A Networkers Haven

Welcome to "The Future of Supply Chain" a blog dedicated to informing, conversing and learning about each other’s views. This is not a blog designed just for my benifit but for everyone that gets involved and contributes, networking is the prime goal. This is not a sale site, this is an education site. I want to see comments and opinions so we can all benefit from the discussions created here. Supply Chain's are complicated, and some believe boring but could any of us live without them?

So for all those that think they are interesting and want to see and learn what works, this is the place for you.

Comment, contribute and enjoy.

Thursday, 9 July 2009

Community Supply Chain - The Concept

"Community Supply Chain" what does it really mean? What is the concept behind it? How does it work? What would the benefits be? ... I could keep asking questions, I could go on and on about the differences it would make. But to be quite honest I already know what they are, what I am interested in is what you think.

But to get you started I will explain what it is, and the idea behind it.

Imagine if you will an entire supply chain in all its working glory. Now I’m not just talking about what one person’s view is, but more from end to end. From raw materials through to the consumer. A long lengthy process involving many different people in many different job roles all feeding from the same troff. Now that is one messy complicated line of events, problems are bound to come up, which are sadly inevitable.

Companies have spent years and millions of pounds trying to fix or at least improve the smoothness of the chain and will continue to do so. This is where “Community Supply Chain” comes into play. How valuable would it be if we could all see the entire chain end to end? 100% visibility?

A picture of the full supply chain, a system we can interact through, meaning no more phones, no more faxing, no more printing out forecast sheets which are a day old. An online interactive system, continuously flowing, as if it was alive.

We could see where the problems lie, with whom they sit and how they’ve been created. We would have clarity of vision, a chance to see how we could improve things. It would give me more time to act on issues and be easier to control. So why is this not being done? Sadly I cannot seem to answer that question, maybe you could?

We hit upon this idea of networking as soon as the Internet came about, but have never adopted it in supply chain, why not? Why are we not working together more? Why are we only fixing our own problems when others affect us just as much as our own?

All the questions above point only one way to me, “Community Supply Chain”. Can anyone else think of a way to take supply chain issues to the next level?

I would really like to hear your thoughts on this, what “Community Supply Chain” means to you? How you would see it helping, where the problems in the concept lie? And the big one, would it work?


  1. Chris:
    I am on the same page with this one. The world seems to love the "google effect" for search and use but we have yet to drive it to the real business world to improve out-dated application solutions. This is glaringly true in the supply chain. Why is it folks feel that the internet is just fine for banking transactions, social networking, buying and selling of personal goods, but we cannot pass business data because it is so "critical and secretive"? The time is upon us where the true visionaries within the business community drive options rather than large-scale application solutions and begin to use the myriad of solutions available today in the "clouds". One would have to assume that the concern over "data theft" or drop-shipping a TV on the driveway by hackers would pale in comparison to internal employee theft numbers. This type of discussion is long overdue and is really the next wave of true supply chain synergy.

  2. Linkedin Member21 July 2009 at 06:10

    In order to optimize a supply chain, the focus must move from individual supply chain members to end users. This optimization requires that each member communicate with one another, share information and strategically align their independent organizations into a collaborative supply chain. However, the first step of this process, open communication, is very difficult. Additionally, organizations still experience independent members attempting to optimize profit, generating distrust amongst participating parties. The buzz words dominating new business models in the supply chain industry are “cooperation” and “collaboration”. The volatile economic climate of today requires collaboration’s benefits, but most companies do not understand how to implement collaboration or the impediments. On this premise, community SC would be a difficult sell and implementation.

  3. Linkedin Member21 July 2009 at 06:11

    I believe that with any new idea or application, fear is the number one roadblock to a successful implementation. The idea of an optimized community supply chain in theory would bring benefits to all those involved, but I agree that the first step of open communication and shared information is a difficult hurdle to cross. We have had some success by facilitating smaller community level round table discussions, allowing businesses to discover mutually beneficial needs and services. As the benefits of cooperation are realized on the local level, the next step is to integrate these smaller discussion groups into regional organizations and so on. With the focus of most companies on cutting operational costs as a means of survival, I think that the climate is right to promote this idea.

  4. LinkedIn Member21 July 2009 at 06:12

    There is a lot of discussion here on visibility and while I am not knocking visibility, its value is limited unless another huge hurdle to efficiency is removed. Structural inefficiency. By this I mean all of the knownsub-optimizing impacts of silos within a supply chain. Each entity in the supply chain works to minimize his costs, at the possible detriment of total landed costs. For example, consumer goods companies tend to warehouse very close to import ports. Reason? Not because Los Angeles is an efficient place to warehouse and distribute to the average consumer in the US. In fact it is not. The reason in the retailer pays the freight off my door so his costs be damned. Even though bringing the goods further inland would reduce overall landed costs at the store shelf (you can inland a container for a lot less than shipping a truckload later) the manufacturer is minimizing HIS costs, not the overall landed costs of the supply chain in total. This happens not only between companies but within companies in different silo functions. The freight manager wants lowest cost of freight so he insists on slowest mode of transit and large quantities of cargo. That's all fine and dandy but did he check with the Finance manager to see what the carrying costs were and weigh the extra time and obsolescence risk against his savings? Typically no.

