Toward a more effective supply chain

In its recent e-book, The Path to Modern Supply Chain Planning – Why the Shift from Siloed to Collaborative Is Worth the Journey, Kinaxis identifies the warning signs of ineffective planning as follows:

1. Siloed thinking
2. Disconnected execution
3. Lack of executive focus
4. Poor system performance

Of course, these symptoms or signs of ineffective planning are true for supply chains. But they are also true for almost everything else that goes on in the enterprise. Let’s look at them from the bottom up.

Poor system performance

As one great guru of business management used to say—without further qualification: “It’s management’s job to know.” To know what? To know whatever it takes to make effective decisions in guiding the enterprise toward success. So, since planning is also the key function of management, if an organization is being guided toward mediocrity (or worse), then this poor system performance is most certainly a sign of ineffective planning. It is probably a sign of ineffective planning on multiple fronts—not just in matters regarding what some might rather narrowly define as “the supply chain.” Chances are many of the metrics guiding the organization are poorly chosen and even more poorly applied, as well.

Lack of executive focus

When speaking of the lofty goals of the enterprise in terms of growth, revenues, market share, and profits, most executives are well focused. They know where they want to take the organization. However, when it comes to translating those high and lofty goals into actionable items and metrics, they tend to believe the lie that optimizing the performance of all the part of the system will lead to the optimization of the system as a whole. This commonly held belief is a lie and leads to all manner of unintentional mismanagement. Management moves for being focused on singular goals to distraction caused by data overloads and too many goals in too many departments across the enterprise. Executives and managers would do well to engage in in-depth learning about systems thinking—like Theory of Constraints or Constraints Management. This would make their management efforts, along with their choice and application of metrics far more effective than is commonly seen in most enterprises today.

Disconnected execution

Disconnected execution is the natural outcome of the “too many goals in too many departments” failure mentioned above. Each functional silo becomes focused on the goals and targets set for them by management. Then comes the finger-pointing when metrics in one department or silo conflict with metrics in another silo or function. I’m sure you’ve been there—and, maybe, are still there today. I probably don’t need to say more.

Siloed thinking

When each functional silo is thinking on its own metrics and goals, what can you expect but “siloed thinking”? And who is responsible for this siloed thinking? It’s management’s responsibility to know! Generally—all too frequently—management is responsible for creating the metrics, the culture, and the mentality that foster siloed thinking. Their choice and application of metrics even reinforce siloed thinking. And the resulting finger-point—as unpleasant and disruptive as it is—is also their responsibility. Want to take a real step forward? Start at the bottom of the list with how, where and why executives plan and measure. That’s a great place to take “a step back to ask a straightforward question, ‘Why are we doing things this way?’”