by Vivek Sood

August 7, 2018

The meeting room was as sparsely appointed as most meeting rooms used for supplier meetings these days. There were no windows, and barely any space to move. A round table in the center was surrounded by four cheap chairs. The message it sent was of frugality and simplicity.

Yet the four people in the room were all expensively attired, and talked about the high end cars they drove.

The CFO was a tall, lean man. He was perhaps a very good rugby player in his day. Another CXO was a stylish European with trimmed hair. The head of supply chain was the man who was least comfortable in that room. I was the fourth person – and we were discussing how to take the supply chain of this global behemoth to its next level.

It never surprises me that the companies that are making the most profits are also the ones who are always trying to get better and better. Perhaps that is why they always make good profits in the first place.

The conversation was centered around how to upgrade the supply chain to its next level. Our company has not yet decided to accept this project because we were not sure if the company was ready for a real transformation, or was just paying lip service to a trend. In fact that was the only question I was there to answer for myself. The rest of the questions would be taken care of as the project progressed. But, if the answer to this most important question was not not right – a large, branded consulting company would be more appropriate for the project. There are exceptions, but the junior people that they generally deploy on these type of projects rarely care if the recommendations are worthy of implementation. And, so long as the bill is paid by the client, the senior partners rarely care about anything in projects of that type.

Luckily, as the conversation proceeded, it became clear that the company was looking to create a real, positive change in its business. I could relax and spend some more time in this meeting.

But, it also became clear to me that what the other three people called supply chain was actually just logistics. This could cause major problem down the line. When the definitions are not clear, the ambiguity breeds non-accountability. Everyone points fingers are each other.

It would be almost akin to a company contracting you to upgrade their building, but their definition of building is just the lobby (or the lifts). Clearly, you would want to correct that misconception. I pointed out this example to the people in the room, and they wanted me to delineate supply chain and logistics. I told them about my ‘MASTERCLASS WITH MR SUPPLY CHAIN’ which spends a lot of time on stories related to his misconception, and its impact on businesses and their profitability.

We decided that before the project details were agreed upon, it would be a good idea to run an in-house ‘MASTERCLASS WITH MR SUPPLY CHAIN’ for the top 12 people in the company. I think it was a good positive outcome from that meeting. Suddenly, the head of supply chain was a lot more comfortable in the room.


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Vivek Sood

MORE INTERESTING READING
  • Hey, Mr. Sood, you have described very briefly about upgrading the supply chain to the next level if we measure the financial impact of upgrading Supply Chain systems is difficult, but nonetheless required before asking the C-suite to step up for a capital expenditure. In addition to hard tangible benefits, there are many soft benefits – such as retaining customers, positioning within the market and managing customer and supplier relationships. Some tangible benefits are going to be determined by the volume of activities automated with supply chain management systems while others will require deductive reasoning. The following 10 benefits can help you decide if you should take a closer look at replacing your SCM system.

  • It was so shocking to read your statement about the people who called supply chain was actually just logistics it is the completely wrong statement because it is not just about logistics it is very vast or I can say very deep to understand.

    Continually monitoring inventory levels takes up too much time. Newer ERP systems with Supply Chain Management (SCM) functionality feature automated purchasing. This means that the ERP software can be programmed to automatically place orders with vendors when inventory levels drop below a certain level. A critical part of any supply chain strategy is being able to preemptively maintain inventory levels. Automatic purchasing will free up employees to concentrate on other important duties.

    If you had one piece of advice for CPOs and other procurement executives regarding their talent management strategies, what would it be?

    • No cherry logistics is another thing which completely different from supply chain here is the fully detailed information of logistics…
      Logistics is one of several activities that make up a supply chain. The terms logistics and supply chain management are sometimes used interchangeably. Some say there is no difference between the two terms, that supply chain management is the “new” logistics.

  • Hey! I just want toget info regarding “MASTERCLASS WITH MR SUPPLY CHAIN” we are looking to learn something new in SCM. Could we join the classes If available?

  • One of the best ways to improve your supply chain strategy is through utilizing ERP (Enterprise Resource Planning) software. Below are the different ways that ERP software can increase your business profits and efficiency while reducing costs and wastes. Process standardization is central to the success of any supply chain strategy. Having a standardized ERP system will increase efficiency while saving time and money. Another benefit is that employees will share a standardized system of tools, which will increase accuracy, encourage teamwork and reduce miscommunication.

  • In order for companies to succeed, it is critical for them to look at their supply chain management. And in order to facilitate international trade, global suppliers must become strategy driven. Organizations worldwide rely on their customers, so responding quickly and efficiently to the needs of those customers is the only way to continue growing and increasing profitability. Without an efficient supply chain strategy in place, customers cannot be serviced properly and maximum profits cannot be achieved.

  • Many global companies should operate by focusing on their core competencies. I formerly worked in the auto parts manufacturing industry for a company that focused on the production and engineering of brake parts and related accessories. Focusing on this core business was not only a key for us as a supplier, but also benefited our clients. We were able to provide an array of products, and our customers were able to complete their procurement from a single source. This provided us an advantage over our competitors. One way to establish a strategy to improve the way a company operates globally is by transforming the fundamental internal and external players in their supply chain.

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