The Seven Deadly Supply Chain Sins

James A. Tompkins, Ph.D., President and CEO, Tompkins Associates

Have you ever wondered if there’s a university somewhere out there giving degrees in Supply Chain Stupidity? That would solve the mystery of why we continue to see companies making the same deadly mistakes over and over again.

I recently started a list in the back of my journal of stupid supply chain moves. As this list grew, I saw several mistakes being made repeatedly. By understanding and avoiding the Seven Deadly Supply Chain Mistakes below, you can assure that your organization will never be accused of having graduated from that “somewhere out there” university.

1. Selfishness

In today’s world, it is not about your organization versus your competitor’s organization. It is your supply chain versus your competitor’s supply chain. Therefore, it’s essential to eliminate the boundaries between organizations and make sure you and your supply chain partners are really working as one to increase customer satisfaction and market segment. Share information and assure that all links have a common, wholelistic view of the entire supply chain.

2. Short Sightedness

The traditional approach of supplier and customer revolving doors is counter productive. Instead, look at the big picture and establish a strategic plan for supply chain evolution so that you are making long-term investments. You need to be sure your cost reduction efforts are true supply chain cost reductions and not simply the shifting of cost to supply chain partners.

3. Low Commitment Level

The supply chain requires active participation throughout the organization with appropriate vendor and customer peers. Executives need to spend time with key supply chain partners, and organizations will benefit from focusing on their accountability to partner initiatives. Supply chain partners must have a consistent view of their commitment to each other and to the supply chain.

4. Contentment

To truly challenge the status quo and take risks, supply chain partners should always be willing to think outside the box. Envision a clear, well-defined process of continuous improvement throughout the supply chain and a shared vision of opportunities for improvement that is continuously updated. Supply chain partners must keep working together for individual link and supply chain improvements. A contented supply chain is an obsolete supply chain.

5. Rigidity

Ease up! Maybe the contract says 5% discount if ordered in truck load quantities, but as a result of changing from a 53’ trailer to a 48’ trailer, your partner did not qualify for the discount. Legalistic pursuit of contracts and petty pursuits of “You did it/no you did it” are counter productive. Supply chain partners need to work together as one for the best interest of the total and stop rigidly applying rules and procedures. Let’s be accountable for our actions and minimize the need for us to play “watch dog” over one another.

6. Failure to Prioritize

Both your organization and your supply chain must benchmark and establish clear priorities that are mutually understood by all partners who are impacted. Leadership sets realistic timeframes and expectations for accomplishing priorities and updates priorities as appropriate. Accepting too many priorities impedes progress and results in a deterioration of performance enhancement momentum. Use priorities to focus the evolution of Supply Chain Excellence.

7. Poor Communications

To avoid making this mistake, tactical and strategic information should be openly shared throughout the supply chain. Minimize surprises! Put procedures, processes and technology in place to assure that all partners have the same view of the evolution of the supply chain partnerships. Assure that communications within your link are shared with your partners.

James A. Tompkins, Ph.D., is president and founder of Tompkins Associates, a leading supply chain consulting and integration firm. Dr. Tompkins is the author of or contributor to 25 books and more than 500 articles in industry journals. He is an internationally known authority on warehousing, distribution network strategy, material handling, outsourcing, benchmarking and best practices, facilities planning, manufacturing and team building. As the CEO and founder of Tompkins Associates, he has consulted with over half of the Fortune 500 companies in the world including Newell-Rubbermaid, Rite-Aid, Sara Lee Knit Products and the Gap. Dr. Tompkins has made more than 3,000 presentations, including keynote addresses, speeches, executive forums, seminars and short courses in the United States, Canada, Mexico, South America, and throughout Asia, Africa and Europe.