Are you managing logistics or supply chain? Is your team pitching in?
As any fellow football supporter will tell you, expecting great results from your Club when individuals are trying their best but not playing as a team, easily leads to frustration. The so-called spine of any team must integrate well for success – in footballing terms, that is usually the goalkeeper, the central defender, the central midfielder and the striker. A comparison with high-riding Chelsea is clear – yes, great individuals, but more important is that they integrate as a single, coordinated and unified team with a great tactical manager.
What does this analogy have to do with logistics versus supply chain?
Well, arguably both terms are used loosely and often ambiguously, but individual logistics excellence can easily deliver sub-optimal business performance if it is not an integral part of wider supply chain team excellence. As with a great football manager, it is about balance and getting the best out of a team rather than relying on individual excellence.
Wikipedia defines logistics as: ‘the management of the flow of goods between the point of origin and the point of consumption in order to meet some requirements, of customers or corporation’. It defines supply chain management as: “the systemic, strategic co-ordination of the traditional business functions and tactics across these business functions within a particular company and across businesses within the supply chain, for the purpose of improving the long-term performance of the individual companies and the supply chain as a whole”. You’d expect the broader supply chain to have a slightly longer definition! The difference is, however, considerable.
Managing the team for success.
Too often, businesses organise and manage themselves in silos, with logistics being one of the many business silos. This leads to frustrating differences in terms of objectives and priorities, with individual player silos running in different directions and at different speeds. The result equals poor performance, frustrated supporters and contraction or relegation into mediocrity. Organising the business like any team, around clarity of roles and supporting each other (internally and then externally) to achieve objectives will bring bigger rewards and sustainable success.
At its simplest, integrating the core three business functions of Planning, Buying and Logistics into a single Supply Chain Management team will bring success in terms of both improved availability and reduced total inventory.
It sounds so simple, but in most organisations this does not happen anywhere near as well as it could and should do. The result, at best, a goalless draw and mid-table mediocrity, when a 3-0 win and a top table position could well be in your grasp!
21st April 2015