Sports Mode: How are you driving your supply chain?

The one on the right is fun! By default when you start the car, you are in ‘Mid Driving Mode’ which provides ‘balanced tuning,’ but there are two other options:

• Sports Mode gives a consistently sporty drive system set-up for greater agility when driving. (It also brings out a cool Mini with GT stripes out on the display)
• Green Mode offers a consistently more efficient driving setting, in order to achieve maximum range

Funny how this made me think of how companies run their supply chains.

Yes, there are times when you just want the ‘agility’ in your supply chain and you are not too worried about the ‘fuel economy’.  For a retailer this is typically heading into Christmas. Then there are other times when you want ‘green’ mode, where you just want to go the distance but without burning the cash.

Understanding that there are different modes and how to ‘turn them on’ is important in order to respond to the market seasonality and competition. Moreover, turning them ‘on’ is not just a switch on a dashboard.  There needs to be plans and substance behind it. Going flat chat in ‘Sports Mode’ hand to mouth is not sustainable either.

Many supply chains are established as ‘set and forget’ exercises against a point in time. As such they fail to get the competitive advantage out of them. I recall seeing first-hand how in Asia how some hi-tech companies like Dell and Cisco Systems used good planning and execution to grow market share through campaigns backed by effective and efficient supply chains. They cornered the market of key raw materials, which looked at first glance as though they were just covering for Chinese New Year, and then pounced on the market with cheaper products enabled by cheaper volume purchase prices. Clever.

And of course, different modes require different operating models including KPIs, procedures and resources.  ‘Set and forget’ and ‘cruise control’ seeking that ‘lowest cost-to-serve’ is not going to be ‘agile’ and grab that market share. Even my Mini understands that ‘cruise control’ has to be ‘adaptive’.

Aligning supply with demand is key. A truly demand driven supply chain needs to understand who the customer is and develop strategies to profitably serve them. ‘Segmentation’ of customers and a good understanding of demand and market forces allows companies to see opportunities in the ‘traffic’ and drive forward. 

Now with the slowing of the economy due to the Coronavirus, it is the time to move your supply chain into ‘green’ but prepare for ‘sports’ mode when we are back on the road to recovery. How well tuned for performance is your supply chain?