1.1.13 Supply chain integration

Jazz it’s such a beautiful art form.

There are so many types of jazz my favorite types of jazz are the ones that balance structure and improvisation.

Charlie Parker John Coltrane Miles Davis with they and their jazz groups created was so incredible.

Very often there was a song that they would play but for them the song was merely a skeleton.

It was their job to put flesh on that skeleton whether they had three members in the group or 10 the

groups they put together were a collection of virtuosos people that were masters of their instrument

they could follow directions they could take lead they could keep a beat or they could change course

at any point in the song if the leader desired.

And in many cases the leader trusted each member to improvise.

This can’t happen unless each member knows how to communicate and it can’t happen if they aren’t listening

to the music being played.

Some of this requires skill some of this requires an understanding that can only be built up over time.

World class supply chains are not that different.

World class supply chains create their own types of music world class supply chains are a collection

of different instruments.

The purchasing instrument the operation and manufacturing instrument the logistics instruments and like

a great jazz collective a world class supply chain requires that managers in each sector be masters

of their instruments.

These managers must understand what the organization needs.

They must be attentive listening to the needs of the collective.

They must also be courageous enough to take the lead when problems and opportunities arise.

Just like a great jazz leader must carefully choose their bandmates.

A top supply chain executive must find and develop supply chain managers they trust and more than that

they must give them the power to improvise.

As the economic environment changes the same song played over and over gets old and stale.

Improvisation allows a song to evolve as it’s played.

So too it goes with supply chains very often making the same product over and over again for years will

bore a customer.

The best companies and supply chains look for ways to improve products.

This means that they need smart and skillful supply chain managers capable of taking chances.

Next time you listen to jazz or really any type of great music isolate the different instruments.

Notice how independently the instrument is creating something wonderful.

Notice how all of those individuals create something even better.

Notice how the most exciting parts of the song are where one or more members took a chance and then

think about how great your supply chain would be if it was like a great jazz ensemble.

Passionate people doing what they do best empowered and entrusted to make changes and improvements for

the good of the group and all of these people working together to create something that will satisfy

the customer.

Is your supply chain creating beautiful music.

If not what needs to change.

World class athletes their strength and stamina their speed and flexibility when combined with practice

they result in perfect form their throwing motion their stride when running their kicking and swinging


They’re flawless efficient and effective.

Their technique represents the integration of movement the integrated movement of feet knees hips spine

arms and even their neck and head.

It’s no wonder that one small injury can begin a chain reaction that results in a series of other ailments

that are more serious that small injury causes sometimes minor changes in the runner’s stride.

The imperfect stride puts strain on the knees the sore knees look to the hips for support overburdened

hips may cause a severe back injury.

Interestingly the runner’s persistence and strength caused greater problems listening to the injured

toe when it was demanding rest would have been a better idea than running through the pain.

And sometimes those cascading injuries can hamper or end the runner’s career in supply chains.

We see a similar type of phenomenon with inventory.

It’s called the bullwhip effect.

While stores try and predict customer buying patterns they are rarely right.

In order to protect themselves against running out of stock stores order more inventory than they need.

This is the pain point uncertainty uncertainty of demand requires more inventory inventory that is expensive

to buy and hold How about distributors they try and get store orders.

That’s two levels of uncertainty.

Stores and consumers that’s two levels of pain.

Therefore even more inventory is required to mask that pain.

The primary supplier of course wonders how much the distributor will be ordering three levels of uncertainty

which they’re going to need a ton of inventory those cascading injuries require an avalanche of inventory

that magnification of inventory from one level of the supply chain to the next is called the bullet


And just like some simple rest and therapy would have helped the Tohil before it created a series of


The key to avoiding debilitating levels of inventory in the Bulwer.

The effect is simple.

The key is communication.

Communication of customer sales data and changing desires.

Strategic Partnerships between companies and their suppliers sharing of supply chain responsibilities.

And just like the human body must keep its excellent form during recovery.

Supply chain partners must continue to focus on what they do best when they’re dealing with silent or

unreliable supply chain partners.

They start to worry about what is going wrong today and what might go wrong tomorrow.

They lose focus.

They start to slip and then they feel the need to order more inventory.

Don’t let this happen to your company.

Easier said than done of course but there are things you can do to keep the bullwhip effect in check.

Have retail share sales data with the distributors.

Establish a truthful dialogue between supply chain partners.

If you’re going to short an order or if the order is going to arrive late let them know today lying

and hiding information leads to deeper levels of uncertainty that equals more inventory.

Keep your customer informed by having stable pricing or what some call everyday low pricing.

Customers know they are always getting the best deal from you.

Sales sales actually confused customers confused customers don’t purchase freely.

Therefore we don’t get a true sense of their actual demand.

More uncertainty more inventory and the truth is none of this can happen if companies don’t develop

create relationships with their partners and customers.

No one is going to share sales data deliver bad news or buy from a company if they don’t trust you.

The mechanics of cascading injuries and the bullet effect may be difficult but the remedies are easy.

If you get a small injury let it heal.

If you want to avoid the bullet effect develop supply chains that are built on trust and communication.

Jim Rohn Sứ mệnh khởi nghiệp