If your supply chain operations have been in motion for more than ten years, you probably are past a due date or two for technology and process upgrades. But before investing in innovative technology, we should stop and consider the people and the processes that surround your current supply chain.
Since we are writing a story or 'legacy' of Supply Chain, we should consider the 5Ws of this story. (The Who, What, When, Where and Why that make up the narrative.) Supply chains are not silos and they are certainly not ‘one and done’ type operations. They are forever moving and constantly facing new demands.
Before embarking on significant technology or program changes, let’s articulate the 5Ws.
Who is impacted by the Supply Chain, who needs to communicate or place requests? The answer usually lies in several key areas: finance, procurement, operations, and logistics. BUT, it does not mean it is limited to just these areas. Other teams that could be included are marketing, sales, etc.
What specific information or data is being transferred (both internally to your organization and externally to your vendors and suppliers)? What is currently tracked and what should be tracked? One key piece of information is a standard method to describe your materials so that everyone involved in the Supply Chain is talking about the same thing. One simple solution for that is a standard material description format across ALL your materials.
When will a requestor need to receive the materials? At what point is work or materials ordered, shipped or logged? Is it immediate, daily, weekly or will it be just-in-time?
Where will the business of your Supply Chain live? In some industries, it funnels through your finance division, while in others, it strictly lies within operation’s maintenance divisions. It is always critical to ensure that while the Supply Chain may live in one business segment, it does NOT become or is managed as a silo. There should be rule put into place that we course correct whenever a program, division, or role becomes a silo.
The most challenging W to define. For this we must remain objective, we must consider all our WHO and WHAT options. Usually, when facing an update, we need to take a step back to identify what current challenges or gaps can be resolved. Often, we see gaps being mended through process and role enhancements and not just solely with a technology upgrade.
However, when you analyze your Supply Chain, it is imperative to look at it from a holistic, end-to-end perspective. Changes in one part of a Supply Chain can significantly impact results or processes in multiple areas down the line. To ensure optimal value, Supply Chain managers should view and manage the process end-to-end.
Once you get the understanding of your end-to-end Supply Chain, look at defining a Supply Chain strategy to accomplish your business objectives. A good plan is a living thing. It must be flexible and adaptable to meet evolving business and customer needs. It also needs to be clear and precise. This allows you to make a quick decision or action by asking: Does this fit with our strategy and goals?
If these problems surface, you may NOT be on track:
- You have customer complaints of your costs and/or services both internally (i.e., Maintenance is not satisfied with the effort of Materials Management), and externally customers are sending negative feedback.
- Your organization has defined your Supply Chain as being under only 1 or 2 departments (like Procurement and Maintenance).
- Efforts to date to improve your Supply Chain have occurred independently (within 1 or 2 departments) without full collaboration across your organization.
At Cohesive we’ve been helping organizations transform their Supply Chain programs. We’ve seen the big picture and understand the unique challenges. Learn more by visiting our website or by contacting us.