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.


The partnership element begins when we get all areas of the company up to Level 3, where we're partnering to do visibility. Then at Level 4 we're partnering to collaborate, and at Level 5 we're partnering to synthesize. Partnering is a process of thinking more about us and less about me. Partnering is the process of being married. For me to be happy, I have to have a good marriage it's not that I'm this benevolent person; it's that I want to be happy, but I can't be happy unless I have a happy marriage, and therefore the marriage is what's most important. The same thing applies in the supply chain: You really have to take a different perspective when you're partnering for visibility, partnering for collaboration or partnering for synthesis.

4. Prioritize

The next best practice is Prioritize. In this step, we need to take the benchmarking and the assessment activities and use them to identify the specific processes and tasks that we need to improve. The challenge is that you can't just come along and say, "I need to work on transportation." That's a nice beginning statement, but you need to understand what it is that you want to work on with respect to transportation. We can work on transportation from an operations point of view; or from a technology point of view, and look at installing transportation management systems or routing software; or from an outsourcing point of view, and look at what we should no longer do internally. So this prioritization is based upon the assessment and the benchmarking that take place beforehand.

5. Lead, Don't Just Manage

The next best practice has to do with Leadership. First, we need to understand the difference here between leadership and management. Management is an important task. But, unfortunately, we've got plenty of management in most companies, plenty of people to measure and control and perform tasks. What we need more of is leadership. In most organizations today, what you find is that they're about 95 percent management and only 5 percent leadership, and we need to have much more balance there. Fifty/fifty would certainly feel good to me.

Leadership is an evolutionary process. I believe in the process that I call peak-to-peak leadership. The old statement that you've probably heard, success breeds success, is absolutely not true. The natural order of life is that success is followed by failure. Benjamin Franklin said, "Success has ruined many a man." Winston Churchill said, "Success is rarely final." And basketball coach John Wooden said, "The true test of a champion is what he learns after he wins the championship."

The tendency when you're at your peak is to protect what you've done, not to change things, to write budgets, procedures and manuals and not rock the boat. We say, "Wow, things are really happening here." Yes, they're really happening, but what's happening is that you're going downhill; because the people who aren't No. 1 are being innovative and creative, and they're passing you by. All of a sudden you wake up one morning, and you're no longer No. 1. In fact, you don't even make the Top 20. What do you do? You fire the CEO, you bring in a new guy who's innovative and creative, you climb back to the top, you protect it, you go diving back to the bottom, you fire people and so on. The natural order of life is peak to valley, peak to valley. As a leader, your role is to reinvent yourself when you're No. 1. You have to be aware that, because you're the best, you are the long shot, you are the underdog. You need to recreate and alter what you're doing, and that's very difficult.

The supply chain is a perfect area to apply this, because the supply chain is complex, it's multifaceted and it's real easy to get complacent with where you are. Then, all of a sudden, your competition passes you up, you're in the valley and now you have to rebuild from the ground up. The leadership that's required is to take the education, the communication, the benchmarking, the assessment and the prioritization and to make sure that we constantly are moving on to the next new thing.

People say to me, "Jim, you're always taking us someplace new, why can't we just say where we are for a while?" And the answer is: entropy. If you don't go forward, you will go backwards. You have to keep moving on to the next level and the next level and the next level. To do that requires leadership to think outside the box, to challenge what we have done, to alter what we've done, to take some risks and then make some good stuff happen.

6. Add Value by Focusing on Core Competencies

  • Enhance Your Experience.

    When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

Already have an account? Click here to Log in.

Enhance Your Experience.

When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

OR

Complete the registration form.

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required
Required