Oct 082017
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Supply Chain Terms, Quotes and Training.

An assortment of supply chain terms, quotes and various information.  Click into the supply chain training videos to dive deeper into the details.

Supply Chain Terms

“If supply chain had an arch enemy it would be called ‘bad communication’.” ~EverythingSupplyChain.com

When an issue in supply chain arises the cause of it is often bad communication.  Think about the last three problems you experienced in supply chain and was bad communication the culprit?  Many people may be thinking “I communicated effectively, the person just didn’t listen.”  Well, how could communication change so the person would listen correctly?

supply chain

“The supply chain stuff is really trick.” ~Elon Musk

In a few short words Elon Musk sums up supply chain.  If you don’t know, Elon Musk is the CEO of Tesla, SpaceX and Solar City.

supply chain elon musk

“1. Increase Visibility 2. Reduce variability.  These two activities encompass all layers of supply chain management.” ~SupplyChainToday.com

Increasing visibility and reducing variability are constant factors in supply chain.  This helps to improve communication across the supply chain.

supply chain terms

“Having high performing suppliers is key to a well run supply chain.” ~EverythingSupplyChain.com

An organization can have the best people in the world working for them but if you don’t have high performing suppliers your supply chain will suffer.  If you did have the best people working for you, wouldn’t they be sure the suppliers were high performing?

supply chain

“Don’t let the digital supply chain scare you.  Big data, IoT, cloud, AI, drones and deep learning are just ways to improve the supply chain.” ~SupplyChainToday.com

There will always be new buzzwords to get people hooked on the latest technology.  Consultants seem to thrive on buzzwords.  Just remember these terms are just new ways to improve the supply chain.  If you have been in supply chain for awhile you can think back and remember when B2B was a major buzzword.  Think way back when TQM was a major buzzword.  Break things down to the basics and it makes everything easier to understand.

supply chain

“No matter what education you have always keep learning.” ~EverythingSupplyChain.com

This quote can be used by anyone.  You could have an 8th grade education or a phd in supply chain, it doesn’t matter.  ALWAYS KEEP LEARNING.  There is always something to learn and you can learn from anyone.  Sometimes the worst boss is the best teacher because you learn what not to do.

supply chain MBA

“Supply Chain is like nature, it is all around us.” ~Dave Waters

If you don’t think you have supply chain experience you do.  If you ever planned a trip you have experience in logistics.  If you ever bought a house, a car, something from Craigslist etc, you have procurement experience.  There is an example below regarding supply chain experience and cooking a meal.  This may help people understand why it is easy to say supply chain is all around us.

supply chain

“Supply Chain Experience: Plan a meal for 10 people. Everyone must get the food they want and you can’t run out.  you have a $100 budget. Now plan and execute.” ~EverythingSupplyChain.com

If you have ever cooked a meal for more than yourself you have some type of supply chain experience.  You went to the store and sourced your ingredients “raw material/supplies.”  You went home and cooked the meal (manufacturing).  You then served it to the guests (delivered).

supply chain

“Supply Chain – the supply chain starts from the origin of the raw material and ends once the product has been discarded or recycled.”  ~SupplyChainToday.com

What is your definition of supply chain?  There are numerous definitions out there and below is just one example of a way people describe supply chain.

supply chain definition

“Bullwhip Effect: Shifts in customer demand are magnified the farther you move up the supply chain.  This leads to large fluctuations in inventory.” ~EverythingSupplyChain.com

The cause of the bullwhip effect is bad communication.  This ties back with one of the quotes above.  Understanding demand is extremely difficult and I am guessing some people are saying attributing the bullwhip effect to just bad communication does not account for the complexities that go into understanding demand.  By boiling things down to the simplest terms it often makes a difficult concept easier to understand.  Here is some more information that expands on the Bullwhip Effect.

supply chain terms

“Focus on something the customer wants, and then deliver it.” ~Sam Walton, founder of Walmart and created the Walmart Supply Chain.

Sam Walton knew the customer wanted low prices.  The lower the prices the better.  The Walmart Supply Chain is how Sam Walton provide the everyday low prices.

