Is Your Top Team Undermining Your Supply Chain?

This is an excerpt of the original article. It was written for the November 2011 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2011

Innovation. It’s a hard competency to come by. Can schools teach you to be innovative? Is work experience really the only way to open your eyes to what’s possible? Or is the innovative spark something that lurks in an individual’s DNA—and you either have it or you don’t? Innovation. It’s a hard competency to come by. Can schools teach you to be innovative? Is work experience really the only way to open your eyes to what’s possible? Or is the innovative spark something that lurks in an individual’s DNA—and you either have it or you don’t? Innovation has worked in the Gambia situation and in supplier sourcing. Surely, there must be…

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Building a global supply chain to succeed—indeed, to thrive—in a world of rising complexity and uncertainty requires recognizing and tackling significant organizational
challenges. Specifically, the top management team needs to understand that the decisions and activities of their company’s supply chain group affect, and are affected by, the sales team, marketers and product developers, among others. The result is a host of thorny tradeoffs. Should a company, say, move a product to a low-cost manufacturing facility to save money if that means lengthening delivery times? What if trimming the company’s product portfolio to reduce manufacturing complexity and costs could stifle marketing efforts to reach new customers? When do the benefits of improved customer service warrant the additional operating expenses required to deliver it?

Supply chain, sales and marketing managers invariably view such tradeoffs through the lenses of their own responsibilities—and those perspectives often lead to disagreements or misunderstandings. Indeed, a McKinsey survey of global executives cited the inability of functional groups to understand their impact on one another as the most common barrier to collaboration for resolving the major supply chain trade-offs.

Ineffective collaboration has long been a supply chain sore spot, but its costs are set to rise drastically. If it’s hard today to agree on the right response to a disruption in a supply chain, it will be more difficult still when companies deal with multiple interconnected supply chains, each possibly requiring a different solution.

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