In our modern world of the 21st century, supply chains are the lifeblood of enterprises. We rely on the procurement, manufacture, and logistics for the supply of essential products & execution of services.
Supply chains, given their breadths & complexities, are not easy to manage. We who work in them know that supply chains span beyond our enterprises’ borders and that we must relate with vendors, customers, & 3rd party service providers to achieve success
Many so-called management gurus preach we should first formulate visions, missions, objectives, & strategies (VMOS) for our enterprises. They say that a VMOS should be the basis for whatever we do in our jobs or businesses.
But as much as a VMOS provides a roadmap for an enterprise, a doctrine is more apt when it comes to managing supply chains.
A doctrine is a principle or set of principles which become the basis for any course of action. A doctrine isn’t a VMOS and does not necessarily stem from one. Doctrines, however, do go hand-in-hand with the development of VMOS and vice-versa.
Doctrines help us manage the supply chain operations which fall under our enterprises’ direct oversight. Doctrines not only define how we oversee operations on our enterprise’s side of the supply chain but also are the foundations of how we relate with those who connect with us, i.e., vendors, customers, 3rd party service providers.
A doctrine can be a long narrative or brief phrase. The Monroe Doctrine of 1823, which became the basis for American foreign policy, was contained in a speech by then United States’ President James Monroe to the US Congress. More than two hundred years later, American President Donald Trump in his inaugural speech in 2017, presented his political doctrine in two words: “America First.”
A supply chain doctrine would determine how we buy, make, and deliver our products & services in line with whatever VMOS our enterprises’ top executives adopt.
Doctrines for enterprise supply chains aren’t new.
Toyota’s waste-elimination doctrine, which the automotive firm espoused for decades, resulted in Toyota becoming a top-tier global automotive conglomerate, thanks to successful reductions in inventories and breakthrough productivity improvements.
Apple stressed a Just-in-Time doctrine for suppliers in the assembly & delivery of its highly rated products.
Fast-growing fast-fashion e-retailer, Shein, relies on “an on-demand manufacturing model. It subcontracts thousands of small manufacturers in China. They make products in small batches to test market appetite and replenish orders as demand increases.” Shein’s doctrine can be summed up in two words: “on-demand.”
Netflix was the pioneer in the doctrine of mailing (and later streaming) movies & TV shows to customers instead of customers visiting stores.
Many firms have copied Amazon’s e-commerce doctrine in which customers order & pay online.
Tesla banks on a data-driven doctrine in its relationships with suppliers and in how it manages its manufacturing. Tesla relies on data such as “lead times, parts quality, & carrying costs” to rank & favour vendors such that the firm can discover opportunities to strengthen its supply chain.
“Frito-Lay operates 30+ manufacturing facilities across the U.S. and Canada, and more than 200 distribution centres,” in an obvious manifestation of the corporation’s logistics doctrine to ensure availability & delivery of its product lines to anywhere in North America.
When we define a doctrine for our enterprise’s supply chain operations, we establish how we operate independently and together with our partner suppliers, service providers, & customers.
Doctrines are our beliefs translated to principles which guide us to our decisions and actions. They may sound like visions, missions, and strategies, but they are not.
We lead our enterprises via VMOS statements, which are our way of succinctly clarifying our dreams and goals. Doctrines represent principles, how we do things. They are the bases of our policies.
Do we mass produce items for stock, or do we tailor items for individual customers? Do we transport only when we have full truckloads, or do we ship immediately, even if it’s less-than-truckload (LTL)?
Do we buy from suppliers in bulk to take advantage of volume discounts or do we buy in small lot sizes to ensure completeness of materials in inventory?
Do we allow customers to order by the piece or do they must buy by the pallet? Do we allow for short-notice change-overs in our production lines, or do we limit changes in manufacturing schedules to not more than once a week?
Do we accept rush orders or is every order first-come first-serve? Do we prioritise customers who pay in cash or regularly buy more than the rest? Or do we treat every customer order the same, regardless of order quantity or value?
How much quality defect tolerance will we give suppliers? Do we insist on zero defects or will there be an acceptable quality level (AQL)?
Do we allow overbooking of passenger flights, or do we make sure we don’t?
Do we source the cheapest maintenance parts, or do we seek items which are built to last?
These are the kinds of questions supply chain doctrines address. Some may sound easy to answer but in reality, they may not be. Doctrines are the bases of how we decide given different scenarios.
Doctrines aren’t fixed from the start. We will eventually change them as situations change and they get tested with the realities that come with managing supply chains.
We just need to make sure we’re ready to know what principles in those doctrines we are willing to flex and those we will remain steadfast to.
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