The Top Ten Supply Chain Mistakes
It begins and ends with the wants and needs of consumers and customers. This article gives some guidelines expressed as the mistakes that managers often make when attempting system-wide change in their supply chain and the author has focused on ten most common mistakes. Mistake 1: Always viewing the supply chain as a “chain” In addition to the traditional internal activities and relationships, supply chain practitioners now need to focus externally on business-to-business and even business-to-consumer processes and interactions.Mistake 2: Continuing to do business as usual Companies that did not substantially shift their go-to-market strategies or channel strategies achieved only small incremental benefits.
Mistake 3: Having the wrong idea about “control” Not every company will be able to become virtual in all aspects, nor should they. Even a company like Cisco Systems- a wonderful example of extended supply chain leader- still retains strategic control and planning of its overall supply chain and firm tactical control of key elements.In the future, supply chain success will be determined largely by the degree of partnership between the businesses that make up the extended value chain. Mistake 4: Failing to synchronize demand and supply signals Leading-edge companies track point-of-consumption data as well as inventory at the last point of consumption, and they use sophisticated tracking technology to transmit the data effectively. Mistake 5: Believing that technology is the real enabler Six times out of ten, a complex supply chain project will involve an IT implementation.The importance of the fundamental business processes and the strategy surrounding the use of the technology, however, continues to be underestimated. Mistake 6: Failing to gain real visibility Rich quantities of real-time data aren’t universally beneficial.
The Top Ten Supply Chain Mistakes Essay Example
It is important for companies to identify where in their extended supply chains such data can be of business value. Mistake 7: Adopting a “one-channel-fits-all” approach In practice, there are multiple supply chain designs to suit the characteristics of the products and the channels they are sold through.Mistake 8: Misreading the people factor The biggest challenges for employees center around rigorous analytical thinking and technology understanding. Mistake 9: Not leveraging global elements of supply chain operation Globalization of supply chain functions and processes and shared leverage with partners appear to deliver productivity benefits of between 8 and 10 percent. Mistake 10: Underestimating the size of the transformation task A long-term success horizon (three to five years) and dedicated project teams are vital for projects of such complexity.This article tries to explain some of the main problems that companies face when trying to enact meaningful changes in their supply chains. The economic impact of supply chain management is enormous but most of the companies fail to extract full value out of their supply chain transformation effort.
This is mainly because most of the companies consider supply chain transformation as cost containment or technology implementation exercise and not as an integral part of the business process.Although several obstacles pointed in this article have also been addressed elsewhere but this article restates them collectively so that together they can become a catalyst for more forceful remedies. The author has vividly explained the major obstacles and how to deal with them through examples of his own company. It is quite clear from the article that author’s primary goal is to help companies in identifying the mistakes they might commit while implementing supply chain initiatives because the stakes of not doing so are very high.