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Supply chains can add or subtract value from your customer and shareholder business proposition. This is a relative game you vs. your competition. Supply chains risk being anchored in the past and present, not the future, because fixed assets (plants, trucks, warehouses) and comfortable relationships (long standing suppliers) can be hard to change. Customer expectations are constantly changing.

To decide whether your supply chain contributes to your competitive advantage consider:

1. How does your company compete relative to competition?
   Is your advantage innovation, quality, delivery speed, cost minimization or some blend thereof? What key activities and relationships across the end to end chain matter supply base access, distribution channels, production capacity, customer service? Where along that activity chain can value be accessed?
2. Who has power in the chain?
   Those with power often garner the most value. Power is driven by many things market conditions, market share, product reputation, proprietary position, etc. What is your companys power position relative to customers, suppliers, competitors and partners? Is it acceptable/changeable? How can you use it in ways that also recognize your chain partners needs not just your own?
3. Where are the risks in the chain and how can you manage them?
   Supply chains contain a range of potential pitfalls corporate reputation (Toyota faces this today), cost volatility (oil prices from $40/bbl to $150/bbl), regulatory issues (tariff changes), acts of God (remember Katrina), accidents (plant explosions), supplier bankruptcy, miscommunication across multiple tiers, etc. Structured risk anticipation, contingency planning, responsiveness, and supplier involvement all comprise a risk management system to improve the robustness of your chain.
4. What is the transition to a more advantaged chain?
   Supply chains are rarely created from scratch. Shifting your chain while running it is critical. Test alternative demand plans against distribution channel and transport alternatives. Understand what it will take to effectively shift production, change suppliers, or alter transport channels from cost and operational aspects. Always test, qualify and verify new links. Penetrate the chain and expect your suppliers to do the same. Innovate to transition via chain redesigns, substitute materials/services or proprietary technological or information transfer breakthroughs.

If you want your supply chain to improve your competitive position, call CCC to help. CCC consultants were leaders (while still with P&G) in re-engineering P&Gs supply base and supply chain. CCC has since used this expertise to help other companies improve their supply results. Can we help you?

The author, CCC consultant Steve Rogers, was a Purchases Director at P&G, has authored two books (The Supply Based Advantage and On Demand Supply Management) and is an adjunct professor at Xavier University.

Contact Information
Call or e-mail Dick Bruder, CCC President/CEO, at (513) 233-0011 or dbruder@cincconsult.com

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