Leadership Still Counts in Supply Chain

There is a lot of talk (even on this blog) about the cool and "sexy" technology being deployed in Supply Chain today. Things like block chain, robots, drones and apps to do just about everything are all the rage. However, it is my thesis that until and unless you get a full "lights out' warehouse, load control center, and planning department, leadership capability will still be the single competency you cannot do without.

You do not need block chain to run your supply chain (at least today).  However, try to run a 1m square foot warehouse or a sophisticated load control center without great leaders.  It cannot be done.  What do I mean when I say a great leader? It is simple and the good news is you don't need to be General Patton.  You do need to:

1. Treat everyone with dignity and respect... always. 
2. Help people look to leaders to solve problems not just point them out.
3. Lead from the front and on the floor. You cannot be a great leader sitting in an office. In fact, ditch the office as it is too tempting to hide out there.
4. Be visible always. If you have 3 shifts then you have to work third shift as much as you work first. If you can't or are unwilling to do that then you cannot lead a 3 shift operation. That simple.
5. Communicate, communicate, communicate...  every day that goes by where you are not communicating, a gap is being created, a void appears and the associates fill the void with rumor and innuendo.

You have to have a true passion for the subject of leadership and study it like you would any other subject. Through some trial and error you can figure out what works. Finally, write down your personal leadership playbook. Keep it with you.

So,  as much as I love technology,  my travels,  observations and work tell me great leaders can get great results in almost any environment. Go out and lead!!!  You will be surprised at what great things can happen!

Cyber Attacks: How We Have Moved From Corporate Espionage to Corporate Warfare

A great posting over at Supply Chain Matters relative to the impact of cyber attacks on Just in Time (JIT) businesses.  A simple cyber attack can now shut down your tier 1 and tier 2 suppliers which will bring a JIT supply chain to a screeching halt.

You should read this article and understand the points of vulnerability in your supply chain for cyber attacks:

1. Aggregators and Service Providers: You may have a process which you are not even aware of where data goes from you to a third party, it is manipulated, then sent back to you. Simple process.  But if that third party is not certified and is rendered useless by an attack it can shut your processes down.  Think about it this way:
   
   - You are using a third party company to take demand information and create a production forecast and schedule.
    - That schedule or forecast is then fed back to you and input into your MRP.
    - The third party is attached by cyber criminals
    - Your production shuts down.
   
2. Tier II and Tier III Suppliers: There is a reason they are able to cut costs and sell to you cheaper.   There is something they no longer are doing.  Don't let them compromise on cyber security and you need to follow up and check and check.  If their plant goes down, the JIT supply chain goes down with it.
   
3. Think Global: Remember, your suppliers have suppliers in countries you may not be able to point out on a map.  Make sure you can map out your supply chain then overlay a heat map of where cyber attacks come from.  This will help you identify your vulnerabilities.  

A very good article, I encourage you to go read it and you, as a supply chain leader, must be at the front of developing a cyber security effort.  

If Your Supply Chain is Not Customer Centric - You Are Dead

My previous post discussed why Amazon is killing the retail market.  My thesis is simple and it has nothing to do with Amazon being a financial juggernaut.  It was not always that way so we have to ask ourselves how they arrived where they are today.  The reason: Customer Centricity.  Amazon bills themselves as ..."The Earth's Most Customer Centric Company".  They are passionate about the customer.  So, what are the supply chain implications:

1. Stop Talking About Cutting Costs and Start Talking About Increasing Revenue: The stereotypical supply chain manager prides themselves on cutting costs.  They talk about taking inventory out, moving to cheaper modes of transportation, consolidating warehouses or, God forbid, outsourcing to get cheaper labor.
   
   What they don't talk about is "How can I make the supply chain better to get products to the customer faster so we can drive sales".  Yet, this is the question they should be asking and this is the question the Amazon supply chain managers think about every day.  If you want to know what a "cost centric" supply chain looks like, look no further than Sears.  They are cutting costs right out of business.
   
2. Get Supply Chain Managers Closer to The Sales Force:  If your supply chain managers are not on the road with sales people periodically, meeting with customers and listening to the nuances of what they want, you are not a customer centric supply chain.  I have met a lot of supply chain leaders who say they are customer centric and then I ask them to name (by name, not company) 5 customers who are in a position to buy their product (not the logistics people of the customer company but the actual customer) and they almost never can do it.
   
   Also, if you are selling to an intermediary (i.e., MFG selling to retailer) don't forget the ultimate customer is the consumer not the intermediary.  The intermediary is only going to buy your product if the consumer is pulling it through the channel.  Because of this, you have to understand the real needs of the consumer.
   
3. Velocity is a Weapon:  Customers and consumers want speed.  When supply chain managers cut costs that is generally a euphemism for cutting speed.  It generally means, buffering inventory, slower transportation modes, conducting mode shifts by "trapping freight" and building truckloads etc.  Make no mistake, these are all revenue and sales killers.  Speed wins!
   
4. Look to the Future:  Don't build your supply chain for today!  Look to the future.  What will customers and consumers want in the future and ensure your supply chain can flex to the future.  This is one of Amazon's super secret sauces.  10 years ago who would have believed people would pay $100 per year to get access to 2 day or next day delivery?  The only company that did was Amazon which left others far behind - in some cases so far behind they can never catch up.
   
5. Listen to the Language Your Company Uses and Change it!:  Here is what I mean:  When Amazon discusses customer service they say, "2 day delivery".  When others discuss it (and I have heard a lot of retailers say this) they say "next day shipping".  Notice the nuance here? Amazon's statement is customer centric - when will the customer receive it.  The other statement is internally focused - when will I ship it.  This is a critical difference and it highlights the issue. 

Of course costs cannot be ignored and you have to do this in the most efficient manner possible but my point is that a growing company, with great customer centricity, can drive more revenue.  You cannot cut costs fast enough to overcome lower and lower sales (see Sears for a case study).  

Bottom line:  BE CUSTOMER - CENTRIC!

Amazon Mission Statement:  "Our vision is to be earth's most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online."

Amazon Doesn't Kill Businesses - Ignoring Customer Needs Does

I am going to formulate a more detailed post on this tonight and I think this is a topic needing coverage. It is all about how Amazon got where they are.

The central point: Don't blame Amazon for killing retail.  Amazon was and still is insanely focused on the customer which causes them to innovate around CUSTOMER needs and not internal politics.

While other companies are trying to figure out how to cut out value for the customer to improve costs, Amazon figured out what will "wow" the customer and then figured out how to do this at an acceptable cost.

If others would get maniacal about serving the customer, they could compete. The funny thing is most won't do it.