Who's ultimately responsible for your company's supply chain? If it's not your CEO or president, then you could be in trouble. For a decade now, the message has been hard to miss: Without support from the top—the very top—you may never be able to truly optimize your operations.
To find a success story that supports this claim, you need look no further than your friendly neighborhood Wal-Mart. The late Sam Walton, founder of Wal-Mart, saw the value of his retail stores' supply chain as a competitive force back when terms like "logistics" and "supply chain" either didn't exist or were limited to military usage. Shortly before his passing, Walton cited logistics excellence as the primary reason why his little variety store in Bentonville, Ark., had grown into one of the greatest business successes of the 20th century.
For every CEO who gets it, of course, there are dozens who don't. Yet Walton's pioneering vision for supply chain excellence has not been lost on academics and consultants. For more than 15 years, they've churned out research projects, white papers and dissertations on the topic, often accompanied by charts and graphs that would give Albert Einstein a headache. They've all drawn much the same conclusion: If your corporate-level executives aren't actively involved in driving supply chain optimization, your operation will fall short of its potential.
So why aren't we there yet? Perhaps it's the complexity of supply chain operations and the lack of a clear, simple, understandable definition of the supply chain itself. Harried CEOs often don't have the time to sit and listen to a 60-plus minute presentation. These folks need sound bites and bullet points.
That's why a comment made by Cliff Lynch, the subject of our May issue's Thought Leader Profile (see DC VELOCITY, May 2003), stopped me in my tracks. "Your supply chain is your company," he said. As soon as I heard it, I started to think about how beautiful that statement was in its simplicity. Great minds in this field have spent countless hours struggling to define a supply chain. The result has been widespread disagreement and confusion. With six simple words, Lynch cleared it all up.
His rationale is equally clear. Lynch maintains that supp ly chain operations are so complex and far-reaching that the only person who can truly manage all the moving parts is the person who manages the overall company. "You've got logistics, which includes your transportation, distribution center and warehouse activities. You've got manufacturing. You've got procurement, human resources, sales and finance." he says. "It encompasses everything, and then some."
Maybe , just maybe, Lynch's comment will prove to be the magic bullet: When presented with the simple notion that "the supply chain is the company," CEOs will take note and begin leading the charge.
If that happens, maybe we won't have to keep asking ourselves: "Are we there yet?"