“If you’re not getting ahead, you’re falling behind.”
This mindset pervades the world’s most competitive businesses nowadays. It’s a hard-charging, spare-no-effort approach that drives companies to new levels of performance.
Supply chain planners have embraced this attitude as much as anyone else. Their catchphrase is “constant improvement.” They seek to optimize processes continually. Identify and obliterate pockets of waste. Tighten the screws on underperforming suppliers. Fight for every tenth-of-a-percentage-point increase in customer service levels.
I’m not saying I oppose this attitude. But I’m here to argue that sometimes, doing nothing is smarter than trying to do everything at once.
1,001 Best Practices, or 7 Basic Principles?
To put it another way, companies that try to implement every hot new best practice run the risk of tying themselves in knots and making sustainable improvement impossible.
In a recent article titled “The Seven Principles of Effective Supply Chain Planning,” APICS’ Peter A. Bolstorff writes:
“Question: Is best practice supply chain planning simply a function of incorporating more leading practices?
Bolstorff doesn’t encourage manufacturers and distributors to try to incorporate every leading practice that comes along. Instead, he shares seven basic principles that the best planning organizations typically adopt. These, he believes, can serve as general guidelines for any organization that wants to enhance its overall supply chain performance without getting bogged down in the details.
I tend to agree. In our quest to supply chain excellence, we all worry sometimes about getting left behind. But it’s important to remember that best practices aren’t the goal—they’re a means to an end. Focus not on constant tinkering with your processes, but rather, on steady progress towards long-term supply chain planning goals.
Three Key Supply Chain Planning Principles to Keep in Mind
Bolstorff’s seven principles are thought provoking and worth a read. Here are three that especially caught my eye:
#2: Synchronized long-term, tactical, and execution planning processes, planning horizons, and intervals for data refresh.
The key word here is “synchronized” and the key challenge is doing it over very different time periods. The age of planning on spreadsheets, in departmental silos, is over. All planning activities belong in a centralized supply chain planning system. That’s the only way organizations can reliably coordinate goals and timelines. And that’s the only way they can refresh everyone’s data at regular intervals.
#3: Mature collaborative processes for both key customers and suppliers reconciling forecast, orders, and usage or sell through.
Ever felt like you’re nothing but a mediator between your most demanding customers and your most important suppliers? What if you let them talk to each other, with your company listening in on every exchange? By increasing the transparency of your demand and supply data—in a secure online system, of course—you can eliminate unpleasant surprises on both ends of your supply chain.
#6: Disciplined product lifecycle management process bridging the gap between product development and supply chain.
This principle is also about eliminating surprises and increasing synchronization across your business. Importantly, it is also part of a well functional S&OP or Integrated Business Planning process. All products have lifecycles, and successful businesses are continually adding new products while others products are being phased out. This activity has a profound impact on your supply chain and requires a disciplined management process to monitor and control. Many businesses lack these processes.
Good food for thought? After you’ve had a chance to read Peter Bolstorff’s article, I’d love to hear what you thought of his seven principles in the comment boxes below.