The 2:00 Minute Warning

I'm pretty sure that most if not all of you are familiar with the adage: “If you fail to plan, you are planning to fail.”

I bring this up because recently a friend and CEO called me to discuss how his company could improve their supply chain capabilities. He was particularly interested in identifying “best practices” or things that his company could be or should be doing in order to improve their service levels and profitability.

After listening to him, I responded that before directly answering his questions or discussing the issues, it would be helpful if I could first review his company's written supply chain plan. That's when he confirmed my suspicions: His company didn't have a written supply chain plan.

Here at TranzAct, we are experts in helping companies create and execute great supply chain plans, so I was not surprised by his response. During the Covid induced supply chain crisis from 2020 – 2022, I gave lots of presentations to over 2000 senior executives about how to build stronger and better supply chains.

In preparing for these presentations, we conducted surveys and talked to industry experts and we learned that fewer than 15% of the companies in the United States have a written supply chain plan that is updated on an annual basis.

So here is a quick question for you: Does your company have an annual written supply chain plan? If the answer to that question is “No” then let’s talk.

The absence of a written supply chain plan has consequences. For example, during my presentations, I would ask these executives to stand up if they thought having a good supply chain was critically important to their company's success. Everyone would stand up. While they were standing I asked them to rate their company's supply chain capabilities on a “5” point scale. Approximately 90% of the audience rated their supply chains as being mediocre or average.

If your company has an average or even mediocre supply chain, you better hope all of your competitors do too! Because one thing I learned when I interviewed Jeff Wilke, who was the # 2 executive at Amazon before he retired, is that a key to Amazon’s success was building a great supply chain that they could use to beat – no, make that dominate – their competitors. To this day, when I am talking to C-Level executives about their supply chains, I often have to remind them: If one of your competitors decides to go “Amazon” on you and build a great supply chain, what will your company do?

Why wait for the answer to that question?  When something is really important, you create a plan! That's why companies have things like sales and marketing plans, disaster recovery plans, or cyber security plans to protect their company. So if supply chain issues are really important to your company, why not invest the time and effort to create a written supply chain plan that leads to great results and protects your competitive position?

If you are wondering where to begin, let's have a conversation. TranzAct can help you create a plan. An effective supply chain plan identifies:

1.    Your company's top supply chain priorities, 
2.    The parties responsible for managing these priorities, 
3.    The investments that will be needed, and 
4.    The metrics that will be used to gauge progress in addressing these priorities.  

An effective written supply chain plan can eliminate surprises and also keep people from having to guess or be reactive to events that cause disruptions or costs to spike.

Having a great written supply chain plan can provide direction for the future. To learn more, give us a call, send me an email, or schedule a one-on-one discussion.  We have a wealth of tools and experience that could help you shape what that plan should look like.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT

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