Materials Handling is the Cinderella of emerging market supply chains
August 28, 2020

Why do so many supply chain projects fail? And what to do about it?

Why do so many supply chain projects fail? And what to do about it?

In today’s environment, businesses’ Supply Chains are receiving more attention than they ever have before.  This will result in more Supply Chain projects…..many of which will inevitably fail.  So it’s timely to ask, “What are the root causes behind the failure of so many Supply Chain projects?”

To try to answer this, we white-boarded a list of all the failures we knew of – along with our best estimates of the key cause for each failure.  In doing this, we initially focussed on the dramatic, gut wrenching project failures that make news around the supply chain community.*  However, we then realised that there was a whole other class of failure…which were the projects that never got going.

Here’s a summary of the reasons we came up with for project failures – broken down into two classifications:

 

Causes behind FAIL-TO-LAUNCH projects:

  • Under-resourcing: Expecting internal resources to ‘double-hat’ and/or not assigning accountability for progress
  • Under-encouraging: Organization structures that don’t reward individuals for driving change and innovation
  • Under-skilling: Teams that didn’t have the know-how or exposure to find their way past obstacles or didn’t know how to build a justification for the investment
  • Under-sponsoring: Project teams that failed to build momentum or achieve interdepartmental cooperation because senior management insufficiently championed the cause

 

Causes behind CRASH & BURN projects:

  • All or the above, plus….
  • Underscoping: Failing to appreciate that Supply Chain connectivity means a single change may impact many stakeholders
  • Going cheap: Selecting lowest cost over best value
  • Abdicating: Pushing responsibility onto the vendor (this is especially true in complex software and warehouse automation projects)
  • Isolation: Working in silos, failing to engage and enrol relevant stakeholders
  • Hope over preparation: Lack of rigour in analysis, planning, design and project management
  • Execution burn-out: No show-stopper failures but ‘death-by-a-thousand-pinpricks’ as compounding minor delays drive the operation further and further behind schedule and the team deeper into exhaustion

 

So, what can you do about it?

  1. Recognise that the salient feature of Supply Chain is interconnectivity. Any effort to drive material and sustainable change will require a ‘stepping back’ to comprehend and address flow-on impacts on the wider business
  2. Realise that, with the right approach, such impacts can be mitigated or turned into positives for the business
  3. Complement in-house knowledge through ‘hands-on’ people (like us!) who have the exposure and depth to quickly find the path of maximum benefit and minimum risk
  4. Start ‘lite’ with a size-of-prize analysis to establish what can be achieved and how it can be funded. (Note that in today’s environment there are increasingly innovative ways to make projects self-funding – avoiding cash outflows until they can be funded by project results)
  5. And take this Bear Bryant quote to heart:

    “It’s not the will to win, but the will to prepare to win that makes the difference.”

    We’ve had this quote on the wall of our office for almost 20 years – and we live by it.  As a result we’ve not had a single project failure during that time.

 

If you believe that your supply chain should be doing more for your business, talk to us.  You may be surprised at:

  • How informative and effective a fresh pair of eyes can be
  • How perceived obstacles are not necessarily show-stoppers
  • The size-of-prize available
  • How easily change can be funded

 

*Supply Chain projects that go wrong tend to get noticed: kilometres of trucks lined up outside distribution centres, depleted products on retail shelves, angry calls coming in from customers and HQ and dead-on-their-feet project team members working all hours.  Sadly, these projects can also derail promising careers.  We’ve seen numerous people leave this sector after going through rough projects.

Leave a Reply

Your email address will not be published. Required fields are marked *