Monday, January 20, 2014

Can Vision and/or Culture Drive Supply Chains?

There are hundreds of articles and books on what exactly, makes something or someone successful. Many attribute timing, planning, intelligence, sometimes even luck, to the successful elite. However, it's always struck me that the most successful musicians, scientists, academics, and even athletes had one thing in common: a singular drive to succeed in their particular field. Often, it comes at the expense of personal relationships. But that drive creates hours- and then hundreds of thousands of hours- of practice; and that much practice would make anyone successful.

What struck me most when reading about the various supply chain models and companies was that success in this arena was also, to a large extent, due to a singular purpose or drive. Some call it Vision, or Company Culture, others, just a commitment.

Ikea's commitment to a "low price with meaning" drives its entire supply chain and design process. Gordon Murray's iStream process followed directly from his personal ambition to create a better process combined with his expertise (his 'former' passion). Herman Miller's cradle to cradle production was made successful in large part due to his initial and full commitment to the approach: "By incorporating environmental considerations into the earliest stages of design as possible, Herman Miller is minimizing the costs of internal change, while also minimizing the life cycle impacts of a chair." (Source: Design for the Next Generation: Incorporating Cradle-to-Cradle Design into Herman Miller Products, by Rossi, et. al) Even Tata's vision of dispersing wealth via kits containing its Nano can be seen as driving its supply chain.

Finally, this reminded me of Zappos. Zappos company ethos regarding culture and customer service has impacted its supply chain. 


Having rejected the drop ship model and the outsourcing of its inventory management, Zappos operates its supply chain more reactively- because the ability to react to its customer's demands quickly is more important than the ability to run an efficient warehouse. They make up for this with increased customer loyalty: "75% of Zappos orders are from repeat customers." (Source: Tony Hsieh, Zappos, and the Art of Great Company Culture

Do you think that companies like Zappos or Ikea have a 'leg up' on other companies due to a very streamlined and purposeful vision? That their supply chain management is driven by culture/ethos/vision? Or is this just a successful, multi-faceted strategy (of which the supply chain features prominently) that has been marketed well?


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