Unless you work in a big box store or food business, most of your product decisions have been made with industrial supply chains in mind – a truckload of cotton, two warehouses of goods, 10 warehouses of even more. This arrangement is probably one of the most effective ways to control the cost of goods and delivery. But there’s a catch: according to The Economist, supply chains are also big problems to manage.
Supply chains are actually one of the world’s best-known national inventions – and also one of the world’s worst-kept secrets. These arrangements set up business supply chains such that your suppliers have to work with the company that ships your stuff to you. They do this by slicing up the world’s supply of goods into smaller chunks and then managing or tracking the movement of the chunks among warehouses. But with three billion people living in supply chains around the world, and another seven billion working inside some of these supply chains, there’s a lot of moving parts that make this process almost impossible to manage and keep track of.
There’s a generally accepted view in management that supply chains are complex systems of human connections. Many parts of the supply chain are distributed by hand or automated. But the whole is made up of interconnected partings that have to be managed effectively and most of them can be difficult to understand. That’s where supply chain management systems come in.
These systems use statistical analysis and big data to offer new insights and have a variety of intricate pieces mapped together. This has led to some inventions – marketing solutions for a completely new product, a supply chain management system that isn’t a solution at all but a moving pain. You might see this the time you wait for another truck in a warehouse that’s been closed all weekend to two warehouses in three states.
When Supply Chain Innovation comes into play in this situation, the game is changed. Instead of thinking about the point at which each truck drops off another truck, you’re trying to get the trucks to your end point in the shortest amount of time.