Triangle of Competing Priorities

Organisations are systems. They take input from the external environment, process it and give back the output to the external environment. The subystems of the organisation play their role in the cycle. A subsystem has a role for itself and a contribution towards the overall system. The delicate balance of individual goals and the system goals is an area where many organisations fail. Failure lacks reasoning for many as the subsystems seems to deliver what is expected out of them. It is apparent that individual achievements don't necessarily lead to organisational achievements. Something some where seems to be wrong.

Supply Chain is the central nervous system of an organisation. By the definition of being the central nervous sytstem it inherently has the accountability of the health of the system. A central nervous syetsm is still a 'subsystem' so is Supply Chain. In my understanding it is the role of the central nervous system to ensure the synchronization of the other subsystems to ensure system performance. Extending the same analogy to orgnisations, one subsystem which makes the rest 'dance to the same tune' (read: aligns to same objective) is the Supply Chain. It is likely that the role of supply chain hence will be critical and also a composite of multiple simultaneous 'competing priorities'.

Its the pull from multiple subsystems and the push from the overall system objective which represents the conflict and hence the challenge for a Supply Chain. The overlap of consistent objectives is pretty rare an occurence in organisation. In my experience of organisations I have observed that organisational objectives represent 'competing priorities' which a supply chain has to finely balance and deliver upon.

I term them as the 'Triangle of Competing Priorities'. Those are;

a. Reduce the working capitial
b. Reduce costs (transaction costs)
c. Offer world class customer service

The organisational objectives represent priorities which are naturally not in synchronised with each other. Balancing those necessarily means risk . Supply Chain hence can't eliminate risk. In the world of business, Supply Chain Risk is the most critical aspect of business management and seems to be least acted upon in the business.

In my experience, I know organisations appreciate that they have objectives to achieve, progressive ones acknowledge the "Triangle of Competing Priorities", am not sure if any are acting for mitigate Supply Chain Risk.

Risky is it not?

Comments

  1. keyur kotechaOctober 25, 2010 at 10:08 PM

    well....i think its the same as Goldratt mention in the goal- Balancing the triangle of Inventory, efficiency and throughput.-

    ReplyDelete

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