Friday, December 28, 2007

Why care about supply chains? They make the world a flatter place.


So I guess at some point I have to answer the inevitable question: Why spend so much time writing about supply chains? And why do I have to answer this question? Actually, to be honest, the real reason I have to answer this question is because it comes from my wife (and if I don't answer it, she'll just keep asking me). You might not believe this, but she actually thinks supply chains are boring. I know, I know, I can't believe it either -- and thank God there's a few out there that agree with us (Though apparently we may be a little defensive if the blog titled "Who said supply chains are boring?" is any indication).

Apparently, however, my wife is actually in the majority in this one. Yup, it was hard for me to admit, but your average American not only doesn't know what a supply chain is, but (gasp!) could care less.

So why do I think supply chains are worthy of all this time? Because I agree with Tom Friedman when he refers to "supply chaining" as one of the Ten Flatteners -- ten trends that made the world flat. Friedman describes supply chaining as:

"a method of collaborating horizontally -- among suppliers, retailers, and customers -- to create value. Supply chaining is both enabled by the flattening of the world and a hugely important flattener itself, because the more these supply chains grow and proliferate, the more they force the adoption of common standards between companies (so that every link of every supply chain can interface with the next), the more they eliminate points of friction at borders, the more the efficiencies of one company get adopted by others, and the more they encourage global collaboration."


[Author's segue: I'll be honest, I'm a big fan of Friedman -- he has a great way of taking complex ideas and making them extremely simple. I had a chance to hear him speak in person and one nugget that struck me was his description of the power of naming a trend or idea. In his words, "As a columnist, in my world, if you can name an idea, you can own it." Clearly, this isn't rocket science -- people have been doing this for years in areas from from politics (see "Death Tax") to marketing (then again, maybe politics and marketing really aren't that far removed) -- but Friedman's simple description of the power of naming something stuck with me. Another book along the same lines is "Made to Stick" by Chip and Dan Heath. I saw Dan Heath speak -- great presenter with excellent content.]


Since I think most people aren't likely to remember Friendman's Ten Flatteners, I'd simplify the trends even more. Imagine globalization as a three-legged stool: one leg is air travel, which allows the fast movement of people; the second leg is the internet, which allows the efficient movement of information (including financial information); the third is the ubiquitous intermodal cargo container which allows the fast movement of goods. (The cargo container is affectionately know to those in the shipping industry as "the box" -- for anyone interested in a great read of how the shipping industry was revolutionized by a trucker from the southern U.S. check out "The Box" by Marc Levinson).


I'm betting that just about everyone could name Orville and Wilbur Wright as the inventors of controlled, powered human flight. Many people might even be able to identify Bob Kahn and Vint Cerf as the inventors of the Transmission Control Protocol (TCP) which moves data on the modern Internet. But how many people would put Malcom Mclean in the same category? How many people even know who Malcom Mclean was? Yet his contribution to globalization by vastly increasing the efficiency in which goods are moved around the world is arguably no less revolutionary than the Wright brothers or the many involved in developing and refining the protocols that make the internet possible.


So that, in a nutshell, is why I think supply chains are worthy of all this time, and why those of us who work with them and in them on a daily basis need to explain more to the average American about what they are, how they work, and why they're important. I'll even go farther and say supply chains are not only important, but they're sexy. Ok, maybe that's too much of a reach right now, but we all need something to strive for, right? Rember, if you can name something, you can own it. So now you'll have to excuse me while I pass the computer to my wife so she can read this post...

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