Tag Archives for " Business Strategy "

Strategy Is An Easy Game – Especially for the Good Yachtsmen and Navigators

It appears a bit extreme now – but it was very common at time when I was a navigating cadet.

As a 17 year old cadet learning to navigate a large 28,600 metric tonnes vessel, one of first things I was asked to do was to make sure that I learnt the entire ‘International Rules of Road’ by heart. Almost all the cadets had to do this. The intention seemed to be that you must have no doubt in times of panic. At a time of impending collision there would be no room to think or maneuver – and the reaction must be automatic.

The Chief Mate (mentor for the cadets) would ask us any rule at any time, and expect the cadets to be able to recite these line, chapter and verse.

Here is short video of the perils of sea – mainly to put thing in the right context.

Most good yachtsmen and navigators would have these rules stuck in their memories no matter how much time has passed since they did their MoT (navigators’ license).

For me, after more than 30 years they are still alive, and many of them serve as good guidelines for practical decision making in strategy.

 

Here is an example: RULE 7 (COLREGS 72)

NAVIGATION RULE STRATEGY GUIDANCE
(a) Every vessel shall use all available means appropriate to the prevailing circumstances and conditions to determine if risk of collision exists. If there is any doubt such risk shall be deemed to exist. Every company should use all available means appropriate to the prevailing market conditions and competitive landscape to determine if significant risk to profitability exists. If there is any doubt such risk should be deemed to exist.
(b) Proper use shall be made of radar equipment if fitted and operational, including long-range scanning to obtain early warning of risk of collision and radar plotting or equivalent systematic observation of detected objects. Judicious use should be made of diagnostic tools and methodologies that are available and appropriate, including long-range forecasting to obtain early warning of risks of significant profit drops, and benchmarking or equivalent systematic observation of risks identified.
(c) Assumptions shall not be made on the basis of scanty information, especially scanty radar information. Assumptions shall not be made on the basis of scanty information, especially poor diagnostic information.
(d) In determining if risk of collision exists the following considerations shall be among those taken into account: (i) such risk shall be deemed to exist if the compass bearing of an approaching vessel does not appreciably change; (ii) such risk may sometimes exist even when an appreciable bearing change is evident, particularly when approaching a very large vessel or a tow or when approaching a vessel at close range In determining if risk of significant profit drop exists the following considerations shall be among those taken into account: (i) such risk shall be deemed to exist if the performance of an appropriate benchmark does not appreciably change; (ii) such risk may sometimes exist even when an appreciable performance change is evident, particularly when approaching a turbulent market condition, or when benchmark itself has become irrelevant.
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The Second Biggest Mistake in Business Transformations

In this article I want to focus on the second biggest mistake companies make during business transformations.

In case you are wondering why I am focusing on the second biggest mistake rather than the biggest one – it is because I have already written a blog post on that topic last week. Here is the link to it.

But the second biggest mistake is even more common and well known.

It is so easy to recognise that there are a whole lot of cliches used to describe it.

Yet it is so common that it worth spending half an hour writing a blog post about it. Even if 10 business transformations are put back on track after reading this blogpost – it would have done its job. After all each derailed business transformation is a huge waste of human effort and ingenuity.

So, what are the cliches that are used to describe this second mistake. I am sure everyone is familiar with these:

Putting the Horse Before the Cart.

Confusing the Cause with Effect.

Post Hoc Fallacy

A theoretical discussion of human fallacies is out of scope of this blogpost. You can read more about these here.

Practical observation shows that most business transformations require at least some degree of IT upgrade.

In many cases these IT upgrades take a life of their own and business objectives of the transformation projects start taking a back seat to these technological considerations.

In my book UNCHAIN YOUR CORPORATIONS I have given more than 20 examples of this phenomenon, in various contexts. Below I quote from the book:

Modern supply chains collect information at each node of the network. This rich data is methodically analyzed to optimize demand, supply, inventory, costs and service levels to create the best profit results. Not many people know this art – while there might be many pretenders.

