About Supply Chain -3

"Efficiency is doing things right. Effectiveness is doing the right thing.

Supply Chain Management is as equally misunderstood as Purchasing. Imagine a physical chain that links all relevant actors from the final clients of a business to the last suppliers of the organization via the various elements of the business itself – there you have your supply chain. On top of this chain you have a smaller chain which is itself linked with the bigger one in many places – this is the IT part of the supply chain which carries the information related to the physical flows in the supply chain.

As we work in ever more decentralized organizations with more and more specialist service providers within and outside the organizations – linked one after another – the control of the physical and information flows of a supply chain become absolutely critical to your ability to effectively steer your business and satisfy your clients.

In essence Supply Chain Management is about bringing a maximum amount of flexibility to a business, allowing it to easily modify its structure and organization and to enter in whatever configuration required into new markets and regions, but also to withdraw from such and to adapt wherever and whenever required at a high speed and a low cost. If your control of the supply chain is very good, you will be able to use this ability in a proactive way to gain a significant competitive advantage in speed, productivity and adaptability.

A recent US based study says that tomorrow, the success of a company will depend more on it’s ability to build and coordinate an extended enterprise (which is a network based on Supply Chain architecture) than on its brands. (to be continued …..)

In the extended enterprises of tomorrow, Supply Chain, together with Purchasing, will play a key role. Put in a very simplistic way, People in Supply Chain will be the architects of the extended enterprises. They will be responsible for ensuring that the information flow and the physical flow, as well as the “connectors” between all members of such networks and their clients and suppliers are clearly defined and managed for maximum effect.

When these responsibilities are combined with the typical profiles that will work in such areas – very international, business understanding, communicators and leaders – it becomes apparent that People in Purchasing and Supply Chain are set to become the entrepreneurs and General Managers of tomorrow’s modern business organizations.