Get back from the holiday break, with renewed energy and focus.  And look at these things!

Let me look back over 2013 at some of the common challenges and supply chain essentials our consulting clients have faced.  And also the topics of greatest interest and engagement at our Supply Chain Leaders Academy.  And maybe I’ll add a bit of ‘future thinking’ on the challenges that might lie ahead for us all.

So with this ‘backdrop’, I’ll suggest what you might want to be focussing on early in 2014 to ensure that you stay competitive and even better, get ‘ahead of the pack’.

It’s a changing World.

As said by Heraclitus over 2,500 years ago, there is nothing constant…but change.   And this is more true than ever before for those in business and in Supply Chain & Logistics in particular.  Whether it be the ‘Global Market’, exchange rate fluctuations, increased (and cheaper) competition and the continued growth of online alternatives, those managing the Supply Chain have a tougher job than ever to stay ahead of the pack.

Indeed there are well known companies that are buckling under these pressures, who may not survive.  Which is very sad, but also somewhat inevitable as markets and consumer demand changes.  I recently wrote a short piece about Large Retailer Domination that you might find relevant over here:  Will it be a slow death by private labels and cheap imports?

So we need to accept that change is here and here to stay.  Traditional ways of doing business can rapidly disappear to be replaced with totally new models that wipe out the ‘old ways’.  How many of you have a GPS in the car?  I have two.  That have both remained unused for years.  I now get all that functionality (regularly updated) on my iPhone for free…

The Essentials

I think that the essentials of Supply Chain management these days fall into these ‘survival’ or ‘dominate’ principles, depending on where you’re currently positioned in the market place.  If you are doing well, then you will probably know these.  And improving them will help you stay ‘dominant’.

Supply Chain EssentialsIf you are struggling, ignore these at your peril.

So in no particular order …

Stay Flexible. When the World is changing fast around you, you can’t afford to be locked in to too many high cost constraints.  OK, depending on the type of organisation you are, this can be hard.  But look for flexibility in assets and variable costs where you can.

This is why Outsourcing continues to remain an upward trend.

Plan and Communicate.  I still see many organisations with poor planning and communication disciplines.  Sales & Operations Planning or IBP (Integrated Business Planning) as it’s now known, is certainly on the essentials list for those who are new to the concept.  Not sure what it is?  Here’s a short video.  What is Sales and Operations Planning?

Know Your Costs – and Profitability!  For those in Supply Chain, this comes down to understanding your ‘cost to serve’. If you don’t have a good idea of these things, you are heading for trouble:

  1. Logistics cost per order. (warehousing and delivery)
  2. Average order value.  (and the ‘distribution of values’ from high to low)
  3. Supply Chain cost per case/pallet/tonne (or whatever unit you use)

Just knowing these three things will help you identify areas where you can improve performance and reduce costs.

For more information on the topic, you can see a range of videos and articles: Cost to Serve Articles

Learn what you don’t know!  What’s that great quote?  Actually it’s more of a statement of knowledge awareness or ‘competence’

  1. Unconscious incompetence.  The individual does not understand or know how to do something and does not necessarily recognise the deficit. They may deny the usefulness of the skill. The individual must recognise their own incompetence, and the value of the new skill, before moving on to the next stage.
  2. Conscious incompetence. Though the individual does not understand or know how to do something, he or she does recognise the deficit, as well as the value of a new skill in addressing the deficit.
  3. Conscious competence. The individual understands or knows how to do something. However, demonstrating the skill or knowledge requires concentration.
  4. Unconscious competence. The individual has had so much practice with a skill that it has become “second nature” and can be performed easily. As a result, the skill can be performed while executing another task.

So I would urge you to keep honing your skills and in particular, always seek to find out what you don’t realise, you don’t know!  Stage 1 above.  You might even want to consider joining our Supply Chain Leaders Academy.  Here’s some members feedback.

Summary.

I could probably go on to list another five or six supply chain ‘essentials’ but honestly, I think these four are probably the ‘most’ essential.

I really do hope you achieve all you set out to achieve in 2014, from a career and organisational perspective.

Feel free to add some more of your ‘essentials’ in the comments below…

 

Rob O'Byrne - Logistics BureauBest Regards

Rob O’Byrne

Email or +61 417 417 307/+61 2 8799 2175