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How Did We Arrive At This Confusing State Of Supply Chain?

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Confusing State Of Supply Chain

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How Did We Arrive At This Confusing State Of Supply Chain?

Confusing State Of SCM

If you are confused about the SCM, you are not alone. Thousands of people around this world express frustration.

The easiest example of this confusion can be seen in SCM training and conferences. Some people run a SCM event entirely focused on logistics, while others run a SCM course or event almost entirely focused on procurement, or warehousing, or 3PL, or inventory.

This is not the only confusion about SCM. People at Director or VP level get frustrated when they have to sit through courses entirely focused on mundane operational aspects of SCM.

At the same time SCM analysts and managers sit through strategic courses they find too airy-fairy and vague. The problem was clearly that they chose the wrong event.

Similar confusion abounds among the various generations of supply chain management, as well as BAU and BT content.

Read this article for more details on BAU and BT supply chain projects: https://globalscgroup.com/why-supply-chain-careers-in-business-transformations-bt-differ-from-supply-chain-careers-in-business-as-usual-bau/

All This Confusion Has A Long History Confusing State Of Supply Chain

Operations management and industrial engineering were the two early streams of study that were closely related to the supply chain management arena.

When our founder, Vivek Sood did MBA in 1995-96 from one of the best businesses schools in the world, there was not a single MBA level supply chain course in the entire world. We know because he wanted to specialise in SCM, and looked far and beyond for a suitable course.

But the Operations management and industrial engineering continued as two separate entities till the peak times of world war II. During this time the need for improvements in military logistics skyrocketed and the new branch of study was born integrating core values of operations management and industrial engineering.

In 1963 the National Council of Physical Distribution Management was formed and it was the predominant organisation in the field of managing the physical flow of goods though a chain, though the name supply chain management was not yet coined.

The Birth Of Confusing Supply Chain Management

When our senior partner Dr Wolfgang Partsch and his team coined the term supply chain management in 1978, they created the methodology to study the four flows (at that time fifth flow was - risk was not considered) of the supply chain.

For the first two decades of its existence, supply chain management field was largely ignored - both by the universities and the certification bodies.

Meanwhile, with outstanding real world results, savvy companies and their top consultants continued to progress the thought leadership in supply chains, and popularize the concept of five flows and integration / optimisation matrix.

Yet, I still remember in 2003 being asked on a golf course 'what kind of chains does your company (GLOBAL SUPPLY CHAIN GROUP) supply?'

Business Confusing State Of Supply Chain

Seeing the outstanding success of supply chain concepts, eventually most universities and business schools jumped on the bandwagons and created courses, or even entire degrees focused on supply chain management.

At the same time certification bodies who were formerly training inventory analysts, production planners, warehousemen, logisticians, and even truck drivers and purchasing officers started incorporating supply chain terminology in their course materials and nomenclature.

That is how we have arrived at the situation where we are today and that is one of the reasons for the confusion about the plethora of courses and their varying level of quality and coverage of key supply chain concepts.

A Rose By Any Other Name...

So, when you encounter a logistics manager, or a purchasing manager, or a production planner who is masquarading as a supply chain manager, learn to recognise him/her as such.

Similarly, when there is an advertised supply chain seminar, training, project, workshop, retreat or conference, be alert to the possibility that in reality it might turn out to just cover logistics, purchasing, production, or some other obscure part of supply chain.

Now that narrow aspect of supply chain might happen to be your entire focus - in which case it is an ideal event for you.

But, it is more than likely that you focus was something else, in which case you will end up feeling duped.

What's In A Name?

Everything - if it is accurate.

And, nothing - if it is not.

So, what can you do about all this information?

Firstly, it pays to be well informed. Understand the difference between shipping, logistics and supply chains. There are plenty of articles on this website to help you do so. Our books also cover the topic in great detail.

Secondly, understand that while they are related, in the same way as the study of nursing is related to the study of medicine, they are still two very different fields.

Thirdly, make a concious decision. All these endeavours - shipping, logistics, procurement, supply chain have a place in a modern economy.

But, a nurse cannot be expected to perform brain surgery.

Nor is a logistician expected to finely balance the five flows of supply chain management - s/he may only vaguely know what they are.

