In a recent Forbes article, three common supply chain weaknesses are highlighted:
- Being reactive rather than pro-active
- Lack of visibility
- Lack of accountability
The behavioural weaknesses – lack of pro-activity and accountability should be no surprise to me or the readers of my blog. As the S&OP mindset study I conducted with Supply Chain Movement in 2017/2018 show similar results.
We made an S&OP mindset checklist with 10 yes-or-no questions about effective behaviours for S&OP. It is free to download here. We then asked supply chain professionals to answer those questions, to provide insight if S&OP processes are supported by an effective organizational mindset.
Overall results indicate that only in 42% of S&OP processes, team members engage pro-actively across functions to solve business issues. Only 52% indicate they hold each other personally accountable to meet objectives.
So roughly half of businesses with S&OP see pro-activeness and accountability around them. Not a great thought when you stroll through the halls of the average business!
Interestingly, in self-proclaimed effective S&OP processes this accountability rises to 85% versus 50% for not effective S&OP. In self-proclaimed effective S&OP processes pro-activeness rises to 62% versus 31% for not effective S&OP.
The right mindset, including pro-activeness and accountability, seems to have impact on S&OP effectiveness. It is not a great step to assume it also has a positive impact on supply chain and overall business effectiveness.
Although pro-activeness and accountability are of major importance, we found that the biggest difference in mindset between average S&OP and effective S&OP were:
- Team members openly challenge each other and put critical topics on the table
- Our leadership team strongly believes and shows that employees are capable of growing the business.
Although it has been estimated that the state of mind accounts for at least 50 percent of the variation in an individuals performance, on average we only spend 5 percent of our time on optimizing our performance due to mental training.
The Forbes article provides some ideas to address the three major supply chain weaknesses, which is great. Unfortunately, in our study only 29% of participants thought that mindset was addressed enough in their organisation.
The time might have come to change that and spend some time on mental training. Or maybe as a mental toughness coach I’m just biased!
You can find the results of the S&OP mindset study here
Foto credit: https://www.indiatvnews.com/
2 thoughts on “Three common weaknesses in supply chain”
Irresponsible stakeholders responsible for providing data to support S&OP planning are a big weakness in many big organizations. The habit of inflating demand projections “just in case” there is an unexpected surge in volumes late in the year, the practice of “keeping numbers in the back pocket” to suppress expectations for the next review cycle or creating unsustainable volume through price manipulation in order to secure short term organic growth all contribute to unreliable data being used for the next planning cycle. For some reason governance within S&OP never really took off as a priority although some of these underhanded practices result in excess scrap – impacting the company’s operating costs.