Three years ago, I wrote a popular post highlighting “5 New Year’s Resolutions for Supply Chain and Logistics Executives.” The same resolutions still apply today, so I encourage you to re-read the post in case you forgot them or ignored the advice the first time around.
Today, I’m adding to the list of resolutions, but instead of focusing on things you should do this year, I’m focusing on 4 things you should stop doing in 2017.
- Stop viewing technology as a silver bullet. With so much innovation happening in technology, it’s so easy to chase the next new shiny thing, whether it’s artificial intelligence (AI), Internet of Things (IoT), and countless other emerging technologies. But technology won’t solve your supply chain problems or help you improve unless you also address the most common culprits of poor supply chain performance: poor data quality, lack of resources and training, lack of metrics and accountability, and poor communication and collaboration with trading partners (see resolution #3 below). For related commentary, see “There’s No Silver Bullet for Supply Chain Visibility” and “Forget Innovation, Just Execute Better”.
- Stop viewing logistics as a cost center. As I highlighted recently in “Your Supply Chain Strategy is Your Business Plan (Unless It’s Not),” the people who really need stop viewing logistics as a cost center are not the people in the front lines of supply chain and logistics (they already know it), but the CEOs and CFOs at manufacturing and retail companies. Yet most of those executives have never step foot in a warehouse or loading dock and would probably get lost trying to find it. Simply put, companies that continue to view logistics as just a cost center and put it at the bottom of their investment priority list, will experience a decline in customer satisfaction and loyalty, which will also bring down their market share and profitability.
- Stop bullying your suppliers, carriers, and other trading partners. Extending payment terms to 120 days or more. Bullying suppliers over price cuts. Taking a “I Win, You Lose” approach to negotiations. All of these actions might improve your financial performance in the short term, but as history has shown over and over again, bad things happen in the long term (quality issues, supplier bankruptcies, etc) when you increase the cost of doing business for your suppliers and trading partners but still demand price decreases from them. For related commentary, see “Walmart’s Message to Suppliers: Talk to the Hand,” “The High Cost of Poor Supplier Relationships,” and “Time to Squeeze Carriers for Better Rates?”
- Stop passing the buck on responsibility when it comes to creating socially responsible and ethical supply chains. We’ve seen many examples in recent years where companies have passed the buck of responsibility to suppliers or other parties when supply chain issues related to labor, safety, environmental, or legal practices have surfaced (e.g., the collapse of the garment factory in Bangladesh that killed hundreds of ‘slave-labor’ employees, Rip Curl apparel marked “Made in China” actually being made in North Korea). When it comes to these types of serious supply chain problems, saying “I didn’t know” is no longer an acceptable excuse (if it ever was). As I’ve written before, if you want to create socially responsible and ethical supply chains, you have to develop a more granular and detailed understanding of your supply chains; you have to improve the way you communicate and collaborate with your suppliers, especially lower-tiered ones; and most importantly, you can’t outsource the responsibility — the buck ultimately stops with you, the brand owner. For related commentary, see “Made in ‘I Really Don’t Know’” and “GM Supplier Factory Explosion: Thoughts on Supply Chain Visibility and Responsibility”.
You’ve heard all of these things before, but it’s been going in one ear, out the other for many years. It’s now 2017. Just stop it.
What would you add to the “Stop It” list? Did you come up with any New Year’s resolutions to improve as a supply chain and logistics leader this year? Post a comment and share your perspective!