Apple dominates the supply chain. While Sony and RIM had to delay products, Apple trucked ahead with the iPad2 right on time, and even though the backlog was a little bigger than they expected, they’re still doing fine. But how can you argue with over 60 Billion in Cash? Especially when “Apple could survive on current cash alone until 2018” (TUAW.com).
And that’s another reason why your company needs to be a supply chain leader.
The annual salary surveys are reporting that salaries are rising again. In addition to Next Level Purchasing’s survey, which was discussed in yesterday afternoon’s post, we have the Logistics Management 27th Annual Salary Survey, which found that median salaries increased for the third year in a row. And even though the average increase was only 2.2%, that’s still good given the economy, and a 12.5% increase since 2007.
The article notes that a number of search firms are saying, including Kimmel & Associates, are saying that the time is right for seasoned pros looking for a new job, but is it? While I agree that your average manufacturer and retailer is as lean as they can get and that they are not going to be able to build their top lines if they don’t staff up their supply chain departments, I still don’t know if the average company is ready to hire. While it’s true that the impending crunch for seasoned supply chain and logistics talent is going to put any seasoned pro with a good education at a premium, I still don’t see a plentiful job market. But I guess it never hurts to be ready with a polished resume when it does return. Any thoughts?
A recent article over on Industry Week that indicated that it is “time for a supplier health check” made a good point — Tier 1 suppliers may need to expand globally in the high-growth markets more quickly than they had originally anticipated, and manufacturers need to know if their Tier 1s are up to this challenge. In order to make this assessment, they have to do a detailed supplier assessment of their current Tier 1 suppliers, which should ask, at a minimum, these questions:
If any of these questions yield negative answers, the supplier might need to be replaced. The alternative, if the supplier is critical, is for the organization to take an ownership position in the supplier and get it back on track. Either way, the supplier base needs to change.
As mentioned in yesterday’s post on What Can The Right Supply Chain Transformation Do For You, there are a number of best practices that should be followed when undertaking a supply chain transformation but by far the most important is to listen to the voice of the customer. Since the whole purpose of the supply chain is to serve the company and the whole purpose of the company is to serve the customer, the best supply chain is one that serves the needs of the customer from end to end and enables the company to excel in the products and services it provides.
Even when considering manufacturing, service, and raw material suppliers, the voice of the customer has a hand to play. The voice of the customer has a role to play at each stage of the supply chain mega process. Whether you are Planning, Buying, Making, Moving, Storing, Selling, or handling a Return — the customer’s needs must be considered. The following are just a few of the questions that can be asked at each stage:
| Stage | Question |
| Plan | What needs does the customer have? What products or services might meet these needs? Which of these do we have the competence to offer? |
| Buy | What materials or services do we need to offer the products or services we plan to offer? What level of quality is the customer expecting? How robust do the materials or services need to be? |
| Make | What features are most important to the customer? What level of quality is required? What materials should be avoided because they might be hazardous? |
| Move | How fast does the customer need the product? How environmentally concerned is the customer? Are there any special transportation requirements required to insure the product arrives to the customer as expected? |
| Store | Where should we place the product to get it to the customer when they need it? What are the storage requirements to maintain quality and integrity? |
| Sell | What price point is the customer expecting? Where does the customer expect to buy the product? |
| Return | If something goes wrong, how does the customer expect to accomplish a return? Where does the customer expect to make a return? How efficient does the customer expect the return to be? |
If you answer these questions correctly, then you just might have a customer who says:
And that’s a successfully transformed supply chain.
There’s a two-fold reason one of the top themes for SI this year is Next Generation Sourcing and a reason SI has spent posts (upon posts) discussing CAPS Value Focussed Supply, Tompkins Associates’ Supply Chain Value Creation Framework, BravoSolution’s High Definition Sourcing, Purchasing Practice’s Innovation Framework, The MPower Group’s Next Practices, and, shortly, Greybeard Advisors’ Next Level Supply Management. Not only is your supply chain not likely to survive the prolonged global economic recession and “jobless recovery” without it, but it’s going to mean the difference between survival and smashing success.
As proof, I point you to The Lessons from Dell’s Supply Chain Transformation, a recent videocast and article over on Supply Chain Digest.
While Dell’s investor relations group edited out some of the more detailed metrics that resulted from their recent supply chain transformation, the ones that stayed were extremely compelling.
That’s more-or-less a 30% improvement across the board! All you have to do is implement best practices and, most importantly, listen to the voice of the customer at each stage. (And yes, it’s often easier said than done, but those returns are worth the effort.)