BY ART VAN BODEGRAVEN AND
KENNETH B. ACKERMAN
basictraining
The myth of THE supply chain
THE PROFESSION TALKS EASILY ABOUT THE SUPPLY CHAIN
as some sort of singular entity, whether using supply chain, demand
chain, or value chain as the topic at hand. It’s a convenient conversational shorthand that can easily be misapplied and misunderstood
over time.
It’s one thing to talk about Walmart’s supply chain, which is a radical oversimplification in itself. It is quite another to opine in stentorian tones about the effects of port disruptions on THE global
supply chain, which misinforms multitudes who are already unclear
on what our world is about.
Worse, it is all too easy for us to fall into thinking in those same
terms.
So, we were a bit taken aback by a recent headline heralding IBM’s establishment of a single
supply chain within its internal organization. We
cannot comment definitively, not having 1)
done the research, and 2) being but simple lads,
and from the country.
But we do have some thoughts about the complex nature of our universe of several supply
chains.
PEELING BACK THE LAYERS OF THE ONION
To be fair, many large, diverse retailers do
operate their own logistics networks. Walmart, certainly, and others, such as Costco, Kroger,
Limited Brands, and on and on. But that is a far cry from constituting a singular supply chain.
Any company, retailer, manufacturer, defense contractor, or whatever has numerous individual supply chains to plan and manage.
Ohio State’s Dr. Martha Cooper aptly characterized the phenomenon a few years ago as being more like a tree, with many roots reaching back into supply sources, a trunk that encased the several pathways involved, and a lush canopy of branches, representing the myriad distribution channels and end delivery points.
Even in relatively simple applications, each category of supplier
(often with distinctions for individual suppliers) will mean a vast
number of starting points for supply chain execution within an
organization. Products and materials may or may not come together in a limited (but seldom singular) number of physical flows. But
then they branch out again, with (typically) different flows for different distribution channels, and very often, distinct handling char-
acteristics and flows for specific customers within
a given channel.
TRYING TO GET IT ALL IN ONE PLACE
A well-known footwear designer and distributor
has gone about as far as it can in integrating multichannel distribution into one supply chain flow.
But even in that case, the specific arrangements for
offshore manufacturing and incoming shipments
have somewhat differing characteristics and physical flows.
To complicate matters, the company serves three
major channels of distribution
out of its national distribution
center. It picks, packs, and ships
to 1) its sizable national network of captive branded brick
and mortar stores, 2) its wholesale business, with all of the
major national apparel retailers
as customers, and 3) its hundreds of thousands of B2C
Internet and catalog customers.
Even with all product coming out of the same building,
storage for each channel is dif-
ferent, pick/pack/ship processes are different, shipment modes are different, and timing is different.
Some apparel merchants have established completely separate facilities, managements, systems,
and accountabilities to serve their different channels. The footwear example is merely three separate
businesses operated within a single set of four walls.
The footwear case is demanding, in that it presents opportunities for error and confusion that are
not faced by a single-purpose operation.
OUT THE DOOR
Given costs, mode relationships, customer preferences, weights, volumes, cube movement, and
quality/documentation/timing requirements, even
customers within the same channel may be served
