SCM Is Like the Indy 500, But the Race Never Ends

Have you ever watched the Indianapolis 500?  Global supply chains are just like that.

Today’s global supply chains are incredibly complex, fast. and full of technology. Planning and execution systems are integrated across the enterprise and at different times, different functions overtake the lead in strategic importance and response.

Take the pandemic response, for example. At first, companies were scrambling for parts coming from Wuhan China, involving procurement and logistics. Then manufacturing and engineering took over the pole position trying to determine what parts could be re-engineered to reduce the critical parts coming from China.

What parts could be 3D printed or made differently? 

Then HR took the lead to race towards keeping the workplace safe, and developing work-from-home policies. Then slow-downs, pit-stops and crashes occurred. Winning strategies were deployed to try to win the race, and inevitably, there were winners and losers.

And when the race is finally over, the planning and strategy development start all over again with new perspectives to mitigate risk in the future.

But it was not always this way.

Fifty years ago there was no such term as supply chain management. The Purchasing Department was mostly administrative and handed their hand-written purchase orders to the typing pool ton type and mail. Logistics was the Shipping/Receiving dock supervisor, responsible for shipping products on whatever trucking company he deemed was best. Manufacturing managers were relatively obscure in most organizations, acting on their own. Forecasting and planning responded to sales, but not very well due to the lack of software tools, and planning was based on orders that were taken over the phone or hand-written in the field. There was no email!

We’ve come a long way, baby!  Zoom, Zoom.

Today’s successful supply chains are integrated processes, relying on the integration and cause-and-effect functions of software. Supply Chain functions now have a place on the Executive team. Women have risen to executive levels. Manufacturing is likely to be global, or at least dependent on globally-sourced parts. Sales and Operations Planning is a standard process. Forecasting is sophisticated enough to plan and then rapidly replan for natural disasters, weather events, market changes, and any other surprise disaster with supporting software. Procurement can respond nimbly via email and systems communication with suppliers. Logistics can respond to support new schedules and priorities. The whole system is sensitive to political policy and leadership changes. Artificial intelligence can predict and warn of pending events, digital twins can simulate and rapidly improve manufacturing.

The Race Never Finishes

Different business functions can take the lead in the race to the finish, but the race never finishes. Supply Chain professionals are now better educated, sophisticated, and approach the work as an integration of functions and technology. The race is accelerating: all parts are integrated and ready with lightning-fast pit stops and changes in strategies depending on what the race requires.

Try to keep up.

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