The next component in business transformations is the informational part of the business network, which is strongly bounded by its IT systems. A word of caution, though, IT should always be viewed as a means to an end rather than the end in itself. In other words, systems are implemented to facilitate information exchange that is conducive to business transformation.

In the project we were working on, the challenge was indeed, moving the system from the regional to the global structure. Apart from having islands of data to consolidate, the company also found themselves dissatisfied with a system that met only 70% of its needs.

Even though you may be tempted by flexibility as it offers more room for maneuver in the future, every additional bit of flexibility breeds corresponding complexity.

To some extent, if a supply chain forms the backbone of your business, then IT is like the nervous system that helps circulate pulses of information and intelligence around the body.

To get a more realistic picture of the complexity, type “supply chain software” into Google and you will get more than 75 million results. How do you know which one is the right one? Though many of them will pretend that they can, there is not a single piece of software that can do everything that you require from a supply chain software solution.

Plethora of tools are available – each with its own peculiarities and limitations. Old ERP type systems can lead your operations into a big hole from which it will take years to emerge. Furthermore, each tool is most suitable for certain situations, and unsuitable for other situations. You need the ability get the right tools – just the ones that suit your situation – and combine them well.

As mentioned above, even though IT is not a solution to every problem, it should not be allowed to create even more problems than those that exist in the first place.

I have dedicated a whole chapter to IT systems in my book The 5-Star Business Network and here I would like to focus only on a few key things. To get this component right, you also need to see things through the eyes of the system provider. It is a delicate dance between rigid functionality and flexible business outcome.

How do you choose the right software for, say forecasting, from among more than 2,500 such systems? How do you link this system to the other systems it needs to work closely with – say inventory management software? How do you pick the right inventory management software from among more than 2,000 systems that claim to do more or less the same thing? Do you go for a single solution that is about 50%-60% right, at best – or do you go for a best-of-breed solution that can cover more than 85% of your need, if you do it properly? All these are very complex questions to answer.

Figure below, taken from my book The 5-Star Business Network, illustrates just some of the ways a business can falter along their road to using IT for business transformation.

GLOBAL SUPPLY CHAIN GROUP

FIGURE: PROBLEMS WITH USING INFORMATION TECHNOLOGY FOR BUSINESS TRANSFORMATIONS

Your job is to mix and match a best-of-breed solution suite.

Then you configure the pieces to form an integrated system, that meets your rapidly changing needs in a business transformation.

How?

We need to revisit the strategic component, to examine the level of disconnect between the corporate strategy and the IT capabilities and carefully find tools that fill that gap.

In the past, it might have been the case that corporate strategies were made up in the air, then supply chain strategies were formed by people down in the warehouses based on their own assumptions about what the business wanted to achieve, and the IT staff work in their own cubicles to provide systems based on poorly articulated needs.

If the above example of three isolated types of strategies resonates with your personal experience, you would also concur that despite numerous vocal calls for enterprise-wide collaboration, people still continue to work in silos. This is equal to saying many companies are still staying at Supply Chain 0.0 while others are moving towards 1.0 or 2.0 or, even mastering Supply Chain 3.0.

Figure – The process and service component

As you can see from Figure above, which shows typical processes in a supply chain 1.0, there are four levels that need to be weaved into a cohesive whole. Typically, there can be missing links between processes – vertically, or even horizontally.

Someone working at the operational level may not know how their work is related to the work of someone at the tactical level.

Even worse, for instance, a delivery scheduler may not know how his work output related to that of his next cubicle neighbor – the customer forecast expert.

During a transformation, processes and services may get streamlined, re-aligned or even created from scratch to accommodate change. That is why it is pivotal to keep in mind how they all fit together by devising a visual presentation such as the pyramid diagram above.

Another practical example may illustrate the point better.

supply chain managementI was having a conversation with one of the senior executives responsible for business transformation in a large-sized industrial company with operations and plants across the developed world. This particular person had come from one of the top tier global consulting houses and obviously was very well versed in the hypothesis-driven problem-solving approach, which both he and I had learned in our formative years in top tier consulting houses. He was adamant that this approach would be enough to carry out a large-scale supply chain transformation in his business. Hence, he was very skeptical about the supply chain methodologies that we were espousing.

