The Supply Chain come-back

The private equity companies that bought half the world in the last couple of years, in search of quick money and the highest possible returns for their investors, are starting to sell some of their portfolio again. Companies are being floated on the stock market, or sold to bigger multinationals that easily survived the financial crisis and still have enough cash in their pocket. As most private equity companies were focussing on the financial health and cash flow of a company to pay off their debts, their Supply Chains might have been suffering.

In my past experience, I witnessed a financial department double within a year while the Supply Chain and other departments were dying for resources to provide the services they needed to provide. Financial reporting and cash flow forecast went from monthly to weekly to almost daily to satisfy the banks that the company was able to pay off the debts it was loaded with. On the positive side, I saw a new managing director challenge this status and get agreement on a longer term growth path, which required additional resources across all departments. And through the Supply Chain Movement I’ve been made aware of private equity owned European companies like Leaf International (confectionary) that have invested the last three years in S&OP processes, reducing inventory, obsoletes and increasing customer service. Isn’t that what it’s all about?

Although we have to realize the Supply Chain is just providing a service and works as an enabler in most companies, it can’t be treated as a ‘given’. A Supply Chain is not something which is just there and will automatically work. It needs maintenance, analysis, enthusiasm and innovation to continuously improve and satisfy the customer’s ever changing demand in an intelligent way. Now that companies are being sold back to owners who have longer term views and broader interests, let’s hope the Supply Chain can benefit and make a strong come back.

As a Supply Chain manager it’s great to be pushed and challenged for a certain period of time to provide services to your company and to satisfy the customer with limited resources. It makes you inventive and come up with solutions you would otherwise never think about. It makes the Supply Chain more effective, leaner and smarter. But it is so much more rewarding to be taken serious and get enough resources to create and implement a Supply Chain vision which supports the companies’ future growth path -a Supply Chain from which the company can benefit for years to come.

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