If you were hired as the top Supply Chain Management executive at a company, what would be your top three initiatives to improve the company’s capabilities?
Here is my list:
1. Get the right people on board! You can’t accomplish anything else if you don’t have the right talent. The toughest part of the job will be getting rid of people who don’t have the right skills and attitudes. As a new executive, the best time to do a house cleaning is within a few months of taking the job. Once people are let go, you free up space to bring new people on board. But be patient! Hold out and make sure you get people with the skills and knowledge you need.
2. Understand your costs at a granular level! What are your total landed costs by stock keeping unit, product, and product family? What are your costs to fulfill to different customers, and how do those costs change based on a customer’s order size, value added services, and product assortment?
3. Benchmark your supply chain! Benchmarking is not an exact science. Different companies can perform at different levels based on their strategy, the degree of automation in their facilities, and their customer’s requirements. Nevertheless, belonging to organizations like the Warehousing Education and Research Council (WERC) and the Supply Chain Council can be a relatively inexpensive way for your company to get some benchmarking data to see how it is roughly doing compared to others. Some software providers, like SAP, also have free benchmarking services. Discovering that your company is subpar in a particular area can be another argument for receiving the project resources you need to make improvements in that area.
Different companies will have different strategies. They will be at different levels of competence when it comes to collaboration with trading partners, sales and operations planning, having continuous improvement processes in place, supply chain risk management, and the journey to truly becoming demand-driven. All of these things are important. But you have to start somewhere. If everything is a goal, then nothing will be accomplished. Focus is critical.
I believe that starting with these three things will better prepare you for any other supply chain initiative your company might take today or in the future.
But not all of these things are easy. Getting better costing data will likely take more than a year. Your company may need to buy and implement the right supply chain execution solutions to achieve success in understanding your costs. And you will probably need some help from consultants. Finally, the goal of achieving a high level of supply chain talent is never ending.
What would your top three initiatives be? I’d love to hear.