In his mind, he could derive the same results from the first principles using his hypothesis-driven approach. And I was patiently explaining to him the difference between going back to the first principles to create a new approach, and deploying a tried and tested approach for supply chain transformations which had the benefit of having adapted the same hypothesis-driven approach.

So I gave him an example of the early stage motorcars where people were still using solid rubber tires and a number of fittings which were a carry-over from the days of horse buggies. Of course, if he had the luxury of time and budget to make all the mistakes there were, he could probably recreate a modern-day motorcar, going through all the stages of evolution. He was smarter than most of the population, so he could perhaps complete the task in 20% of the time that it took for the actual evolution to take place and perhaps, at 20% of the budget. Yet, if a modern-day motorcar was already developed, wouldn’t he be better off testing if it suited his purpose and adapting it for his use?

The role of “process” in business transformation cannot be overemphasized or under-emphasized.

Obviously, on one hand, you can become too rigid and attached to the process itself. On the other hand, robust processes, based on experience from a number of similar business transformations in the past, are far more useful than some skeptics envisage.

After all, who would you like to be your guide for a climb – a person who can theoretically show you a path through a map of a mountain, or a person who has actually traversed that particular journey several times before, and knows all the pitfalls along the road?

Now let us talk about the “service” bit in the process and service component.

One of the hangovers from the last century industrial organizations which never ceases to surprise me in a modern-day organization, is the importance attached to a product in comparison to the importance attached to service by the company.

What do I mean by that?

Most companies still think they are selling a product, when it is clear that in today’s information economy, most companies are selling the combination of product and service.

The service might be just fitting the product, or providing the right information about the product, or helping customers choose the right product for their needs.

To give you an example, if you are a customer of a motorcar company like Ford or General Motors and you are looking for a particular part, you will be amazed to know how many different possibilities there are of fitting the right part for the purpose. You will then need to discuss your particular needs with someone called a Parts Interpreter in order to pick a suitable part for your motorcar. It is a very specialized job and invaluable service provided by the car industry to its customers. It is the service that makes the cost of parts more expensive than the base cost of manufacturing and selling that part.

GLOBAL SUPPLY CHAIN GROUPIn almost every project we have done, when we calculated the overall cost-to-serve, it is very clear that the product component of the cost was supplemented by the service component of the cost, which was quite substantial to start with, and getting higher progressively.

In other words, the overall cost-to-serve is made up of cost of product plus cost of service, each a fairly significant component of the overall cost-to-serve. Then why do companies keep ignoring the cost of service or treat it as a minor hassle, rather than manage it as an overall part of the full cost equation?

In many companies, especially engineering-oriented companies, product takes the center stage, because it is tangible and visible, and these companies take great pride in creating superior products.

Hence, service is merely an after-thought, even though the cost of service might, in many cases, be higher than the cost of product.

That is the reason why a cost-to-serve analysis is an eye-opener for senior management teams or for boards of directors, when an overall cost breakdown is laid out, clearly showing that cost of product is far less than the cost of service. Suddenly, the entire orientation of the management changes towards managing the service component much more efficiently and effectively than they have ever done in the past.

We have noticed that tendency in airlines, in the automotive industry, the mining industry and in many other industries.

If you look at it from a customer perspective, the service is the most important part of the equation – it is well remembered long after the part (or the product) has been fitted and used.

Similar to the informational component, companies are increasingly discovering their ability to cherry-pick service providers that deal with different service modules. Before this can happen, service components must be broken up into geographical, asset based and activity based components to discover and engage best service provider for each module. This is known as modularization.

GLOBAL SUPPLY CHAIN GROUPThen, service modules are homogenized in order to create and manage parallel interactions with several service providers at same time. The cherry-picking or commoditization of service modules enables you to configure a best-of-breed customized business-to-business network that would be impossible to emulate for your competitors, and provide flexibility, cost advantage and risk mitigation to your company.

All this is possible only if you avoid making this second biggest mistake in business transformations and keep the focus firmly on the business – not on the tools – IT systems, or processes – used to achieve the business transformations.

