Ellery's Essays

Understanding the Supply Chain Engineering Roadmap

We know what we want, i.e., we have a vision.

We know where we’re at versus what we want, i.e., we did our reality check.

We see the disparities between our present-state & future-state performances, i.e., we mind the gaps in our supply chain operations.

The next step in building our supply chains is to make a roadmap, a series of steps which taken together would lead us to a desired future state of supply chain performance. These steps would bridge or bypass the gaps we identified by comparing our present operations to what we envisioned.

It sounds like Project management methodology, in which we define and plan tasks, resources, accountabilities, and schedules for a complex undertaking. Typically, in project management, we identify which tasks goes first and determine milestones, the points on a project’s path in which we meet the criteria for a task’s achievements. We also determine whether our accomplishments are aligned with our objectives.

But the roadmap of building supply chains is not composed of tasks, but solutions, in which we address problems the gaps we had identified represent. Project management is more about making a solution into reality, as the project which we are undertaking is by itself the solution (or set of solutions) to a problem. In managing a project, we know what we need to do; we clarify the tasks, plan the support, assign the people who’d be responsible, and determine the schedule and costs. In the building of supply chains, however, we define and solve problems from the gaps we observed in our operations. We make visible the challenges from the realities of individual operations, we look for the root-causes, and we clarify the problems of each; we then set out to solve them.

Managing a project is like planning a road trip through known territory. We are familiar with the terrain and the traffic. We make out a route via streets & highways to reach our destination. And we estimate how long and how much it will cost it will take to get there. Our roadmap is a route passing through existing territories and networks.

Drawing a supply-chain-building roadmap, however, is not only like planning a road trip but also constructing the road itself. The territory between the starting point and destination requires development. It’s like building a highway through a jungle. We would need to survey the terrain, obtain resources, determine the best pathways, and invest in the infrastructure. We would need to build the road for the roadmap.

Unlike project management, drawing the supply chain roadmap identifies problems from performance gaps in supply chain operations. The problems and their respective solutions are what would be the components of the roadmap from the present state to the envisioned future state. We just need to plan which ones we solve first.

Given that the supply-chain-building roadmap is focused toward solving problems, we’d not precisely know how long and how much we would need to complete it. The purpose of the roadmap would be to lay out the problems we can expect to encounter and must solve,

It may be argued that there are already structures & systems in place. There are already established manufacturing & logistics networks and multitudes of vendor with long track records. There are functioning global supply chains in place. Why would we need to build new systems & structures?

Despite the existence & growth of local & global infrastructure (e.g. ports, ships, trade routes, manufacturing & logistics facilities) many supply chains have stagnated performance-wise. An extreme observation would be that supply chains have become trapped in their own infrastructure.

Supply chain management has generally been about working with available resources, systems, & structures. Managers improve operations based on what exists, such as ports, trade routes, facilities. Enterprises have put a lot of focus, for example, on transportation turn-around times, outright inventory reductions, and head count cutbacks to uplift their operations’ productivities.

But working with what we have can go only so far in improving our supply chains. Many supply chains have plateaued in performance such as inventory turnovers and delivery performances staying flat over time. It doesn’t help that disruptions such as weather & climate disturbances (e.g. drought limiting port traffic at the Panama Canal), security diversions (e.g., ships avoiding Red Sea missile attacks), and more complicated regulations (e.g., requirements to disclose supply chain sources) have made it more difficult to optimise supply chains.

Managing supply chains per se is therefore not enough. We need to build better structures & systems from the ones we have at present. The supply-chain-building roadmap we would draw would be about solving the problems in setting up new structures & system based on the gaps we had observed between our present-state operational performances and desired future-state results.

We know our vision, we accept our reality, and we see the gaps that we need to close. We identify problems in building our supply chains, and plan which ones we will solve in sequence or simultaneously, bearing in mind that the problem-solving path we choose to take would be consistent with our vision.

About Ellery’s Essays

Mind the Gap

We see the sign in many railway stations around the world: mind the gap. It’s a reminder, if not a warning, for us to watch our step as we cross the space between the train from the platform. As much as we may take it for granted, if we don’t watch our step, we can fall into the gap and risk injury.

Gaps are the spaces that separate us from where we are and where we want to go. They can be small and easy to cross just like those between trains & platforms. But they can be large like rivers or oceans in which we would need to ride on ships or plans to pass over them.

Gaps, in the supply chain engineering context, are the disparities between the ideal and the present states of the structures & systems of our operations. Gaps represent the differences between the performances we want to achieve versus how we are currently doing. Gaps are the obstructions, divides, barriers, and adversities that stand in our way toward our ultimate objectives.

Gap analysis is the third (3^rd) step in building supply chains. It follows the first step of envisioning, in which we define the future state, what we want our operations to be like. And it comes right after the reality check, in which we diagnose the present state of our supply chain operations.

In both the envisioning and the reality check, we actively collaborate with partners as much as we coordinate with our colleagues. In both steps, we seek consensus on the aspired future state as we acknowledge our present state.

In gap analysis, we compare both the future state and the present state. Even if it may seem obvious, the purpose of this step is to measure and appreciate the gaps between the present state of operations versus the activities we aspire for the future state.

We know what we want our supply chains to be. We envisioned it.

We know where we are currently, what is our present state, because we did a reality check.

We then identify and assess the gaps between the present state and the future state, we look at and figure out how to bridge the divides between both states.

Gaps could be small, or they could be large. Some may seem simple to resolve; some may seem overwhelming. Some may not be very clear, if not invisible, to observe.

