Last week, Gartner announced its annual Supply Chain Top 25 rankings, and like every year, it sparked a lot of commentary and debate about the methodology, along with software vendors and others using the results for marketing purposes.
Almost everyone can agree on one thing: anything that gets people talking about supply chain management is a good thing.
But does Apple really have the best supply chain in the world? Does Gartner’s methodology truly reflect supply chain excellence? What, if anything, do companies learn from this report that helps them improve their own supply chains?
Go ahead, post a comment and share your thoughts; I’m sure your responses will be all over the map.
The reality is that you can view supply chain excellence through many lenses. And that numbers, whether they’re financial or operational in nature, without context — such as a company’s business processes or strategic objectives — are just that: numbers.
Is your supply chain best-in-class? There are many ways to approach this question, but here is my quick 1-Question Assessment Test, which I borrowed from a presentation Bindiya Vakil, founder of Resilinc and a supply chain risk management expert, gave a few years ago at a CSCMP New England Roundtable event:
Can you complete the following email within four hours of a supply chain disruption?
At 9:05am today, an earthquake of magnitude 7.0 struck Vietnam. N suppliers have manufacturing sites in a X mile radius of the epicenter. Within X hours of the event, we contacted all of these suppliers and determined that X supplier has shop floor damage. This will take N weeks to repair and clean up, and an additional N weeks to ramp and clear backlog. N single sourced parts with revenue impact $X-$YM each are manufactured at this facility. They are used in critical product lines Alpha and Gamma.
We have N weeks of component supply on hand and have secured additional N weeks of inventory from the broker market. The supplier has an alternate facility in X which can build this part. A 4 person team will deploy tomorrow to the alternate facility to support the supplier with an initial build. The alternate site should be up within N weeks. Communications with the supplier are streamlined and updates are posted every N hours.
At this time, we have no reason to believe that our manufacturing lines will be shut down due to this event.
The ability to compose that email implies that you have mapped your supply chain, that you have timely, accurate, and complete visibility of what’s happening in your supply chain, and that you communicate and collaborate effectively with your suppliers and trading partners — which, in my book, are all fundamental attributes of supply chain excellence. From this, everything else follows: financial performance, market share, and customer satisfaction and loyalty.
Can Apple or any of the other companies on Gartner’s Supply Chain Top 25 list write that email today within four hours of a supply chain disruption? I don’t know for sure, but based on all the research available, I’m willing to bet the vast majority can’t.
Can you write that email today? A question worth discussing at your next supply chain leadership meeting — and a goal worth pursuing in the weeks and months ahead.