    Going one step further, the consumer goods DC and the retailer's DC perform the exact same function in the supply chain, creating a location for buffer stock and break bulk activity. The consumer goods manufacturer's DC typically ships not directly to store but to the retailer's DC. The entire 2nd DC, the handling to prepare the DC to DC transfer shipment, the freight to go to the retailer's DC is all from a Lean perspective waste. In a perfect world, the supply chain, acting as a perfectly integrated efficient "community" would collaborate vertically and create a shared use network for the manufacturer and retailers alike, eliminating all of the sub-optimizing silo cost management and duplicate holding, handling and shipping costs. There are a lot of reasons this isn't happening today but most have to do with companies protecting their silo and none have to do with efficiency. There is no one company that can move the goods independently through the supply chain at the same or lower cost than a true "community" supply chain could if they structurally collaborate--ie build a better mouse trap from the ground up.

  5. LinkedIn Member21 July 2009 at 06:13

    Seems nice... Honestly I thought you were talking about the old CPFR concept (collaborative planning, forecasting and replenishment) which, of course, did not pass the test of being a good will initiative.

    And I tend to think that is the key stone: good will.
    In these "desperate times" (as usual) everyone is trying to get a little bit more from their suppliers and customers (forcing the whole chain to be as efficient as possible). Then, "full visibility" as you mention could be interpreted as a negative thing. Just think about the opportunities when a customer has requested you to openly show your costs... (kind of dangerous, if you ask me).
    Another relevant point is that we can never stop to have human interaction, either by phone, e-mail, instant messaging, etc. We will always find ourselves asking, answering, confirming, instructing or delegating something. It's natural.

    Before asking ourselves why haven't we implemented this CSC thing, my question would be: Do we really think it would work in the first place?

    Maybe if you get enough "yes" answers, we could start a "critical mass" to set this movement in motion.

  6. LinkedIn Member21 July 2009 at 06:14

    I would like to think we could come close to that some day, and I would certainly like to be a part of it, but we will probably never reach it. Before you can achieve any type of optimized supply chain model each company in the chain must first get their own "ducks in row". How many companies these days truly have clear communication between their ranks and various departments? How many are utilizing their Information Technology properly? How many ERP systems are set up to grow as technology changes? How many sourcing specialists are spinning their wheels doing tasks that the computer can do instead of developing relationships with their suppliers? Etc......

    Until these types of processes are reasonably in place, it is unlikely that upstream suppliers will have a proper model to follow.

    If a company is fortunate enough to have "their ducks in a row", then it takes considerable time to help develop similar strategies with suppliers. That may mean a change in the supplier's technology, or their internal processes. But that is what needs to be done. This type of networking should be done face to face, not over the internet in blog.

  7. LinkedIn Member21 July 2009 at 06:15

    Changing processes and technology is another challenge (or opportunity), by the time half of supply chain has their "ducks in row", there will be a new wonder SC strategy, that will absolutely "save the day" and so the cycle starts again. We have changed gears so many times in supply chain management over the past 25 years, and still have many of the same problems. There are many good SC management tools available today and that makes it more confusing to select the correct one. But picking the correct strategy and optimizing it and then getting suppliers on board is what needs to done.

    I have been around for the past 25 years to see all the changes, and it is interesting to note that I consider CPFR (collaborative planning, forecasting and replenishment) a relatively new concept as it was introduced in the 90's I believe. It like many others is a good concept and will work if the appropriate personnel is properly trained, top management buys in, and it is given the time to make it work.

  8. LinkedIn Member21 July 2009 at 06:16

    All that's said above is true, so I will not repeat it. What I would add is the following:

    1/ companies, just like people, protect their privacy. Even if one party is more than willing to provide complete openness, more parties in the same supply chain will not. The parties ALL need to provide openness to make this work. However, the parties in a supply chain negotiate long term contracts with one another. If your trading partner has key numbers of your business you lose negotiating room to make money off of them. The same parties try to make more money together and to make money at the expense of the other. It is a fundamental conflict.

    2/ Technology-wise we are not so far off. There are plenty of adequate systems out there for the job. But until they all start adopting the same standards of storing and communicating information, the effort of making countless different systems of all the various parties integrate outweighs the benefit.

  9. LinkedIn Member21 July 2009 at 06:17

    Personally, I would like to run a global supply chain from my PDA on the beach in the Bahamas. The dream (or goal) of total visibility seems both close and, yet, far away. I believe in a total inter-connected world, where I will have visibility into all logistics paths, production, warehousing, as well as, all the material planning decisions taking place. Through exception reporting I can be notified of any problems or potential problems, so (from the beach) I can take care of them and eliminate them.

    If I were to have all I want, I would like a 3D visualization of the world through a hologram, that could show me where all my product and raw material are, and highlight where weather, wars, or other force majeure will create problems. In addition, I would love to see the creation of software intelligent agents that would take care of a majority of the material planning functions and ordering material according to predefined base stock policies. In addition, I would have software bots notifying me of exceptions. I would have constraint programming models optimizing my global supply chain that balances a centralized decision making process along with one that is decentralized to allow for flexibility.

    Yes, I am a dreamer. The problems of "real life" are difficult. A simple purchasing decision of when I should buy and how much is difficult especially when raw material is shared between end products. We live in a stochastic world with many uncertainties like weather, war, customs, flat tires, traffic, someone accidently cutting a cable (grrr!) or trucks delivering to the wrong location (double grrr!).
    Factories migrate to developing nations with limited IT capability. Plus, and one of the most difficult to capture is the human element. People are difficult to control--need them to scan items, record accurately (avoid data integrity issues), not get around the systems and follow prescribed rules.

    But I can hope. And yes I do work on these issues and hope that we can move from theory to actual application.

  10. We are actually working on creating a Supply Chain Community. It's going to be a place for suppliers evaluations (peer to peer), forums, blogs, and a warehouse where the small to mid sized companies will be able to store and manage their suppliers.

    It's a work in the progress, but you may already look at http://www.SupplierEvaluations.com and give us your opinion.