Supply Chain Learnings from the Olympics
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Supply Chain Learnings from the Olympics

I am an avid fan of the Olympics. Watching it fills my evenings. I relish in the stories of athletic accomplishments.

I Will Never Be an Athlete

As a chemical engineering student at the University of Tennessee in the mid-1970s), I passed by academic labs studying athletic potential on the way to the pool. (I love swimming.) As I passed the department doors of the athletic department, I laughed wondering, "Will anyone ever see this stuff as a serious study?" As an engineering student, I gravitated to studies with academic rigor in math and science. I was wrong.

If anyone has ever "bonked" on a run or a cycle, you know that the capabilities of the human potential are not endless. Better training, nutrition, and equipment drive performance, but there is no substitute for the right DNA and grit/determination. Training builds stamina, but form and strategy are learned skills. The athlete needs to want to win. Age is an undeniable factor.

In sports, we learn that a runner is not a runner. The athlete winning the 100M in track is different from a marathoner. The build of an 800M swimmer is distinctly different than that of a pommel horse gymnast. (Yes, I loved STEVE!)

I will never be an athlete, but I make myself move with a purpose every day. I swim a mile three times a week, take ballet 2X a week, build core with Pilates 2X a week, walk a mile each day with my dog, and play pickleball twice a week. I am not good at any of my athletic endeavors. For me, the goal is healthy aging, but the training process is humbling. My seventy-year-old body is less flexible, and my muscles are aging. I feel the effects of time. My body can no longer cycle due to carpal tunnel in my wrists. My potential is much less today than when I was sixty.

Applying the Learning

The process of training has helped me to better understand supply chains. Each year, I write the Supply Chains to Admire report. This is my current focus. I will publish the new report--an analysis of the performance of 556 public companies for 2013-2023 this month. The research and analysis take me 4-5 weeks. I liken it to a root canal. So, why do I do it? In the research process, I learned from the patterns. I am reinforced by the fact that 5K readers read the report.

One of my greatest insights this year is that a supply chain does not have unlimited potential. Like the human body, supply chains are complex, non-linear systems. They need to be designed for purpose, and one design does not fit all needs.

In the mid 1990s, I worked for a supply chain planning technology provider. My job was to build business use cases for the sales teams. Using a database of balance sheet reporting, I would write a case of how the technology we were selling could improve inventory turns and reduce costs. I made several mistakes. The goal of this blog is to share the mistakes I made to help others. The mistakes I frequently see are:

1). A Supply Chain Does Not Have Unlimited Potential. Continuous improvement efforts need to be bounded by understanding the effective frontier. Network design analysis helps to define what is feasible at the intersection of margin, inventory, growth, customer service, and asset utilization. You can use whatever metrics you want in these categories, but you quickly find that these metrics in supply chains are interrelated with undeniable trade-offs. (It is not as simple as customer service/inventory, and cost trade-offs.) Increasing potential requires managing complexity, designing buffers, implementing push/pull decoupling points, and building organizational competency. I find that this is true for every supply chain within a corporation. Companies have five to seven supply chains. I define supply chain types by analyzing forecastability, order cycle requirements, and volume. (I don't care how you segment to drive the design; in the analysis, you will find a frontier or boundary for feasible/reliable results.) The problem is that most technologists and consultants advocate projects without understanding the capabilities/potential of the supply chain. A supply chain design does not have unlimited potential.

2) Clarity of the Goal. The training for a 1000-meter dive is very different than the 100-meter sprint. Few supply chain leaders that I work with are clear on their goals. Functional excellence focused on cost does not serve anyone well. This focus creates waste, destroying the planet and denigrating corporate results. (Unfortunately, this is the objective function of most traditional supply chain planning technologies.) Focusing on functional performance reminds me of the fallacy of telling a decathlete they can win if they are only good at one event. The strategy of winning a decathlon requires the athlete to be good, but not necessarily the best at each event, to win the overall total score. Metrics like OEE (Overall Operations Efficiency) throw the supply chain out of balance. A high-scoring performance on OEE does not translate to margin. As companies became larger through M&A and globalization, the issues of goal clarity became more paramount, but few were equal to the challenge.

