Supply Chain: the good, the bad, and the ugly
Hello! I’m Caner and welcome to my newsletter - the SupplyChainist. Every Friday, I write about subjects within the supply chain management that I learned and keep learning during the last 10 years.
Good morning!
One year has passed since World Health Organization (WHO) announced Covid-19 as a pandemic. What a challenging year it has been for all of us.
From the professional level, supply chain teams got exhausted - perhaps a little more than other departments. It was the supply chain teams that received urgent meeting invites for risk assessment way before WHO declared a pandemic.
One positive impact of Covid-19 on supply chain professionals has been that it reminded businesses to have strong supply chain talent and processes. This increased the demand for supply chain talent, which is already in shortage.
Source: Gartner, research in 2019
I never planned to work in the supply chain.
My first job was in sourcing and procurement within the consumer electronics industry. I sourced products based on specs created by engineers. I found my role was too disconnected from customers. It didn’t allow me to understand the business and what customers really wanted.
Next, I became an entrepreneur. I spent 99% of my time in sales - the closest function to the customer. Selling is fun. You will talk with customers every day. If you deliver what you promised, you’ll get paid! It makes you feel like a superstar.
What else could be better building relationships with customers based on trust, selling them goods and services, and generate revenue?
Supply chain maximizes the value generated
Supply chain teams’ performance, plans, and decisions have a direct impact not only on the revenue but also on the cost. Therefore, we can maximize the generated value (revenue - cost).
This is powerful.
It has almost been 5 years since I became a supply chain professional who totally surprised me and exceeded my expectations.
It allows me to use a lot of soft and hard skills. I work with many internal stakeholders as well as with customers directly every day. I support revenue generation by managing service levels. I minimize and optimize costs as much as possible.
One reason I started this newsletter is also to promote the supply chain function.
Most people believe the supply chain is fully an internal function (partly yes, partly no). When I speak with people outside of the supply chain about my role - they don’t get it - especially how I can work with customers directly. When I worked in procurement, I was thinking the same, and I had a poor understanding of the supply chain. Now being in the role for about 5 years, knowing what I like and dislike and the ups and downs of the role, I compiled a short list of points on the good, bad, and ugly parts of the supply chain.
The Good:
Data and fact-driven: you can’t bullshit - many data points available.
Cross-functional collaboration: you work with every team, every day.
Dynamic environment: You will never get bored. Your job is to match supply and demand - both of which change every day.
Customer-collaboration: your goal is to create total customer satisfaction by the achievement of supply chain KPIs. Your customer’s success depends on your supply chain success. If your customer cannot get the right products at the right quantity at the right time, then you have failed your customer and company.
Measurable goals and KPIs: you can prove achievements by numbers and in dollars (both for revenue generation and cost improvement)
The Bad:
Uncertainty: You frequently have to make decisions in uncertainty. Decisions can be costly. Forecasting demand is the most simple example. You know your forecast will always be wrong. You have to make plans based on this.
Complexity: You have to work with many SKUs, suppliers, production sites, warehouses, DCs, and customers. (Many interactions happening constantly)
The Ugly:
Thankless job: You'll prevent thousands of problems from happening, but nobody will be aware of it. It only escalates up as bad news if the problem is not resolved. Unfortunately, no news is good news is still in place, and it's okay.
Things will probably go wrong: Your plan's success is dependant on the success and execution of tens of other internal and external interactions. Unfortunately, nobody can't control it all. Things will go wrong, and it's okay if you have done everything you can.
How do you see the good, the bad, and the ugly within your work? Please share with me below!
References:
Thank you for being part of the supplychainist and have a great Friday :)
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