Earlier this year, I saw a quote in The Reader’s Digest attributed to Colin Powell.
Great leaders are almost always great simplifiers.
This quote resonated with me because I believe in the power of simplification in Supply Chain Management and business in general.
Having misplaced the photocopy I made from the magazine, I went on-line to make sure I have the wording correct. I was not surprised to learn that The Reader’s Digest had in fact digested the quote. The original was a bit longer:
Great leaders are almost always great simplifiers, who can cut through argument, debate and doubt, to offer a solution everybody can understand. www.brainyquote.com
What is my point … A good definition of simplify is to reduce in complexity. If simplification is good, complexity would therefore be bad. It simply is.
At the root of Colin Powell’s quote is that a great simplifier makes things clear. When the problem, issue, or task is clear, the action plan is more evident and simple. Complexity and clutter cause confusion and organizational paralysis.
What does this mean for the supply chain? What does it mean in terms of inventory? Complexity is certainly the enemy in both cases. Here simplification means less:
- Less Suppliers of every kind
- Less SKUs
- Less steps in almost any process
- Less movement of goods
- Less paperwork
- Less people
- Less customers
For customers, suppliers, and people, any one with children knows the rule. Managing two children is four times the work as managing one. The intelligent reduction of suppliers is a well known strategy in Supply Chain improvement. The same applies to customers. Not all customers have the same profitability. Many companies have actually reduced the number of customers they call on and service directly by pushing the smaller and less profitable clients to wholesalers and distributors.
For finished goods and materials, the same principle applies. A Pareto Analysis of sales will show that 20% of the SKUs are responsible for 80% of the sales. Maintaining low sales SKUs is disproportionately costly. Changing packaging designs and refreshing products without some very simple and clear rules, will result in Excess & Obsolete inventory. Maybe a way to look at this is in terms of pruning. Consider grape vines. If not properly tended, the vines become unruly; vegetation growth dominates rather than fruit production. Grapes grow on one year old wood. So constant pruning is required to maximize the quantity and quality of the grape production. Finished goods and materials need to be pruned constantly. New products and product changes are continually generated. Full life cycle management of products must be done continually as well. Simple, right?
We began with an inspirational quote from Colin Powell. Let’s close this with a related quote from another very smart fellow: Albert Einstein.
Everything should be made as simple as possible, but no simpler.
In business, I have never heard of an example of the Supply Chain executives driving simplification too far.
So, be an even greater leader, learn to drive simplification.