To gauge the gaps between the present state and the future state, we first confirm what our goals are vis-à-vis our envisioning. We then assess our present state via our performances versus these goals.

The general manager of a high-end (i.e., luxury) furniture exporter firm is dissatisfied with the long order-to-delivery lead time to customers. The exporter sources raw materials & manufactures in Southeast Asia, and transports finished items to waiting clients in North America and Europe.

It can take up to three (3) months from the time customers place their orders to when they receive the products. Customers have complained that is too long and the general manager agreed.

The general manager observed that it takes up to one (1) month to manufacture an item at the firm’s factory in Southeast Asia. The GM, with the help of consultants, therefore, did a gap analysis.

It takes up to twenty-nine (29) calendar days from the time the factory receives a job order (document requesting & authorising manufacture of a furniture item) to the time items are shipped (as in loaded on a container van & dispatched from the factory).

The general manager noted there was a lot of waiting time between production steps and saw that he could narrow down the factory job-order-to-shipment lead time to four (4) days.

He broke down the manufacturing process to three (3) major operations: fabrication, assembly, & finishing, and found that he could pinpoint gaps in each.

It then became a matter of identifying specific areas of improvement in each operation to shorten the lead manufacturing time. These identified areas of improvement would be up for problem-solving by supply chain engineers. We just have to figure out which ones we prioritise.

We face gaps wherever we go and in whatever we do. Many are small and easy to cross; some require intervention such as building bridges or booking transportation to cross large bodies of water.

Whether they be small or big, we mind the gaps we meet, otherwise, if we are careless, we risk falling into them and incurring injury or expense.

We analyse gaps as the third step in building our supply chains. We try to consider all of them in identifying where best to transform our operations for the better. The cumulative effect of closing the gaps in our supply chains do lead to better business results.

Once we know the gaps in our supply chains, we then figure out which ones we want to close or address from first to last. This sequence, if we would call it that, would be the basis for the fourth (4^th)) step in building our supply chains: drawing the roadmap.

Meanwhile, let’s make sure we mind the gaps we run into.

About Ellery’s Essays

Transitioning from Yesterday’s Trade Routes to Tomorrow’s Supply Chains

We use maps to guide us to a new destination. If we don’t have one, we’ll end up lost and asking people on the way for directions. We then would remember the route we took in case we’d return to where we went.

Thanks to apps like Waze, Google Maps, and Apple Maps, it’s easy to figure out the shortest & fastest routes to just about anywhere, whether we drive a car, bicycle, or scooter, or walk. Getting lost in the woods (or even lost at sea) is unlikely as long as we have a smartphone handset and mobile Wi-Fi connection.

We didn’t have these conveniences not so long ago (as in up to the turn of the 20^th century) and our forefathers had it much rougher before then.

But we still follow most of the same routes our ancestors travelled many years ago.

We as people have been doing business with each other since the dawn of civilisation. Farmers & fisherfolk would sell their harvests & seafood to bakers, butchers, & artisans. The trading led to marketplaces and then to villages as populations grew. Villages would trade goods with others nearby, who would then trade with others further away. Before long, merchants would be shipping goods across seas and mountains.

Merchandise trading has been a business endeavour for generations. We sell minerals, livestock, & crops in exchange for items we hope would be of higher value, such as gold & garments (and weapons & human slaves, which in the past was not yet frowned upon socially, morally, or legally).

As the trading became more lucrative, merchants sought more stuff to buy & sell. The competition (which also in the past meant wars & conquests) got fiercer such that kingdoms & merchants encouraged explorers to go further out.

Explorers didn’t know where to go and had no idea who’d they meet. Their purpose was to discover and negotiate with any community they’d run into and obtain both supplies (i.e., food, water) and acquire items which may be of value to return home with.

It wasn’t easy. Some explorers died of disease on the way. Some were robbed, killed, or taken prisoner. Some got lost and never returned. Some fought among themselves and ended up stranded or missing.

For those explorers who did succeed, that is, met & established rapport with tribal chiefs and overlords of empires, trade agreements were established. Explorers returned with hefty cargoes of valuable merchandise. Merchants and kings, impressed with the new items and wanting for more, invested more ships & caravans to ply the new trade routes.

These trade routes became the springboards for the awesome global supply chains of our modern day & age. From caravans of camels & mules, we today have kilometre-long freight trains crisscrossing vast territories via elaborate railway networks. From galleons sailing for months across oceans, we have super-size ships laden with hundreds of steel container vans moving to & from continents in a matter of days. From the guilds & merchants who produced textiles & trinkets, we have sprawling factories churning electronics, appliances, automobiles, garments, petroleum, minerals, furniture, etc., by the millions. Jet-fuelled aeroplanes, large storage & handling facilities, computers, & apps, some unheard of as recent as the early years of the 21^st century, complement the volumes of trade transactions that take place every day around the world.

We have resorted to advanced technologies to make our supply chains more efficient. We have automated manufacturing & logistics operations, applied artificial intelligence to our purchasing & order-to-delivery transactions, invented apps to guide our transportation vehicles (and inevitably make them self-driven), and integrated our planning & order-to-delivery information systems.

We have also made our supply chains more sustainable and governable. We had made our organisations more ethnically and gender diverse, had tapped renewable energy sources, and had become more compliant to ethical & socially accepted norms & regulations.

We benefit from present-day supply chains in that we can avail of so many products & services from almost anywhere in the world at short notice. Modern supply chains are a far cry from the trade routes of the past.

But, despite the technological advances and the availabilities of products & services in quantities unprecedented in human history, have our supply chains become more productive than the trade routes of the past?

