A recent post over on the HBR blogs by Nilofer Merchant, author of The New How, on how We Can’t Agree to Disagree discussed the importance of alignment and three areas where alignment is pivotal in a business. The post was excellent, but overlooked a fourth major area where alignment is critical to success: the supply chain.
If the supply chain is not aligned, one or more of the following will happen:
- wrong product in the wrong place
the product will be in a truck when it should be in a warehouse, in a warehouse when it should be on the shelf, or shelved in a low-traffic store instead of a high-traffic one where it will sell five times faster
- overstock on poor selling SKUs, across-the-board stock-outs on high selling SKUs
this will result in the need to take losses to clear out the excess inventory on the poor selling SKUs and lost sales on the high-selling SKUs
- (severe) production delays
when the required raw materials don’t arrive when needed or when orders are sent to factories that are near capacity instead of factories that are idling 50% of the time
And this is jus tthe tip of the iceberg. So when you are aligning you brand, your board, and your market, don’t forget the supply chain that is required to serve the market your company is focussing on.