Sure you will need the right tools, and deploy them rightly – that is important. But much more important is why you are deploying them, and are you getting the right results from them?

If Your Business Has Too Much Internal Focus, You Could Be Missing Out

It’s no surprise that customers hate companies with too much internal focus.  As organizations free up their inter-departmental planning from rigidities, the communications start to bloom.  Efficiency improves considerable and everybody starts running together, faster.  However, a higher set of problems emerge due to lack of external focus – on suppliers, customers, and end-consumers. Many times everybody inside the organization is running together, faster, but in the wrong direction.

A Revamped Business Model: The Introduction of Customer Centric

New challenges need new responses. The common organizational model looks like the generic drainpipe structure, meeting the mammalian need for an ordered hierarchy and flow of power within a business. Most companies have evolved in the last 2 decades and their functioning has become almost entirely customer centric.  Their customers’ priorities drive most of the business workings.  The traditional drainpipe model frequently stifles customer responsiveness and innovation, therefore there is a clear need for a new standardized customer centric model of business. The new customer centric model starts with customers at the apex of the organization.  It is the customers’ needs which the organization is trying to serve, so directly aligned with the customers is the sales team.  The function of the sales team is to have an https://www.viagrapascherfr.com/le-viagra-vente-libre/ intimate understanding of the customers’ needs.  Only then can an organization create successful products.  An organization can outsource almost everything else it does, but it can never outsource its sales. Two other key functions which are equally important and support the sales team is marketing and research & development.  Between these three we form the top tier of the modern organization’s structure.

sales and marketing

The Customer Centric Business Model

5 ways to turn your company around using your business network

There are a number of factors that have ensured that business have been struggling in the current economic environment. Technology has made many business models defunct, incomes and profits are falling due to cost cutting and price conscious consumers and off-shoring has hollowed out entire industries. Given this reality, business networks are essential to struggling companies to help turn their fortunes around. Here are five ways you can use your business network to turn your company around – the five cornerstones of a Five Star Business Network.

My Experience With Freight Cost Reduction Using Supply Chain Software

One of the reasons I invest so much time and resources of our company in keeping current with the information technology is that good supply chain depends almost entirely on good information. And, your information is only as good as the technology deployed to collect, collate, store, parse and reproduce the information on demand. It is no secret that most of our supply chain transformation projects are highly time intensive and heavily data driven. We trust all participants in the supply chain, and we verify everything – from several angles. However, if you have been working in freight cost reduction for over 30 years like I have been, you know the reality on ground. But that raises a big question about the data. Specifically – ‘a data scientist can only be as good as the data s/he has.’  In most projects the data is woefully inadequate – even today in 2016. Rather than talk about our current freight cost reduction projects, I will give an example from several years ago (for sake of propriety and confidentiality I will disguise some details). When our team completed the initial 8 week diagnostic on that project for an industrial corporation with $1.3 Billion supply chain, it was clear that despite heavy investment in SAP, supply chain data was far from adequate. In fact for ocean shipping it was so inadequate that we had to employ temporary staff in to digitize a paper trail of transaction details in order to conduct our analysis.  I could probably spend another 5,000 words just writing about how difficult it was to get hold of the data, and then how difficult it was to verify the veracity of that SAP extracts. After all my team was sharing their travails with me on a daily basis. We had signed a fixed price 10 week contract for completing the work. We anticipated the usual data problems for the first week or 2. What we did not anticipate was a 5 week run around to get hold of the SAP extract, and then another 2 weeks to verify its veracity. As a result our team had to find additional resources, and time, to conduct a 6-7 week analysis in 3-4 weeks in order to meet the deadline for senior executive off-site meeting scheduled for the end of the diagnostic. I asked the team to make full record of all the inadequacies they found in the SAP set-up so that we could provide recommendations on system upgrade to facilitate good supply chain planning, control and decision making.  While this was not something our company worked on, and it was not even part of the project brief, it was going to be extremely useful for future SAP upgrades in the company. After all limits of any machine are only discovered when it is being used at its limits. (Now that upgrade is a subject for another blog, at some other time). It was clear to all that SAP was set-up mainly for financial reporting purposes, and supply chain management was an afterthought to the transaction recording. As a result, the system did a marvelous job of providing aggregate data on financial well-being of the organisation. It also facilitated adequate drilling-down of financial transactions. Yet linking those financial details to actual supply chain movements was less than adequate. In fact, for ocean shipping, nearly 25 hand-over points in the transaction workflow were all aggregated into one single SAP transaction. Our team diligently recorded all the issues with supply chain transaction processing that we found during our strategic diagnostics of supply chain. Several pages of tables similar to the one below were cross-checked, verified and created. Data Issues in SCM Not just that, an annex report with high level requirements for future upgrade of SAP was also created, even though this was not part of our original project brief. Unfortunately, I am disinclined to publicly share even sanitized version of a sample extract out of this report . privately, I might be able to share sanitized extracts in case your team is going through a process of making your SAP installation more user friendly to your digitized supply chain. I chose this old case example for several reasons. Firstly, it has gone through a full cycle of business and information technology outcomes, which are now well known. On business side our supply chain transformation project was a massive success. In fact the global head of supply chain (who later became the CEO) wrote this in the foreword to one of my books:

