I am a Supply Chain Management consultant. The trouble is that no one knows exactly what
that means! The subject matter is so
broad that it covers nearly everything involved in the day-to-day operation of
a business.
In my ‘elevator speech’ I try to encompass the essence of
the business with the following description:
“Supply Chain Management looks at
the internal operations of a business in relation to its customers and
suppliers. We seek to align those
operations with the company’s business partners to reduce overall cost and
mitigate risks.”
This usually gets me a nod or some grunt of comprehension. However, when pressed for examples of clients
I am working with, I usually describe a start-up company in Philadelphia that,
with my help, has begun importing a food product from Israel. My audience usually walks away with the
conclusion that I am an Import/Export consultant.
If I describe arranging warehouse space and delivery of
product to the customer, they conclude that I am a Logistics consultant.
So how is Supply Chain Management consulting different from
Operations Management consulting and Import/Export consulting, etc.? I think that the key is really about
focus. Like all ‘consultants’ we seek
out efficiencies and cost savings in the business operation, however, by focusing
on the supply chain, we look to gain those efficiencies by strengthening the
relationships with all the stakeholders in the chain.
When sitting with a client, we usually start by looking
forward, down the supply chain, towards the ultimate consumer of the product or
service. What, we ask, do they
need? Assuming that the consumer is not their
direct customer, the next question is, what does the customer need to most
efficiently meet that need?
Few clients know the answers to these questions and the task
is to develop a strong relationship with their customers and later to find ways
to integrate the client’s internal operations with their customer base. This can take many forms, including package
design, computer systems integration, delivery schedules, etc. Eventually, procedures must be put into place
to monitor the relationship and make the necessary course corrections when
conditions change.
Of course, once our clients are equipped with the knowledge
of what their customers want and need, the next step is to look backwards along
the chain and get the suppliers to adjust their internal operations to bring
them into alignment with those of the client and their customers. This involves strengthening the relationships
with the suppliers and making them true partners in the process.
Often our clients’ requirements extend well beyond the
traditional supplier / procurer relationship.
Bringing a key supplier in to during product design can reduce the likelihood
of expensive customization of the supplier’s products to meet the design
criteria.
A strong supply chain allows other initiatives to be
promoted and implemented across the chain.
One focus involves sustainability.
Most companies do not want their product to be associated with child
labor abuses, global warming, water pollution and the like. Most will implement initiatives internally to
make certain that they are socially responsible. Clearly, however, the need for initiatives
goes well beyond the 4 walls of the business.
Managing the supply chain gives the business the ability to monitor its
suppliers and assist them in implementing similar initiatives in their
business.
Supply chain management, although primarily focused on
manufacturing and distribution, can also be applied to service based
businesses. Every company, benefits from
getting a fuller understanding of their customers and finding ways to more
closely meet their needs.
So ultimately, supply chain management is all about building
strong relationships and integrating business partners more closely.