If we define productivity as fulfilling customer or market demand within stipulated schedules, at specified quantities & qualities, and at values desired by stakeholders, we still have plenty of room for improvement.

Demand has grown in leaps & bounds as trade routes transformed into the complex supply chains of the 21^st century. As we can get more, we want more. Our supply chains, therefore, are in a constant state of constraints in capacities & bottlenecks.

Relationships established via negotiations & agreements are the foundations of the trades that our supply chains operate from. It was like that in the past and it still is today. Despite how much of our trading has become complicated and big through time & globalisation, we continue to manage our supply chains based on terms & conditions of our contracts. How we run our operations depend a great deal on what we agreed with vendors, service providers, & customers.

Our contracts with our vendors and customers had largely focused on results. We settle & commit on prices, volumes, specifications, & schedules. How we will fulfil those contracts are entirely up to the individual enterprises; we don’t care how our vendors will supply us as long as they do.

It may be time that we confront this kind of thinking because it may be what has been impeding further improvement to supply chain productivity.

Despite the popularity of technologies, from automation, AI, to digital (whatever that means), supply chains have not gotten any better. On the other hand, supply chains in the 2020s have found themselves getting greater attention for shortages, delays, and higher costs. Our supply chains are stagnating. It’s no help that adversities (e.g. piracy, natural disasters, political wars) are dragging down our businesses as much as, if not worse, than they did in the past. Supply chain managers have been struggling to satisfy demand and at the same have been busy untangling messes caused by disruptions.

Collaboration with our partners (vendors, service providers, & customers) is key to unlocking more improvements in our supply chains. We need to tie in our enterprises’ operations with our partners as we establish common-ground targets in prices, volumes, specifications, & schedules.

How do we do that? It’s not that enterprises have tried to collaborate. As much as they have, it hadn’t seemed to work. It’s not only because partners hesitate to trust each other, but also because they have no idea how to interconnect their operations. We have become so accustomed to working within the boundaries of our businesses and leaving it up to others to source, serve, & deliver. We didn’t care and we saw no reason to, at least until our supply chains have plateaued in performance & growth.

We are realising collaboration does not just mean negotiating & fulfilling agreed contractual obligations on our own. It means actively cooperating in tying & optimising operations together to attain mutually beneficial results.

Optimising, however, is not included in the supply chain manager’s job description. Management is about planning, organising, directing, & controlling. Managers also improve systems & structures, but they don’t optimise them. This is because optimisation involves building systems & structures to attain loftier results.

Optimisation is the purview of engineers, not managers. Engineers build systems & structures to optimise facilities & operations to achieve the best possible results. We manage by working within systems & structures. We optimise by changing them.

To optimise our supply chains, we must, therefore, not rely on the management of supply chains but by building them.

Building our supply chains would be unprecedented for many of our enterprises. We never really did since the debut of the trade routes. It would be a break from the traditional negotiation-to-contract I-don’t-care-how-you-do-it process. We’d be working together with partners to create operating relationships that are mutually productive for every participant.

It’s not something we would expect many enterprise leaders to outright accept. As of the mid-2020s, executives, managers, and academics are stuck to the notions that management can optimise supply chains via advanced automation & digital technologies. Many stubbornly believe we can manage adversities, risks, & fickle external regulatory & economic environments.

We don’t just work with what we have when times change, we also undertake necessary changes to adapt to our evolving world. We also sometimes lead changes to our world when we proactively initiate changes.

We have many conveniences today that our ancestors (and we ourselves) didn’t have just not so long ago. Thanks to these conveniences, we can avail ourselves of items & services from just about anywhere in the world at almost a moment’s notice.

Greater convenience, however, has led to greater demand growth. And while we tackle adversities which have not really gone away since the early days of trading history, we find our supply chains stuck in a performance plateau.

Collaboration via contracts has not been satisfactory. We need to collaborate to tie interconnect and optimise operations. Optimisation means changing our existing systems & structures, not just working with what are already there. We would need engineering expertise to build our supply chains as management by itself wouldn’t be able to do it, as it was never part of its job in the first place.

It won’t be easy as many of us do not accept that the management of supply chains by itself won’t make them any better.

It wasn’t easy for explorers to discover the trade routes then. It won’t likewise be easy for today’s engineers to build the new supply chains of tomorrow.

About Ellery’s Essays

Lessons from an IT & Logistics Mess

A multinational consumer goods corporation initiated a comprehensive information system project for all its departments, manufacturing & logistics operations included. The lead person of the project was Dana, one of the corporation’s up-in-coming IT managers.

Dana convened a working group comprised of senior heads of respective departments of the multinational’s various departments, i.e., finance, sales, manufacturing, & logistics. For several months, Dana and the working group toiled over how to integrate the new IT system into the organisation’s operations. Different programs & user interfaces were presented, discussed, & debated.

Finally, Dana and the working group agreed to a final prototype & implementation schedule for the IT system.

The logistics senior manager, Otis, however, was often absent during the working group’s meetings. Whenever he did attend, he would just nod to whatever Dana proposed. Right after the members of the working group placed their signatures of acceptance of the new IT system prototype, the chief executive officer (CEO) asked Otis to resign, citing his chronic absenteeism and poor job performance.

As soon as the new logistics manager, Ben, attended the last working group meeting, Dana told him that the new IT system would be up and live within a week. Ben asked if he could look at the system. Dana said yes but Ben would just have to accept the system as is since the programmers were almost done preparing the system for implementation and the working group & the top management had already approved it.

