Predicted setbacks in the progression or enhancement of upcoming supply chains, explained through two primary factors.
Published on September 5, 2023, by Mortson Enterprises Inc.
In an article penned by Mike Mortson, CEO of our platform, the importance of strong leadership in Supply Chain progress is emphasized. The article, titled "Supply Chain Progress," highlights the key factors driving the need for improvements and the major obstacles that often hinder progress.
The Need for Improvement
The forces pushing for these necessary improvements are numerous, including competition, customer expectations, stakeholder expectations, cash flow demands, cost and profit pressures, a lack of resources, poor productivity, new technologies, broken business processes, a need to improve metrics, and more.
The Major Obstacles
Two major obstacles to Supply Chain improvements are Complacency or Inertia and Lack of Leadership. Complacency or Inertia refers to a false sense of security and choosing to do nothing, which can impede future improvements and progress.
Many companies accept a certain level of inefficiency as normal, such as tolerating regular stockouts (5-20%), because this seems industry-standard. This complacency prevents efforts to improve supply chain agility and performance until competitors exploit these weaknesses to gain market share.
Organizational inertia often manifests as a focus on maintaining existing core businesses rather than investing in transformative capabilities or new technologies. This limits innovation and adaptability, as seen in European corporations that initially ignored disruptive trends like e-mobility, resulting in crisis when markets shifted.
Legacy systems and outdated processes also contribute to inertia, making technological integration and digital transformation difficult, which in turn hinders real-time visibility, decision-making, and responsiveness.
Lack of leadership is the number one reason why any improvements to Supply Chain will fail. Effective leaders need to create environments where experimentation and failure are accepted to foster innovation, yet many organizations lack such leadership cultures, impeding transformation efforts.
Leadership failures also include poor communication and employee engagement, resulting in unclear responsibilities, duplication of tasks, and inefficient workflows that cause delays and resource waste.
The Digital Supply Chain
The Digital Supply Chain (the future) requires the creation of an end-to-end electronically connected business network for the implementation and operation of control towers, predictive analytics, artificial intelligence, blockchain, augmented reality, big data, autonomous vehicles, and more.
Effecting a Digital Transformation requires strong leadership and determination, resolve, persistence, courage, intestinal fortitude, and drive. Weak leadership will lead to failure and loss of support from the organization at all levels.
Change is hard but necessary, and the inability to make change will lead to mediocrity or organizational failure. Supply Chains need improvement across all companies, industries, institutions, and geographies.
In summary, complacency results in accepting the status quo and resisting change, while a lack of strong leadership prevents strategic vision, accountability, and cultural shifts necessary for supply chain improvement. Overcoming these requires leaders to champion innovation, foster agility, and confront complacency directly. Strong leadership is critical in driving change and overcoming obstacles to Supply Chain improvements.
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