Five Questions CEOs Should Ask about their Supply Chain

27 Sep 2016 1:50 PM | Christon Valdivieso

Authored by: Brian Nolf and Gerhard Plenert, Wipro Consulting Services

Original Post on: Industry Week

Recent news reports about flaws in diverse products—from a leading smartphone application to a highly anticipated aviation product, to the recent “horsegate” affair in Europe—have focused on the large number of suppliers in the chain, potentially creating the impression that the scale of the supply chain might in and of itself have been a contributing factor in these quality control failures.

While there’s no question that the number of suppliers in a supply chain can, in some instances, result in a product flaw, for almost any product there’s far more involved in quality control than just the number of suppliers.

If all the recent media attention to quality control has made you think twice about your own supply chain’s capabilities, it’s worth stepping back to take a fresh look at how it compares to best practices.

Supply chains can be defined as the movement of three critical resources: materials, information and money. A failure in the movement of any of these can lead to a failure of the entire chain, whether there is only one supplier or hundreds. If a payment is late, a part held up, or there’s no data or misleading data available to track a component, the supply chain will fail.

And, to build on this, if you think quality in a supply chain is just having the right materials in the right place at the right time, you’re not thinking broadly enough. Supply chain management must also focus on the quality of the materials, the accuracy and content value in the information shared between supplier and customer, and the accuracy and timeliness in the financial transactions.

As a CEO, you may not be directly responsible for the inner workings of your company’s supply chain. But your supply chain is a huge contributor to the safe and timely delivery of your goods to customers—which means it’s critical to your financial success. It literally pays to be proactive in making sure your supply chain is designed for success, and that means asking some key questions about it:

1. Is quality built into your supply chain, or do inspection and correction occur after the fact?

2. Is supply chain management a strategic senior level position in your organization or is it a part of an operations activity?

3. Is the movement of information and money as critical in your supply chain as the movement of materials? In other words, does it take longer to create paperwork and process payments than it takes to deliver the goods?

4. Do you have a built-in change management process that constantly reviews the elements of your supply chain and looks for opportunities to improve quality and operational efficiency—or do your systems, policies and procedures block improvement?

5. Does your supply chain minimize the amount of touches and the touch time in supply chain transactions, so as to reduce the number of potential failure points?


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