Saturday 19th Aug 2017 - Logistics & Supply Chain

Time for a conceptual leap?

Are we ready to make the next big conceptual leap in the way we think about supply chains? In fact, should we be even thinking about supply chains at all any more?

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

There are those that prefer to think in terms of demand chains. They argue that the term supply chain puts the emphasis on pushing goods along the chain, when it should be on pulling goods through the chain in response to demand.

But, increasingly we are being asked to worry less about supply and demand and focus more on value. And rather than thinking in terms of a chain, we are should think more in terms of a network or web.

The development of the value web concept is examined in a recent report, “Business eco-systems come of age”, published by Deloitte University Press.

In the section on “Supply chains and value webs” Eamonn Kelly & Kelly Marchese argue that “many ‘supply chains’ appear to be evolving into ‘value webs’, which span and connect whole eco-systems of suppliers and collaborators.

“Properly activated, these value webs can be more effective on multiple dimensions — reducing costs, improving service levels, mitigating risks of disruption, and delivering feedback-fuelled learning and innovation.”

That’s all very good, but the challenge of achieving it is significant. Kelly & Marchese argue that value webs are characterised by complex, connected, and inter-dependent relationships, where knowledge flows, learning, and collaboration are almost as important as more familiar product flows, controls, and coordination.

But with every challenge comes opportunity, and Kelly & Marchese are quick to point out that supply chain professionals that embrace the value web opportunities can enhance their status as strategic leaders.

The corollary to that, of course, is that failure to respond to these changes risks being left behind in an increasingly competitive market.

 

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