Shipping operations on the first day the system went live was a disaster. There were no orders or items to allocate or plan deliveries. Staff couldn’t print invoices. Trucks waited for hours to be loaded & dispatched. Forklift operators likewise idly stood by as staff sweated waiting for the slow IT system to print pick lists.

Finally, Ben got fed up. He told staff to manually override the system to print invoices & dispatch shipments. Dana angrily disagreed. She reminded Ben that he was not doing what the system was designed for. Ben said he didn’t sign off on the system in the first place and he could have helped make it better if Dana gave him the chance. Dana, however, threatened Ben and both ended up quarrelling in public.

Ben continued to override the IT system much to the annoyance of Dana. Top executives, meanwhile, complained about slower than usual shipments and demanded Ben do better. Executives could only scratch their heads, however, when Ben & Dana tried to explain what happened. The executives themselves didn’t understand what the IT system they approved was designed to do.

The multinational corporation updated the IT system some months later. Operations stabilised as Ben & staff contributed their input. Dana eventually got promoted to a more senior position, but Ben resigned some months later.

Whether it’s implementing a new system or constructing a new facility, we who are project leaders make it a point to involve users & stakeholders to participate in the planning and to jointly approve the final design.

Dana’s mistake was she relied solely on senior heads to get their input and authorise the system she was introducing. She failed to ask the real users themselves such as the logistics staff who would be at the forefront in the execution of her system’s order-to-shipping module of the IT system. She thought the former logistics manager’s, Otis’, signature was enough, and she didn’t give weight to any of Ben’s or the logistics staff’s inputs.

Ben’s mistake was he didn’t apprise his superiors to the potential problems of the system. He paid for that mistake with the ensuing mess his shipping department went through starting the first day of the system’s implementation and with a tarnished record for his bucking the system and quarrelling with Dana.

But the biggest mistake was the executive leadership’s passive oversight of the new IT system’s implementation. The executive leadership’s ignorance could not be excused given that the corporation invested a lot of money into the new system. Not only the chief information officer (CIO), chief supply chain officer (CSCO), chief financial officer (CFO), and the sales director but also the CEO himself were just as (if not more) accountable as Dana & Ben in the system’s implementation.

The leadership had no one to blame but themselves for the mess.

But at least somehow, they learned as the corporation in later years did well.

This was based on a true story in which we hopefully won’t have to similarly experience.

About Ellery’s Essays

Industrial Engineers Don’t Need to be Certified

Many nations require engineers to be certified & registered before they can practice, or at least be recognised as authorities in their fields. Given that engineers, such as civil, mechanical, & electrical engineers, design & construct equipment & facilities which the ordinary public uses, it makes sense that governments insist engineers undergo extensive education & licensing.

Many of these same nations, however, don’t require industrial engineers to register or be licensed. Many people don’t recognise industrial engineers as true engineers. IEs are seen more as managers, hence, there’s no rationale to register IEs as engineers.

We, who are industrial engineers, have strived for legitimacy. We want to be recognised as engineers, not managers. We don’t really like the stereotype that IEs are nothing more than technical support for managers, that we are just timekeepers with stopwatches who simply measure how long workers finish their tasks.

Some of us turn to private professional organisations to attest to our industrial engineering expertise. We apply for memberships & certifications and boast these to prospective employers & clients. If we can’t get licenses from governments, we can at least get certifications from private groups to legitimise our IE backgrounds.

But what qualifies the private groups as the authority to legitimise IEs?

Universities hand out diplomas to graduating students after they had passed through curricula of classes taught by distinguished professors. We know the professors are qualified because they themselves were taught by previous academicians.

We recognise the authority of professors not only from their educational training, however, but also from their track records of research & insights. The best professors are ones who make discoveries, formulate daring theories, and eagerly educate us about them.

Many engineers have contributed their share of discoveries & insights. They introduced new ways to construct buildings, assemble machines, fabricate parts, invent new formulae, and find new sources of energy. We owe engineers a lot for the better standards of living they had brought to our societies.

We who are industrial engineers have also contributed our share of discoveries & insights. Somehow, for some reason, however, the same societies who appreciate engineers for their innovations, don’t seem to recognise our IE insights to the same degree.

Perhaps it’s because our IE discoveries seem more mundane, or unlike other engineering fields, invite controversies. IEs, unlike other engineers, put focus on the performance of workers in their workplaces; whatever ideas we bring forward, therefore, are subject to varying individual opinions. Some individuals, such as executives & labour union leaders, would bitterly disagree with IE findings about how well workers perform.

Many private groups don’t have peers who have sterling track records as those of university professors. Whether it’s because many IE experts aren’t equally recognised for their work or because there aren’t many IE professors is not the issue. Certifications from private groups with shallow credentials would not truly authenticate us as industrial engineers.

We IEs should do what the engineers did when they were also starting out more than a hundred years ago. We should be doing our own research and discovering new ideas. We should be hunkering down into our operations and relentlessly pursue solutions to problems. And when we do find those innovative solutions, we should be then strongly proposing & justifying for their design & implementation.

If we seek an ideal platform for where we as IEs can innovate, it would be supply chains. There has never been so much opportunity to improve the supply chains as in this period more than twenty (20) years into the 21^st century.

We have faced many challenges with supply chains since their inception in the 1990s. Costs continue to rise. Items, including critical ones such commodities, medicines, & spare parts, are chronically out of stock. If items are not out of stock, their deliveries are frequently delayed or incomplete. And if it’s not delays or outs-of-stock, we would have too much inventories of the items, in which we incur unwanted storage & logistics expenses. Items also go obsolete due to expiry and changes in customer preferences, which lead to waste & expensive disposals.

