Over the last three years, I have worked hundreds of hours rescuing, correcting, and launching supply chain operations. The problems are as age-old as the trade itself, but the "pandemic-panic" magnified every single supply chain problem a thousand-fold.
Most of the problems I unearthed and solved had been niggling little issues for decades. And then the COVID Supply Chain crisis hit.
The occasional demurrage bill started to arrive daily, hitting hundreds of thousands of dollars in a few months.
A missed sailing here and there grew to backlogs, inventory depletion, lost sales, and catastrophic impact on the P&L.
Vendor compliance, once a casual conversation, turned to lawsuits and burned bridges.
Amidst all the chaos CFO, CEO, and COO sent out cries for help. A once fly on the a$$ of the corporate P&L, supply chain was now a looming condor.
With my clients, we analyzed, corrected, process improved, and implemented at a fever pitch. As a result, hundreds of thousands were saved, weeks we sliced off the supply chains, and visibility into the future cleared.
Three years of beautiful progress and improvement in the humble supply chain.
Today – As freight costs drop to pre-pandemic levels, containers are once again abundant, and warehouse space has eased; companies are slowly sliding back into their sloppy inbound ways.
Bloated supply chain teams, hired in panic, are side-eyed and slated for the cutting block. Rigorous processes have eased. The daily executive calls have waned.
And slowly, the tolerance for a bit of demurrage here and a little late shipment there has begun to build – again.
Backsliding is never a winning strategy and will lead to only one thing…the painful cries of CFOs, CEOs, and COOs worldwide, again confused by this unpredictable and wildly expensive thing called supply chain.
So how do you prevent wailing executives –
1. Look Up and Downstream – Supply chain is a flow. The most amazing supply chain systems will fail every time if the up-and-down steam processes are broken. You must start with the PO creation and issuance process all the way through to the final destination.
That is BIG. But, until you have at least a high-level understanding of the entire flow, success will be limited.
2. Maintain Executive Pressure – Executives don't like supply chain meetings because very few understand supply chain…and frankly, compared to marketing campaigns with celebrities and new product collabs, supply chain sucks. It's boring, and it costs money.
However, as any decent executive knows, it's not all champagne and cake. Executives must stay involved in supply chain through meetings, metrics readouts, and problem resolution. The supply chain is the backbone of your business…treat it as such.
3. Invest in supply chain tech. Not a new ERP…Supply Chain Tech. There are dozens of options on the market with varying capabilities, interfaces, and scopes. Until you can measure your supply chain, you cannot manage it.
Excel spreadsheets don't count! That 42-page data monster that requires two analysts and a manager to feed and care for? It is not working! It's not real-time. There is no external data. Burn it.
Most supply chain tech offers analytics and predictive solutions. Find one that works for your company and USE IT.
The KPIs and data required to manage a supply chain are relatively basic. The more complicated part is what to do when a KPI is missed.
And the real flex? How do you predict and prevent supply chain misses…creating a flawlessly smooth flow.
Supply chain had its moment during the pandemic. In my entire career, I have never heard such heated and passionate conversations about "supply chain" - at the grocery store, no less!
As the limelight fades, keep your learning close and maintain an intense focus on the supply chain. Any improvement will continue to benefit the corporate bottom line and provide a much softer landing during the next crisis.