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Copyright - These concepts, frameworks and ideas are copyright of GLOBAL SUPPLY CHAIN GROUP from the time of their creation. Do NOT copy these without permission and proper attribution.

Notes:

1. These ideas and concepts will be usually expressed by our thought leaders in multiple forums - conferences, speeches, books, reports, workshops, webinars, videos and training. You may have heard us say the same thing before.

2. The date shown above the article refers to the day when this article was updated. This blog post or article may have been written anytime prior to that date.

3. All anecdotes are based on true stories to highlight the key points of the article - some details are changed to protect identification of the parties involved.

4. You are encouraged to comment below - your real identity and email will not be revealed when your comment is displayed. Insightful comments will be featured, and will win a copy of one of our books. Please keep the comments relevant, decorous and respectful of everyone. All comments represent opinions of the commentators.

Our Quick Notes On Five Flows Of Supply Chain Management

Part of our new “Quick Notes” series – this report answers your most pertinent questions of the topic.

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. What are the five flows of SCM?

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. What is the importance of difference between "Supply Chain" and "Value Chain"?

. What are the stellar case studies of each of the five flows?

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Table of Contents

ABOUT THE PRINCIPAL AUTHOR

Today, Vivek and his partners are among 20-30 people on the planet earth who have this deep understanding of supply chain systems, practices and tools. CEOs, COOs, executives and Boards call them in most challenging situations once they know the full potential of supply chain based transformations. Following are key milestones in Vivek's journey:

  • Started in 1983 as a merchant navy cadet at 18 years age, worked his way to qualify as a Captain – qualified to take command of any merchant ship, worldwide.
  • Earned a top tier MBA from UNSW at the top of his class.
  • Joined highly regarded strategy consulting firm Booz Allen & Hamilton, consulting to the CEOs, Boards and senior management of global corporations within Australia.
  • To learn and specialise in supply chain – against all odds, sought out the co-inventor of supply chain in Germany and convinced him to be a partner in his firm, GLOBAL SUPPLY CHAIN GROUP, launched in January 2000.
  • More than 500 successful blue chip projects with high impact business transformations in large corporations using the full power of SUPPLY CHAIN MANAGEMENT.
  • 4 Seminal and path breaking business books IN SUPPLY CHAIN MANAGEMENT – these are available in bookstores and universities and libraries worldwide.

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5.0
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THE 5-STAR BUSINESS NETWORK

If you are deeply passionate about the world of business and supply chain networks as I am, and enjoy digging answers to critical questions that will help build and steer your business with wisdom, then join me. This book is a journey of exploration through the world of business networks that run along the veins of today’s commercial world.

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OUTPERFORM OUTSOURCE OUTPROFIT

The trend of outsourcing continues to grow unabated with the whole gamut of services, from simple to mission-critical tasks. There is not a single company on earth that does not outsource anything. It is not just about cost arbitrage, it is also a finer expression of division of labour at the organisational level. Like all leverage, outsourcing is a double-edged sword too. On one hand, it allows you to do more, faster. On the other hand, if it goes bad, it can easily kill your business. If you do not believe that is possible – you can google the Fox Meyer saga from the 90s and see for yourself.

4.3
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UNCHAIN YOUR CORPORATION

Businesses Are Chained By Unseen Chains. If You Are Looking For Ways To “Unchain Your Corporation” A Successful Business Transformation Is Required.

Successful Business Transformations Are Difficult, Yet Rewarding.

Business Transformation Is Fast Becoming A Question Of Survival In The Modern Globalised Era.

Modern Supply Chains Integrate Businesses And Economies Faster By Systematic Information Sharing From Internal And External Sources.

Companies Can Multiply Profits By Progressively Ramping Up Cohesion And Collaboration Of All Moving Parts In B2B Network To Achieve Tighter Integration.

4.3
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GREEN SUPPLY CHAIN – AN ACTION MANIFESTO

It is generally accepted that environmental consciousness is now changing to environmental proactiveness as organizations are discovering that it makes good commercial sense.

Boards are asking the management to review their policies related to environmental norms, not only to bolster their corporate social responsibility aims, but also because consumers are asking for greener supply chains

It is also widely agreed that consumers will increasingly prefer to buy more and even pay more for products or services provided in an environmentally sound manner.

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