A few words about myself – I joined the Manufacturing Advisory Service early in 2009, just after the crash and have been involved in business growth and consultancy ever since, latterly with Sheffield City Region Growth Hub. I’m also a Supply Chain Advisor with Huddersfield University, working on a Manufacturing Supply Chain project on behalf on Leeds City Region, as well as working as an independent consultant.
I think the first question to answer is – What is a Supply Chain? Wikipedia gives the following definition: –
A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer.
So, it’s not just your suppliers and certainly not just logistics, – these are both important elements but not the whole picture.
Taking it right back to basics, a typical supply chain begins with the raw materials obtained through mining, agriculture, forestry, fishing etc. These ‘raw’ materials get turned into products which in turn are distributed and sold to end users, as a general rule, the more complex the product the more stages it will go through and the longer the supply chain. You can see from this that many links in the chain involve different companies, each of which is looking to maximise its’ own returns but with little interest in the rest of the chain, except perhaps their immediate suppliers and customers.
Today, that’s an old fashioned view, more and more companies have realised that they don’t operate in isolation and that what they do can have a big impact up or down the chain, so a key point of strengthening your position in a supply chain is to consider the needs of the rest of the chain – upwards to the eventual customers and downwards to the original producers – and what can you do that will make life easier for the others. Once you’ve sorted that your position in the chain becomes much stronger, with less likelihood of being displaced by a competitor – but you can’t afford to relax – continual improvement is vital – just think about the number of companies you used to know that no longer exist because they failed to keep up with the rate of change in their supply chain
Laws and regulations, social trends and technology developments have a big impact throughout supply chains and frequently represent barriers to entry which must be overcome before your company will even be considered as a new supplier. ISO standards and technical certifications are classic examples of this – frequently specific standards are required to prove a particular competency or level of control applicable to an industry sector – e.g. TS16949 for automotive suppliers.
So, in conclusion, the key to supply chain success, or indeed business success in general, is to understand the needs and expectations of your customers and their customers and continually thinking about what you can do that will make things better for them – without making yourself bankrupt of course!