Supply chains & networks: How do they fit together?
Collaborative supply chain, distributed supply chain, supply network . . . business has long stopped thinking about business as discrete entities. When Toyota developed long-term, stable relationships with suppliers to allow it to have shorter, quicker, more responsive relationships with its customers, business was changed forever.
Hi speed computers provide us with the tools to take the idea of a collaborative supply chain and turn it into a supply network. We have to think differently though and many of us ask, is it worth it?
What is the payoff for thinking about our supply chain as a collaborative network?
These are the FIVE benefits that we hope to gain.
- Be alerted to opportunities more often
- Get an appropriate team together much faster to respond to opportunities
- Produce better products and services more profitably and at a lower price
- Provide the critical mass for genuine innovation (rather than mimicry and spin)
- Develop skills as a team that can only be developed when a team works together for a while
And isn’t this just talk? How do we measure these benefits and show ROI?
Metrics can be developed for each of the FIVE benefits. An industry association might ask its members, for example
- How many interesting leads did you receive this month?
- How many leads did you leave on the table because you lacked the resources to respond and how many consortia did you form or were invited to join?
- Of the consortia whom are working, how many believe they will be able to improve quality, margins and price?
- How many consortia believe they have the critical mass of skills and resources to work innovatively at the forefront of their field?
- Does the consortium compete against other named consortia and when do they go head-to-head?
And how does this talk of networks affect HR – not the form-filling bit of HR – but the organisational design and management?
Equally, somebody say in HR who is working on collaborative supply chains would ask similar questions.
- What is our supply chain at the moment?
- What line of sight do we have of the supply chain upstream and downstream and can we document our understanding of the supply chain the way we document a job in-house?
- When do we receive incoming messages about leads?
- When do we receive data that allows us to investigate our position in the supply chain?
- What projects have we going on that focus on improving our position in the supply chain?
- What projects are put aside because ‘we aren’t big enough or good enough to do them’?
- What holds people up and if we changed the question to what do we do well, what opportunities emerge?
- Who does our supply chain compete with and how do we monitor them?
That’s enough for going along with. From these lists, you should be able to see how other people manage their supply chains; what industry associations can and should be doing to raise the profitability of the entire industry; and what HR should and could be doing to upgrade HR to the contemporary networked world.