Daily Archives: May 3, 2008

Supply Chain Shocks Get the Attention of Chief Executive

One of the publications I like to peruse regularly is Chief Executive, but more often than not, supply chain has been missing from their pages. However, it looks like that might be changing and it was nice to see the recent article on Shocks to the Supply Chain that noted the importance of the supply chain and the need for a company to look at its supply chain “holistically”.

With fuel costs approaching 120 a barrel as I write this, limited shipping capacities, skyrocketing raw material costs in certain categories, and supply chain risk increasing by the day, it’s nice to see supply chain getting more press in publications targeted at chief executives as it could be the only shot at profitability for many company’s in today’s economy which is currently undergoing a recession and stagflation.

It’s also nice to see that it noted that supply chain is taking on importance in companies of all shapes in sizes. For example, the article noted that Jamba Juice takes supply chain issues so seriously that last July it made the effort to lure the Vice president of Global Procurement at Wal-Mart to its operation. Furthermore, in an effort to control costs, they also use long-term forecasting models to minimize surprises and develop a holistic approach to mitigate future cost risk.

And although the article was pretty high-level, and not that useful to a supply chain pro, it also had some good advice at a level an executive not well versed in supply chain can understand. For example, the article notes that the supply chain should be flexible and allow for different modes of sourcing, manufacturing, and transport if breaks emerge or if costs increase. So, even though it won’t tell you anything you don’t already know, it would be worth your time to make sure your CEO’s copy of Chief Executive falls open on those pages. Because maybe, just maybe, they’ll get a little closer to understanding just how important you are.