Earlier this month, I joined a select group of supply chain executives at Lora’s annual Supply Chain Summit for a few days of heady conversations about what works, what needs work and what supply chains will look like in 2030.
One ah-ha moment that is still on my mind came with what is a pretty obvious truth: Growth is what matters – on Wall Street, Main St. and around the world. Sadly, most of today’s supply chains aren’t designed to be an engine for growth, they are designed to squeeze and squeeze and squeeze costs out of the process. Sadder still, I think, is that we’ve been talking about the transition from cost-based agenda to a value-centric model focused on growth for decades. And while Lora’s annual list of Supply Chains to Admire spotlights companies that are making measurable strides, like Hershey, L’Oreal and Dollar General, the universe remains small.
Why is it so hard to build a growth-centric supply chain? For decades, supply chain teams have been measured on getting products to market at the lowest possible cost. Every new idea is challenged by the mantra: “it’ll cost you” and all too often, that’s when the conversation stops. I’m not saying that cost should not be a consideration when it comes to measuring supply chain performance – I’m just saying it should not be the first and most weighted factor in making decisions about what products to bring to market, what markets to enter and how we compete on the global stage.
Supply chain executives need to embrace the vision of a supply chain that supports growth. They then need to put information to work for them – using data and analytics to get the answers to a different, more strategic set of questions, such as:
- How will this help us serve our customers better?
- How can we get new products to market more quickly?
- How can we break into new markets successfully and more quickly?
- How can we use sensing to change in near real-time what gets built to better adapt to market demand?
Changing the lens through which supply chain performance is measured requires that supply chain executives do what Lora’s event called us all to do: Imagine. When we stop looking at the supply chain as a cost center and start treating it as an engine for growth, the possibilities are indeed, endless.
Originally published on Beet Fusion.
Jim Lawton 