Supply chains also have faced increasing risk and frequent disruptions. Supply chain managers (SCMs) have been unable to tackle adversities with the existing infrastructure and resources they are limited to.

Supply chains, thus, need to change. Business leaders, however, have been slow to realise that. Supply chain management by itself is becoming a futile option to sustaining the viabilities of supply chains.

A supply chain is a conglomeration of relationships within & between enterprises which transact, convert, & move merchandise from one operation to the next, starting from the sources (e.g. raw materials) to their ends (i.e., the final end-users). They’re not really chains that are linearly connected by ‘links;’ they branch out like trees. They’re not eco-systems as glorified by some so-called experts; supply chains aren’t jungles. Contracts between individuals & enterprises doing business with each other determine how supply chains operate.

Industrial engineers are most qualified to improve supply chains. IEs would have the competent abilities to tackle the complex systems & structures underlying supply chains, given that they are based on relationships. IEs would have the experience in optimising the methods & frameworks used in supply chain operations. IEs also have the talents to focus on the holistic designs of systems as much as on the processes of specific activities.

IEs would engineer our supply chains, not manage them. Supply chains present a splendid opportunity for IEs to show off their prowess in problem solving and productivity improvements.

We don’t need to be endorsed by professional associations or private groups to be recognised as IEs. We just need to do what the early engineers did more than a century ago, i.e., we should solve problems and build systems via our own initiatives. We should proactively innovate, invent, & implement solutions.

Nowhere is it more promising to present our IE capabilities than in existing supply chains. There is much potential, if not so many problems, waiting to be worked on in supply chains.

We don’t need to join a club to justify ourselves. We just need to show what we can do.

About Ellery’s Essays

The Reality Check

It happens all the time.

We go to an off-site strategic planning session (or a seminar or workshop), bond with colleagues in teambuilding exercises, creatively come up with new ideas, and commit to action plans to implement them.

As soon as we return to our workplaces, we go back to doing what we have always been doing. We respond to requests that have piled up on our inboxes and we catch up on tasks because we have deadlines to meet. Some of us may try to implement some of those action plans we committed to, but sooner or later, they fall by the wayside because we have other more important things our bosses tell us to do. It’s as if we never left; that off-site experience seemed just a dream.

The first step to building supply chains is envisioning. We, who are enterprise professionals, stakeholders, and our partners formulate a future supply chain state we all agree we want to attain.

Envisioning requires collaboration which involves both the sharing of information & ideas, and negotiation. We put forth varying positions on what each of us believes what our supply chains should be like and what they should deliver. The hard part would be marrying our and their positions into one agreed vision for a future supply chain state. We spend time & energy listening, conversing, & convincing as we iron out differences and understand each other’s opinions. We give and take until we arrive to a consensus.

When we and our partners finally settle on a common vision for our supply chains, we celebrate. A common vision among supply chain partners would be a significant achievement, a feat which many enterprises have not pulled off. It may even be a first time for whatever industry we are in, thereby a triumph which could lead to breakthrough results.

Excited as we may be about what we envisioned, we wonder if we could really achieve that vision we and our partners just hammered out. Is our vision going to be just like those ideas we committed to in the last off-site strategic planning session we went to? Is it just another dream that disintegrates as soon as we wake up to our supply chain realities?

We can all be fired up to implement new concepts in our operations only to see them immediately fail as soon as we run into adversities. For example, we may want to start using statistical control charts to monitor materials as they transform to finished goods. We assign & orient operators to update the charts at their respective workplaces. After a few days, the charts are no more. The operators didn’t appreciate the value of the control charts as they complained they had no time to measure samples and graph them. Vendors and customers didn’t see the relevance of the control charts to their own quality parameters. And finally, our bosses didn’t care for them even though they signed off on using the charts in that last off-site strategic planning session.

Envisioning a future state can be exciting. But the excitement easily extinguishes as soon as we come back to reality. Hence, to proceed with the building of our supply chains, we need to undertake the next step after envisioning: the reality check.

To build a supply chain, we must not only have a clear vision of the future systems & structures we are aiming for, we also must see visibly what we currently have and are doing. We can’t proceed to our destination without knowing where we’re starting from.

In the reality check, or what some of us may formally call the diagnostic assessment, we lay out and examine the details of our present-day operations. We map activities, draw the structures of our organisations & relationships, tabulate operating prerequisites, gather & graph performance information, and lay out facility & flow diagrams.

The purpose of the reality check is twofold:

It’s to understand what we’re doing and find out where we are today.
It’s to identify the gaps between our present state and future state.

A reality check is an exercise in evaluation. We make visible the systems & structures and gauge the performance of our supply chain operations. It’s essentially showing a mirror of one’s operations to stakeholders.

Reality checks are not meant to be springboards to quick-fix solutions, even though we may immediately find offhand obvious ones as we examine our supply chains.

We use reality checks to compare our present supply chain states to the future state vision we and our partners formulated. We not only gain insight about what and how our supply chains are doing but also explore how far we need to go & how much we need to do. In short, we identify the gaps.

It’s nice to dream, to conjure a future state which would be better than what we presently are in.

But our dream clouds go “poof!” as soon as they collide with realities.

Supply chain realities give us no respite. As soon as we form a collaborated vision with our colleagues & partners, we should do a reality check or formally, a diagnosis of our present-day supply chain operations.

When we make visible our supply chains operations and their performances, we can assess where we are today and comprehend the gaps between our supply chains today and our visions for them.

