The route between suppliers and customers can be a labyrinthine network with calamities lurking in unexpected places. The top 10 supply chain disasters
reported in Supply Chain Digest
convey the possibilities. But supply chain disasters themselves are evolving.
Dan Gilmore, editor in chief of the publication, says technological meltdowns are less likely today.
Most recent supply chain trouble, he says, flows from failures of strategy or execution."Virtuous Connections,"
a Strategy + Business
article by Richard Verity and Chris McNally, describes how one supply
chain manager untangled the Gordian knots in the sprawling maze of
connections an anonymous European company used to supply 30,000 products
to 10,000 customers The manager realized, the article says, that every
supply chain is a set of virtuous or vicious circles.
Both types of circles are complexes of events, in which each iteration of a cycle reinforces another iteration. The S+B
article explains that in a supply chain, deficiencies in on area reinforce weaknesses elsewhere in the chain. Read the articlehere
to learn the managerial insights and decisions that fostered success.
The best known vicious circle
, in which prices spiral out of control as currency loses its value. In a virtuous circle
, each iteration of a cycle reinforces conditions that led to favorable results.
finely tuned supply chain. with no lost, late or damaged products and a
shortage ofirate customers,is a virtuous circle in which each link
improves the next. A functioning supply chain is more than the sum of
its parts, the authors showed, and the economic gains were more than
those anticipated by each individual improvement. They were exponential.
Improvements created tipping points that led to cost savings in parts
of the network that seemed to have little to do with each other.
AMR Research published the Supply Chain Top 25 for 2009
, which it identifies as iconic businesses that achieved innovational and operational excellence. What is the next supply chain disaster?
It's hard to say, but some experts suggest some supply chain failures
are inevitable, and theymay afflict those least prepared for change.