When I engaged Vivek’s services for supply chain transformation in one of the companies I was heading, we expected the careful and methodical approach that he was famous for. Outsourcing was only one of the components of our supply chain, and at the time we did not think it was even a particularly important one.

I was already convinced that critical business turnaround can only be achieved by taking an end-to-end supply chain approach to this transformation. I was pleased to note that the original target set for 3 years was surpassed by almost 70% in just 18 months – providing graphic evidence of the full power of these ideas in action.

On the information technology side, the supply chain requirements were never fully translated into a usable system resource base. I will not go into the reasons in this blog. SAP has since invested in Ariba – a procurement management software. unfortunately, the confusion between procurement and supply chain management continues to persist. A number of journalists, and even business professionals use the terms interchangeably. On the IT side the supply chain workflow still remains inadequately supported. A few newer companies are starting to crop up, yet a great majority of them (to some degree) seem to be falling into the same traps that their predecessors fell into above. In my next blog I will cover this in more detail. Meanwhile, share your experience with SAP, Ariba or other so called supply chain transaction processing software systems. Not only will you add to the accumulated IP on supply chain system, but also you may earn a copy of the book quoted above. You can find comments on My Experience With Freight Cost Reduction Using Supply Chain Software on LinkedIn.

Are You Making What You are Worth

One of my posts on LinkedIn sparked a lot of interest and a healthy debate. I am not sure about the reason for interest but seems like people agree with the above statement, as well as its reverse:

The person who does less than s/he is paid for, will soon be paid less that s/he does.

So, what do you get paid for? And, are you getting paid for what you are worth? What skills do you bring to the job? What attitude to you bring? Are you being rewarded for the two? What can you do? Use the figure below as a guideline: universe-workology You can find comments on LinkedIn.

Changing Role of Supply Chain Management in Digital Economy

In the rapidly changing world – role of supply chain is constantly evolving. There are now at least three generations of supply chains and the confusion about the roles and expectations is leading to massive losses inside the corporations. Here are some insights and excerpts from my speech on this topic. You can see the video on Latest Advances in Supply Chain Management – a Keynote Speech. Everyone has a circle of influence – in LinkedIn, Facebook, Twitter, contacts and colleagues. If these ideas make sense to you, share them far and wide. If they do not – make a comment here. To know more about Vivek Sood, make sure to visit my website viveksood.com or Global Supply Chain Group. For any questions or comments, feel free to contact us or email at contact@globalscgroup.com. You can find comments on this article on LinkedIn.

What Do Roads in Rural Bali Have to Do With Supply Chain Digitization?

