I chose this picture because I was lucky enough to attend the first Supply Chain Insights (SCI) Summit held this past week in Phoenix, which was an eye-opener and inspiring, but also just a little scary. It was a little scary because it shows how much more we all could be doing to improve the effectiveness of supply chain management as a practice. Lora Cecere, who founded SCI after spending some years at AMR Research, is recreating the executive focused supply chain conferences hosted by AMR Research in the 1990s. From what I saw in this first conference, she will succeed in attracting senior supply chain executives by making the conferences both practical and business focused. The case studies presented were excellent and, as a planning wonk, I liked that many of the presentations extended beyond planning to design (both product and supply chain), sourcing, manufacturing excellence, and talent. The core message of the conference is that the productivity improvements we saw in the 1990s, through the adoption of supply chain as a practice and the deployment of the first generation of advanced planning solutions, have stalled. Lora challenged the audience to think differently about supply chain in order to overcome what she calls the effective frontier, principally by changing from an inside-out approach to an outside-in approach. The presentation by Kimberly-Clark was the one that spoke to me the most in the sense that it captured not only the end point, the destination, but also the journey they took to becoming demand-driven. This is not an easy journey and must start with a vision and a passion, because it is a long journey. Many supply chain taboos and concepts of best practice have to be challenged in order to start and sustain the journey. As a very frequent conference attendee and speaker, what I found different was most of the speakers were talking about doing different things, not doing the same thing differently. All too often at conferences we hear about incremental change, about small improvements in a functional silo. It is very seldom that we hear about change at a large scale addressing the core issues in supply chain, the barriers to breaking through the effective frontier.
In that light, I do want to focus on one barrier identified by Lora in which I have a slightly different perspective. In discussing the extensive use of consultants to advise on process change, Lora used this brilliant slide. I agree with the core sentiment captured by the slide. Where I have a different take is that if you are going to do something different, something that very few other companies are doing, then by definition it must be “emerging”. If it isn’t “emerging” then, at best, it must be “standard” practice, in which case it isn’t “best” practice. Of course I am referring here to differentiating practices that give competitive advantage. There is no advantage to be gained in adopting emerging practices for commodity processes. And why would you want to commoditize a differentiating practice by adopting standard practices masquerading as best practice? All of the companies that presented had adopted new approaches to issue that many companies faced, whether this was Procter & Gamble’s adoption of analytics, Dell’s innovative use of organic materials for packaging, or Kimberly-Clark’s demand-driven journey. If they had adopted “best practice” approaches promoted by the management consultants they would not have achieved the results that they did. At the time the photograph was taken, most doctors did smoke and few were aware of the long term health effects. Warning against the health consequences of smoking was an “emerging” practice discounted by the majority of doctors. But this is a small quibble. Lora set out to challenge us to re-think supply chain excellence. She succeeded with me. More importantly, from comments over lunch, she succeeded with the practitioners. I can honestly say that I learned a lot at the SCI Summit. First of all I must thank the SCI people for putting on the great conference and commend all the speakers for their great contributions. I will be writing separate blogs about some of the sessions. I truly look forward to the next SCI Summit. Given the current state of many supply chain conferences, it can’t come soon enough.
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