Having come through the Coronavirus pandemic, most people will have felt the impact of Supply Chain failures.
For consumers they will have seen empty store shelves and either an inability to get goods or at a minimum delays in getting deliveries. For employees, at a minimum they will have experienced stressful working conditions to resolve issues, and at its worst they will have lost their jobs or even seen their companies fail.
All of this implies that making improvements and Supply Chain progress is necessary and eventual. However there are 2 pivotal factors that will almost certainly lead to the failure of organizations to improve their Supply Chains in any respect.
The Need for Supply Chain Progress and Improvements
Supply Chains need improvement across all companies, industries, institutions, and geographies. There is not a single case where Supply Chains can not be improved.
The forces driving these needed improvements are many and varied. It could be the competition, customer expectations, stakeholder expectations, cash flow demands, cost and profit pressures, a lack of resources, poor productivity, new technologies, broken business processes, a need to improve metrics, and on and on and on.
But unfortunately there are 2 forces that are so considerable that they dwarf all other obstacles. When they working to impede change they will stop any efforts you have to make improvements.
Certainly you could name other factors that will stop change from happening. But if the reasons that I outline below are either disabled, or changed to being positive forces for change, they can most often overcome any other obstacles that arise.
What are these powerful, yet terrifying, change blockers? Let’s save the worst for last.
2. Complacency or Inertia
The pandemic put every business and every business at risk. Every Supply Chain faltered in innumerable ways. Leaders and employees alike reacted in real time to mitigate, if not resolve, issues as quickly as possible in order to keep their operations running.
Given that no business was immune to the effects of the pandemic, no matter how big or small, you would think that this would be enough reason to make changes that would help protect businesses from any future disruptions. But that is largely not what ended up happening.
As the pandemic ebbed and faded into our past, a funny thing happened. Companies just went back to their old ways of doing things, as if the pandemic scare never even happened. Because, for too many people, it was easier that way … it was easier to be complacent and just do nothing … no matter how stupid that inaction was.
This false sense of security is so misplaced as to be comical. There will always be a disastrous situation of some kind. It may not be as global as the pandemic, but even if it is localized disasters can be catastrophic.
To choose to do nothing, because that is the path of least resistance, is a problem that far too many Supply Chains are faced with. It is a major reason that is impeding future improvements and progress of any kind, even though the reasons for making those changes are as clear as can be.
It is certainly true that making changes can be hard. It is further true that making those changes systemic and sustainable is even harder. But to choose to do nothing because the path is hard is a formula for mediocrity at best and inevitable failure as a certainty.
1. Lack of Leadership
Management is necessary to keep businesses operating, whether efficiently or not.
Leadership is required to define and relate a vision, to create the roadmap to realize that vision, to implement the plans that make that vision a reality, to shape the culture and direction of an organization, to mobilize and motivate resources, and to blast through all of the internal and external barriers that stand in the way of achieving and sustaining that vision.
Without leadership any organization can continue on just being managed. But it will never become a major success, a competitive force, a place that people clamour to join, and it may never even survive.
Leadership is most critical when it comes to Supply Chain progress. Supply Chain is the engine which drives the operational and financial success, or failure, of most organizations. From planning to cash management to Procurement to Manufacturing and Distribution and Warehousing to customer service and logistics and reverse logistics, and on and on, it is all Supply Chain.
The wide array of Supply Chain activities mean that this function is in the centre of the action no matter what is going on in a company. Business process optimization, profitability, cash flow, customer satisfaction, competitiveness, return of investment all require a highly effective and efficient Supply Chain organization.
All of that requires great leadership to create, continuously improve, and perennially optimize these activities.
For instance, the Digital Supply Chain (which is the future) requires the creation of an end-to-end electronically connected business network (from low tier suppliers all the way through to the end customers) upon which technologies and processes for control towers, predictive analytics, artificial intelligence, blockchain, augment reality, big data, autonomous vehicles, etc need to be implemented and operated.
None of that can happen without leadership. And effecting a Digital Transformation, let alone other forms of change, is highly challenging and difficult. You need to create the vision, get buy in, get the necessary resources, develop the necessary talent, implement the vision, remove all obstacles, and blast through all blockers and non-believers.
Strong leadership in driving change is not of the faint of heart. It requires determination, resolve, persistence, courage, intestinal fortitude, and drive. It requires an unwavering intensity of belief, even when you are surrounded by doubters and disbelievers.
In short, that leadership path is hard. And that is the problem. Too few “leaders” have the conviction and characteristics to forge new paths, to challenge the status quo, to go out on a limb, and put their careers on the line.
For that reason, the lack of leadership is the number one reason why any improvements to Supply Chain will fail. If you don’t have leadership you won’t even get started. If you have weak leadership you will fail and along the way you will lose the support of your organization at all levels.
But if you have strong leadership, even if your efforts don’t always succeed, you will make breakthroughs and you will eventually succeed where weaker managers faltered.
Change is hard. But change is necessary. Failure to make change will eventually lead to mediocrity if not outright organizational failure.
The ability to make change does not really depend on resources or technologies. Certainly effort is required to get the necessary resources or technologies, but those issues can be overcome to achieve Supply Chain progress.
What is harder to overcome are the issues of complacency, or inertia, and the lack of leadership. You can have all of the resources in the world at your disposal but if you are blocked by inertia or a lack of leadership, then all efforts to make improvements, no matter how vital to organizational survival, will fail.
Mike Mortson, CEO Supply Chain Game Changer