SCM30: If I could change SCM, I would call it…

Published April 20th, 2012 by Kirk Munroe 1 Comment

SCMWelcome to the third blog post in the SCM30 series.

Though supply chain management concepts have been in practice since the turn of the last century, it is widely agreed that the term was created by Keith Oliver in 1982 – 30 years ago.  This post in our series focuses precisely on that – the term ‘supply chain management’.

There is a posting in the Supply Chain Expert Community discussion forum that asks the question: If you could re-name SCM today, would you? If so, what would it be?  While others have weighed in with some interesting thoughts, here are mine…

If I could change SCM, I would call it SCE … Supply Chain Excellence (or Effectiveness – either work for me)

First off, I am not a long standing SCM expert.  Thought we should get that on the table.  However, I do have a long history of working with analytics-based enterprise software to help companies make better business decisions, to better achieve corporate strategy.  With this background, the word “management” carries a connotation that screams “drive out costs at all costs.”

To make sure I am not losing it, I went to my friends at Dictionary.com and found: the act or manner of managing;  handling, direction, or control.  The word “control” jumped out at me, so I following the rabbit to find: to exercise restraint or direction over; dominate; command.   If I am being balanced and fair, there are other definitions of management that are not so dictatorial, but the connotation still holds for me.

In short, I don’t think SCM because management implies execution alone and not strategy.  Execution is certainly a big part of the equation, but I would like to think that supply chains, and the software that enables them, can be so much more.

With that out of the way, if we look at the three real traditional strategies a company can have (leaving out “system lock-in” as a viable option for most businesses).  First, we have lowest cost provider.  Second, product or service innovator.  Third, customer intimacy.

In this first case, it is mostly about managing out costs or optimizing the supply chain, but in the latter two cases, clearly the supply chain has to be thought of as an essential component of the corporate strategy.  It is hard to think about creating innovative products if you think of your supply chain as a low-cost assembly line.  It is even harder to think about delighting your customer without considering product customization, order flexibility, and so many more factors from order to delivery that are key to the supply chain.

I am not going as far as saying we should be calling it SCS (Supply Chain Strategy) because it is equal parts strategy AND execution.  There might be a better word than Excellence or Effectiveness, but I hope the point is clear and why the M in SCM doesn’t work for me.

Would love to hear your thoughts on this topic – either here on the blog or join the discussion on the community.

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One Response to “SCM30: If I could change SCM, I would call it…”

  1. Bill Seliger

    Kirk, the word that I find most misleading in ‘Supply Chain Management’ is ‘Supply’. The terms Chain and Management are widely understood, even in the general public, but all too often SCM is thought to mean supply into an organization (not out to customers) and we even find that Supply Chain Management starts and ends with sourcing or purchasing in some organizations (to their detriment!)

    I hear the term ‘Value Chain’ mentioned often these days and I believe that’s a better term for what supply chain managers should be focusing on – the adding of value from resources to customer (and even back again, including reverse logistics). Value chain also implies focus on product in one direction and cash in the other – all part of SCM. The term ‘value’ even tilts us towards ‘Lean’ and reminds us to also focus on eliminating those activities that don’t add value.

    I agree that Value Chain Strategy would be a subset of Value Chain Management (Management includes Strategy but goes on to include execution, etc.)

    Thanks for the thought provoking post!

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