Walmart Supply Chain

“Total Cost of Ownership (TCO): All costs associated with procurement and using the item.” ~EverythingSupplyChain.com

An example of Total Cost of ownership would be buying an economy car that is $2,000 cheaper than its nearest competitor.  But what you soon find out is that you are constantly in the garage having it fixed.  Even if the vehicle is under warranty it is still taking up valuable time to take it in and then have to rent a car or borrow one.  Then once the warranty is up the $2,000 dollars you saved in price is eaten up by repairs.

supply chain total cost of ownership

“If you can’t explain it simply, you don’t understand it well enough.” ~Albert Einstein

Break things down into simple terms.  Some people trying to make everything complex, be the person who tries to make things simple.  The Warren Buffett quote goes well with this.  Many of the quotes and terms on this page break things down into simple phrases.  From there, you can add all the complexities you wish.

supply chain basics

“The business schools reward complex behavior more than simple behavior, but simple behavior is more effective.” ~Warren Buffett

Simple beats complex.  Steve Jobs has a great quote that goes well with what Warren Buffett is saying below.  “Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” ~Steve Jobs

MBA supply chain

“Train your procurement organization well.  This investment can save millions of dollars.” ~EverythingSupplyChain.com

If your procurement organization isn’t what it needs to be what are you doing to improve it?  Not saying you need to spend millions of dollars in training, just saying you need to be sure the organization is trained.  The list of supply chain terms on this page is another place to start.

Supply Chain Training

“Strategic sourcing in the simplest terms – leveraging all resources to get the best value for the company.” ~EverythingSupplyChain.com

The procurement organization can save a company millions of dollars.

Strategic Sourcing Supply Chain

“When you surround an army, leave an outlet free.  Do not press a desperate foe too hard.” ~Sun Tzu

Always thought the Art of War was an interesting book to apply to business.  This quote applies well when dealing with suppliers.  Don’t squeeze suppliers too much.  They will either go out of business or refuse to do business with your company.

supply chain art of war

“You don’t want to negotiate the price of simple things you buy everyday.” ~Jeff Bezos, founder and CEO Amazon.

Good quote to see how Amazon went about with their pricing strategy.

Amazon Supply Chain

“We care about every worker in our worldwide supply chain… What we will not do – and never have done – is stand still or turn a blind eye to problems in our supply chain.  On this you have my word.” ~Tim Cook

Tim Cook is the current CEO of Apple.  Would encourage people to research Tim Cook and what he did to make the Apple supply chain one of the best in the world.

Apple supply chain

“The goal as a company is to have customer service that is not just the best but legendary.” ~Sam Walton, founder of Walmart.

Sam Walton did amazing things with the Walmart supply chain.  The goal was legendary service and much of that was done because of supply chain innovations.

Walmart supply chain

“Reduct maverick spending: maverick spending is said to be around 10%-20% higher than purchasing from companies with negotiated contracts.” ~SupplyChainToday.com

maverick spend supply chain

Aggregated Training Information.


Supply-Chain Quotes

  • “Every breakthrough business idea begins with solving a common problem. The bigger the problem, the bigger the opportunity. I discovered a big one when I took apart an IBM PC. I made two interesting discoveries: The components were all manufactured by other companies, and the system that retailed for $3,000 cost about $600 in parts.”  ~ Michael Dell
  • “Why not make the work easier and more interesting so that people do not have to sweat?  The Toyota style is not to create results by working hard. It is a system that says there is no limit to people’s creativity.  People don’t go to Toyota to ‘work’ they go there to ‘think’”   ~Taiichi Ohno
  • “What we need to do is always lean into the future; when the world changes around you and when it changes against you – what used to be a tailwind is now a head wind – you have to lean into that and figure out what to do because complaining isn’t a strategy.” ~ Jeff Bezos
  • “We are the most focused company that I know of or have read of or have any knowledge of. We say no to good ideas every day. We say no to great ideas in order to keep the amount of things we focus on very small in number, so that we can put enormous energy behind the ones we do choose…..It’s not just saying yes to the right products, it’s saying no to many products that are good ideas, but just not nearly as good as other ones.”  ~ Tim Cook, CEO Apple.
  • “Help young people. Help small guys. Because small guys will be big. Young people will have the seeds you bury in their minds, and when they grow up, they will change the world.” ~ Jack Ma
  • “Gentlemen, the officer who doesn’t know his communications and supply as well as his tactics is totally useless.”  ~ General George S. Patton
  • “Leaders win through logistics. Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets at the right place at the right time. In other words, you must win through superior logistics.”  ~ Tom Peters
  • “For much of Toyota’s history, we have ensured the quality and reliability of our vehicles by placing a device called an andon cord on every production line – and empowering any team member to halt production if there’s an assembly problem. Only when the problem is resolved does the line begin to move again.”  ~ Akio Toyoda, CEO Toyota Motor Company
  • “At Wal-Mart, it goes back to Sam Walton and the foundation and business model that we simply operate for less, or everyday low cost. We’re known for operating in a very efficient way and then giving those savings to customers.”  ~ Mike Duke, former CEO Walmart
  • “All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.”  ~ Taiichi Ohno, father of the Toyota Production System
  • “Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.” ~ Steve Jobs

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