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The New Realities of Supply Chain

By Philip E. Quigley, CFPIM, PMP | July/August 2013 | 23 | 4

In today's volatile world, it’s essential to set up a planning process that regularly looks at the most challenging areas and helps you think through the impact of what is happening.Tips for dealing with the unpredictable

Today’s world is volatile. We’ve all heard this, and we all know that, as a result of this volatility, supply chain and operations management professionals must constantly figure out how to prevail over serious, often surprising, challenges.  

Consider how the production of laptop and desktop computers has been affected by smartphones and tablets. Components, sourcing practices, packaging, shipping, distribution—all of these elements are experiencing transformation. Meanwhile, political conflict in Korea may lead to wide disruption of ocean and air shipping. India, too, is seeing some political rumbles. Then, there is the impact of new gas production in the United States via fracking. And let’s not forget the talk of shifting work back to the United States because of cheaper energy here. These are just a few examples of what our industry faces.

How much will things change? No one really knows. But it is the responsibility of supply chain and operations management professionals to do some serious thinking, questioning, and decision making. Plus, implementing plans and strategies is more critical than ever. 

The power of people
How do we succeed in this volatile world? First, it’s essential to set up a planning process that regularly looks at the most challenging areas and helps you think through the impact of what is happening. This means spending some time working with your colleagues and team members away from the office. And it means bringing in some outsiders to challenge what you are thinking. Consider having an off-site yearly conference or workshop. No tablets or smartphones allowed—just talk to everyone. Give the problems total concentration. 

Out of this conference should come planning guidelines, assumptions, and a strategy for the future. On a routine basis—monthly or quarterly—spend a half-day reviewing the plan, and see if anything has changed that will influence it. If something drastic happens, the group should meet immediately.

With the planning process defined, some other issues now can be brought forward. The most critical are quality and trust within the supply chain. After all, no matter how carefully you plan, things happen that are simply out of the blue. You must have good, competent people who trust both each other and the process. It’s been said that people are more important than ideas. People (if they are smart) can develop new ideas, improve bad ones, work together, and trust each other. These attributes enable you to move quickly and decisively, because no matter how smart the systems are, you will need data from time to time.

The world is full of potential change, conflict, growth, and disaster. You must have a planning process that monitors, analyzes, and decides on appropriate steps. Then, you can take action when necessary. Most importantly, you need highly talented people around you who see problems as exciting challenges to overcome. There always will be those who deal effectively with unforeseen events and those who don’t. Which do you want to be?

Philip E. Quigley, CFPIM, PMP, teaches at Chapman University’s Argyros School of Business and Economics and California State University at Fullerton. He may be contacted at pquigley@fullerton.edu.

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