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Articles in This Series
Lessons & Stories
It is All in the Strands, Yarns, and Fibers
There are times where the metaphor of the supply chain is wrong. I think that a rope or a system of pipes is more accurate.
Consider the construction of a rope. Look closely. There are thousands of fibers in a rope, which are bound together into yarns, gathered into strands and braided together into a single line. The strands give the rope the flexibility to bend and stretch. Without that flexibility the rope would not be as useful — we could not tie knots with it, and it would not hang loosely when we throw it over the side of a cliff to climb on it. The strands give the rope resilience to absorb shock as we rappel. The multiple strands make the rope stronger, the braiding lending it greater tensile strength than the sum of the strength of the strands.
Diminishing Returns of Discount Thinking
There are times when I think the idea of kissing frogs is not that far removed from the idea that buying in bulk is a better deal. Costco makes a significant profit selling mass quantities of food, perhaps more profit per customer than the grocery stores do. It isn’t just the larger packages that drive up volume and profits. Buy One Get One (BOGO) is another ploy to move inventory, as a slight discount in retail price, to spur gross margin dollar growth.
Best Practice Supply Chain is a Glass Pipeline
Better visibility allows supply chain managers to see farther upward and downward into their supply chains. With that vision, best-in-class supply-chain managers leverage the benefits of the “glass pipeline” to predict demand and determine where issues in the supply chain can affect utilization of resources such as labor and transportation.
There are five steps aspiring supply-chain managers can follow to gain the vision they need in order to take control of the variables that can whipsaw their operations.
Behind the Scenes Communication
Every supply chain consists of three separate and vital threads:
- The actual physical movement of goods.
- The flow of money.
- The flow of information supporting the movement of the goods and the flow of the money.
The flow of information has started to become more important only in the past few centuries. For a long time, information about a shipment moved with the shipment. Thirty years ago a consumer could not track or trace a parcel shipment, and a freight carrier had a hard time tracking or tracing a specific shipment. It could be done, but only with a great effort and at a high cost.
Technology has made the process easier and cheaper. Easier and cheaper lowers the bar, allowing more access to a service. Today a consumer can track the status of a package, learning what stage of the process the package has passed. A carrier can trace a shipment through the last step of the process.
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