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SUPPLY CHAIN EVOLUTION Learning from Everest

Summit, pinnacle, top--reaching the highest level. Throughout history, standing atop the highest peaks in the world symbolizes man's ability to overcome and conquer even the most demanding feats of human adventure. The structure for achievement in many business models uses the same triangle (as the mountain) in the form of a diagram to help employees reach superior achievement.

As in business, the supply chain of mountain climbing has undergone radical change. Using Mount Everest as our example, we see that the change came about from three improvements: ( 1) the introduction of the direct alpine approach of Italian climber Reinhold Messner, (2) the technological advances in equipment, gear, and clothing, and (3) the replacement of Sherpas (local inhabitants) with helicopters to transport necessities.  In 1963, a successful climb of Mount Everestrequired the aid of over 900 Sherpas hauling 300 tons of equipment.  Due to the second and third improvements above, the same expedition in 2000 is shortened by a month, and the amount of equipment needed has drastically decreased.  There are, however, elements such as weather and human error that offset even the best improvements.  The highly publicized expedition of 1996, resulting in the deaths of 12 explorers (which was the highest single-year loss in history), could not be saved in spite of these advances.1

Back in the business arena, we witness a change in supply chain relationships from a "we-you"/"vendor-customer" philosophy to an "us" philosophy.  Soon gone may be the days of separateness between a company and its chief supply-chain arm(s).  We benefit from opening our doors and allowing our supplier more responsibility for, involvement with, and input on aspects of our business.  The cooperative relationship, however, is based on the human elements of trust and respect. In spite of the evolution and advancements, we still—as our friends on Mount Everesthave shown us—need to attend to the human side of the supply chain.

Here are a few suggestions to consider when looking at your supply chain:

1.       Streamline your vendor selection.  Even the smallest of companies can have a tremendous amount of suppliers.  Set up authorized sources, establish online catalogs, and allow for the approval to purchase supplies and miscellaneous items by use of simple systems.

2.       Work with the best firms.  The "best" does not always mean the cheapest.  As in any relationship, it's not always important who the vendor is when things are going smoothly.  However, the "best" does mean that your vendor steps up to the plate when things go wrong and takes proper measures. Select a vendor who considers you important and who will do the extras.

3.       Computerize and track all purchases.  (Suppliers can do this for you, also.) . Too many managers mistakenly assume that they're in tune with their supply chain, and it never hurts to reinforce the correct figures.

4.       Invite suppliers in to visit your plant.  The more they understand your business, the more they can help.  Toyota will send its own engineers into a supplier's shop to assist in productivity gains.  Their gains are Toyota's gains.

5.       Address problems early.  Forming new alliances and partnerships in the marketplace requires sharp communication and relationship skills.  If you've got a hunch that your company isn't getting what it needs, check the numbers, the other options available, and your staff (including management and front line.)  If the relationship or the service is shaky when the going is smooth, what happens when there's a turn in the marketplace?  Remember that in spite of well laid plans and advances in technology and in the supply chain, the '96 Everest climb was disastrous because a storm arose and people found themselves as the unprepared victims of unsound judgment.

6.       Don't just pick up the next buzz technique, such as JIT or TQM, for supply-chain thinking.  Realize that just as your systems and corporate culture took years to develop, your supply chain will evolve and develop over time as well.  The creators of many of the supply chains have been developing these concepts for years.  Supply-chain changes won't happen overnight, but focusing attention in this area will pay off in time.

1Jon Krakauer, Into Thin Air

 

© MM David & Lorrie Goldsmith

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01.08.2019 (23 days ago)
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