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Are Multiple Supply Chains Important (Survey Response 6)

Written by: Jon Hansen

Article Overview: A 2006 Report made the following statement: "Designing and operating multiple supply networks to meet the needs of specific market segments--supply chain innovation and the use of multiple supply chains will be important to future revenue and market share growth." Based on your own experience is this an accurate assessment? If yes, why? If no, why?

Are Multiple Supply Chains Important (Survey Response 6)

Sid, Process Consultant and Analyst, Bombay, India

I think the moot question out here is whether Subjective Questions can have Objective Answers?

Let us consider some Seeds for thought:

1. Customer Demand for a Single Product is Highly Variable
Naturally the Supply Chain has to be supple enough to adjust to this Variability. However the Variability cannot be fully tackled by a single supply chain, hence the temptation to look at additional supply chains in times of Peaks and Troughs.

Real Life Analogies

E.g. 1 - While companies have Staff on Rolls for identified work flow they have started resorting to Temps for tackling manpower variability in times of Work Flow Variabilities.
E.g. 2 - Companies use more that 1 Internet Service Provider to tackle the bandwidth variabilities

2. Customer Demand is increasingly migrating to Need Solutions which involve a combination of Products and Services. Obviously the complexity of Supply Chain is larger now.

A single supply chain to cater to continuosly changing demand chain seems like an Objective Answer to a Subjective Question!

3. Optimization of Future Supply Chains
It is about Managing Demand Variability for Solutions by designing A Supply Chain which harmonises the multiple supply chains for each product or service.

In simple terms Each Solution is a combination of many Products and Services. Each such product or service can have few / multiple supply chains. So in effect one has to visualise multiple supply chains hooked onto a Central Supply chain which is unique to each Solution.

I guess that is the essence of the Report !!

My Response:

Thank you for your thoughtful response Sid. I appreciate the added perspective.

What is interesting is that this "assessment" appeared in a report that was written by the Institute of Supply Management (ISM), CAPS and AT Kearney last year. Much like the other commenters, I shared similar reservations that were outlined in part 3 of of my 7 part series Dangerous Supply Chain Myths. The report's title by the way was Succeeding in a Dynamic World: Supply Management in the Decade Ahead.

My reasoning however was tied to the fact that while the concept of Multiple Supply Chains has some merit, with 85% of all initiatives failing to achieve the expected results to date, most organizations have not been able to progress past the walk (re success within existing environments) before you can run stage. In essence, what is conceptually viable is not necessarily practical in real-world circumstances. At least not to the point where you can offer an absolute such as the one presented in the report.

The fact remains that these variables to which you had referred are a reflection of an agent-based model in which real-time adaptation to real-world circumstances is the key element. Unfortunately, the majority of traditional thinking and therefore applications and adjunct concepts are structured around the "absolutes" of an equation-based model.

As long as industry pundits (which includes vendors) continue to focus on improving the sequential framework of the current equation-based supply "chain" model versus developing the agent-based Metaprise platform that drives true real-world, real-time synchronization between disparate stakeholders, it is unlikely that the subjective elements will be adequately addressed.

Please feel free to provide additional comments on the above, because afterall it is the passionate exchange of ideas that drives true innovation and progress.

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Article Tags: analogies, bombay india, commenters, complexity, customer demand, institute of supply management, internet service provider, ism, manpower, moot question, objective answer, objective answers, single supply, subjective questions, supply chain, supply chains, thoughtful response, troughs, variability, work flow



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