Daily Archives: May 27, 2007

Critical Supply Strategies for Succeeding in a Dynamic World

As close followers of SpendMatters, where I tend to comment regularly (after all, it is the only other Spend/Supply Management blog that you have to read daily), will have observed, on average, I’m not overly impressed with what comes out of ISM more often than not. However, the recent article Succeeding in a Dynamic World, which was jointly compiled by the ISM, CAPS Research, and A.T. Kearney, was quite good. (After all, both A.T. Kearney and CAPS in particular are known for putting out great work.)

One of the most interesting sections of the 10-page report (which is worth reading) was section three on critical supply strategies. In a world where it seems that risk and cost is increasing daily, good supply chain strategies are more important than ever. Even though none of these strategies are new, which should be obvious as they have been discussed on the blogs, including this one, countless times, it is nice to see them collected all in one place AND endorsed by the ISM which, whether or not it deserves to be, is the largest and most influential supply and spend management association in the United States.

The seven critical supply strategies presented in the article were:

  • Category Strategy Development

    Consolidate your supply base for each category into a small number of preferred suppliers that can be efficiently managed while mitigating risk. The strategy for each category should focus on the overall value chain over a three-to-five year time frame.

  • Supplier Development and Management

    Effective supplier development and management should deliver a competitive advantage in cost, quality, delivery/responsiveness, technology, and innovation achieved.

  • Multiple Supply Networks

    The tail of the supply chain needs to be tailored to each developing market and this will require domestic partners to help execute fulfillment and delivery. In addition, good risk mitigation requires flexibility and diversity in your supply chain and supporting networks.

  • Internal & External Collaboration

    In order to extract the significant gains that collaboration can bring, companies will need to enable best-practice multi-lateral collaboration between supply partners, achieve integrated product development, and employ “customer of choice” positioning.

  • Talent Attraction & Retention

    A supply chain is not an abstract network driven by processes and machines, but a real network driven by people. Good supply chains run on good people. Supply Chain Success will be impossible without the right talent, which is becoming rarer every day thanks to the global talent war. Any organization that does not have a good process in place to identify necessary skills, evaluate organizational gaps, and identify, recruit, develop, and maintain talent is doomed to become a second class citizen in the emerging international marketplace.

  • Enablement of the Supply Management Organization

    Although center-led organizations will continue to dominate for the next decade, as global operations become more complex, hybrid center-led models will begin to emerge to maximize value based upon the right mix of responsiveness and centralized control. Successful organizations will need to adopt and utilize appropriate supply chain technologies that integrate functional management and track appropriate metrics.

  • Enabling Technology

    Technology is key in the supply chain organization of the future. The right technology will enable enterprise-wide supply management, external supply chain visibility, and internal and external collaboration.

Although this obviously is not a complete list, as it makes no mention of the emerging importance of Global Trade Management, Supply Chain Finance, or Right-Cost Country Sourcing, just to name a few disciplines, it is still a great starting point and areas that any successful supply chain operation will need to have fully figured out to succeed.