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“Anti-Strategy”:  A Death Knell to the Supply Chain – Part III

“Anti-Strategy”:  A Death Knell to the Supply Chain – Part III

By: Jim Gitney   |     May 8, 2015

supply chain management consulting” Anti-Strategy ” is defined as result of the set of activities initiated by well-meaning people who don’t have a corporate strategy to guide their thinking. As you can imagine, without an overarching corporate strategy that properly focuses demand creation and the supply chain, a lot of decisions can be made that will sub optimize performance. If you think about the illustration accompanying this article, you can see over 100 key supply chain elements that need to be managed and collectively optimized.

Group50 supply chain consulting company’s supply chain leaders are capable of optimizing one or more of these, but it is not possible to optimize all of them. In lieu of an overarching corporate strategy that provides guidance to all strategic activities, a senior supply chain manager will optimize what (he/she) believes to be the most appropriate combination. Often times their perspective will be influenced by something they were told in a meeting leading to the “fire drill of the month”. The CEO demands lower inventory levels, but Marketing and sales need more inventory to support a new product launch and the installed product base. The COO says he wants lower unit cost and that the sources should be from another country without taking into consideration the “Total Cost of Acquisition”. Each of us have been the recipient of this type of mandate.

Group50 supply chain management consulting can all agree that the supply chain strategy that is focused on lowest possible inventory levels may not be the most appropriate strategy for a company who needs to ship every order complete or a company who is launching a new series of products. The following are some real world examples:

  • Everyone knew that the CEO of a middle market company wanted to double its size in 5 years. Because there wasn’t a clear strategy around the product platforms that were going to deliver that growth, the supply chain leader struggled with which products he should focus his supply chain resources on and was given the wrong guidance by the business unit managers. They were attempting to protect their P&L’s.
  • One client had a product configuration issue with a customer who was a small portion of their total business and completely changed their finished goods approach incurring over two million dollars in incremental cost in spite of several simple solutions to the problem.
  • A company ordered its entire product volume from one vendor in the Far East in order to gain volume discounts but had no competitive bidding leverage on the supplier to lower unit costs.
  • One company lowered supply chain cost by having a single distribution center which put them at a competitive disadvantage over their rivals who could distribute product next day for a fraction of the shipping cost.

Each functional leader is capable of optimizing the performance of their function, but in a vacuum, they will do what makes most sense to them. You might argue that staff meetings and planning meetings are designed to keep these things from happening, but they aren’t nearly as effective as having a well thought through business strategy to use as the litmus test for decision making. 90% of companies don’t effectively implement the strategies they do have and our experience is that most companies don’t have one that is well thought through.

If you want to find out how you can eliminate Anti-Strategy in your company, you can reach us at (909) 949-9083 or send a note to info@group50.com or request more information here.

The following articles provide more insight on the impact of Anti-Strategy at the functional level.

  1. HOW CAN ANTI-STRATEGY KILL YOUR ORGANIZATION? – PART II
  2. “ANTI-STRATEGY”:  A DEATH KNELL TO THE SUPPLY CHAIN – PART III
  3. THE IMPACT OF ANTI-STRATEGY ON MARKET EFFECTIVENESS – PART IV
  4. ANTI-STRATEGY – HOW SALES COMPENSATION CAN ACCELERATE IT – PART V
  5. FROM “ANTI-STRATEGY” TO ACTIONABLE STRATEGY – PART VI
  6. ANTI-STRATEGY AND INFORMATION GAPS – PART VII
  7. “ANTI-STRATEGY” AND THE COMMUNICATION CONUNDRUM – PART VIII
  8. INOCULATING INFORMATION TECHNOLOGY AGAINST ANTI-STRATEGY – PART IX

Feel free to share this link to the Anti-Strategy series with colleagues who might find this of value to them and their organization.

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About the Author:  Jim Gitney, CEO and Founder, started Group50® Consulting in 2004 with the focus of working with companies to significantly improve their performance by leveraging peopleprocess and technology as part of developing a company’s strategic plan 5.0.  In 2013, he created Group50’s Business Hierarchy of Needs® change management framework, a fundamental strategic planning and strategic execution guide to senior leadership teams, and was granted a trademark in 2015. This framework eliminates the existence of Anti-Strategy.

Jim has held C-suite and Board positions in large and small companies (GE, Black & Decker, Sunbeam, Rain Bird, Pankl Aerospace and others) both privately and publicly held. He is considered a subject matter expert in strategic planning, strategic execution, operations, supply chain and restructuring.  He has taken best practices from around the world, worked closely with clients and other Group50® consultants to create Group50’s full suite of strategic planning and execution tools. Group50® consulting consists of consultants from every functional discipline who have spent their careers in corporate America developing strategic plans and rolling up their shirt sleeves to get it done.

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This entry was posted in Anti-Strategy, Supply Chain Optimization, Weekend Thought, on May 8, 2015
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