Another week, another supply chain conference.  This time I’m on my way to Las Vegas to speak at Manhattan Associates’ Momentum 2009 conference.  My talk is on “The Hidden Value of Software-as-a-Service,” a topic that never seems to get old.  I’ll have more to say about the conference tomorrow.

On the plane ride over, I re-read a couple of classic supply chain articles, including Hau Lee’s “The Triple-A Supply Chain” (Harvard Business Review, October 2004).  Through various case studies, Lee shows that companies with efficient and cost-effective supply chains don’t necessarily gain a sustainable competitive advantage, and they are unable to respond to unexpected changes in demand or supply.   Lee then outlines three key attributes of great supply chains: agility, adaptability, and alignment.  To quote from the article: “First, great supply chains are agile.  They react speedily to sudden changes in demand or supply.  Second, they adapt over time as market structures and strategies evolve.  Third, they align the interests of all the firms in the supply network so that companies optimize the chain’s performance when they maximize their interests.  Only supply chains that are agile, adaptable, and aligned provide companies with sustainable competitive advantage.”

I wish I would have read Lee’s article before I wrote my piece yesterday about the Wall Street Journal article.  It is clear to me now that the supply chain problems triggered by the economic slowdown were not caused solely by a lack of clarity or visibility, but also by a lack of alignment.  Lee makes the important point that “any two of these dimensions alone aren’t enough.  Only companies that build all three [agility, adaptability, and alignment] into supply chains become better faster than their rivals.“  In other words, you can have great visibility to sales, forecast, and inventory data, but if the interests of everyone in your supply chain are misaligned, you’ll end up with the same problems.  “Acting clearly” is not enough; you must act clearly in alignment with your supply chain partners.

The other article I read was “Are You the Weakest Link in Your Company’s Supply Chain?” (Harvard Business Review, September 2007).  It was written by Reuben E. Slone, Executive VP of Supply Chain at Office Max, and John T. Mentzer and J. Paul Dittman, both from the University of Tennessee.  The “you” in the title is the CEO.  “In this article,” the authors write, “we advise CEOs not to become unwitting weak links in their companies’ own supply chain strategies.  The costs of neglecting important matters of supply chain management are damaging to any type of business for which SCM is potentially a competitive differentiator (most notably, manufacturing, retail, and distribution).  CEOs should get involved.”

The authors then go on to outline six key practices for smart supply chain management.  Some of these practices, like “Setting Incentives for Supportive Behavior,” underscore the points made in the Triple-A Supply Chain article.  But here are the two practices that appealed the most to me.

Picking the Right Leaders.  The authors took an informal poll of 27 supply chain executives, and 13 of them had no training or experience in supply chain management before taking the position.  “As long as SCM remains a black box to the CEO,” the authors write, “so too will a supply chain leader’s possible deficiencies.“  As I wrote back in January, I believe that talent management will separate tomorrow’s industry leaders from the laggards (see “Talent Management in Supply Chain and Logistics“).

Keeping Up with Supply Chain Technologies and Trends.  This one is my favorite for obvious, selfish reasons.  Keeping leaders informed is what we do at ARC, and it’s at the core of Logistics Viewpoints’ mission statement-”to provide logistics professionals with clear and concise analyses of logistics trends, technologies, and services.”  Maybe we should include educating the CEO as part of our mission statement too.  Here’s what the authors had to say: “For the company to excel in the technology area, the CEO should be briefed regularly about and have high-level knowledge of supply chain technologies.  She should also demonstrate a thorough understanding of how the firm is applying these technologies and be capable of asking challenging questions-before any new technology is specified, purchased, and rolled out.”

How many CEOS are here at Momentum, and the other supply chain and logistics conferences I’ve attended this year?  Not enough.

And with that, I have to iron my clothes.  Taking the wrinkles out is a lesson I learned from my father, a morning practice that keeps him alive in my thoughts.