There’s a lot of talk of late about supply chain best practices and whether or not they are good for business. Repudiators increasingly assert the claim that best practices merely encourage mediocrity and have no place in enterprises that wish to lead their competitive field.
Where does this leave small or medium business leaders then, when striving to drive supply chain value while also saving on costs and reducing inefficiencies?
Should they forget about supply chain best practices, take a blue sky approach and innovate for all they are worth? As with so many arguments, the realistic answer probably lies somewhere between the two extremes.
This post explores some of the arguments of supply chain best practice “naysayers” and suggests why ruling best practices out of the supply chain picture is a step too far.
Argument #1: Best Practice is “Copycatting”
Okay, so by the very definition of the term, a supply chain best practice is something which somebody else is doing. If your company adopts a best practice (say the antagonists) it stands no chance of winning the competitive race.
That’s all very well if your company has already achieved maturity in supply chain management. If you want to get ahead, you’ll certainly need a degree of innovation to power your ambition.
In reality though, many companies struggle with supply chain fundamentals, while rather fewer have them down pat. If your business is in the former category in any aspect of SCM, then what on earth can be wrong with following the examples of leading supply chain organisations?
Those leading companies after all, are in a place where yours needs to be. Instead of reinventing the wheel just to get in the race, hitch a ride on somebody else’s chariot. Once you have the grasp of the current best practice, that’s the time to break the mold and innovate.
Argument #2: Best Practice is a One-size-fits-all Approach
This is another argument used by those who believe supply chain best practice should be placed in the museum of old ideas. However, it’s simply not true—unless you want it to be. Proper adoption of supply chain best practices involves finding the ones that fit the needs of your company, or adapting those which offer value but don’t quite fit.
Let’s be honest here. How many “innovative” business solutions are actually adaptations of what has gone before?
Certainly, if your company should try to shoehorn a best practice into the supply chain simply because it’s a best practice (which is a mistake that many companies have made), it might easily do more harm than good. On the other hand, identifying a best practice and building upon it to improve your own business is an action to be commended.
Argument #3: Best Practices Lead to Mediocrity
This is the favourite battle cry of those opposed to supply chain benchmarking of best practices. The thing is, it’s true to a certain degree. But to illustrate why this is often not a valid argument for avoiding best practices, I’d like to use a motorsport analogy…
The moment the red lights go out at the start of a Formula One Grand Prix, there is a leader—and a lot of followers. By the time the cars begin the final lap, the leader may be different to the one which was in front on lap one.
The most effective way for race cars to overtake one another is first to follow close behind—in the slipstream of the lead car. When the time is right, the challenging driver leaves the slipstream and makes the overtaking attempt.
The point of this analogy is to illustrate that while it’s entirely possible to go from standing still to leading the race, it’s much more common to go from standing still, to keeping up, before finally getting ahead.
Mediocrity might not be desirable as an ultimate condition—but it’s a manageable stepping stone to class-leading performance. So even if supply chain best practices lead to mediocrity, that shouldn’t predicate an argument for their avoidance.
Supply Chain Best Practice: A Tool Like Any Other
Perhaps you already have a firm position on the value (or otherwise) of supply chain best practices. If you’re currently on the fence though, and are trying to improve fundamental aspects of your company’s supply chain operations, you’re probably closer to being right than supporters of both the “for” and “against” lobbies.
It’s true that the most successful supply chain organisations today are those that innovate. By all means seek to do the same, especially where your supply chain strengths are. At the same time though, don’t let the consensus of the “best practices are bad for business” league sway you too much.
Where supply chain improvement is required, treat best practice as a tool and use it where it makes sense. Most importantly, feel free to slipstream with impunity while searching for the right opportunity to take the competitive lead.