The supply chain is in many ways the literal backbone of the company and a successful can make you just as much as a weak one can break you. Great leaders have made blunders that killed their organizations inadvertently just because of how delicate a mistake can be in this area and how severe the consequences are when there is poor supply chain management. Experts estimate that the supply chain makes up over half of the total cost of production, so this is an area of daily business that should be given its proper place and the effort it requires. Supply chains today are nothing like they were 20, 10 and even 5 years ago! The pace at which the market evolves is so swift that simply being good at it will not cut it, you have to constantly strive to be the best and that means having the ability to adapt to the changes in the world of logistics and the demands of customers that are becoming more educated on the procedures required by the companies they hire and more strict on the expectations the hold from said companies.
On this article here at David Kiger’s Blog, we want to take a look at some of the most common mistakes made by supply chain managers and how they can easily be avoided in order to prevent great losses of time, money and resources.
Stop thinking you can do it all yourself
The mistakes made by others are a great way of learning so you do not have to make them yourself. Sometimes managers fall into the mistake of thinking they can undertake any challenge and wrongly believe that by having the will of facing those challenges they will come out on top. This is a big mistake, and it sometimes goes for companies that spread themselves too thin trying to please customers who seek multiple solutions by thinking they can cover them all. Sometimes is a lot better to focus on the few things you are great at doing, instead of attempting to cover many needs in a mediocre way.
Too much innovation too soon
New technologies in the supply chain are great ways to boost productivity and thus lower costs, however when the investments are made without thinking about how it will affect other aspects of the operation that have nothing to do with the speed of production, then the problems arise. Sometimes the technology is not a good fit for your operation and the demand does not justify the investment. You should always look at your people first and try to find solutions for your challenges inside the company before bringing in the new machine that is supposed to fix all of your problems.
Being more reactive than proactive
Proactive management takes care of issues before they arise because they understand the likelihood of something going south, even if it hasn’t happened before. Reacting to issues leaves very little for readjustment because you can only think about fixing the problem and no so much making sure it never happens again. Playing catch-up is a terrible way to run business and that is why reactive managers rarely get far in the world of SCM.
An invisible supply chain
In an increasingly global market is becoming more common to spread out the supply chain all over the world. While this can sometimes ensure that practices and services to the supply chain are the best available, it also has a tendency to blind managers towards some of the most distant elements of the process. A leader must understand and visualize where their parts and materials are coming from and also where their products are going. This is not negotiable and sometimes the mistake happens because they feel so removed due to the geographical distance that they think it doesn’t matter.
Thinking you know everything
Strategies like mentoring are a great way to attack that know-it-all complex that can deeply hurt the supply chain. Some else’s experience can be your experience if you go about it the right way. Mentors are great for giving you perspective and helping your gain a fresh insight on the situation.
Not being open to feedback
Everyone in the company should be involved in finding solutions and that is why feedback is so important. Assembly line workers are involved in the minutia of what is going on at the manufacturing level, they are the best source for direct information and can sometimes make a huge difference with their insight.
Failing to have contingencies in place
Not having a plan B is not just arrogant but just plain irresponsible. Issues are going to arise no matter what, so being ready means having another path to reach the same goal. Supply chains often fail because when things go bad, everything grinds to a halt because nobody knows what to do next, so it is extremely important to be prepared for these problems and have a contingency in place to deal with it.
* Featured Image courtesy of Ahmad Tarek at Flickr.com