From all that has been said and written about supply chains, perhaps a recap of insights is in order:
Every enterprise, every organisation, and every firm have some sort of supply chain within it and beyond it. Enterprises procure ‘input,’ convert them to ‘output,’ and deliver the latter to customers. Enterprises which trade with one another make up the ‘chain,’ which is manifest in the exchange of merchandise.
Supply chains are not only about the production of goods but also services. Hospitals admit patients and cure them. Trial courts resolve legal cases. Schools educate students.
There are processes within and between enterprises which when viewed altogether are the operating models of supply chains.
No two supply chains are alike. No matter how similar or identical the processes between two firms, there is no such thing as identical supply chain twins. There will always be a difference, which whether minute or significant will make one supply chain stand out from the other.
A supply chain is not one straight line of one link after another. It’s not a series but an intertwining network of relationships. An enterprise could be a vendor, customer, service provider, or all three at the same time.
The reach from input to output is vast for many supply chains. Many products are the results of many multiple operations, starting from primary beginnings such as the mining of ores and the harvest of crops, through the creation of parts, ingredients, components, & finished items, and finally to the delivery to or servicing of consumers. It’s true that not all supply chains are complicated, but most operations executives would likely say that any supply chain are already quite a lot as is to manage.
It can’t be stressed enough that supply chains aren’t limited to within organisations of enterprises. Still, many firms, especially those who see themselves as large companies, think they are the centres of their supply chains. They exert influence on vendors and customers as they try to subject them to their standards. It may seem to work for some organisations (e.g., Walmart) although it can end badly for others (e.g., Boeing). There will always be some point where enterprises would better off to negotiate and collaborate.
Relationships establish the existence of supply chains. The systems & structures which underlie supply chains are the results of those relationships. How we set up and perform our operations depend on the terms we set with our vendors, customers, and service providers.
- Collaboration is the Best Alternative
The ideal relationships are the ones where everyone wins, where everyone gets what they want. We, however, live in a world where we many of us would rather win by making others lose.
A win-lose approach seems easier to execute than a win-win one because we don’t have to share; we keep the spoils from the wars where we are the victors. We don’t realise that in supply chains, there is a likelihood of karma, where those who had lost due to our gains will get back at us in the future. We win some and lose some is not a constructive mantra in terms of our long-term interests.
Collaboration remains the best alternative, never mind how exceedingly painstaking and time-consuming it may look compared to an adversarial approach.
The aim of supply chains is productivity. We perform to be productive such that the overall objectives of enterprises are met. Pursuing how much we make per person or striving to be fast in our deliveries should be consistent with achieving what standards and goals we had set, not only from the perspectives of our employers but also with those we had collaborated with.
We can’t build a house without an image of what we want it to look like. Similarly, we can’t build our supply chains without an inkling of how we’d like it to operate and perform.
Planning and execution begin with a vision. But unlike a small group such as a family to draw the blueprints, our supply chains need to enrol a good number of individuals of different experiences and professions to conjure and make into reality our dream operations.
Envisioning our supply chains is a challenge as it requires a collaborative effort of stakeholders, i.e., participants in the supply chain. Our supply chains will only be as good as those who own and actively work together for them. Not only the executives & owners but also the front-line & support personnel should have a say.
And just like building a house, we need the expertise of engineers to help construct the envisioned systems or structures of our supply chains.
Supply chains are not the exclusive purviews of managers. Yet, in the modern age of the 2020s, after supply chains had been identified as key business models, we do not have engineers dedicated to design and build systems & structures for supply chain operations.
We’re still leaving supply chain improvements up to management, which is a big mistake.
Supply chains manifest the operating relationships enterprises have with each other. They apply to just about every merchandise & service and are found virtually in all industries. They are complicated, vast, and unique.
Managers cannot improve supply chains without collaboration of stakeholders of linked enterprises. Collaboration requires vision. Making visions into realities require not only consensus among stakeholders but also the expertise of engineering, which is badly lacking.
Ellery's Essays 