Digitization is the buzzword of the moment in Supply Chain. Going by the number of articles and posts on digitization, you would think that the pope has just discovered religion. In fact, I recently read an article which used the word ‘digitization’ nearly 100 times in about 4 paragraphs. It talked about demand digitization, supply digitization, inventory digitization, fulfillment digitization, planning digitization, and many such things. Is this really that new? Since the days of SAP (late 80s), or before, digitization has been gradually gaining pace. Yet, current articles are making out as if there is a switch you flick – and suddenly you have ‘light – aka digitization’ Reality is far more interesting and juicy. Thinking of digitization, I was reminded of our business transformation projects and trouble with getting accurate data. Despite spending hundreds of millions of dollars on ERP systems, (and in many cases over a billion dollars), most companies still fall way short in terms of their data – both in terms of accuracy and completeness. Before starting almost every project we are assured that the data will be in our hands within a few days – at the most. Typically, we count ourselves lucky if the data extracts are available within 3 weeks, and are accurate enough to be useful for analysis. But, this blog post is not about the barriers to digitization, rather it is about the nature of digitization itself. Why the data is not readily available, and why is it of such poor quality that it is barely useful for most analysis – this discussion will open up a pandora’s box of pent up feelings within the companies. Most technology companies are clueless about the human element, and continue to plough ahead in darkness – and blame their customers for technology failures. Reading the recent spate of articles on digitization left me with a distinct impression that another element which they show a marked ignorance about is the nature of digitization itself. The belief that it is a binary switch where you get technology and suddenly your company is ‘digitized’ is far from reality. Recently, I had the occasion of spending nearly a month on a sabbatical and family holiday in the island of Bali. I happened to travel over the entire length and breadth of the island during this period and noticed the state of the roads varied significantly depending on how far I was from the ‘touristy Bali’. What started as paving over the village footpaths, would gradually morph into high quality road, which would later be widened to accommodate growing traffic, and later replaced by a highway/motorway in parts. Most island roads were however, still narrow village paths paved over for modern transport. All this existed simultaneously at the same time and will continue to exist well into the future – with gradual upgrades from one level to next over the years. That is the state of digitization of supply chain and will continue to be, with gradual upgrades from one level to next well into the future. We have no Y2K type crisis (remember that?) that will force upgrades, and dollars are scarce in most companies that do not enjoy some historical or political advantage. No amount of hype from IT vendors is going to change this reality. Also, CEOs and CFOs of long memories of past IT projects that failed to fully deliver. Perhaps the next generation of executives will be gullible enough to fall for the same hype again. You can find comments on “What Do Roads in Rural Bali Have to Do With Supply Chain Digitization?” article on LinkedIn.

What Causes Supply Chain Confusion

My last post Supply Chain Confusion could kill your business generated several great comments from highly qualified professionals around the world, and in this post I want to explore the reasons for the confusion. Obviously, the confusion is debilitating, and unprofitable. I am sure readers will have their own experiences with the confusion in supply chain world, and can add to the discussion by commenting below.

1. Supply Chain Confusion created by service providers:

In my previous article I mentioned the examples of trucking companies (or warehousing companies) who have painted over their old trucks from XYZ Trucking/Transport to XYZ Logistics to XYZ Supply Chain Solutions without any material change in their capabilities or service offerings. While this kind of ‘branding’ exercise seems harmless enough, and most customers are not ‘fooled’ by such over-representation of the capabilities – it does have several deleterious effects. To give you an example – I was recently asked to answer a question on quora.com by a recent entrant into one of these companies who had entered the ‘field of supply chain’ to make a glamorous career. S/he was disappointed when s/he found that most of the work was rather mundane execution level work in transportation and warehousing. To exacerbate the situation they did not see any prospects of getting even remotely involved in the ‘sexier stuff’ such as supply chain modelling or business transformation. Evidently, then, this type is hurting careers, reputations and perhaps even the entire industry when these companies represent that what they do is all there is to SCM!

