Last week I had a meeting with a prospective client who said he needed some help with supply chain management. The problem as described to me by the VP of Global Operations at this well respected technology company was quite simple, “My product lead times are too damn long... my whole supply chain is too damn long.” So in traditional consulting fashion I asked a few, not especially difficult questions like, “How long are your product lead times?”, and the ever important, “How long do they need to be?”
So why do we call these things supply “chains” anyway? I grew up in a fairly rural existence where a chain was a pretty essential thing to have around. Whether it was towing a friend’s broken down pick-up or pulling out an old stump with a tractor, I never once recall worrying about a chain being too long.
The physical analogy of a long, interconnected set of supplier operations that eventually lead to the shipping of a finished product was first popularized by Keith Oliver at Booz Allen Hamilton. The obvious, simplistic likening of a supply network to a chain has a certain logical appeal that is not lost on me, although it was actually quite revolutionary at the time. But why did he call it a chain? Why not a supply rope – or better yet, how about a supply spring, or perhaps a supply fabric?
I think many of our prospective clients would suggest that the choice of “chain” is extremely appropriate as it is the one thing tying them down, holding them back and keeping them from breaking free to large sales and market share gains. Contrary to what Mr. Oliver may have intended, his now ubiquitous term supply chain has become a catch all, a buzz word, a misnomer, an excuse and a crutch. But before I flout well established convention and reexamine his choice of words, let us first examine the pros and cons of the now institutionalized analogy of supply networks to the physical properties of a chain.
As is the case with a physical chain, a supply chain tends to be only as strong, and as reliable, as its weakest link – so points to Mr. Oliver on this one. It is also fair to say that a pull signal travels from one end of a short chain to the other faster than that same signal travels through a very long chain, which is also consistent with the behavior of most supply networks. But perhaps this is where the analogy ends, or at least should end. The links of a chain have but two physical connections: a single link on the input and a single link on the output, hardly representative of the way our supply systems work today. When the chain is working, its links can rub together while they are, in effect, pulling against each other. This rubbing and pulling cause friction and in extreme cases a lot of heat – so Mr. Oliver is actually looking more thoughtful on his word choice by the minute.