About Ellery’s Essays

A Supply Chain Vision with Specifics Would be a Remarkable Feat

Building the supply chain which we & our partners want begins with envisioning. We define a future state for the operational links between our enterprises and our suppliers, service providers, & customers in which we aim to achieve mutually beneficial strategic goals.

A vision for our supply chains is not only a narrative about what we want to become but also an outline of objectives. Envisioning is not like looking through a telescope at a far-off place, and then telling ourselves, “this is where we want to go.” It’s not just about what we want our operations to look like but also about how we want our supply chains to perform.

The following is an example of a five (5) year vision for a supply chain for steel products (e.g., I-beams ):

Note that the above vision describes a “mass-customisation value-oriented supply chain.” A supply chain vision communicates the doctrine we aim for our operations. It also expresses support for our enterprises’ overall missions, in which in this case is “to be the preferred suppliers of metal products in the construction industry.”

The vision statement narrates how we want our supply chain to operate. At the same time, via the vision’s objectives, it elaborates the results we want to expect. In the above example, this includes “20% growth in shipments, 100% item availability, perfect order deliveries, lowest cost versus rivals, zero scrapping, and zero defects quality.”

The purpose of envisioning is to imagine what we want our supply chains to become. Just like when we construct houses or facilities, a vision of our supply chain serves as a blueprint for how we & our partners will build our operations.

But again, just as in building houses or facilities, a supply chain vision is like an architectural plan, in which it is a broad picture of the future state of operations. We typically seek assistance from engineers to help us develop specific plans based on our visionary blueprint.

When we build houses or facilities, specific plans include electrical schematics, structural diagrams, and plumbing layouts. In supply chains, these would consist of detailed maps of operations.

We usually underestimate the time & effort we need to envision & plan the building of our supply chains. It’s a given in construction projects that we sometimes change our plans even when the facility is already halfway finished. We change plans not only because we noticed something we didn’t foresee but also because we were not thorough enough in finalising what we wanted in the first place.

We are only human therefore changes are often forthcoming. But it pays to keep changes to a minimum; changes are after all expensive and causes delays. We tend to rush sometimes through the envisioning and planning stage and thus, it becomes more likely we will make last-minute changes.

In envisioning supply chains, we require consensus among partners, which would be very challenging. The devil is in the details as we would likely need to spend much time & effort debating with our partners especially on the specifics of our supply chain vision.

But imagine the sense of accomplishment if we do finally agree to a shared supply chain vision which includes not only a broad plan but specifics as well. It would be a remarkable achievement, a manifestation of collaboration of stakeholders with different points of view to start with. Having a plan where everyone dedicates to would be a historic feat.

Envisioning, however, is only the first step in building the supply chain. We still would need to figure out how to get from where we are (the present state) to our vision (the future state).

We would need to develop a roadmap.

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Thirteen (13) Do’s & Don’ts in Supply Chain Envisioning

Before we change, improve, or build our supply chains, we must first have a vision. We must first agree with our partners what we want our supply chains to become.

Envisioning is not an activity of a single individual or enterprise when it comes to transforming our supply chains. It requires consensus between stakeholders of our organisations and our partners, who include our suppliers, service providers, and customers.

We as human individuals have different personalities. Some of us are extroverts and some of us are introverts. Some of us are assertive and some of us are shy. When it comes to social interactions, some of us dominate the discussion while others remain silent. Hence, it is always a challenge to collaborate to envision, especially for our large, complicated supply chains.

Nevertheless, for envisioning to succeed, we all must participate. We each must have our say and contribute. If any one of us and our partners don’t agree with the majority on a common vision, we won’t fully realise our desired future state.

A large aviation company decided to streamline its supply chain. Top management decided to outsource a large part of its in-house production operations. The aviation company contracted vendors to fabricate thousands of aircraft parts and arranged with 3^rd party service contractors to put the parts together into modules such as fuselages, cockpits, wings, and passenger seating areas. The aviation company would then join the modules into completely assembled aircrafts at their main facility. The aviation company would benefit from shorter production lead times as vendors & 3^rd party contractors would be given deadlines and quotas to deliver parts & modules.

Things did not go as the aviation company envisioned. Vendors could not meet deadlines & quotas. Contractors were not delivering modules within the aviation company’s time frame. When modules did arrive at the aviation company’s assembly site, inspectors found that some did not meet specifications. Contractors had to rework modules. The aviation company mandated more frequent inspections of parts & components which in turn caused more delays.

The aviation company did not consult its partners about its vision. It simply told vendors and service providers what they wanted from them. Partners (which in this case were treated more as subordinates) were just told to comply otherwise the aviation company will find someone else to do the job. As much as partners tried, they could not immediately comply with the aviation company’s standards and the aviation company could not find better suppliers than the ones they already had.

Over a period of months, the aviation company worked with its suppliers and contractors to communicate concerns and fix the problems. Finally, suppliers and the aviation company would share common goals. The company was able to shorten lead times and deliver to customers. Both the aviation company and its suppliers still had many challenges to hurdle, but at last, they promised to work together.

Envisioning is a group effort, not in which an enterprise does and dictates to others. No matter how large or reputable our enterprise may be, it is always best to work with suppliers and customers, rather than tell them what to do.

True, it can be and is difficult to work with partners. They are after all differently managed and have agenda of their own. We may even unfairly prejudge them as inferior in how they manage their organisations. But our partners are there because they are our key connections in the supply chains which we are part and parcel of. As much as they may be willing to kowtow to our standards, they don’t answer to us. We must not subjugate them but instead, we should treat them as associates which we could cultivate mutually beneficial relationships.

