Tuesday, March 06, 2007

Supply Chain Strategy - What's dat?

Creating a supply chain or logistics strategy in 2007 is an old fashioned boondoggle… you all think you know what your organization needs, but in reality, uncertainty reigns supreme. How should you go about it? Good question…May I present some guidance?

What is it? Logistics…supply chain…international transport????

Supply chain strategy and logistics projects, from concept to reality, start and end with your organization’s vision or business strategy.

So, ask yourself, what is the optimal supply chain design to help drive business results?

Your outcome must be a framework that is used to assess current and future needs, while detailing a process to build capabilities and supply chain efficiencies. Oh yeah, don’t forget to create a system of metrics that help drive continuous improvement as well.

Your plan must detail relationship strategies and processes for demand, supply, and innovation over five to 10 years that work to accomplish business goals. A cool design, that reflects changes in market dynamics, like power shifts in relationships, risk assessments and emerging constraints (workforce, logistic challenges, and governmental regulations, etc). This plan also outlines a clear organizational design with supporting processes mapped out for an extended period of time.

You must set clear milestones.

The audience that is perusing this strategy must be convinced that your goals and objectives are clear and actionable. Please assesses, review the right balance of risk, complexity, and opportunity. This business case will lead your organization to the ultimate plan.

What it is not? Your plan…that is…

To alleviate misconceptions, here’s a look at what the strategy should not be:

-- Focused solely on the supply chain or company operations--supply chain strategy is not just about supply, operations, or manufacturing. It is a holistic view of demand planning, product and supply processes aimed at maximizing opportunity and mitigating risk across your whole business. Psst…this will get the C dudes to buy in…!!!

-- Internally Focused—an excellent strategy looks beyond the corporate reservation. You have to analyze all the supporting ecosystems. This will ensure that your business strategy and objectives come to fruition.

-- Point in time—your idea is not at the fulcrum point in time. This is a multiyear plan, that will build the capabilities, infrastructure, process, and people to carry out the strategy.

-- Elitist or “company-centric”--no company is an island, so a good plan focuses on the ecosystem, the market dynamics, and the power shifts in all these relationships. It details how these shifts can be used to better support the over-all business strategy.

-- Technology Only--it is not a technology project or the output of a network design optimization project. While technology supports the business processes in the supply chain strategy, it should never be confused with the development of a supply chain strategy. People and process!

-- A substitute for business strategy--a company can only have a successful supply chain strategy if, and only if, its purpose is to support the business strategy.

-- A fiscal plan--the financial impact of the supply chain strategy is one output, and should not be confused with the development of a financial plan.

-- Dawn of the Dead Buzzwords--a good plan defines each term to make it actionable: flexibility, agility, demand driven, visibility, paradigm shift, quantum leap, AAARGH! Void yourself and the project of trite, hackneyed phrases and buzzology.

Check out Wired, Tired, Expired in Wired Magazine or any FastCompany article for the newest words. Go beyond the buzzwords!

What does a good one look like?

A solid plan is realistic and clear. You can ensure that it is actionable, and that it will get approval of the board and the leadership team.

The plan must be based on realistic market performance, the emerging market dynamics, and how well it will support the overall business strategy of your company.

Don’t be afraid to reach past what you may think will be acceptable within your company. Go for it!


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