Supply chain-strategies are being discussed a lot. The need is clear, but how can we take decisions within the supply chain if we don’t have a strategy? Supply chain professionals themselves are the main cause of this problem because they keep on acting like Calimero. They have to stop staying at the sideline and need to start taking the lead.
There is a clear difference between the theory of general business-strategy and the theory of supply chain strategy. Since many years the concepts developed by Porter, Treacey & Wiersema etcetera, are widely adapted. More recently developments like Blue Ocean, Business Model Canvas and Start-with-why (Simon Sinek) were adopted shortly after their introduction as common theory and are being applied in daily operations. But when we discuss the supply chain strategy we often still find the theories of Marshall Fisher from 1997 and the Triple A of Hau Lee from 2004. The connection to the business strategy was not made in those days.
Fortunately many advocates like Martin Christopher, Steven Melnyk, John Gattorna and Hernán David Perez have tried to bridge this gap. Customer orientation and differentiation have replaced the old fashioned one-size-fits-all approach. Finally a boost for a professional supply chain-strategy?
Unfortunately only a few organisations have developed and implemented a good supply chain strategy. During SCL Europe in Barcelona I talked about this with John Gattorna. He was frustrated tremendously that so few organisations / people work with his concepts. Customer orientation and differentiation were also in Barcelona the central theme of many sessions, but it doesn’t seem to be fully adopted. After the lectures everyone hurries back to the booth of a (software) supplier to hear another nice sales pitch. Nice, another internal improvement! Isn’t it?
The choice of the theory, the methodology or the tools, templates and so on does not determine the success of a supply chain strategy. If a good supply chain strategy has been developed and implemented, the theory, the methodology or the tool are not relevant any more. No, in many situations we – the supply chain professionals – ourselves are the problem. Our behaviour, intention and courage are not sufficient to build and implement a good strategy.
It is unbelievable how many supply chain professionals keep on behaving like Calimero. The outside world is scary and nasty, it is unfair… I come across many companies where fear dominates, fear for other departments and functions. ‘Sales is not able to forecast well’, is used as an argument to explain the failure of another S&OP-project. Subsequently we happily continue with out internal optimisation. In our comfort zone back to improvement of processes and systems; at least we do not need to cooperate and communicate with other people in that case . Many supply chain colleagues still don’t understand that making your point is less important then getting your point. How can we play an important role in strategy if we keep on focussing on ‘making our point’?
We keep on talking about ‘the business’ as being the other part of the organisation. Harm van Tongeren (VP Supply Chain Benelux Unilever NL) spoke the correct words: ‘We do not talk about the business, we are the business.’ A supply chain strategy definitely has to start at the business strategy. What are the value propositions of the customers, what are the key buying factors, etcetera? How can we develop a professional and well defined supply chain strategy (starting with outside-in thinking) if we stay on the sideline and are not integral part of the business? If we are the business, then we have to behave like the business.
Only by initiating and having the constructive discussions on strategy you will become a partner in strategic decision making. Regardless whether it is a sales meeting or a business meeting, supply chain has to be on the agenda. Not yet invited? Take the first step and make sure you get invited. And invite the ‘troublesome’ salesman in your supply chain meeting. It might be confronting that some supply chain initiatives aren’t key buying factors for the customers, but better late than never…
If we really want to get results from having a supply chain strategy, then things have to change. That change is not far away, it is us…. Quoting Simon Sinek: ‘Let us all be or become the leader we would like to have ourselves’ I completely agree. Throw away that Calimero egg shell and behave as a leader. Step out of our own comfort zone, take another perspective and take the lead. Not only for yourself, but also for your department and your people. You are ‘the business’, your strategy therefore is by definition a business-strategy.
Alfons Willemsen is partner at Involvation
This ‘Preek’(preach) was published in Supply Chain Magazine 05 2016. ‘De Preek’ is a speech in which the speaker addresses his message for the discipline of supply chain management. A preach has the aim to educate, to encourage, to correct in order to let the readers grow in their belief and become strong mature supply chain professionals.