Virtuous Connections

strategy + business (Verity, McNally) - A fine-tuned supply chain is more than the sum of its parts. Ideally, each link improves the next.

Every supply chain is composed of a set of virtuous or vicious circles; deficiencies in one area cause or reinforce weaknesses in other parts of the chain. This notion, that a supply chain will fail to demonstrate significant and sustainable system-wide improvements from staggered initiatives, offers a new way of looking at a supply chain — as an integrated whole, not as a set of individualized and independent processes. To put it another way, a supply chain is deftly calibrated only to the extent that each part of the chain triggers a virtuous circle in the next.  Reposted from SupplyChainBrain

"Although West and his team implicitly understood the potential influence of the virtuous circle concept on supply chain performance, they nonetheless forecast gains based on expected, discrete improvements in each individual aspect of the supply chain and ignored their carryover impact on subsequent links. In fact, the gains were exponential. And those gains demonstrated clearly that connecting the silos within an organization — particularly within a sprawling structure like a multinational’s supply chain — can produce tipping points that drive efficiency and generate cost savings in parts of the network that at first appear to have little direct bearing on one another."