Creating Supply Chain Excellence in the Times of Chaos


Strategist consider scenarios of Static, Dynamic, Complex & Chaotic environments in which industries operate. The parameters for determining the same are – number of variables in the environment & the rate of change of those variables. A chaotic environment is one when the rate of change is high & the number of variables in the environment are large. The industry context for that period of industry life cycle is a ‘Chaotic’ environment. The current industry is passing through a phase like that with no surety if that is a permanent change in the way it will need to operate for years to come.

Supply Chains are structures which support a random event called ‘sales’. Each Supply Chain supports a systemic component of demand & a random component of demand. The state of Supply Chains in Chaotic industry context makes the component of  'randomness' increase. While enterprises may engage in the creation of their Strategic Plans, most of them are falling short of their desired outcomes.

Enterprises have alternatives to make corrections to achieve their desired outcomes. A Proactive approach, a Re-active approach or a Control approach. Reactive & Control approaches focus on dampening the variations using numerical data & laying down measurements to bring the process under control. This approach has its utility at the operational level while if the environment in which the enterprise operates has undergone a change then the enterprise may well achieve its operational goal just to realize it was marching on the wrong path.

A Pro-active approach would mean that the enterprise perceives the need to change, identifies the theme is wishes to pursue to change so that it is relevant for its markets & it’s needs. This approach would help to create an sustainable organisation for the creating Supply Chain excellence in the times of chaos.

The pillars which would create Supply Chain Excellence for thriving on chaos are;

a. Supply Chain Leadership,
b. Revenue Growth through Supply Partner Collaboration,
c. Supply Chain Risk Management &
d. Reducing Supply Chain complexity.

Rest of the article in under publication...to be published in Oct 2012 for an event titled 'Vibrant 2012'!

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