Supply Chain Importance

Do you have someone that keeps their finger on every layer of your supply chain? A Chief Supply Chain Officer (CSCO) so to speak. If your business involves moving a product(s) to an end user there should be someone in charge of supply chain health. Ignoring the supply chain is quite possibly the number 1 way to add unnecessary cost to products, force you to lease more real estate than necessary, and eat away at overall profit margin.

Supply Chains are not sexy things. They are composed by your greedy suppliers, transportation companies that find new ways to make your life difficult, buildings that are ugly and expensive, workers you wouldn't want to associate yourself even when you are at work, and equipment that just keeps sucking down your money. This is the last way you should envision your supply chain. In the end there are three types of supply chains. Those that:

1) Put you ahead of your competitors, reduce your costs, and make you a superstar to your customers.

2) Keep you in the race with no advantages.

3) Drain your money, make your customers hate you, and put you out of business tomorrow.

More companies than not fall into that #2 category. Probably 80% of all supply chains exist because they have to. They have minimal thought put into them and simply operate on their own. 10% fall into the superstar category and 10% fall into the quickly going out of business category. How many companies realize they are in the wrong one? Probably not many until it is too late.

Designate a person who is in charge of keeping the supply chain healthy. This person should understand the workings inside your distribution centers, know the suppliers and track product and order lifecycles. Processes should be in place to track the key metrics around these areas. If you do not have anyone who can do this, it may be time to look for outside help. There are many consultants or consulting companies willing and capable of assisting you in your evaluation of what you have and what you need. Do not be afraid to bring someone in, the future success of your company could be at stake.


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