Is There a Supply Chain Cliff Looming?

  • by Bill DuBois
  • Published

The term “Fiscal Cliff” is now as well known as the outcome of the US Presidential election. Don’t close your browser yet, this won’t be a political discussion. For anyone who knows me, my only political rant happened when the Ontario Government raised the beer tax. As you know the “fiscal cliff” is a warning from leading economists that given the tug-of-war between significant budget austerity and an economic recovery still hanging in the balance, there will be a double-dip recession if Washington fails to respond in time to make a difference.

Is There a Supply Chain Cliff Looming?

Given the increased risks that just didn’t seem to impact yesterday’s Supply Chains, are the Supply Chains of today facing a “cliff” similar to the financial cliff if they fail to change how they respond to these new challenges?

Take the Wall Street Journal article on Sharp, stating that Sharp’s “future is at risk”? Sharp was counting on steady growth and significantly increased capacities of liquid crystal display panels. When the growth didn’t happen, that translated into excess capacity and the company losses “ballooned”. Sharp’s President, Takashi Okuda reflected, “We lacked a sense of speed. The situation could have been different if we took steps mores more quickly”.

Sharp is not alone. Look at any company struggling with the impact of recent natural disasters, managing through a fragile global economy, or dealing with strikes, recalls, big data and extended Supply Chains. Every link and every issue pushes you closure to the edge of the cliff. The problem many of these companies are facing is that they continue to manage today’s challenges with yesterday’s tools. These are the tools where planning was good enough, just like a horse and buggy used to be good enough to tour around town. However, tools that place an equal importance to planning, monitoring and responding in time to make a difference are the new necessity. It’s not just about speed and doing the wrong things faster. It’s about modeling the data and analytics of the extended supply chain and keeping a pulse on every node so you can plan, monitor and respond to the unexpected swiftly and with confidence. Understandably though, it can be difficult for companies to make the necessary changes to their processes and toolset while in the middle of dealing with keeping the organization afloat given the challenges mentioned. In many cases these companies simply look to improve the current use of ERP or Excel and drive some incremental improvements. However, your current processes and the band-aids applied to those processes could be included on the list of supply chain risks if it means an inability to plan, monitor and respond. Supply Chain improvements are certainly a difficult puzzle to piece together for the talented individuals tasked with keeping their organizations competitive.

So, will incremental improvements be good enough or is a breakthrough required in time to navigate the next catastrophic event? Is a Supply Chain intervention required? How close is your Supply Chain to the cliff?

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Bill DuBois has enjoyed over 12 years with Kinaxis in a number of roles including his current position as a business consultant providing pre-sales support to the Kinaxis Sales Team. This includes developing and delivering “stand-out” product demonstrations, delivering ROI analysis and also coordinating and conducting pilot projects for prospective customers. In his other roles with Kinaxis, Bill was the manager of pre sales consulting and joined the company as an integration consultant. Prior to joining Kinaxis, Bill gained 12 years of manufacturing, supply chain and lean experience while with Boeing of Canada. Bill is APICS CPIM certified. And as a qualified APICS instructor, Bill has developed and delivered APICS courses in material planning, master scheduling, capacity management and just-in-time. Bill has also developed and delivered Lean education and training packages for all levels of personnel. Bill studied Electronics Technology at Algonquin College in Ottawa, Ontario, Canada. Bill, as the resident Kinaxis comedian, is also the host of our home-grown Late Late Supply Chain Show. The Late Late Supply Chain Show videos can be found on the Just for Laughs section of the Supply Chain Expert Community. With top-ten list in hand, Bill keys up the funny with his late show antics appealing to a broad base of supply chain professionals — those who can laugh at the chaos of their daily lives (they need the laughter to mask the pain.) Bill has won the plaudits of critics — all one of them – and has proven himself in the ratings — first in late late supply chain shows! And Bill won’t stop until “this order has been filled.” Check him out for yourself!

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  1. I think it is essential for every company to constantly evaluate the future of the company and its supply chain, as well as present and past processes and practices. If an organization is only making incremental changes periodically, rather than viewing their supply chain as being a dynamic, relentlessly changing entity, it risks the continuity of its supply chain.

    Naturally, unforeseeable events such as natural disasters will happen, but a company must always have a contingency plan. Supply chain professionals must always be looking at the future of their industry, their suppliers, and the trends in their economy as well as the economies and political stabilities of their suppliers to keep from “falling off the cliff.”

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