the right considerations. Next, the plan, strategy and tactics of competing are discussed followed by positioning in a safe mode. The most important section of the novel describes the energies, forces and momentum that are needed to be creative and well coordinated in time to get it right. This section reflects on key elements of Supply Chain Management, such as, having the right innovative practices to get it done or how to adapt and reposition in case of unexpected elements. Finally, the novel concludes with the importance of collecting and developing reliable information, and checking the sources.
A Journey to go Through
Delivering product and services in a timely and efficient manor by using the right information might not be “the new art of competing,” but a journey that all companies should go through. This journey includes having the right processes, practices, solutions and information. Competing in our constantly changing world might be complex, but with processes, practices and good Information supported by the right IT technologies, it is possible.
Don’t be afraid to start your journey towards an optimized Supply Chain Management, you won’t regret it!