Building People focused Supply Chain

Over the years, Supply Chains have focused on creating Management Systems & Structures, Policies & Processes, KPIs & IT systems to ensure its efficient functioning. I call it as the "Hard" (not as an adjective!) aspect of Supply Chain.

People focused Supply Chain has assumed subordinate role as People focused seems to be synonymous to "Hero" model. In a Hero model, the person who drives the outcomes is the central point of attention & performance. No enterprise will be scalable with that model. Hence the focus on Hero model is not preferred. By proposing a "People" focused Supply Chain, I have no intention to create a "Hero" model.

Supply Chains are real "Living" things. The beliefs of people who make the Supply Chain operate matters the most in designing & implementing the "Hard" aspects of Supply Chain. e.g. What is the Supply Chain teams belief about its Market Place dynamics shall drive the initiatives to design processes & systems within the enterprise. Let me explain this. In a case, where an enterprise exists in a market where entry of competitors is difficult, copying the product is not easy, environment changes pretty slow as compared to other industries, demand doesn't change etc much is a "Stable" or "Certain" Market Place. BUT the team believes this Market Place to be "Uncertain". This Market Place Logic belief of the team doesn't reflect the Market reality as in this case the Market Place Logic seems to be indicating a "Stable" or 'Certain" Market Place Logic. This belief of "People" towards its Market place shall form the base for Supply Chain interventions. Enterprises need to build their Systems which is a "Hard" aspect weaving the underlying People aspect. e.g. In this case, People in Supply Chain believe that the Market Place is "Uncertain" due to their experience with "Change in Plans", which is in their world view is "Demand Fluctuation". Though this doesn't reflect the Market reality as Market demand is Stable. The enterprise should appreciate that the mismatch between Market place reality & People beliefs is due to an inefficient "Planning Process" of the enterprise. Hence intervention to improve Planning system, which is the "Hard" aspect needs to be undertaken. The same intervention may not work when the Logic is "High uncertainty but Forgiving customers". This is what I mean by building a People focused Supply Chain.

Since time immemorial Supply Chains have focused on "Cost Optimization" initiatives. This is "Hard" aspect of Supply Chain is anchored around "People" & their contribution to Cost Optimization. The underlying Supply Chain "Culture Logic" is an important aspect of the success of such initiatives. Underlying Culture Logic of the enterprise Supply Chain, if, is "Entrepreneurial" in contrast to being "Rational" then implementing Cost Optimization initiatives shall be challenging for the enterprise. e.g. An enterprise where Supply Chain People believe that the Management focus is in formulating strategies & initiating actions, People are more important than profits, success in the enterprise comes when one acts like an entrepreneur, decision making is decentralized etc then the underlying Supply Chain culture is basically "Indirect Control" with Management more outwardly focused. Such Supply Chain Cultures are not very conducive to Cost Optimization through direct Management interventions and focus. Rather in such enterprises, Cost Optimization can be achieved through Management being Hands off, ownership being with "People" and guiding people for achieving broader goal. This approach may contrast in some other enterprise where the Supply Chain Culture may be "Rational" where active & direct control, explaining cause & effect, undertaking focused reviews etc may be needed to achieve the same goal of Cost Optimization. The "Hard" aspect (of Cost Optimization) can be better achieved with an understanding of the Supply Chain Culture Logic of the enterprise. This is what I mean by building a People focused Supply Chain.

While the perspective of People focused Supply Chain is the need of the 21st Century Supply Chain, Covid-19 may have given a reason to accelerate. I fundamentally believe that various Supply Chain improvement levers hinge on building People focused Supply Chain.