Bomb

Blow Up Your Supply Chain

Posted in Strategy & Management and tagged , , , .

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Yes, wouldn’t it be satisfying to scrap your entire big mess of a supply chain — all the inefficiencies, dysfunction, lousy systems, and constraints that constantly annoy you and your customers — and start over fresh?  You can do that, in a figurative sense, through some creative collaboration with internal teams and outsiders as well, and the outcome can be much more than just a fun day of pretend.  This method is known as a “Merlin Exercise,” and is used by the executive coaching firm Paracomm, among others.

Imagining a shiny new supply chain escapes the incrementalism of repeatedly layering small changes on top of the existing supply chain without truly breakthrough results.  This is particularly common in applying software solutions to business challenges: the solution solves the immediate issue, but no more.

You can’t get there from here.  That is, you can’t get to your ideal supply chain from here; you must get to it by approaching it from the future.

Preferably, you have assembled the best thinkers and functional experts in your organization for this venture.  In general, the event looks like this:

Everyone is to forget about software applications and technology in general, and focus instead on outcomes: sales have doubled, costs have been cut 25%, and alternative channels are growing the business.  This could be three, five, or ten years from now.

The group must determine how your enterprise got there. What events or breakthroughs occurred just prior to the leap in business performance?  Don’t just generalize, paint a picture with details.

Continue working backward from the sublime state you’ve imagined for your supply chain, identifying the key events where capabilities (technology or otherwise) advanced your business to the next step. At each point in the timeline, ask how or why the new capability came about.

When you get to today, you’ll see the progression of events from now to the future, and the next few steps from today on won’t look as daunting or impossible as would one giant leap from today to the perfect state.

Example: Sales have grown 25% due to mobile and online purchases.  Why? Because you enabled purchases on these platforms. Why and how? Because the e-commerce pilot you ran with several suppliers demonstrated significant sales gains. Why and how? The pilot revealed that online and mobile customers are a different demographic and buying population than what you normally see for your retail and catalog customers.  This convinced management to expand the pilot.

One reason this exercise works is that the path to excellence is not so clear when standing in the present, surrounded by today’s paradigms.  But transported to the future, the mind is free of these burdens, and the path backwards is easier to see.  Used on a regular basis, this type of visioning can also transform organizational thinking, placing much more emphasis on strategy and the future of the enterprise.

 

 

 

 

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