Like most Americans, I never expected to have to ration toilet paper, but that’s exactly what happened in spring 2020 thanks to the COVID-19 pandemic’s effects on the global supply chain.
It seems almost like a silly example (it certainly didn’t feel that way at the time), but it goes to show how vital the supply chain is for the well-being of the global economy – even down to the survival of a small business. The world changes at a more rapid pace than ever, so having a solid mastery of the elements of the supply chain provides a competitive advantage for individuals and organizations are trying to survive and thrive in a challenging economy.
Supply Chain at a Glance
Basically, the supply chain consists of the elements your business needs to develop and ship its products or services. And like any system, it’s only as strong as its weakest link.
Within the supply chain system, there are five basic functions: sourcing, procurement, logistics, quality, and fulfillment. These deal with everything from obtaining a part you need to build your product to actually delivering the product to your customer; it’s an end-to-end process.
As a business owner or service provider or even someone who works in sourcing or procurement, you are often somewhat dependent on the ability of someone else to deliver. So being really good at your job matters, because you have to find the best products from a reliable source that fulfill your needs in a timely manner so that you can deliver the best product or service to your customers.
Moving at the Speed of Change
One of the most unsettling aspects of supply chain is the rate at which change happens in the modern world. Pandemics strike, natural disasters occur, stock markets crash. More important to your organization, someone may beat you to market if you don’t get there fast enough.
According to Statista estimates, “there is a clear long-term trend of declining corporate longevity with regards to companies on the S&P 500 Index, with this expected to fall even further throughout the 2020s.” Historically, more than two-thirds of start-ups never see a profit. Not exactly stellar motivation for putting your ideas out into the world as a business owner.
Your ability to navigate supply chain functions can actually be the definitive make or break matter for your organization. If a non-negotiable supply for your product suddenly becomes unavailable, you need to be able to rapidly find a new source to procure the needed item quickly and affordably.
Moreover, being able to expeditiously bring a high-quality product or service to market that fulfills your customer’s wants and needs is the difference between making a sale and having shelves full of old inventory. (It’s also a huge benefit of learning the Agile methodology!)
Start Your Supply Chain Journey With CAVU
Are you interested in learning more about supply chain and how to become more efficient as an organization? Check out CAVU’s newest micro-learning, Introduction to Supply Chain, taught by Fledging CEO Ethan Summers.