We’ve heard some pretty bad supply chain analysis advice over the years.
Some of that advice is exemplified in these examples which show just how bad things can get.
To be fair, the scope of some of these examples wasn’t known until too late. However, one big takeaway we’d like to mention up front is to plan for failure—what you’ll do when the playbook you’ve so carefully crafted is thrown out the window.
You’ll soon understand why.
1. “Your supply chain can’t be affected by anyone who’s not in it.”
There may have been a time when this was true.
Risks have changed, though. Lately, a growing number of factors are causing concerns for supply chain managers. Kevin O’Marah at Forbes highlights how threats have evolved over the past decade.
“Where once we worried about localized mistakes or oversights upstream,” he says, “now we worry about cataclysm, potentially at the hands of actors bent on destruction.”
From 2016 to 2017, respondents to SCM World's 2017 Future of Supply Chain survey cite increased concerns about war, terrorism, or other geopolitical threats; natural disasters; and cyberattacks.
“It’s global firefighting,” O’Marah says.
2. “Software will instantly improve a supply chain.”
Not so fast.
While we advocate for the use of software to improve your supply chain we recognize adoption within a company can take some time for any number of reasons.
For example, Hershey Foods introduced a new order-taking and distribution system in 1999. The implementation lurched for longer than expected and, as a result, prevented the company from delivering $100 million worth of candy in time for Halloween.
CIO’s Christopher Koch suggested the then-CEO of Hershey’s issued a statement saying, in part, “Enterprise software is hard. It takes a long time. … [Y]ou will have problems in your business at first because enterprise software isn’t just software. It requires changing the way you do business.”
He goes on to say that, looking back, Hershey’s implementation was actually pretty average for enterprise software. At the time, though, such a large software rollout was rare.
Because adoption time varies, we generally recommend that organizations implement software during slower periods. This allows the enterprise to focus on implementing the software and training users on it before entering a busy season.
3. “Supply chains can handle massive adjustments.”
Supply chains are amazing but unravel if you throw too much at them at once. That’s what happened in the case of Target in 2011 during their proposed Canadian expansion.
The retailer was offered a tremendous deal on real estate, so instead of rolling out in each province, they decided to reach from coast to coast.
“The company lacked the distribution network it needed to supply stores, leaving shelves inconsistently stocked and disappointing shoppers,” wrote Hadley Malcolm and Bruce Horovitz for USA Today.
By 2015, Target had lost $2 billion and decided to pack it in.
“In a sense,” a consultant related to Reuters, “they were compelled to grow very fast.”
Supply chains can handle many small adjustments. One large shift, however, is an unwise move.
If you’re looking to improve your supply chain by increasing your visibility, reducing your time to implementation, and helping you understand the effects of adjustments, contact us today to learn more about how TADA can help.