Supply & Demand Chain Executive recently ran a short piece on the six keys to the sustainable supply chain advantage by Dr. Lowell Yarusso and Ronald J. Sanderson (of The MPower Group) which was quite good. In brief, these six principles were:
- Collaborate, Don’t Compete
because a true value-oriented supply chain consists of an extensive network of integrated suppliers, suppliers’ suppliers, internal supply chain participants and customers, all working together to maximize the value of the supply chain. This can’t be achieved without extensive collaboration.
- Remember the Goal
as many strategic sourcing/supply chain organizations tend to get overwhelmed by the task at hand and lose sight of the bigger picture. After all, cost reductions aren’t about objectives but improving competitiveness and functionality.
- Recognize the Complex, Manage the Simple
The supply chain is complex. That’s not going to change. The key to success is to simplify as many processes as possible so they can be easily managed and the risk of failure, due to unmanageable complexity, minimized.
- Treat the Issue, Not the Symptom
If you track the right metrics, you’ll be able to identify the cause of poor performance and focus on correcting it. This is important because if you don’t correct the issue, the symptom will just keep reappearing.
- Focus on Cost Drivers and Business Impacts
Remember, costs are symptoms; cost drivers are the cause. Cost drivers can be labor, demand, shortage of raw material supply, etc. Left unchecked, they can continue to rise. Tackled head-on, they can be contained.
- Don’t Waste an At-bat
If an idea is worth pursuing, it is worth pursuing to its full and natural conclusion. To make a significant impact on the business, strategic sourcing and supply chain professionals need to understand that, over the course of a season, the difference between “hall of fame” and “journeymen” hitters is largely that the hall-of-famer is driven to excel on every swing. They aren’t satisfied with batting .300. They drive for more. And that’s what’s needed to truly achieve supply chain success — a constant drive for more.
In short, the article serves as a good introductory guide on how to give your supply chain an sustainable advantage. For a deeper dive, I recommending diving into the full article on the six keys to the sustainable supply chain advantage.