Ian
A world without supply chains is chaotic. The whole functioning of the world today, depends on supply chains.
But as they say, when something is too strong and too important it does have its shortcoming. Considering the title, the failures of the times gone-by.
Let’s take a look at some of the greatest supply chain failures.
GM, 1980s
The CEO employs a new robot technology that flops. There are heavy losses, and the incident has the CEO fired. Toyota uses lean manufacturing to gain a competitive advantage over GM.
Apple, 1995
Going by the implementation of a conservative inventory strategy, the company is flooded with new orders for Power MACs and is not able to honour the demand. Gets bad PR and looses a sizeable market share, which it struggles to recover.
Foxmeyer Drug, 1996
The company had inducted new order management and distribution systems. But they failed to work. Fulfilment costs were built into contracts and could not be reimbursed from.
The company filed for bankruptcy and was bought by McKesson.
Adidas. 1996
Installs a new warehousing system. But it doesn’t live up to the expectations, leading the company to under-ship by 80% in the year beginning and the market losses incurred haunt the company for years to come.
ToysRUs.com, 1999
It brings up an exciting offer for Christmas and takes thousands of orders. But the company is not able to fulfil the orders and the company had to send “we’re sorry” emails as gifts, generating bad PR and eventually outsourcing the fulfillment to Amazon.com
Cisco, 2001
The company lacks proper demand and inventory visibility. The company has more products, but there is no demand resulting in an inventory write-down of $2.2 billion and stock drop to 50%.
As we have seen here, even the big players have had their fall when it comes to supply management. So how will we not get there. Are there are any fool-proof methods?
Background: Getting behind the stage is very important. Even going to the lengths of hiring an agency to find the detailed track record of suppliers is going to do more good than harm.
Generosity: It is only fair that every business and every facility and every chain tries to make the most out of less. Even though it is very tempting to sign up the wet-behind-the-ears supply chain partner, it is important to consider the risks involved in productivity abnormalities, timelessness, and restricted flexibility when it comes to demands, orders and products.
Experience: Honesty and punctuality alone will not keep a supply chain working. It requires stressed experience from various fraternities. The staff needs to have experience in ocean, air, rail, and ground logistics.
“Those who don’t know history are destined to repeat it.” – Edmund Burke
Then again, we have Confucius who says, “Our greatest glory is not in never failing, but in rising every time we fall.”
So we got to get up there and do what needs to be done to keep our supply management up and running.
