Gardner's Axioms of Global Supply Chain Management

     Over the last thirty years I’ve had the good fortune of working in the global supply chain and logistics field. During that time, I received an invaluable education on the strategic, operational and financial Best Practices found in industries that include aerospace, automotive, consumer electronics, energy, fashion, healthcare and heavy industry. Of equal importance, that learning process was the result of collaborating with many talented individuals across Asia, Europe, North America, Oceania and South America.

     After all of those diverse experiences and much reflection, I’ve come to the conclusion that there are four axioms of global supply chain management that transcend geography, industry and business model. Focus on them and you’ll have eighty percent of the supply chain puzzle solved. As far as the remaining twenty percent goes…that’s why you have a job, so go figure it out:-). Good luck and safe travels.

1) While global supply chain management encompasses a variety of activities, at the execution level it is essential to focus on the “Four Pillars of Global SCM.” They are: revenue uplift, landed cost controls, lead time rationalization and inventory management.

2) To have any real meaning, the tactics that are carried out within each of these pillars must be traced back to the individual line-items that make up the balance sheet, income statement and most importantly, the cash flow statement. Only then will the functional relationship between operational execution and revenue, margins and asset utilization be truly understood.

3) The most insidious enemy of any supply chain is process variation. Defined as the difference between a desired outcome and what really transpires, supply chain variance can be found in areas like forecasting, landed cost budgeting and estimates for cumulative lead times. The only real cure for process variation is a Zen-level understanding of that most basic of mathematical formulas: The Standard Deviation.

4) True success in global trade is found at the nexus between Sales & Operations Planning and Supply Chain Management. Whereas the former identifies differences between planned and actual outcomes, the latter converts those discoveries into actionable tactics, measurable results and opportunities for continuous improvement.

May you enjoy great success in all of your supply chain endeavors.

Sincerely,

Dan Gardner, President, Trade Facilitators, Inc.