Supply Chain Fundamental Rethinking

A few years back when I quit my SAP consultants’ job stating to my boss that I came from and wish to go back to Supply Chain domain as there is a lot happening there, the response that I got was that listen to your heart but before you go let me know ONE supply chain innovation in the recent past which is not a function of technology. Leaving the bias to technology (as after all he was head of a SAP practice) it’s a profound question. Innovation is a breakthrough in a system which is path breaking. It may or may not have similarities with the current way of doing things. e.g. In the past organizations had supply chains which were functionally oriented hence used to have a procurement function, a planning function, a production function, a warehousing function, a logistics function and so on. Each had their individual objectives to be met which may not be consistent with over all organizational objectives. The term used was “Local Maxima”. In later 80’s, I guess, organizations apprecia...

In the advent of supply chains somewhere in the root of its aspirations lies a factor of achieving excellence. Organizations need to excel which means components of organizations need to excel. Logistics, the movement of goods, has now been replaced by Supply Chain, end to end flow of goods, knowledge, finance and information. The extent to which an organization can succeed in the market place is now a factor of its excellence in Supply Chain. The cliché is – Competition is no more between two organizations, it’s between the Supply Chains of two organizations. The industrial revolution leading into technology innovations has transpired organizations to adapt to multiple and dynamic business environments. The organizations metamorphosed many times all along the history but the need for achieving excellence has consistently been the key driver for survival and growth. Alignment and Integration of Supply Chain with the organizational objectives is a critical parameter for success. The ali...

In the aftermath of the 2008 crises, the landscape of consumption in the largest economy of the world will undergo a permanant change. An economy which consumed the largest and lived on credit will make a life style change to savings. This will dampen the demand for products and services. Organisations across the globe will have one time downward impact in the demand for their products and services to be digested. But the implications of that will create a large mismatch of demand and supply for significant time in future. Most of the supply (read: capacity) which got built across the globe in the recent past will suddenly turn out to be "excess" on a permanant basis. The demand destruction of this kind will create a new supply chain challenge which on one side will be price elastic demand while on the other side will have high costs to be absorbed for the supply chain assets that got created. Many of the suply chains are global in nature for which demand exists in developed...