Stop Taking Your Supply Chain for Granted!

Apr 15, 2020


As I mention in this week’s video, here is a problem that a lot of CEOs want to ignore: They are taking their supply chains for granted! How do I know this? Because whenever a CEO talks to me about their supply chain or transportation issues, I ask them some basic questions. Questions like:

Does your company have a contingency plan that addresses what will happen in the event that you have a disruption in your supply chain?

Has your company done any scenario planning exercises that address potential supply chain disruptions?

Or, does your company have a written Transportation Spend Management Plan which outlines/ details how this area will be run or how it impacts your sales/ operations/ procurement areas?

And there are numerous other questions we could ask, but hopefully you get the point. If the answers to these and other questions we could ask is consistently, “No, no and more no’s” you’re taking your supply chains for granted!

And lest you think this is just Mike speaking, we recently held an interview with David Simchi-Levi, and he told us how in a survey of over 600 companies, what was shocking to him is how few companies had created contingency plans or done any scenario planning that addressed what would actually happen if their supply chains were disrupted.

And in our interview with Harry Moser, he talked about how “low cost” procurement decisions impact supply chains. When you combine offshoring with outsourcing and lean operations, you get a supply chain that has more risks than most companies realize. In the United States, we enjoyed stability long enough to establish systems that could prioritize cost reduction over supply chain resilience without too much concern, but that time may now be over.

You can no longer take your supply chain for granted and expect great things. If you want great outcomes and a durable supply chain, there are three things we encourage you to do:

Be truthful.

Understand what’s going on in your supply chain and stop kidding yourself that nothing bad can happen. Dig into the “what if” questions to find problem areas that could use a plan.

Be transparent.

Get together with your team and share your findings. The “Breaking Down the Silos” series of webinars we’ve hosted with our friends from CSCMP and NASSTRAC have gotten great feedback because they highlighted the value that comes from working across departments. We have the fourth and final webinar in this series, which focuses on warehousing, coming up this Thursday, April 16, 2020, and you can register here.

Be tenacious.

Don’t give up. Changing your supply chain is never easy because you’re dealing with lots of people and a range of “BIG” issues from different areas within your company. It is easy to get discouraged, especially when “turf wars” complicate things, but don’t give up! It’s worth your investment in time to have a great supply chain. Your company will be able to serve your customers better and you’ll make more money and have a healthier bottom line. It’s good for your company and good for our country!

Before signing off, here is an encouraging tip. If you want to stop taking your supply chain for granted, send me an email or give me a call and let’s talk about TranzAct’s Rapid Assessment Process. It’s proven to be a highly effective tool in helping companies jump start their journey to getting their supply chains in “Tip-Top” shape.