The term “supply chain” shouldn't be used anymore—and in its place, the term “network” can be used. In an article featured on Forbes.com, Christopher Koch explains how the term supply chain is simply outdated and conjures up the wrong imagery. For example: “supply” implies a physical item, and chain implies something that can’t be flexible or move out of sequence. And that’s truly the point of the article: not that there needs to be a new term, precisely, but that there needs to be a new definition and understanding of how supply chains—pardon me, networks—function. Koch lists four tips that an individual or organization can start understanding the “network mindset”: Supply Chains are much more about how a network works together and how that network is capable of achieving a singular, specific result.
- Collaboration requires a new way
- Manage by information, not exception
- See beyond the next step
- Markets are now networks
Each of these tips is accompanied by some information on how to apply or, as is the case with the first tip, how Koch came across the tip: I heard companies at the summit say that they are looking forward to the end of the days when 70-80% of their IT budgets are spent supporting (among other things. Perhaps the best case to support Koch’s view (not that it particularly needs any real defending) is simply the nature of worldwide companies. Using Apple as an example, consider how many of their gadgets are constructed in other countries, with parts created in different countries themselves. This kind of organization can’t be a “supply chain” as the term was initially understood. Instead, as Koch suggests, it’s more of a network which supports a final product (a completed Ipad, let’s say), but is acting with its own concerns and issues.) expensive, one-off connections with suppliers, partners and customers. If you are still wondering what cloud computing will ever be good for, this is it: a faster way to collaborate with your network. So whether you choose to embrace Koch’s suggestion for the renaming of the supply chain or you want to stick to the term, the fact remains that your mindset on what makes a supply chain work in the 21st century.