Envisioning is a collaborative process. And because there will be much communication and negotiation as we hammer out accords for a shared vision, we should take care with some do’s and don’ts in how we interact with our supply chain partners:

Do Our Homework

Before we negotiate with partners, we must understand the supply chains we are a part of. We should be familiar not only with the operations of our enterprises but also with the activities that precede and come after ours. It saves time when we invest in understanding what is happening in our supply chains, both inside and outside the walls of our businesses.

2. Do Get Our Acts Together

We should know what we want before we communicate our interests to partners. We also should ensure that we and our in-house colleagues are aligned to our enterprises’ objectives. In short, we and the people of our organisations should be united, if not at least aligned, to our enterprise’s standards and goals.

3. Do Take a Stand

We know what we want in our enterprises, and this should be basis for the positions we present to our partners. Having a stand becomes a springboard for discussion and negotiation.

4. …But Do Be Prepared to Bend

As much as we have standards which are non-negotiable, we, at the same time, should be willing to bend some for the sake of give-and-take negotiating especially if it would lead to win-win agreements which would provide gains we won’t get on our own.

5. Don’t Hold Back But Do Be Polite

We should be blunt but respectful. There’s nothing to lose by being tactful and polite. It may be wise to be hesitant to present privileged data, but we should be prepared to voice our views with supporting information if it would help negotiations progress.

6. Do Give or Take

Negotiations is always about give-or-take. It’s about accepting to do our share of work and sharing information & resources. But it’s also a two-way street. Partners should also agree to do their share and we should insist what we believe we deserve to take from them.

7. Don’t Give Up

Stalemates are expected in any negotiation. We and who we talk to may come to disagreement in which we each would refuse to give what one asks. We, therefore, should give each other time and leeway to think things over. But we should not give up or quit. We should always seek some innovative alternative because our supply chains’ future depends on it.

8. Don’t Delegate

Do not ask someone else to do the negotiating especially if we’re the supply chain leader of an enterprise. Because when we do, it immediately sends a message we, who supposedly are in charge, are not serious in the first place.

9. Don’t Overly Assert

Don’t push partners too hard even if we perceive that they will easily cede to whatever we ask for. Partners, as mentioned earlier, are not like us. They may just say ‘yes’ to our every request to ensure they have our business but we both may not end up what we were aiming for. We are after benefits for them as well as for us and if we push without considering their interests, it would surely backfire.

10. Don’t Come with Closed Minds

Listening is essential in the joint activity of envisioning. It isn’t just about hearing or about empathic understanding; it’s also about having an open mind to ideas the other side may propose.

11. Don’t Pretend

We should come into any envisioning process with authenticity, that is, without masks which disguise our true selves. Honesty is the best policy.

12. Don’t Leave as if Nothing Happened

It’s not a good idea after meeting partners to go back to work as if nothing happened. Just like #8 above, it makes us look phony as much as we have wasted time and effort.

13. Don’t Rebel

The worst thing we can do is go back against what we promised to our partners. It’s one thing to work out an elegantly shared vision; it’s a way bad thing if we treat it nothing more than a scrap of paper & ink which we mean to not comply or oppose subsequently. That is one sure way of ending relationships and going backward in our supply chain efforts.

Envisioning is a collaborative process. But it’s not necessarily a smooth easy one. There will be disagreements as we hear views & see data we may not like. Our partners are unlike us as we each are individuals with our own agenda. But because we are connected via the supply chains we are embedded in, it’s at least worth the try to formulate a common future state for what we want our supply chains to become.

About Ellery’s Essays

Engaging Engineers in Supply Chain Envisioning

Engineers are accustomed to working with tangible things like machines, electrical circuits, infrastructure (e.g., roads, bridges), plumbing, and information & automated technologies. They don’t quite get involved with intangibles like supply chains. Nevertheless, there is a need for supply chain engineers.

Supply chain engineers (SCEs) study the input & output of activities occurring within and between links, not to mention they also examine the interactive relationships that make up these links.

Building supply chains has some similarities with building houses.

Before we build a house, we first not only envision what it would look like inside & outside, but we also imagine what it would be like living in it.

Do we foresee, for example, a multi-level residence including a basement and attic? Or do we favour a one-storey bungalow with a spacious backyard? The house we dream of would not just be a physical and aesthetic structure, but it would also be a place that would be in line with the routines we plan to do when we move in.

We typically consult architects about our visions for the houses we want to build. Architects are trained & experienced in designing buildings and bringing them to life in the form of drawings and models.

After we & the architects finalise what we want our house to look like, we then would seek contractors, typically engineers, to help us how we will build it. Engineers draft detailed blueprints, bills of materials, project schedules, & cost estimates based on the approved architectural plans. Construction follows when we sign off on the proposals and the contractors get to work.

We deal with multiple relationships when it comes to supply chains. It wouldn’t be logical to envision what we want our supply chains to be without discussing it with our partners, who not only are the neighbouring departments to our workplaces but who also are our suppliers, service providers, and customers. The purpose of communicating our ideas with our partners is to work together with them towards a common vision. It is not only us but also our partners who have stakes in the overall supply chain in which our enterprise is only a part of.

When we start exchanging ideas with our partners, I would advise that a supply chain engineer (SCE) already be in the loop of the conversation. Like our consulting an architect to designing a new home, SCEs should be present when we and our partners are envisioning the supply chain we want.

