Wednesday, February 29, 2012
Supply Chain Bad Practices?
In class we have been discussing about Supply Chain Best Practices from Toyota, Apple, Zappos, and other leading companies. Here I will try to give some advice on how to think more critically about improving supply chain, because best practices simply don't apply to all companies' problems.
Best Practices: method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark. In addition, it can evolve to become better as improvements are discovered.
Gathering of best practices is routine for businesses today.
But in today's global, complex and risk-laden business climate, can one company's supply-chain best practices actually help another business succeed with theirs?
The answer is: probably not.
We have to be really clear that everyone has a different perception. Trying to define supply chain best practices is like trying to select the best product. It is not so much how good the product is, but how well the product works for you. The best product will vary with the context.
Having said that, best practices will vary with the context. Best practices in one context can become just “good” or even “bad” in other situations.
This point may seem obvious, but the meaning is crucial.
Why is our supply chain not as good as Toyota's?
As we discussed in class, the Toyota Production System has been taking more than 100 years of development to the company. Furthermore, the culture of the company has a specific organizational mindset. Every company is unique, even Toyota. Trying to replicate Toyota’s context can become a nightmare.
No doubt, industry-specific supply-chain best practices can be a fantastic source of ideas and inspiration. But there is a huge difference between learning from the leaders and blindly pushing staff so that you can be more like Toyota.
The popular best practices are a good place to start, but simply installing them without adapting them to the business is an exercise in futility.