The Weakest Link

The Weakest Link

A chain is only as strong as its weakest link.  In this case, we are not referring to the popular “humiliation” quiz show which debuted in the UK during the summer of 2000.  Literally, this proverb means a physical chain can only be as strong as the weakest link therein. Its origin is often attributed to British philosopher Thomas Reid in his 1786 Essays on the Intellectual Powers of Man chain and has since been used as an analogy to reflect weak members of a team or a poorly designed /manufactured component of a larger entity.

Which brings us to the Supply Chain.

Industry specific, supply chains, and their components, may be defined and characterized in a variety of representations. Essentially, the “chain” in supply chain refers to the step(s) taken by companies and their suppliers to design, develop and distribute a particular product or service to the end customer. The accompanying, and admittedly simplistic graphic, illustrates the high level components of a supply chain. These process chevrons contain much, multi-layered detail. Embedded within each is a network of more specific process activities

A more convoluted –and realistic- view of the supply chain was amusingly developed by Geoff Mulgan and Charlie Leadbeater in Systems Innovation, a publication for Nesta, a global innovation foundation based in the UK.  It reflects the countless supply chain processes required to simply make a cup of tea.

Not surprisingly, there is ample opportunity for weak links and mistakes.

Sure, there are countless supply chain management articles and books to peruse for help. Plenty will be happy to identify end enumerate the limitless number of moving parts of your business than need to be optimally synchronized for maximum performance.

SDI international has performed critical supply chain tasks for Fortune 500 companies for over 25 years. Since our mission is to drive cost efficiencies for our customers, pinpointing potential pitfalls in our business processes is a must. Integrating emerging technologies within our robust process network is a must, too. After 25 years of offering business process solutions we have a vigorous, iterative process that we implement to identify and vet out the weaker links.

For the sake of brevity, we’d like an opportunity to share at least a handful of key actions that can be taken to strengthen those pesky weaker links in your supply chain.

Strategy

Develop and document an annual supply chain strategy. It is the manual that sets the course for intended supply chain improvements. The strategy is a forward looking plan of action that enables a company to capture and retain its competitive advantage. It begins with asking questions and identifying performance and capability gaps in the business. The strategy should be a collaborative effort among your business’s supply chain professionals. It will not only set the direction of the company but will keeps the organization focused and on target.

Risk

Unexpected disruptions need to be planned for. This may sound like an oxymoron but risk management is essential for continuity planning. The most capable of supply chain professionals have integrated risk management into their process portfolio. Global environmental and political risks, in particular, act as clear reminders to strengthen risk management and supply chain disruption strategies.   SCM World published this useful and concise model on developing a risk management strategy.

Measurements

How is your supply chain performing? Clearly defined measurements will help determine the health of your process execution. In order to measure the success of your strategy, a renewed set of strategic metrics to will gauge your progress in achieving strategic goals.

Two of the most valuable supply chain metrics to capture are those of efficiency and effectiveness.

Efficiency is ensuring the right products get to the right place at the right time. The flow of goods, services, information, and financial resources needs to be performed in an efficient, productive manner while meeting end-customer requirements. Earlier this year, Tradecloud, a popular supply chain platform published an extensive list of efficiency KPIs that can be found here.

Effectiveness measures how well an organization is meeting the demands of customers, partners, suppliers and vendors. Have you reduced cost for the organization while maintaining high quality product? Cerasis, the third party logistics carrier succinctly outlines this set of effectiveness metrics, other than cost management.

 

These actions are a modest starter set. If you need more help, SDI is here to help you seize new market opportunities in a constantly changing and volatile global environment.