Supply chain strategy seems so complicated, in that it is a constant tension between customer service and price. Complexity and uncertainty seem to reduce clarity and visibility, requiring supply chain managers to make judgemental decisions. Differences in environment and culture of individuals and companies along the supply chain cause inconsistencies. These must be reduced through improved communication and planning. Lean and agile supply chains manage dynamic push and pull.
It seems to sum up my entire experience of supply chain management as a constant battle against the elements.
I quickly returned to the marketing mantra that there are only three sustainable customer strategies; operational excellence, customer intimacy, or product leadership. By comparison, the marketing paradigm seems so simple and stripped back and yet has stood the test of time. (It’s been over 20 years since I learned the basics of marketing strategy.)
As perceived wisdom is that supply chain management must be closely aligned to business strategy, then I would think so.
So, on closer analysis, operational excellence seemed to correlate with the drive for lean supply chains, focusing on removing waste and having simple efficient processes. This is an effective supply chain strategy but has recently become more challenging when trying to risk manage global uncertainty. Similarly, operational excellence is an increasingly challenging strategy. Consumers are becoming savvier, and the internet is allowing direct comparison of basic product offerings. Customer intimacy requires much greater flexibility driven by customer needs, thus suggesting an agile pull-driven supply chain strategy. Lastly, product leadership also requires flexibility to accommodate the changing demands of new products and services. It appears to correlate with an agile push supply chain strategy. Just as effective is modern customer marketing — a blend of customer intimacy and product leadership, so a balance of push and pull in an agile strategy appears to be the modern solution to most supply chains.
At first sight, there does seem to be some consistency between sustainable customer strategies and their supply chains. I certainly think it worth exploring further how the three marketing archetypes and their derived philosophies may lead to three matching supply chain strategies. And when one of these three supply chain strategies is applied consistently across all the companies and individuals in today’s global supply chains it may make it easier to ensure consistency of approach. This would certainly go some way to helping supply chain managers make more effective judgemental decisions when faced with complexity and uncertainty.
Since supply chain professionals spend their careers fighting against silo mentalities, had we better look at our own approach to strategy and realise that there may be a great deal to learn from others and apply in our environment?
Neil is experienced in helping businesses develop and grow global markets through strategy, outsourcing and international supply chain.