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May 02, 2007

Supply Chain "Best Practices"?

Crossroad Theres an interesting article over at Supply Chain Digest.com by Dan Gilmore, following up on a piece he wrote a few weeks ago on whether there is such a thing as a "supply chain best practice".   The assertion by several responders, including Dr. John Langley from Georgia Tech, is that supply chain practices themselves are perishable depending on shifts in market demand, therefore the concept of a "Best Practice" that universally always applies is a bit of a false hope.

I would agree with other contributors that specific behaviors may not remain "permanently valid" which is what is implied by a best practice.  However, there are some tools and principles that would seem valid for the long haul.

Supply chain visibility, which is the ability see where your goods are at any stage in the pipeline, is a valid tool to have implemented.  In a time when there is increased risk created by long haul global transport, knowing where the goods are is a great thing.  It gives the chain owner options on how to manipulate, merge, store or divert inventory in transit.

Along the same line, any integration with an order system is a good thing in that it directly links customer take away of goods with the replenishment of the store with more of the same.   Kroger, Tesco, any number of firms do this well.   RFID still holds the promise of making that more and more convenient despite paranoia by some that RFID may also make it difficult to remain anonymous whilst purchasing.   

In the end, I think physical handling methods may be perishable as markets change, but the basic visibility and integration that allows logistics professionals to make the changes dynamically in the first place will remain for the long haul.

Certain other buying principles also seem to hold long term value, such as focused control of first costs by controlling transportation from origin.  This concept helps take uncertainty out of product movement as well as increases control on supply chain security.

Eric

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