Considering the current appetite for “supply chain excellence,” I wonder if it is possible we’re focusing on the wrong things? Like cost and asset utilization, trying to become more efficient (faster delivery, lower cost, time to new product introduction) and more effective (asset utilization, higher levels of service, market share, customer retention).
These are all necessary drivers of business success but are they the only attributes that define true excellence?
We try to measure “better-faster-cheaper” by developing indexes based on margin, asset efficiency, inventory turns, supply chain cost as a percentage of sales, or growth. We’ve created maturity curves to track ourselves against our peers. We use this relative positioning to derive high-value improvement initiatives that will lead us up the maturity curve. “Here are the next ten steps to getting better-faster-cheaper.”
DonÂ’t get me wrong, getting better-faster-cheaper is necessary for survival, but not necessarily a recipe for success or excellence. Improvement work is the stuff of 80-hour work weeks, but is it strategic? Yes, in the sense that continuous improvement is table stakes for company survival, but, no, in the sense that these improvements are by definition within the box.
Creating indexes and maturity models builds boxes that can keep us from exploring alternatives. Consultants and analysts can make money by defining a box and having organizations compete within that box for ascendancy. Own the framework and you own the initiative.
If better-faster-cheaper is not “excellence”, what is? What else is there to measure when it comes to excellence?
Written by
A Logility Supply Chain Expert
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