3). The Impact of Non-linear Relationships with Rising Complexity. Did you know that a 1% improvement in demand error translates to a 2-3% improvement in inventory levels but that in 8 out of 10 companies I work with, traditional demand planning processes degrade the forecast (measured by forecast value-added analysis)? Or that the average company has a bullwhip of 3.8 in translating a demand signal to a buying strategy? Few companies measure and manage the bullwhip. <Sigh> Companies deploy "best practices" without measuring the impact on business outcomes. We have a lot of gray-haired leaders/consultants who think they know the answers.

4) Form and Function. A Company Does Not Have One Supply Chain. Few companies, less than 5%, actively design and manage supply chain flows. For me, this is job one. The crazy, zealous behavior of buying and implementing technology using vague terms like digital transformation, end-to-end planning, and the autonomous supply chain drives me crazy. The starting point is designing the supply chain and training the organization for the race that they need to run. Defining outcomes and potential is essential to winning.

5) Surprises Happen. Adaption is Essential. Teams don't Just Happen. At the end of the day, the potential of the supply chain is defined by organizational capabilities. I love the team sports in the Olympics. Each team has a different set of rules and goals. A 400-meter swimming team operates with a much different definition than a volleyball team. When supply chain leaders discuss teamwork, I always ask how you define the team. What are the expectations, required training, and coaching requirements? Few can answer my question.

Back to Writing

This is a small diversion from the mind-numbing writing on the report I should be writing. I could not resist the urge to respond to a few misguided posts I keep seeing on LinkedIn that keep making the same mistakes. Just remember the fact that a supply chain does not have unlimited potential, the complex non-linear system requires clarity of design, and requires goal clarity to reach the effective frontier. Enough said. Enjoy the Olympics. Sadly, it is coming to an end.


Robert Juricic

▶Zero data uploads, zero surprises: Monitor lifecycle risks while keeping your BOM data secure | Complete control, complete visibility◀

2mo

Absolutely loved this read—especially the Olympics analogies! I can totally relate to that 'bonked on a run' feeling, both in fitness and supply chain management. Just like in sports, you can’t expect one-size-fits-all solutions. Each supply chain is like a different event—whether it’s the 100-meter sprint or a marathon, the strategy has to be specific to the goal. And let’s be honest, trying to squeeze unlimited potential out of one design is like expecting to win a decathlon by mastering just one event. Thanks for the insightful (and fun) diversion!

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Gary Newbury

👉🏻👉🏻👉🏻Rapid Supply Chain Performance Improver 💥Transformer ⚡ 25+ Operational Turnarounds 🚀 Mid-Market Growth Escalator 📈 Speaker ♦ Radical Strategic Thinker ♦ Highly Focused ♦ Empowering ♦ Executive Leader

3mo

❤️ point 4. So many organisations suffer from onesupplychainitosis, but service different customers in different ways without understanding what they are doing, that different order and delivery requirements are a thing, nor understand the impact on margin of each customer/service segmentation. In fairness, most do not connect the dots between the business objectives and one of the biggest drivers of success...the supply chain.

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Boris Pavlovski

Technology and Digital Enthusiast I Strategic Business Partner I Building Tech & Digital Ecosystems I Servant Leader

3mo

I like the metaphor, Lora Cecere. I would underline the criticality of assessing whether best practices are fit for purpose within our UNIQUE organizational context. Often, I see a haste to replicate a process or a structure without the dialogue on their applicability (What this means for us?). We must consider factors like organizational culture, complexity, specific demands of our supply chains, etc. 

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Veera Baskar K

End to end supply chain solutions to reduce cost, optimise inventory, improve customer satisfaction, smarter processes and capability building | Founder & CEO - 7th Mile Shift | Ex-TVS Motor Company - AVP Logistics.

3mo

Lora, your analogy between athletic training and supply chain management is spot on. Just as an athlete’s performance is bound by their biological limits, a supply chain's potential is limited by its design and complexity. I completely agree that recognizing these boundaries is essential for setting realistic goals and driving meaningful improvements.

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Mattia Costa

AI Prompt Engineering for Supply Chain Management | Driving E2E Supply Chain Value | Lean Six Sigma

3mo

This is a fascinating analysis, Lora Cecere. I really appreciate you drawing these parallels between the complexities of the Olympic supply chain and the broader challenges businesses face today. The point about the criticality of visibility and the need for real-time data access is so true.  I also thought your insights about the importance of collaboration were spot on. Gone are the days of siloed, adversarial relationships between suppliers, manufacturers, distributors, etc. True supply chain excellence requires all parties to work together transparently towards shared goals.

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