In enlightening (video) interviews by Supply Chain Brain’s Bob Bowman, François Martin-Festa, Supply Chain Global Planning VP at Schneider Electric, and Zoltan Pekar, VP for Global Supply Chain Division at Roland DG Corporation, talked about the greatest challenges they faced in moving their supply chains toward significant improvement.
Protecting the (real) bottlenecks
For Martin-Festa at Schneider Electric, the “biggest challenge was… to be able to put a strategy together, and to connect all the key stakeholders, [in order] to be able to absorb and catch the market fluctuation from… downstream and… mirror it to the bottlenecks… on the upstream.”
Several crucial points are worth noting in this brief statement:
- Strategy – Taking a strategic approach to supply chain management should include defining how return on investment (ROI) is going to be achieved through the tactical execution that flows from the strategy.
- Connect – Include in your strategy and plan steps to connect all the key players in your supply chain. Don’t just connect their technology. Connect with them through strategic and tactical collaboration to strengthen the ties that make your supply chain more than a collection of arm’s length transactions.
- Absorb market fluctuation – Your plan should include specific methods used to determine the strategic sizing and placement of buffers (i.e., stock, time and/or capacity) to absorb and “catch” (i.e., stop) supply and demand fluctuations in their tracks. That is the only way to dampened, and even, end, the damaging results of the bullwhip effect.
- Bottlenecks – Any strategy that has not fully recognized the relatively small number of actual “bottlenecks” (i.e., constraints) in the ability of the supply chain to sustain the flow of relevant materials is, ultimately, an ineffective strategy. Most importantly, do not be afraid of slaying a few “sacred cows.” Many times significant “bottlenecks” stem from policies and procedures, not physical constraints in the supply chain’s systems. “Slay” them and get them out of the way. That way you can deal with the real (physical) bottlenecks to flow.
How do you approach supply chain strategy and tactics? Please leave your comments below. Thank you.
Stay tuned for Part 2 of “Biggest supply chain challenges” coming soon.