Supply Chain Management
Addressing Your Supply Chain Management Crisis with Interim Talent
Supply Chain has been getting more mainstream attention than ever before, but not for the best reasons. Issues driven by the global pandemic have put Supply Chain Management at center stage, and virtually everyone has firsthand experience with what delays and breakages in the supply chain can mean.
Supply Chain Management is the practice of planning, managing, streamlining and continuously improving the supply chain processes to reduce cost and wasted time and effort.
Supply Chain: What is it?
In the simplest terms, the Supply Chain is the network of resources and activities needed to convert raw materials, information and components to create a finished product or service delivered to the end user.
Supply Chain Management (SCM) is the practice of planning, managing, streamlining and continuously improving the supply chain processes to reduce cost and wasted time and effort. SCM requires the close monitoring of all costs needed to create a product and service for end users and analyzing/acting on opportunities for improvement. When done correctly, SCM is a competitive differentiator for every industry in the world.
In order for the end-to-end Supply Chain to function properly, there are a number of elements which must work well together. For example:
- Capable talent
- Quality resources – materials and information making up value-add SC outputs
- Robust Supply Chain Design, Management, Governance, and CI Strategy
- Software and Technologies – Digital Transformation, Digitization of Work and the emergence of Industry 5.0
As we saw with the global pandemic, when one or two of these processes are not working well with the others, major outages and delays can occur.
Supply Chain Overview – Visualize the Components of the Supply Chain
When describing and visualizing Supply Chain, the Enterprise Alignment Diagram developed by ExecQtion (https://www.execqtion.com/) is a useful view. There are 5 main components that create the supply chain & allow it to function.
These elements are:
- Planning
- Sourcing (the materials that go into production)
- Production (or making the product)
- Delivering the product to the end customer
- Return lifecycle management (returns and recycling)
The SCOR Model Helps to Manage and Measure the Supply Chain
Another useful model is The Supply Chain Operations Reference Model, or SCOR, developed by the Supply Chain Council to give industry leaders predefined best practices and metrics for each type of supply chain.
SCOR has also been acquired by the Association for Supply Chain Management (ASCM), as an industry standard for “managing and measuring the performance of a global supply chain.”
CIO.com explains the SCOR Model is:
“Designed to evaluate your supply chain for effectiveness and efficiency of sales and operational planning (S&OP). SCM (Supply Chain Management) is complex, and S&OP implementation can be difficult, but the SCOR model is intended to help standardize the process and create a measurable way to track results.”
Lean Supply Chain Management
Over the past 20+ years, thousands of manufacturing companies have jumped on the “Lean” bandwagon and have seen notable gains. Lean is all about eliminating waste, and removing anything from a process doesn’t add value either to the product itself or to the process. The Lean approach uses a myriad of tools and techniques to help identify and reduce, or in some cases eliminate, waste.
One of the most fundamental of those Lean tools in Supply Chain Management is value stream mapping.
So, how does Six Sigma come into play?
Six Sigma is all about reducing variation and improving first-time quality. Lean Six Sigma provides a structured and statistical method of solving complex problems with a more structured approach to eliminating waste in a supply chain.
Supply Chain Risk Management
Identifying potential risks is an integral piece to the management of the supply chain. Threats to the supply chain can include:
- Volatility of costs
- Shortages in materials
- Failures of suppliers and other resources
- Natural disasters and other unpredictable supply disruptions.
In order to be prepared for disruptions, you must plan for them. Data analytics plays a critical role in identifying and planning for potential risks. Keep in mind, Risk Management is not a ‘one and done’ process. As the political climate, environment, and trade continue to evolve and change, the risks which may impact your supply chain are also subject to change. Additionally, if your organization is considering a facility move, management change, or product redesign, new risks will arise.
When identifying risks, it’s important to consider:
- Reliability,
- Responsiveness,
- Agility,
- Cost, and
- Asset efficiency.
Once risks have been identified they need to be qualified by level of probability, monitored and mitigated as you and your team see fit.
Supply Chain Operational Excellence (OpEx)
Consider this: 80% of the value in most businesses is generated out of 20% of the resources used. Do you clearly and specifically know which processes these are?
Achieving OpEx Leadership involves a number of different processes, competencies, and technologies, in addition to productive teamwork, proactive problem solving, and effective leadership. It’s easier said than done.
In Supply Chain, focusing on customer’s needs, empowering employees and improving processes are paramount to realizing operational excellence leadership. An organization’s main focus needs to be the customer and meeting their needs in the least costly and most efficient way. Everything begins and ends with the customer.
