Five Things I Learned about Supply Chain Management from Writing Bricks Matter

In September 2011, I began the journey. It took me sixteen months.

I started writing on a rainy, cold fall afternoon. I remember it well. As rain streaked the window panes, I wondered how hard writing a book would be. I was soon to learn.

There were three distinct phases: the research, the writing, and the reviews/edits. Each was hard work. It was much tougher than I thought. At each stage of book development, I asked myself, “Why did you want to do this?” The answer was always the same. 2012 marked the third decade of supply chain management. The story needed to be told.

The first phase was research. Over the period of September through December of 2011, I listened to a litany of interviews from 75 first generation of supply chain pioneers. Many of the stories were similar, but I wondered at the absence of data. In each interview, there was a belief that supply chain leadership made a difference, but the people interviewed did not know the balance sheet impact of their efforts.

These early pioneers drove progress, shouldered the burden of new process thinking and built the supply chain organization within their company. However, most of the effort was driven by “projects” or “technologies.” They had worked in isolation on a piece of the supply chain. There were no stories of an end-to-end supply chain transformation. They had pushed from the bottom of the organization often going across the grain. No one thought that the work was done.

When the interviews were done, I plunged into the second phase. The writing began. I thought that this would be fun. For those of you who don’t know me well, I love to write. For me, few things are better than getting up early in the morning and experiencing the flow of words from my fingers. I find the process intoxicating. So, I thought, “How hard would it be to write 98,000 words?” The answer soon became clear. To use a sports analogy, I found that I was a sprinter not a marathon runner. I was used to writing short pieces. I did not have the discipline to pound the keyboard to structure a larger piece. As a result, each chapter became a love/hate relationship. I would start a chapter with a flourish, and soon hit a slump. It would usually happen as I neared the 3,500 word mark. For weeks, I would massage the same 3,500 words looking for an angle, trying to punch out a story and make it coherent. I would toss and turn in bed and tote manuscripts on and off planes. Then suddenly, I would get it! The story would become clear. It was magical. As a result, the words would come freely and the story could progress.

I was a first generation pioneer. I had donned my hard hat and safety shoes in the late 70s. I was picked by my boss to attend early classes taught by Eli Goldratt on The Goal. I spent 15 years building supply chain teams, ten years building software and ten years as an analyst. So, as I sat down to write, I thought it would be easy. I thought I knew my stuff. I thought that the book would be primarily reporting. I was wrong. I learned a lot. In this blog, I share the five things I learned about supply chain management in the process of writing the book, Bricks Matter.

  1. We Seek Clarity. Our Journey is Far from Done. As I wrote the book, it became clear that we have emerging practices not best practices. Our work is not done. After three decades of supply chain process evolution, companies are still not clear on what defines supply chain excellence. As a group of professionals, we have not held ourselves accountable to balance sheet results, and aligned practices and policies to the delivery of greater value. As I realized this, I sent the book to the printers with a heavy heart. As an analyst, I had been guilty of looking at narrow one-year snapshots and broad generalizations. The book made me realize that a discussion of supply chain leadership needs to be a comparison of at least three years of sustained performance against a relevant peer group at the intersection of profitability, growth, cycle and complexity ratios.
  2. Leadership will Happen at the Ends of the Supply Chain. Today’s supply chain is stronger in the middle than at the ends. Leaders will drive differentiation by designing processes from the outside-in for both buy- and sell-side markets. As they navigate this transition, they will find that relationships matter; and while we have talked about collaboration, it has only been talk. Instead, companies have successfully moved cost and waste backwards in the supply chain to trading partners that are less able to shoulder the burden. This was a strong factor in the decline of the American automotive industry; and if companies are not careful, it will be a strong factor in preventing a material event. One of the things that we can clearly see in the analysis of supply chain leaders is that companies that lengthened Days-of-Payables Outstanding (DPO) decreased resilience.
  3. The Role of the Supply Chain Organization. Today’s supply chain organization is both an enabler and a barrier. It is an enabler to manage costs and improve reliability; but sadly, it is a barrier to redefining the next decade of supply chain leadership. In most organizations, the team is defined too narrowly. There is no one on the team that is chartered with building the end-to-end process. Teams confuse the scope of the supply chain organization (which is often limited to distribution) with the need to drive differentiation through end-to-end supply chain leadership. This is worse in Europe than the Americas; but it is a problem for all.
  4. Change. We have to Learn, to Unlearn to Relearn. Due to challenges in front of us, and the growing opportunities with technologies, we must learn the practices of the past, to unlearn and discard them to relearn the practices of the future.  Companies that think that we have “best practices” to move forward will be at a disadvantage.
  5. Outside in. The differentiated supply chain of tomorrow will be built based on a clear understanding of supply chain strategy. It will be built in a step-wise progression from the outside-in.  As companies map these processes, they will find that many of their investments in first generation supply chain technology are legacy. This will be a revolution not an evolution.

The greatest change happened through failure. While we would like to make it glamorous, we mostly stumbled forward trying to avoid other’s mistakes. As I wrote, I gained clarity. I hope that you do as well.

This entry was posted in Uncategorized and tagged , . Bookmark the permalink.