2. Supply Chain Confusion created by those who mistake the a small part for the whole (of supply chain)

No doubt strategic sourcing, logistics, warehousing, production planning, inventory management, demand forecasting all are parts of good supply chain management. Yet almost all of them are quite capable of representing that they constitute the entirety of supply chain management. Look at the way that a number of professional bodies have renamed themselves and pretend to represent the entirety of ‘supply chain’ professionals. Their antics remind of the ancient Hindu tale of 6 blind men which was so well captured by the American John Godfrey Saxe in the The Blind Men and the Elephant (Source: Wikipedia):

i. It was six men of Indostan To learning much inclined, Who went to see the Elephant (Though all of them were blind), That each by observation Might satisfy his mind.
ii. The First approached the Elephant, And happening to fall Against his broad and sturdy side, At once began to bawl: “God bless me!—but the Elephant Is very like a wall!”
iii. The Second, feeling of the tusk, Cried:”Ho!—what have we here So very round and smooth and sharp? To me ‘t is mighty clear This wonder of an Elephant Is very like a spear!”
iv. The Third approached the animal, And happening to take The squirming trunk within his hands, Thus boldly up and spake: “I see,” quoth he, “the Elephant Is very like a snake!”
v. The Fourth reached out his eager hand, And felt about the knee. “What most this wondrous beast is like Is mighty plain,” quoth he; “‘T is clear enough the Elephant Is very like a tree!”
vi. The Fifth, who chanced to touch the ear, Said: “E’en the blindest man Can tell what this resembles most; Deny the fact who can, This marvel of an Elephant Is very like a fan!”
vii. The Sixth no sooner had begun About the beast to grope, Than, seizing on the swinging tail That fell within his scope, “I see,” quoth he, “the Elephant Is very like a rope!”
viii. And so these men of Indostan Disputed loud and long, Each in his own opinion Exceeding stiff and strong, Though each was partly in the right, And all were in the wrong!
moral

So, oft in theological wars The disputants, I ween, Rail on in utter ignorance Of what each other mean, And prate about an Elephant Not one of them has seen!

Amusingly, the confusion in supply chain management also involves 6 different streams of thoughts.

There Are No Natives in This Land

Supply chain is a relatively new field. Especially at a higher level, there are no people who ‘grew up in supply chain management’.

Traditionally, supply chain professionals have come from one of the three or four streams in businesses.

  1. Logistics – 3PL service providers,warehouse staff, or internal logistics staff – also include people who confuse ‘logistics’ with supply chain’
  2. Procurement – or Sourcing, or strategic sourcing – also includes people who easily confuse ‘supply’ with ‘supply chain’3
  3. Production Planning – or Scheduling – also includes people who easily confuse ‘production planning’ or ‘sales and operations planning’ with ‘supply chain planning’
  4. Inventory Management – also includes people who confuse ‘inventory planning’ or ‘sales and operations planning’ with ‘supply chain planning’
  5. Materials Management or Materials Handling – also includes people who confuse ‘materials management’ with supply chain management
  6. Demand Forecasting – also includes people who confuse demand forecasting with demand management with supply chain management

I have worked closely with all 6 type of pedigree – and each of them have distinct foibles, strengths, weaknesses and biases.

One bias they all have in common is that they tend to have a soft corner for their own pedigree. For example, I spent my own formative years in shipping, logistics and transportation, and for some reason I am still a shipping person at heart. As they say once you spend time at sea – the salt water starts running through your veins.

However, all 6 type of pedigrees also have a great majority of people who are happy to represent their own specialisation as the entirety of supply chain management. That is what causes the confusion.

I could probably write an entire chapter of each of these 6 type of people, and their biases – including the impact of the confusion they cause to damage the profitability and ‘brand supply chain management’. But if you are from within the folds of supply chain management – you will easily recognise most of what I have to say here.

And, if you are not from with the folds of supply chain management then more explaination is no use to you – because you are better off reading my other articles on use of supply chain management for business transformation –  just search for those keywords in the search bar next to the tool bar on top.

I will cover the rest of the cause of confusions in my next post. These are rather esoteric models and we will raise the level of conceptual thinking a few notches in that article.

Related Reading:

  1. https://globalscgroup.com/supply-chain-confusion/
  2. https://globalscgroup.com/how/
  3. https://globalscgroup.com/the-single-biggest-mistake-in-business-transformations/
  4. https://globalscgroup.com/the-second-biggest-mistake-in-business-transformations/
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