Supply Chain Management: Get Serious or Get Seriously Hurt
May 19, 2021
This may be the most blunt and direct Two Minute Warning ever.
A recent Two Minute Warning raised an important question: How serious are you about addressing your transportation and supply chain issues? The response has resulted in some interesting conversations with CEOs and C-Level executives. Overall, they are not real happy about how soaring freight costs and other supply chain issues are impacting their operations and bottom line profitability.
Explaining how things in the transportation industry are causing freight costs to soar is relatively easy. Answering their questions about what their company could be doing to mitigate costs and protect their supply chains is more challenging – especially when I remind them that: “When it comes to managing supply chain and logistics issues, your company has two choices: get serious or get seriously hurt.”
Truth be told, most C-Level executives want to believe that their company is serious about supply chain issues. But as we learned in a recent webinar I was asked to conduct for about 100 C-Level executives, there are at least two reasons why this may not be true.
First, as MIT Professor David Simchi-Levi noted in this recent webinar, when companies choose not to “stress test” their supply chains, it’s a sign that many companies want to believe that their supply chains are “OK”.
Second, when C-Level executives can’t pass a brief three question supply chain quiz that takes less than one minute to complete, it’s another sign: They are not serious about protecting their supply chains! Here are some key points to consider if you want your company to successfully navigate in these turbulent transportation and supply chain waters:
- Since great supply chains happen by design and not by accident, C-Level executives need to be tangibly committed to supporting those who are entrusted with transportation and supply chain responsibilities. C-Level executives can’t delegate a commitment to having a great supply chain. Now more than ever, your team needs to know that you are committed to helping them manage in these extraordinarily challenging times.
- Since capacity will likely be tight across all modes and create tension in supply chains, there's a need for logistics, transportation and supply chain professionals to “communicate upward” so their C-Level executives can make informed decisions about the support and resources that will be required to address what is happening in the transportation markets.
On the recommendation front, if you are truly serious about managing these transportation and supply chain issues, but are wondering, “Where do we begin?” give me a call.
Our Rapid Assessment has proven to be a very effective process that brings together people from all areas (a.k.a. sales, procurement, operations, logistics, supply chain, and IT) and helps them understand how their decisions affect their transportation costs and supply chain capabilities. More importantly, it can help you and your team define the path in moving from your current supply chain state to your preferred future supply chain state.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
CONNECT ON LINKEDIN