Supply chains come in all shapes, sizes and complexities. And supply chain management needs to adapt and plan ahead to keep everything flowing smoothly. That is why we will discuss how you can get the most out of your unique supply chain in this blog series. To guide us through this series we start each of our topics with a meaningful film quote that explains the core of our story. The film title that inspired me for this topic:
"The Good, the Bad and the Ugly."
As VP Sales & Marketing at Solventure, I have often seen the good, the bad and the ugly in plenty of supply chains. And much like the spaghetti western by Sergio Leone and starring Clint Eastwood, you have good, bad and ugly customers, consultants and tools in many supply chains. In this blog, I’ll go over how you can recognize each one, so you can be the one left standing after your supply chain stand-off.
The Good
In an ideal supply chain situation, which I do witness every so often, a customer recognizes the value of its supply chain and is aware when something needs to be done to fix or improve it. Let’s take this scenario as the beginning of our perfect script for a supply chain western. In this script, the protagonist customer might be suffering from an underperforming supply chain. Understandably, they go looking for a supply chain consultant who might be able to help them get things back on track.
In their supporting role, the supply chain consultant should get to know the customer, learn what makes their company tick, and which specific needs they have for possible supply chain services or tools. Ideally, this consultant specializes in supply chain, instead of it being just a part of their consulting expertise, so they can offer the best supply chain advice and know-how. These types of boutique firms will also advice against certain ideas if they know from experience it will not bring value to the company even if this means they wil sell less man-days to the customer. They will not tell you what you want to hear, they will tell you about the brutal facts.
As a plot device for this supply chain western, the supporting consultant finally needs the right supply chain tool to arrive as a happy ending for everyone involved. In this perfect scenario, the consultant and customer start their search for the right tool by narrowing down their choices. This can be done through some desktop research (e.g. by consulting Gartner), selecting those tools’ strong points that fit their needs and industry like a glove. This way of working moves the plot along and avoids stranding in an RFP (Request For Proposal) swamp. Afterwards, the main characters can discuss the details with maximum 3 possible parties and find the right ending for their supply chain story.
The Bad
But not every supply chain story ends like a fairy tale. Let me take you to another movie universe, where everything that could go wrong in a supply chain story does. Not because of malintent, but because the parties involved simply don’t know any better. The protagonist customer, for instance, has no idea of the value of its supply chain, nor how to optimize its state when it starts to have a profound (negative) impact on general business. To expand with a short example; if you let a CEO choose between growth or margin improvement, most will go for growth. To accomplisch growth, most companies hire a new sales squad and spend cash on new marketing campaigns. I seldomly hear organizations say 'I'm growing due to reducing missed sales' or 'by focusing on improving OTIF' and therefore invest in the value of supply chain. Strike 1...
Starring as the supporting role in this movie, we find large, body-shopping consultancy firms, that don’t take any time to get to know their customers’ needs, nor find ways to support them individually. Their primary motive is to sell their complicated supply chain systems, for which you absolutely need their consultants to keep them working in the long term. In a recent conversation with a customer, this person shared his vision on the power of the right implementation consultant. By working with both specialized experts and one of the big 5 consulting firms, he said; 'A bad tool with a good implementation expert has chances on success, a good tool with a bad implementation partner is a failure from the start'. Strike 2...
The tools in place for this scenario mostly focus on a pretty interface, which seems recognizable and easy to work with. They also promise they can do almost everything you might need for your supply chain, but when you look under the hood, you might find it can do a bit of everything, but nothing thoroughly. Which competence do you prefer in a tool, the technical power or the good-looking interface? Unfortunately, most of the people judging these kinds of tools don’t have the technical knowledge to get to those nitty-gritty details and figure out the mismatch between their needs and the tool in front of them and most likely just pick the one they know by name. Strike 3, you're out!
The Ugly
If you thought the last scenario was bad, now’s the time when things get really ugly. It would be a bit of a stretch to say we’ll be discussing the villains of our supply chain story, but the following fellows certainly don’t have the best interests for (their own) supply chains.
The first shady character personifies companies who know their supply chains are severely lacking, but don’t do anything to remedy the situation. And if they do invest in their supply chain, they throw a lot of money at a new ERP system, without having any idea how much return on investment it will bring them. This is especially heinous when you think of how a well-structured supply chain can – predictably – improve a company’s forecast accuracy, reduce missed sales, and eventually make them a lot of profit.
The consultancy firms in this ugly scenario aren’t any better. Without any proper supply chain process knowledge, as a reseller they offer companies general supply chain tools as a side business. And these still get sold, as they do tick the right boxes in those ungodly long Excel sheets in equally long RFP processes. Sometimes, after more than 2 years, companies still haven’t chosen their supply chain partner or tool. It’s an extremely ugly process, with too many opinions at the table, and not enough supply chain experts.
Which tool these characters end up with, doesn’t really matter. It will certainly not fill in all the empty promises that were made along the way. And when it becomes clear that the tool is an empty box, it’s too late. Many companies in this scenario will prefer to keep dumping money in this bottomless pit instead of pulling the plug sooner rather than later. And if a supply chain expert does have the courage to do so, they will be more likely to lose their job than to be congratulated. This interesting discussion, which is currently ongoing on LinkedIn, is just another example.
Find the supply chain partner and tool you deserve
Out of all these possible scenarios, you would probably prefer to live in the first one, so some points of advice are in order:
- Before embarking on the search for a new supply chain partner or tool, it's essential to ensure that you have a well-defined understanding of your requirements and a comprehensive list of your specific needs ready.
- When looking for a supply chain partner or consultancy company, focus on their knowledge of your business, your supply chain and your industry. Only with this expertise they will be able to serve your specific needs.
- Consult mainly with your internal supply chain experts when selecting a supply chain partner and/or tool. Too many ideas at one table might muddy the waters and leave you with a lengthy, and costly, decision process. Be aware, IT knows about IT, they don't know Supply Chain.
- Look out for vendors who promise too much and produce too little results. Always let your experts look under the hood to see what's actually there and pick the supply chain tool that fits your specific needs, even though it might not be the fanciest-looking one. Don't buy a promise on PowerPoint!
- What counts is how beneficial this tool can be for your company. Even more than a costly new ERP system, a proven supply chain tool can show it can improve a company's forecast accuracy, reduce missed sales, and eventually make you a lot of profit.
