Posted by: Matthew Molinari | June 30, 2012

Managing Change

 

Please take a look at my latest video blog if you have some time. I’ve been reading a book called The New Supply Chain Agenda which talks about the 5 key steps that help to drive value in your supply chain. Then earlier today, I found this article about a 90,000 square foot house that was built in Florida and I couldn’t help but think about the 5th step from the book.

The article details how the house was being built by David Siegel and is the largest house in America. At first, it seemed like a fluff piece talking about the extravagance of the owners but then the piece takes an interesting turn. Siegel is in the real estate business and was in the middle of building the house in 2008 when everything collapsed. Now, the house sits unfinished as Siegel’s company is pretty much run by the banks he had loans with.

The most interesting part to me was Siegel’s reason for building the house – “because we could”. If ever there was a philosophy to avoid in the supply chain that would be it. I mentioned the 5 steps from the book and they are:

1) Hire the right talent

2) Select the appropriate technology

3) Collaborate internally

4) Collaborate externally

5) Manage change in the supply chain

You may notice that each step builds on the one before it. You can’t hope to manage change if you haven’t done the first four steps successfully. Siegel is a perfect example of this. You simply cannot manage your supply chain as if the inherent risks do not exist simply because they aren’t effecting your business right now.

In fact, I would argue that when things are going the smoothest is when you need to be the most alert for potential problems. The one thing you don’t want is to assume that current conditions are going to continue forever and make plans based on that assumption. That is how you end up with a 90,000 square foot unfinished house with $4 million of marble sitting in the garage.

All businesses should realize that there are peaks and valleys that are constantly emerging as time passes. The key to successfully navigating your supply chain through the valleys is planning for them while you are enjoying the view from the top.

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