How can you achieve Leadership in Supply Chain Operational Excellence?
The most common obstacle in achieving OpEx is people. Unlike technology or products, people have a mind of their own, and if they’re not properly engaged, informed, and skilled, your supply chain will suffer.
Performance Monitoring and Improvement
To monitor, empower, and improve the competency of your staff, a number of tools exist, such as:
- Skills matrixes,
- Gap analysis,
- Key Performance Indicators (KPIs), and
- Focused workforce development programs.
Communications
Effective Communications, or lack thereof, can either make or break any organization’s ability to achieve Operational Excellence.
Logistics
Occasionally, the definitions of Logistics and Supply Chain Management become muddled. In fact, the term Logistics Management is often used to replace the term Supply Chain Management in Europe. In the United States, Logistics is just one of the components of the supply chain puzzle.
What is Logistics?
Every product, and many services, begin with raw materials. These are assembled then transported to a warehouse and/or shipped to the end user, which is either a business or a consumer. Logistics takes into account planning, transportation of inbound materials, managing inventory, any necessary outsourcing and the management of the fleet of transportation vehicles.
What Is A Third-Party Logistics (3PLs) Firm?
A 3PL acts as an added piece of your business to assist with supply chain efforts. A 3PL offers a business the chance to outsource their logistics to experts in the field. A 3PL assists with:
- Distribution,
- Coordination of transport providers,
- Cross-docking,
- Storage,
- And more.
Third-Party Logistics Firms can assist an organization with anything from transportation to warehouse storage to a full supply chain management service.
SCOR
SCOR, or Supply Chain Operations Reference Model, is a reference framework used to address, improve, and communicate supply chain management decisions within a company and with suppliers and customers of a company (1). SCOR was created as a supply chain improvement methodology and covers all phases of the supply chain process from the entry of the order to the receipt of the product to the end user, as well as the return lifecycle for reuse and disposal.
In the simplest terms: the SCOR model seeks to optimize all the processes needed to satisfy the end user (or customer).
How is SCOR Structured?
The SCOR model is comprised of 4 key sections:
- Performance
- Processes
- Practices
- People
(1) SCOR Model, Supply Chain Council, October 7, 2004.
Certified Supply Chain Transformation Architect (CSCTA)
The Certified Supply Chain Transformation Architect (CSCTA) Program cultivates the capabilities of executives to deliver end-to-end supply chain performance improvement and transformation.
The CSCTA program focuses on transformational executive leadership utilizing applied learning. The certification provides industry sought after skills for Supply Chain Executives, focusing on:
- The implementation of best practices
- Step-by-step processes for accelerated results
- Real-world examples & simulated decisions
How is the course structured?
The course confronts executives with realistic scenarios and case studies, encouraging them to problem solve and apply their industry knowledge. The unique holistic approach both identifies and develops skills in supply chain leaders. Students not only learn from the course materials, but also from their fellow students. Each executive in attendance contributes their own personal experiences and point of view.
The course includes:
- Evaluation and a Customized Learning Plan based on each executive’s needs
- Applied Learning Sessions
- Comprehensive Examination
- Application Interview of Best Practices
Does it work?
“The integrated best practices we learned to apply in the course is a well thought out and reliable way of achieving our business goals. What I liked most about this course is its focus on leadership skills, its high-quality content and delivery, and my ability to apply it immediately with results.”
Mike Kingzett, VP Supply Chain Transformation
“As a 20+ year Supply Chain Professional, I have been through countless Executive courses and supply chain management programs. All of that material and instruction operated in a vacuum without tying it to each other. Then I found the CSCTA. This 8-day course did what no others have done……tie Executive leadership, strategic planning, change management and supply chain management all into one in a language that top-level executives can understand…”
Blake Mathies, SCOR-P, CSCP, CPIM, PMP, LSSGB – Vice President, Supply Chain
Supply Chain Management During COVID-19
During the COVID-19 pandemic, Ron Crabtree has been speaking to business executives around the world in virtually every industry. It’s no surprise supply chains have been hit hard by the pandemic, either by an influx of demand, lack there of, or a break in the chain. Ron identifies 3 business groups affected differently by the pandemic:
- Those who have seen an increase in demand.
- There are those who are swimming along.
- Organizations who’ve been crushed by steep declines in demand or being forced to shut down.
Ron put together 5 Things Dictating How Bad It Will Be Coming Out of the Pandemic, an article to aid companies in their return after the COVID-19 quarantine.