THE HARSH REALITIES OF SUPPLY CHAIN IMPORTANCE

It’s widely accepted that for a business to be successful it needs two things: Marketing and innovation.

But then, it begs the question: What about the supply chain?

And I bet once you ask this, you may be thinking that it’s just about product innovation, right?

Well, that’s not quite the entire story. You need to fall in love with your ideal client, not your product. And once you do that, you start to understand just exactly how important it is to innovate, to turn on a dime, to be creative, to make sure that you (and no one else) can meet and exceed your ideal customer needs and this is exactly where and why a supply chain is important.

For instance, do you think that the food retailers are in love with their ideal customers?

If they were, would they have taken so long to implement buying restrictions for products in demand, and then again take so very long to recover when the threat was no longer imminent? Furthermore, when it looks like we may have a second spike and they would certainly have re-implemented the buying restrictions quickly, does a food retailer ever really want to restrict the buying ability of their ideal clients?

So, who is really at fault here? Who is carrying on their business, as per usual and leaving it to the retail staff on the frontline to deal with the angst and anger from the retailers’ ideal clients? These clients, who are frustrated about being unable to buy what they want to buy and what the retailers want them to buy?

I will leave this thought right here. The suppliers need to start behaving as if the retail clients are their ideal clients and get on with working out what their supply chain needs to do in times of great disruption! (Otherwise, more disruptions, which will become ongoing disruptions in our future, will spell the end of these businesses!) They might need to carry more inventory – a harsh reality of dealing in tough times.

The ongoing pandemic certainly fits the bill of a harsh reality. In fact, one can even go as far and say that it’s the terrifying result of smaller harsh realities amalgamating into a greater monstrosity.

But this begs the question: what were these smaller realities? How did they come to be this global catastrophe that is now destroying lives?

The answer is obviously complex. (In fact, the linked U.N. article is just one among many facets showing how COVID-19 is wreaking havoc in the developing world.) Still, understanding complex problems and offering nuanced solutions are supposed to be the duty of business and corporate leaders.

A good place to start, however, is our very own supply chains.

For 20 years, since the start of the new millennium, experts and consultants have continued to call out those in leadership for practices that have left their supply chains inadequate, damaged and unfit to fulfill major business goals.  

But instead of heeding those warnings, the world has seen scandal after scandal with regards to the choice of partners in their supply chain network. The range of embarrassments have included fiascos with sweatshop labor, illegally procured raw materials and even the sort of major oversight that led to dramatic shortages (like the infamous toilet paper shortages). 

All of these events have led to disruption due to massive calls for reform, restructuring and corporate transparency. Why then should business leaders continue to brush these matters aside as if such disruptions don’t exist? And now thanks to COVID-19, many of these flawed supply chains have finally buckled from their vulnerabilities. 

Thus, here’s a quick crash course on the reality of supply chain importance and why the duty to ensure their integrity in all areas is a serious one that needs to be embraced by business leaders. 

Reality #1: Supply Chains Affect People’s Lives 

Let’s start with the most glaring reality. Everything that comes in and out of a supply chain affects human lives to a considerable degree. It affects the lives of the customers awaiting their orders. It affects the employees working in warehouses, factories and logistics. We can’t also ignore the environmental impact that falls on top of that! It affects the lives of people on the front line, in retailers and customer service who are dealing directly with customers. 

Like it or not, resilient supply chains are those that put heavy consideration into the welfare of everyone involved. Mistreating any particular party badly enough sub-optimises your supply chain and negatively affects the whole. It can also affect the supply chain beyond your business, your customers, and their customers! 

This has been a solid supply chain principle since the time of Henry Ford! And yet, instead of preserving and advancing the idea of welfare for all people involved, many supply chains opted for neglect (as the many scandals have aptly demonstrated).  

Reality #2: Supply Chains Affect National Economies 

In one way or another, economies are built upon people’s need to access necessary goods and services as well as the ability to purchase them. And clearly, supply chains of all sorts provide both in ample amounts. 

This makes the flow of resources, goods and finished products a lifeblood of economies. And even with the devastating closures of many smaller shops and retailers worldwide, other companies are still working round the clock to stay in business and keep the economy flowing and growing. 

Thus, it is all the more critical for supply chain managers and business leaders to make the necessary adjustments and step-changes towards resilience! If you work in retail, for example, you will need to understand how the Post-Covid world will have driven more people to shop online than in brick-n-mortar. Has your organisation already taken measures to adjust in order to keep the movement of goods flowing? (That’s just one question out of many we’ve discussed by the way, and that’s only the beginning!) 

Reality #3: Supply Chains Have Shaped History 

The history of mankind is rife with examples of how advances and radical changes in supply chains acted as the sort of floodgates to innovation, advancing civilisation and increasing prosperity. Whether it was the use of the Silk Road, the Age of Exploration that followed its closure as well as our own advances in flight and communication that characterised the modern period. 

All of these shaped history in no small amount. Therefore, whatever business and supply chain leaders choose to do now will have no less an impact on our futures.The same history will eventually hold us accountable for how we played our part in steering our supply chain towards progress and advancement (or not)! 

So to all supply chain leaders out there: The future is yours for the taking! What will you be doing to advance your supply chain, when and more importantly, do you have a really powerful ‘’why’’? 

Have you fallen in love with your ideal client, are you doing this to be better or even the best to serve them, to add more value than any other competitor, and what does this level of extraordinary success mean for you, your career, your organisation and your family?

For any enquiries or questions, contact Lisa on +61 (0) 408 028 326.

This post originally appeared on CTS Blog at: https://www.corporatetransformationservices.com/harsh-realities-of-supply-chain-importance/