The Supply Chain Workload Iceberg!

Supply Chain Workload Iceberg

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Supply Chain responsibilities are vast in any organization. These jobs reach far and wide, touching virtually every business process, most metrics, and all functional areas.

But too often the expected deliverables from Supply Chain professionals are established without a real understanding of the totality and breadth of actual tasks that must be performed underneath those high level expectations.

With an iceberg it is said that only 10% of it is visible as the rest is under the water. This can be analogous to the work done in Supply Chain.

So let’s explore the Supply Chain Workload iceberg!

Why is the Supply Chain Workload Iceberg Important?

Unless you work in the field you do not understand and appreciate the amount of work involved to make things happen in Supply Chain. And when Executives and Financial teams are pressuring functions on their resource and expenditure levels it can be challenging to defend those requirements with those who don’t understand the complexity involved in making Supply Chain run, and run well.

Supply Chain touches virtually every aspect of the planning, structure, processes, operational performance and financial performance of any organization. Historically the Supply Chain has been viewed as more of an administrative, necessary back office function. But a more modern and progressive view is that Supply Chain is a strategic function of the highest value which can make or break the success and survival of an company in any industry.

Given the importance of Supply Chain it is important to have a better understanding of all of the work that is performed. It is easy for an Executive to issue high level orders to add new suppliers for instance, but the number of processes and the amount of effort required to make that seemingly simple request happen can be enormous.

To illustrate the Supply Chain Workload iceberg we’ve selected a few sample business processes to demonstrate our message.

New Supplier and Materials Set Up

When a Procurement team is asked to find a new supplier to perform a particular service or supply a specific type of components, parts or materials there are a large number of steps required to bring this result to fruition.

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Following is a list of the tasks required. Depending on the number of detailed steps that are actually performed this list could be much, much longer. Most of these tasks occur below the surface, that is beyond the visibility of anyone not otherwise aware of what is involved. That is these tasks are the 90% of the iceberg that most can not see.

  • Sourcing Research
  • Supplier Identification
  • Supplier Visits
  • Quotation
  • Risk assessment
  • Selection
  • Negotiating Ts & Cs
  • Contracting
  • Sample orders and approval
  • Parameter and data entry (PDM)
  • Purchase Order management
  • Auditing
  • Performance tracking/management
  • Ongoing negotiations
  • Supplier relationship management
  • Process and expenditure approvals throughout

Customer Order Commitment

When a customer places an order it is necessary to make a commitment as to when that order will be fulfilled and delivered. While a sales person may have made the sale in B2B, or a website is the platform for order receipt in ECommerce and B2C, it is necessary for Supply Chain to determine, and commit to, when that order will be shipped and delivered to the customer.

There are many different factors that go in to determining when an order can be delivered. Even if visibility to these factors is automated there is a lot of work that goes on behind the scenes, or below the surface, to provide this information. Every one of these steps is a separate business process that must be executed either in advance, or in real time, so that realistic and informed customer commitments can be made as to their order requirements.

Just as with the iceberg the Customer only cares about the commitment they receive regarding their order. They are oblivious to the 90% of the work that happens below the surface in order to make that commitment a reality.

  • Inventory availability across channels
  • Finished goods, sub assemblies, work in process, components availability
  • Delivery lead times
  • Distribution Centre/Warehouse leadtimes/workload
  • Manufacturing Center lead times/workload
  • Open orders and prior commitments
  • Customer demand plans
  • Order backlog
  • Supply plans
  • Payment confirmation
  • Fraudulent order checking
  • RMA processing
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Warehouse Order Fulfillment

When customer or channel orders are received and delivery dates committed it is often incumbent on the Warehouse, Distribution Centre, or perhaps another channel, to fulfill those orders. Those orders can only be fulfilled if a series of business processes has already occurred in managing the warehouse which will then enable the completion of orders.

Whether it be new order fulfillment, channel replenishment, or order returns processing there are number professionals involved in executing all of these processes. As with our prior examples most people only understand that goods are shipped out of the warehouse and they are not aware of the work that happens below the surface to make this happen in the most efficient and expedient manner possible.

  • Yard management for inbound shipments and scheduling
  • Receiving
  • Bill of lading/open order quantity verification
  • Quality inspection
  • Sorting
  • Labelling
  • Storage/Put away
  • Cycle counting
  • Retrieval
  • Picking
  • Packing
  • Labelling
  • Replenishment
  • Outbound truck scheduling/loading
  • Shipping
  • Returns receipt, checking, storage

The Supply Chain Workload Iceberg

Those who work in Supply Chain know of the extensive set of business processes to be executed to make things happen. Their ability to execute that complexity in the most effective manner can give those on the outside the impression that these tasks are easier, or simpler, than they really are.

And while it is always important to focus on process simplification and waste elimination there is no getting around the fact that a lot of work is required to make things happen. Most people just see the tip of the iceberg whereas those who work in the profession are fully aware of the 90% of the iceberg that most people can’t see.

In this article we’ve given a few examples of this analogy in action.

Let us know what other examples you see of the Supply Chain Workload iceberg!

Originally published on March 23, 2021.

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