The supply chain has been very much taken for granted over the last couple of decades, and few of us ever stopped to wonder how the food in our local supermarket actually got there. Until suddenly, the shelves were empty and we were being asked to queue for everything from new cars to paracetamol.
The reason, we were told, was a breakdown in the supply chain. And what needed to happen was much more supply chain synchronization.
What is supply chain synchronization?
According to a Global Supply Chain Institute white paper1;
“Supply chain synchronization is the strategic work conducted to bridge the gap between supply chain operations, multi-functional business processes, and people systems.”
Or what the authors refer to, in their (much more readable) summary in the Supply Chain Management Review2, as “the 3 Ps”.
1. Physical resources and operations
This is what most of us think of when we hear the words ‘supply chain’. It’s the physical moving of the stuff from the factory floor to the shop, and from the warehouse to the construction site. And the breakdown of this operation has never been better captured than by the sight of the enormous container ship, the Ever Given, as it sat stranded in the Suez Canal, in March of 2021.
The Physical resources are the what, the Business Processes are the how. How do you minimize waste and deliver on innovation? What can you do to reduce working capital requirements? What are the best tools for digitizing and automating your various processes? And how much of all that needs to be outsourced?
It’s the processes that you put in place that will determine your Net Operating Profit After Tax (NOPAT), and increase the all-important Economic Value Added (EVA).
And the People are of course the who. Or, in a word, culture. What can you do to make sure you’re taking on the right people, and creating an environment for them all to flourish in? What’s the right balance between hard and soft skills? Are your leaders actually leading, and what can you do to help them do so?
How do you make supply chain synchronization happen?
So what can you do about any of this, now?
Improving the physical elements of the supply chain and its operations, or what’s called supply chain planning, is very much a long-term project. While the third of those 3 Ps, people, is by far the trickiest. As Peter Drucker (he of OKRs) so aptly put it, “culture eats strategy for breakfast.”2
By far the easiest and quickest win then is by focusing on the second of those Ps, your processes.
It all comes down to your internal processes
Specifically, it’s your internal processes that link your people to the physical assets. And how both perform depends on them. What that comes down to is how well and how speedily you move data around;
“Data is fundamental to a supply chain synchronization; this allows business to have visibility and respond in unison to changes.”3
If everyone is working in silos, any problems with, say, sourcing on the supplier side will inevitably result in penalties being issued. All of the physical assets need to be connected to their milestones and deadlines, and to the people overseeing them. So that each of the materials and products can be tracked from supplier to customer. And all of them, and all of that, needs to be kept permanently up to date.
The only way to do that properly is by using the right software. Real-time analysis will mean you can track variables like cost, delivery, speed, and responsiveness. And it’ll give you the tools to model the supply chain and simulate what-if scenarios.
As the authors of the white paper conclude;
“Platform-based management and digitalization create powerful opportunities to simplify, standardize, and speed supply chain operations.”1
“You can’t fix what you can’t see.”2
How can you achieve supply chain synchronization if you can’t see all the moving parts?
- “End-To-End Supply Chain Synchronization”, https://www.mainepointe.com/hubfs/GSCI%20MP%20White%20Paper%20End%20to%20End%20Supply%20Chain%20Synchronization%20.pdf?utm_campaign=GSCI%20White%20Paper%20-%20Supply%20Chain%20Synchronization&utm_source=GSCI%20Synchronization%20Press%20Release
- Mike Burnette, the Global Supply Chain Institute, https://councils.forbes.com/podcast/synchronizing-the-supply-chain
- Picture Credit “© S.J. de Waard / CC-BY-SA-4.0 (via Wikimedia Commons)”