There’s a good article at Supply Excellence entitled “Has the Economic Recovery begun? Are you ready?” that I provided feedback on and wanted to include here as well.
### My comment ###
Having had the privilege of meeting with executives of many manufacturers in the US over the past 12 months, one common dialog seems to be prevalent—first, what should we do differently to avoid a latent response to a future downturn and all the pain that implies, and second, how do we posture for the inevitable recovery while everyone around us appears to be operating with a heightened sense of insecurity. It is easy to say that “responsiveness” is at the heart of both of these problems, however, for many organizations, like the titanic, it is difficult to move quickly regardless of advanced warning of risk.
Given that supply chain is a team sport, what I’ve heard, and would be interested in further commentary from the readers, is that responding to downturn risk is more about individual play; that is, each enterprise must take responsibility for their own responsiveness to a downturn. There may be some that would say “we were just following our customers forecast”. Without a doubt, it is the more agile players that avoid injury.
Preparing for the economic recovery, which I believe has already begun in many sectors, is more about team play. Regardless of how agile and responsive an individual player in the supply chain is, winning big during a recovery requires that everyone on your supply chain team be equally responsive and agile. Leading manufacturers are busy working with their suppliers to establish transparency in supply/demand data, and working hard to improve synchronization through tight collaboration.
The top 3 strategic improvements that would improve an organizations operations performance would be to:
- Gain control over your data, whether it belongs to you, or partners. If it can adversely, or favorably affect your business, you need the visibility to the data.
- Establish a robust supply chain surveillance system. Knowing sooner about impending risk or reward on either side of the supply chain is key to breakthrough business performance.
- Empower people within the supply chain to collaborate. I’m not saying this doesn’t happen, but many people think inter-enterprise collaboration is about system-to-system data exchange, and not the old fashion human collaboration factor.
TrackBack
• Digg This
• Add to del.icio.us
Tags: Collaboration, Operations performance, Supply chain management, Supply chain risk management, Supply chain visibility
Posted in Supply chain collaboration, Supply chain risk management
You can leave a response, or trackback from your own site.
I would certainly agree with the top 3 improvements a company could make to improve responsiveness to changing economic conditions, with specific emphasis on number 3 collaboration. Whether it is internal or external collaboration, the two need to be vigorously excercized and information needs to be merged within the organization into a sort of competitive advantage bank of information that is constantly changing. Obviously then, an organization does not want to react to each bit of information but rather develope a mid range future trend line or course of probability that one can develope the supply chain around. It is all mostly about old fashioned human collaboration, maybe backed by data; but the thing we have to rememer about data is that it is typically based on laging information. Relying exclusively on data suggests that your decissions may be 2-3 months behind the real economic curve hence your way too late to react to upturns or down turns in the supply chain. Way too many organizations do not empower people to collaborate externally or internally and even if they do, the organization doesn’t know what to do with the information base they have or how to react to it in a unified approach.
I’m always happy to hear someone else supporting the notion that people still play a vital role in achieving performance goals. The robotic solutions born in the 90’s, and early this century are now, more than ever, showing their weaknesses, and leaders are turning back to “old fashion human collaboration”, as you stated, Ron. One of my favourite quotes comes from Shephen Haeckel, in his book titled Adaptive Enterprise —
“Human skill in recognizing patterns and thinking creatively about un-anticipated challenges will mark the difference between successful firms and unsuccessful ones.”
Clearly, the business conditions of our time are rapidly changing the business solutions required. I have to believe that most executives don’t believe the answer lies in yet another sophisticated optimization algorithm designed to keep people out of it.