Achieving supply chain success is essential for businesses to maintain financial viability and relevance in the modern global market. However, various critical variables often cause issues, such as poor toxic culture, flawed processes, and outdated technology. The inability to attract and retain top-tier talent and inefficient logistics and business metrics also contribute to the struggle.

Until you can leverage what it takes to succeed, most businesses today will struggle to maintain fiscal viability and relevance in the Modern Global Market.  The root causes of these issues often stem from a clash of the following critical Supply Chain Variables:

  1. Poor Toxic Culture
  2. Inability to execute good Business Strategies
  3. Flawed Processes
  4. Flawed or outdated Technology and Equipment that limits visibility
  5. Inability to attract and retain top tier Talent
  6. Inefficient Logistics and Business Metrics

Designed by practitioners for practitioners, the Next Level Purchasing Body of Knowledge provides simple how-to-do steps to underpin, integrate, and enhance the essential components of supply chain management, leading to supply chain success. However, chronic business issues, such as unnecessary complexity, poor strategy, lack of visibility, and outsourcing critical functions to the wrong partners, often stem from silo thinking and a lack of systems thinking acumen.

Despite these challenges, successful organizations can manage these issues and respond to political, sustainability, financial, demographic, ecological, and competitive trends affecting their industry and supply chain capacity.

Many top-class Supply Chain Operations have the following components:

Dynamic Culture: A culture that is open to innovation, candor, risk-taking, and carefully managed for diversity and change management. These characteristics make it agile and able to rapidly deploy thought leadership and other vital assets to shifts in market pressures. Employee traits such as collaboration, open-mindedness, and willingness to disrupt and challenge conventional thinking are highly praised and rewarded. Social Responsibility is a major dimension of their business strategy.

Execution of Good Business Strategies: A culture of openness to change, agility, risk-taking and innovation enables it to execute its strategic initiatives with lethal precision.

Three essential dimensions drive great strategies towards supply chain success:

  • Leveraging and enhancing its Core Competencies through Continuous Improvement. Making warehousing and logistics two critical disciplines, core competency. The dramatic reduction in reliance on 3PL companies such as FedEx and UPS have enabled it to reduce cost, reduce touch points, reduce complexity, and increase the speed of delivery
  • Leveraging the acquisition of other companies to neutralize critical deficiencies. A few years ago, Amazon purchased Kiva Robots and deployed several thousand robots to leverage speed and accuracy. This action has resulted in a dramatic cost reduction in its warehouse operations. The acquisition of Whole Foods has enabled Amazon to smash formidable barriers to a profitable entry into the grocery industry.
  • Including customer feedback via Voice of the Customer Data Collection in key strategic decisions and designing products and services to meet those requirements.

Simple Robust Process: Simple processes that are highly error proofed. Efficiency, speed, and flow are at the forefront of Process Design and Auditing Doctrine. LEAN Principles underpin all process mechanisms, mandating an unwavering fight against process waste, including excessive transportation, motion, inventories, waiting (for products and information), over-processing, over-production, and defects.

Easy to use Technology and Robust Equipment Maintenance: Technology and error-proofing mechanisms that are easy to learn and use. Special care is taken to guarantee near-zero equipment failure, high availability, and uptime. This is done by leveraging Total Productive Maintenance (TPM) and Overall Equipment Effectiveness (OEE) both principles from LEAN Methodology.

Top Tier Talent: HR Functions that are highly strategic and sophisticated. Robust retention, rewards and recognition programs are in place. High morale and exceptional human capital supported by robust processes and technology make the companies formidable competitors and conquerors of market share.

Logistics Excellence and Business Metrics: Mastering the science of creating logistics networks that are slim trim, and efficient. The company leverages a few key metrics and assures that data is available in many cases in real-time. Driving and measuring the success of its business strategy by utilizing the Balanced Score Card Methodology. The company selects its metrics from four key areas: Financial, Process/Quality, Employee, and Customer, with special attention given to selecting balancing metrics. For instance, the company measures Delivery Lead Time in conjunction with Picking Accuracy.

NLPA Library: Looking for authoritative procurement templates, tools, webinars, and more?  Take that step to supply chain success by taking advantage of having exactly what you need at your fingertips in the NLPA Library.        

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Published On: December 14th, 2022Comments Off on Leveraging Critical Factors for Supply Chain Success
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David Millington, M.Sc., QSM, NPDP, CL6σBB, SPP, SPSM3®, CM®
About the Author:

David Millington, M.Sc., QSM, NPDP, CL6σBB, SPP, SPSM3®, CM®

Director of Education, NLPA