nearly everyone, most seriously the VP who suddenly
owned the distribution network. We remember with
great fondness the $25 billion client that decided to fold
a supply chain project into its strategic sourcing initiative. There were consultants hanging from every tree
until the program’s champion realized that they had, in
his words, put the horse behind the cart and then expected the horse to do all the pushing.
As time passed, though, more and more procurement
structures got, correctly, folded into supply chain
groups. So much so that we were recently taken aback by
an article in one of the other trade publications that suggested that supply chain and procurement needed to
really work on improved communications and elevated
collaboration, as if they lived in separate regions of
Middle Earth.
So, for those who have not yet put a tentative toe in the
waters of the 21st century, let’s simplify. It borders on
lunacy to keep these natural colleagues separated. Face
it. You can’t hope to manage inventories effectively without daily interaction with procurement. You’ll never
have what you need when and where you need it (and
not before) without teaming up with procurement.
Independent planning and execution will nearly guarantee dissatisfied internal customers and disappointed
external customers. You won’t be able to please sales and
marketing, and meet marketplace demands unless you
are all together in the bass boat.
NEARING THE END OF THE TRAIL
As much as we favor full inclusion and integration of
sourcing and procurement activities in the holistic supply chain organization, we’re beginning to wonder if
there is more here than simply getting all the right players into the tent. Once everyone has found the secret of
meshing product and materials acquisition into end-to-end planning and execution, what will be left?
Is this merely a matter of fulfilling an advanced vision
of the role of supply chain management in the enterprise? Or do we stand before the open door of a new
structural paradigm to carry us through this century? Is
supply chain management slowly and certainly replacing
operations management in the corporate pantheon?
HOW CAN YOU BE SERIOUS?!?!
We might be premature in advancing this concept. We
could be wrong. But the trend is difficult to ignore, the
logic is straightforward, and positive evidence is emerging. Not to mention that the manufacturing and opera-tions-dominated model: 1) has served well, but for a very
long time, and 2) tends to contain concepts and philoso-phies that don’t square well with new century practices,
especially in employee and business relationships.
We have seen the concept in operation—and succeeding—as early as 20 years ago. And there seems to be
overwhelming consensus that supply chain management
is the natural facilitator of corporate sales and operations planning efforts, with enormous impacts on manufacturing, sourcing and procurement, financial performance, and all of the traditional supply chain, logistics, and distribution functions.
Some might see this as a power grab by a newly energized and empowered supply chain community. It
would not be the first such accusation.
But the argument is compelling. Last-generation
operations management was a command-and-control
structure (or derived from one). It was a collection of
functions, each with challenging performance targets
and function-centric metrics. From an integrated supply chain perspective, the individual functions could
each be successful by their own lights, with performance bonuses all ’round, while overall enterprise performance was sub-par.
In an advanced supply chain organization, the leader
is a coach, facilitator, and talent developer. Metrics are
aligned around corporatewide objectives. Functions
collaborate, and diverse teams work on projects with
sustainable continuous improvement. Activities
throughout the supply chain are: 1) planned, 2) integrated, 3) synchronized, and 4) externally focused. It
doesn’t seem to us that the new model leaves any room
for internal strife or disconnected initiatives. Nor can it
tolerate extensive interfacing among disparate functions; the pieces must be components of a seamless
operating structure.
Maybe, just maybe, the time for widespread adoption
of the holistic supply chain model for all operational
functions, including manufacturing, has come. ;
Art van Bodegraven may be reached at (614) 336-0346 or
avan@columbus.rr.com. You can read his blog at http://blogs.dcvelocity.
com/the_art_of_art/. Kenneth B. Ackerman, president of The Ackerman
Company, can be reached at (614) 488-3165 or ken@warehousing-forum.com.
