Cover Story: 7 Habits of Highly Efficient Supply & Demand Chains

To go the distance in business you need to take a disciplined approach. Here are some key best practices for making your supply chain hum.


Stephen Covey's The 7 Habits of Highly Effective People first appeared on bookstands in 1990 and went on to sell millions of copies, offering a formula for personal and professional success based on a "paradigm shift" in how people perceive the world and themselves, a focus on character and principle, and the practice of the oft-repeated seven habits.

Seeking to apply the "7 Habits" approach to the supply chain, Supply & Demand Chain Executive asked Jim Tompkins, CEO and founder of Tompkins Associates, a Raleigh, N.C.-based consultancy and systems integrator, to reflect on his 30 years of experience helping companies achieve supply chain excellence and to identify those best practices, or "habits," that are key to ensuring success in modern supply and demand chains. Our conversation with Tompkins began with the first best practice on his list:

1. Communicate

Jim Tompkins: The first is "Communicate," and the best practice here is to communicate to ensure that all the departments within your company and all the links within your supply chain have a common understanding of what "supply chain" means and what the objectives are, and that everyone has a common understanding of the "what, why, who and where." There should be no surprises as to what you're trying to accomplish.

The old ways of thinking, where I focused within my department or within my link, are totally irrelevant today. We have to melt the boundaries and think horizontally all the way from the original raw material supplier to the ultimate end user. We need to think as one to provide the end customer with the ultimate in satisfaction with our product, service and pricing. We have to be 100 percent focused on making that customer delighted, and so it's an integrated, unified, end-to-end pursuit to create customer satisfaction.

S&DCE: What are the barriers to achieving this particular best practice?

Tompkins: The first is momentum, because this isn't how people have done business. People have been promoted by selfishly pursuing very narrow goals that are vertical as opposed to horizontal. If my job is to take 20 percent out of the cost of transportation, it doesn't matter that I mess-up distribution, it doesn't matter that I mess up accounts payable. I am going to accomplish my very selfish, narrow goal and make that happen.

The second aspect would be cultural, and I think there are three types of culture. There's static, consistent culture, where, if it ain't broke, don't change it, don't rock the boat, do what you've always done. This is how we've done it for twenty years and we've always been successful, so don't change anything. You're very static, you're very consistent, what you do is what you've done, no changes at all. The second culture is dynamic inconsistency, where there's a tremendous amount of change but very little improvement because there's no overall understanding of what we're trying to accomplish in the supply chain. Abe Lincoln's quote is, "Let us not mistake change for progress." We've got a lot of change going on, a lot of activity, a lot of turning, but there's no real progress because we aren't all buying into the same well-communicated, consistent thought process on where the supply chain is headed. And then the third culture is dynamic consistency, where we're dynamic and continually making improvements based upon a shared, consistent vision of what we're trying to accomplish with the supply chain. It's only with the dynamic consistent culture that you can overcome the momentum of doing it the same old way and achieve excellence in the supply chain.

S&DCE: Is there a technological aspect to the challenges in realizing this best practice?

Tompkins: With this particular best practice, technology is not the challenge. Now, if you're implementing technology, the challenge can be that we all need to have the same perspective on what we're trying to accomplish with that technology. But it's not the technology per se, it's the communication, the education, the consistency, the shared vision, the direction that is really what we're getting at with this particular best practice.

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