Is your supply chain in flow?
Proposed by Mihály Csíkszentmihályi in the positive psychology, ‘Flow’ is the mental state in which a person in an activity is fully immersed in a feeling of energized focus, full involvement, and success in the process of the activity. According to Csikszentmihalyi, flow is completely focused motivation. It is a single-minded immersion and represents perhaps the ultimate in harnessing the emotions in the service of performing and learning. In flow, the emotions are not just contained and channeled, but positive, energized, and aligned with the task at hand (source: Wikipedia).
What does this have to do with supply chain? Well, I just borrowed the term, because I think a well-organized and well run supply chain needs to be in a state of flow, at least close to it or oscillate around it.
If the challenges continuously outweighs the capability in a supply chain it will not be possible to deliver customer satisfaction with a competitive cost model. The lack of capability will in the end be reflected in short cuts, workarounds with a higher cost to serve and hence will eat in to your margin. If your capabilities are continuously higher than your challenges that means you over invested in your supply chain, which impacts your return on capital employed.
When your supply chain is in a state of flow, there are two likely ways to break out the flow:
- Increase in capability: you invest in challenges that you see in the future and hence break the state of flow yourself to prepare for the future or to create a competitive supply chain advantage. This will be done by assertive companies with a supply chain vision and innovative views.
- Increased challenges: mergers, new market dynamics, political changes or black swan events will increase your (known) supply chain challenges and break the state of flow in your supply chain. Companies that don’t invest in their supply chain and see their supply chain as cost centres will sit and wait until the world around them breaks the state of flow in the supply chain. A market change or black swam event is a learning opportunity for an assertive company. They will adapt to the change and immediately focus on increasing their supply chain capability.
Supply chain flow can also be broken by decreasing challenges or capability, but leading supply chain companies will choose to break out the supply chain flow themselves. They want to have competitive advantage and build their capability on anticipated increasing challenges. But the real winners according to this flow principle are companies who are able to apply the ‘ultimate in harnessing the emotions in the service of performing and learning’ to their ultimate supply chain.
These will not be companies without a clear supply chain vision or companies who try to cost cut their way to greatness. Neither this will be companies that can’t make an emotional connection with their employees through their purpose, vision, brands and products.
The ultimate supply chain will come from companies that have an achieving, positive, learning and innovative culture, where disruptive thinking to improve and learn is encouraged. These companies have a purpose, brands and products in which their people believe. This creates an environment where people will go the extra mile to improve their supply chain to satisfy their customer. These companies are also not afraid of new challenges that come to them; they rather look forward to new challenges outside their current capabilities. These companies even invent new challenges through disruptive thinking and create solutions for these challenges. Their state of mind and vision is beyond the existing supply chain challenges and capabilities in this world. They understand that the equilibrium of flow has to be broken by themselves if they want to keep leading.
Now tell me, is your supply chain in flow?