Is Your Supply Chain Broken? 5 Questions CEOs Should Ask

Is your supply chain broken or about to break?

Is your supply chain broken or about to break?

A recent story in Industry Week reiterates the importance that C-level executives need to monitor and manage their supply chains.  The story, written by two supply chain experts at Wipro Consulting, details five questions that CEOs should be asking about the condition and status of their supply chains – especially in light of recent news items such as the “horsegate” problem in Europe relating to horsemeat being included in beef products. The authors raise the question of whether or not the scale of the supply chain might in and of itself have been a contributing factor in quality control failures.

One key point they make: if you think quality in a supply chain is just having the right materials in the right place at the right time, you’re not thinking broadly enough. Supply chain management must also focus on the quality of the materials, the accuracy and content value in the information shared between supplier and customer, and the accuracy and timeliness in the financial transactions.

They suggest that it makes financial sense to proactively manage your supply chain to make sure it is designed to be successful and propose five questions that every CEO should ask:

1. Is quality built into your supply chain, or do inspection and correction occur after the fact?

2. Is supply chain management a strategic senior level position in your organization or is it a part of an operations activity?

3. Is the movement of information and money as critical in your supply chain as the movement of materials? In other words, does it take longer to create paperwork and process payments than it takes to deliver the goods?

4. Do you have a built-in change management process that constantly reviews the elements of your supply chain and looks for opportunities to improve quality and operational efficiency—or do your systems, policies and procedures block improvement?

5. Does your supply chain minimize the amount of touches and the touch time in supply chain transactions, so as to reduce the number of potential failure points?

All too often, we at Intelleflex see supply chains (especially cold chains) that are primarily reactive. Information about the condition of a product that has spoiled or been exposed to adverse conditions is available only after-the-fact when it is too late to take corrective action. Additionally, information is not typically easily shared between supply chain partners and too much of the record keeping is paper-based which slows down supply chain operations and can introduce costly errors.

The article proposes some answers to these questions stating that the issues relate to culture, capability, flexibility, capacity and technology, systems and processes, repeatability and reliability, and collaboration.

Solutions that provide the ability to automatically capture and collect information electronically about products as they move through the supply chain is essential.  But, equally important is the ability to access, share and act upon that data. RFID and cloud-based data services (such as ZEST Data Services) can help make this happen and not only improve supply chain operations but provide valuable information to supply chain executives that provides the ability to proactively manage an intelligent supply chain.

The article concludes with some wise advice: It shouldn’t take a high-profile quality control failure for CEOs to take a fresh look at what’s happening in their own organization since a supply chain failure of any kind could devastate or destroy profitability. Start being proactive by asking the five key questions and ensuring that your supply chain organization has a culture of collaboration, responsiveness and constant improvement.

You can read the entire Industry Week article here.

Kevin Payne
Senior Director of Marketing