SCEs help us picture what and how our and our partners’ operating relationships would be like. SCEs visualise and assess operations via their expertise via tools such as value-stream mapping (VSM) and process flow diagrams. They help establish monitoring systems, and analyse performance from these systems to assess the health of supply chain relationships.

SCEs embed themselves in the relationships between supply chain partners. They strive to understand individual partners’ views of supply chain operations and find out the ideals they pursue. Unlike projects where engineers work with single clients, SCEs work with partners from one supply chain tier to the next, as they find the common ground which would become the foundation for a shared vision.

The supply chain engineers’ role is not to build teams but to build supply chains. SCEs don’t get involved in interpersonal issues. If there are partners who have personal conflicts with one another, it’s best they iron them out first with the help of their superiors or via consultation with organisational development professionals.

SCEs, however, can assist partners in addressing crises in their operations, especially if the crises are negatively affecting operations of other partners upstream or downstream the supply chain. SCEs solve problems as any other engineer does; they help partners fix supply chain crises and put out burning platforms.

The purpose of envisioning with supply chain partners is grounded on mutual benefit. It’s not charity, nor should there be hidden agenda for the self-centred aim to get something out for oneself. It is about individuals cooperating to achieve results in which everyone reaps positive gains.

Supply chains are comprehensive and complex. SCEs help partners make sense of the intricacies of individual operations and how they all tie in together. They can feedback insights to help supply chain partners cultivate ideas about what and how their supply chains should operate.

When we build our houses, we have a vision. The same holds true when we build supply chains, except the vision must be a shared one with partners. It’s not teambuilding, but collaboration towards mutually beneficial outcomes.

Envisioning via engagement with SCEs is a crucial first step in building the supply chains we want.

About Ellery’s Essays

Envisioning: The First Step to Building Supply Chains

Supply chains are big, long, comprehensive, and complicated. Managing them means dealing with multiple customers, vendors & service providers. We buy and deliver from and to distant places or just next-door. We sell many types of products and handle much more in raw & packaging materials and in-process inventories. We move merchandise via elaborate sea, land, and air transport networks.

We encounter so many problems with supply chains, which if we solve, lead to huge benefits, but if left unsolved, cause costly setbacks to our organisations.

We’re realising that supply chain management by itself is no longer sufficient in solving operational problems. As much as we have been lured by digital information technologies, cutting-edge automation, and buzzword concepts like Just-in-Time, Lean, & Six Sigma, we have not been made significant strides in improving the productivities of our supply chains. We have even forgotten about productivity itself as fickle domestic & international trade policies, increasing industrial labour strife, and divisive political & social activism distract us in our management of supply chains.

We maintain short-term relationships with partners (i.e., vendors, service providers, and customers), instead of working with them toward long-term ones. We rationalise that it’s hard to peg lasting relationships with partners because our enterprise strategies & portfolios are constantly evolving. Products change, our needs change, and our operations change, so how can we develop lasting relationships with our partners? We can’t figure out how our supply chains should be set up because we don’t know what the situation will be like tomorrow.

We’re not getting the results we want and many of us don’t have a clear idea of what we want in the first place. We’re more reactive than proactive when it comes to managing supply chains. There are too many day-to-day things to address or worse, there are burning platforms, that are overwhelming and keeping us from taking the initiative to improve our operations.

So, what should we do? How do we get the upper hand over our supply chains such that we can manage them to be better?

Answer: we rebuild them. We rebuild supply chains to what we want them to be. Better, more productive, and beneficial to all, that is, we and our partners.

Building better supply chains is not the same as constructing new facilities or inventing new machines. Supply chains are intangible. Even though they have tangible components like transportation vehicles, production lines, storage facilities, & material handling equipment, these components taken together, as in a series of connected operations, are not readily perceptible.

We as individuals view supply chains differently. What one enterprise executive sees would not be the same as what another perceives. It is a challenge therefore for stakeholders (i.e., enterprises, suppliers, customers) to have shared points of view of their supply chains.

Building supply chains, therefore, requires collaboration among partners. Collaboration begins with alignment towards a vision, in which we agree to a single set of supply chain objectives. The very first step to building supply chains is, therefore, envisioning.

Envisioning is not the same as the visioning activity many organisations do via their teambuilding sessions. Teambuilding sessions are often activities where organisations aim to foster employee camaraderie and morale. From experience, many so-called visions from these teambuilding sessions fall flat; they never make it as seriously pursued work goals that go beyond the fancy posters on bulletin boards. Employees in many firms go back to what they were doing as soon as they walk into their workplaces and face the hard realities of their jobs.

Envisioning would also not apply for entrepreneurs who are just starting up or who are struggling to survive. It doesn’t make sense to envision when survival is the immediate goal. Most successful entrepreneurs have clear & set dreams when they begin their businesses; envisioning just after we commence business wouldn’t therefore be logical.

Envisioning is an activity in which we and our supply chain partners work together to visualise a mutually beneficial future state. We and our partners develop and deliberate on what we imagine would be our ideal supply chains, ones in which everyone would stand to benefit from in productivity and in achievement of shared goals.

It is not about one (1) individual’s or enterprise’s vision but one that is shared among partners, in which we all are active stakeholders in the enterprises that make up our supply chains. Every partner should therefore contribute to the task of envisioning.

We face many challenges with our supply chains. So much so, that we should consider rebuilding them to be better. The first thing we need to do when building our supply chains is to work with our partners to envision a common future state for our supply chains.

If we can establish something in common to shoot for, it would be a big first step as we and our partners seize the initiative in rebuilding our supply chains.

About Ellery’s Essays