Is now the time to think about suppy chain transformation?
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Dan Gilmore poses some excellent questions in an article entitled “Recession and supply chain transformation ” over at Supply Chain Digest. He talks about the current state of the economy and asks whether or not you should be thining about supply chain transformation right now.
I sent my comments to Dan and have included them here as well. What do you think, is now the time to be thinking about supply chain transformation?
## My Comment ##
Dan – I agree with your thoughts overall. These are tough times to say the least. And, that’s going to bring more pressure on supply chain professionals to come up with even more cost reductions to help dampen the blow from dwindling demand. I think the last several years had actually seen a renewed awakening that the supply chain was able to contribute to the top line growth of a company and not just the bottom line, which has long been the view. Unfortunately, the events of the last several of months will set that movement back as the focus shifts fully back to cost reductions.
As you said, this does open a new window for supply chain transformation initiatives, but I don’t think large, wholesale change oriented projects will get funded in these times. I think supply chain professionals would be better served by having a bold vision for supply chain transformation initiatives but to gain approval for and implement them in a more incremental fashion. And, each initiative needs to be tied squarely back to a tangible impact on the financial bottom line of the company to gain support.
I also think companies would be best served by thinking beyond this period to when growth returns. I know, that’s easier said than done right now, but the reality is that when a downturn reverses, the companies that come out strong are the ones that use the downturn to position themselves for the next growth period. These companies use this time to transform themselves into stronger players. The companies that will struggle when things turn around are the ones that act very tactically only during this downturn and fail to take the steps to enable growth on the other side.
As bad as things look right now, they will improve at some point – they always do. Nobody can predict with accuracy when that will happen, but now is not the time to solely think short-term and tactically.
Tags: Supply chain
