No business would ever want to paint a negative picture of growth to the supply chain function. Growth can be a scary prospect if it has not been planned for. Effectively scaling up a supply chain department whilst growing is fundamental to the future prospects of a business. Securing new customers and business opportunities is all fair and well, but if service levels drop as a department stretches – the growth will disappear quickly.
Planning for Expected Growth
It is vital for the leadership team of any enterprise (small, medium or large) to communicate growth and new business opportunities across the business, particularly the supply chain department. Upon receipt of this information, supply chain leadership must establish the potential impact of this new business and the developments required in order to facilitate it.
Analyzing the impact of new business on supply chain functions is not straightforward, as often the full impact cannot be understood until the new opportunity is up and running – but this does not mean it should be ignored. It is vital for supply chain leadership to speak to individual team members about perceived pinch areas and points of exposure. This has to be managed in the right way, no one wants to be seen as a nay-sayer and blockage to growth – these fact-finding exercises should be seen as opportunities to address potential problems and provide optimal solutions. By speaking to the team it may become apparent that there are future opportunities for optimization and streamlining. Leadership should approach these discussions with an open mind, and listen to all observations.
Once received, it is vital that leadership provide a realistic assessment to the wider business of the impact on this growth. They must be frank about the current supply chain team capacity and whether under current conditions the team could cope, and if not provide a detailed analysis of the resources and plans to mitigate for the expected shortfalls. Deliberate overloading of the supply chain department will eventually overwhelm it, and strong leadership is required in order to prepare for growth.
Preparing for Unexpected Growth
The unexpected can happen at any time. Over time, opportunities will arise for businesses that have not been planned or mitigated for, and how the supply chain function reacts and copes is fundamental to their successes or failures.
The cross-functionality of staff is a critical element of supply chain future proofing. It is not possible to predict what supply chain function will be stretched for unplanned business, so encouragement of team members to develop cross functionality will allow short term influxes of work in specific areas. This can allow for leadership to establish medium to long term solutions in the interim period.
Operational capacity is another key theme that needs to be assessed regularly. In order to absorb supply chain influxes, the department should be operating at a base level of 85-90%, leaving space of training and other professional development opportunities for staff. This extra 10-15% supply chain capacity is then available at critical periods, allowing the supply chain team to continue operating. As mentioned earlier, this requires communication from leadership to wider team members, and honest assessments of workload and additional capacity.
To Conclude
Preparation for growth is a fundamental function of any supply chain team, and leadership who ignore it do so at their peril. It should not be treated as a short-term project when new business opportunities arise, but rather a continuous process of future proofing and team assessment. As the saying goes – fail to prepare, prepare to fail.
About the author
John Fraser, Scalconcepts
Scalconcepts is a new blog set up by John Fraser, discussing the supply chain and logistics in relation to small and medium sized businesses. John has been working in supply chain for the last 8 years across a number of different sectors and is keen to share his thoughts and experiences.
Twitter: @scalconcepts
