So why is it when I tell people that I have an interest in the supply chain that their eyes glaze over and they adopt an air of sympathetic resignation? “Isn’t that about trucks and warehouses and manufacturing and stuff?” is a typical response. Why is this? The term “supply chain” is open to interpretation. There are many definitions, models and frameworks but different industries, functions and practitioners have different areas of focus that make the generic term somewhat vague. It’s certainly not often viewed as the sexiest of business areas – which I think is a shame.
To me the supply chain is the heart and lungs of an organization. Done well it is a significant competitive differentiator – done badly it is a major cause of business failure. PwC’s Global Supply Chain Survey 2013 highlighted the correlation between companies that beat the competition on supply chain and those that achieve significantly better financial results. The supply chain enables business success. It delivers the efficiencies to fund innovation to grow brands and categories – it delivers on brand promises through ensuring availability and delivering on quality. It ensures that the organization’s sustainability and regulatory responsibilities are expedited in a way that not only meets defined standards but wherever possible delivers a competitive advantage.
The SCM World Chief Supply Chain Officers Report 2014 described how “Chief executives can no longer afford to delegate strategic understanding of supply chain operations. The connectedness of supply chain capability to margin growth, market entry, product innovation and corporate responsibility now compels CEOs to master at least the broad strokes of what it means to be agile.”
Over half of the respondents in their survey assert that supply chain is understood by the CEO as an equal partner to sales and product management in the success of the business. This is good news: but what are the barriers to making it happen consistently? I mentioned the fragmented nature of the supply chain and therein lies one of the fundamental challenges. There are lots of functions involved and core processes often go across these so measuring performance can be difficult. There are many systems and data sources involved so getting a single view across these is challenging.
Both surveys mentioned talk about how data challenges are set to increase. Big data is consistently described as the most disruptive technology impacting supply chain strategy with the hope that better visibility may come from drilling into huge new data sources.
“The internet of things is important as a way to know what is happening in the physical supply chain, from smart shelves in stores to self-provisioning capital equipment. Both for demand sensing and remote control of physical assets, the internet of things offers huge potential.”
-SCM World Chief Supply Chain Officers Report 2014
Information is power in this environment. Supply chains are having to cope with more and more challenges with increased volatility and demands from customers, partners and legislators showing no signs of dampening. Does it still sound like a boring place to be? I think not – supply chain professionals are involved in business-critical areas and have a genuine and significant impact on business success – let’s recognize, celebrate and most importantly, enable this success…
Photo credit: dok1 / Ashley Modern / CC BY