Our objectives stem from our business priorities, which usually consist of:
- Accumulation of Wealth
- Attaining Competitive Advantage
- Establishing Esteem or Reputation
- Growth in Influence
How managers perform against objectives relative to meeting their business organisations’ priorities define their productivity.
The mistake managers make is classifying productivity as a mere performance measure. As much as it does make visible how well the enterprise performs, productivity is more an attribute than a measure.
Some managers limit productivity to labour performance or to how many tasks teams finish in a fixed time. This is a misleading view of productivity. Productivity looks at how much value a supply chain generates for its stakeholders vis-à-vis their strategic goals.
It’s no secret that one very hard part in managing supply chains is getting stakeholders, not only between the ones within enterprises but also between partners, i.e., vendors, customers, & service providers, to agree on common objectives. No progress in productivity will happen until every enterprise on the supply chain can agree to an end in mind.
It may not be that tough, however, to lay down common objectives. As much as supply chain operations can be complex, many business owners have similar expectations about them:
- Supply chains must be reliable
- They must be efficient
- They must be versatile
I have surmised, therefore, that three elements* dictate supply chain productivity:
- Reliability
- Efficiency
- Versatility
Reliability is “the ability of an item to perform a required function under stated conditions for a specified period of time.”
Versatility denotes our supply chain’s readiness to transform itself as the need arises.
Efficiency measures how fast we produce [deliver] versus how much resources we use. (I see efficiency as one that addresses stakeholders’ clamour for cost control or reduction).
Common sense seems to say that productivity and its elements of reliability, versatility, & efficiency are what we look for in our supply chains and are the answers indeed to the challenges supply chain professionals & executives face.
So, why aren’t executives & stakeholders focusing on these?
Is it maybe because many owners simply don’t yet get it?
*I formerly identified five (5) traits supply chains must have. This essay reflects my updated thinking that productivity is the one ultimate attribute supply chains must pursue in which reliability, efficiency, & versatility are its elements.
Ellery's Essays 