First Thoughts
  By Dan Gilmore - Editor-in-Chief  
  June 28 , 2007  

What is Supply Chain Best Practice? (Part 3)

Gilmore Says:
I must say I like what Paula Thornton of EDS had to offer, referencing a concept from Microsoft: “There's no such thing as correct...that's why we don't say best practices, we say proven practices.

What do you say? Send us your comments here

I write about 48 of these columns a year, and I must admit when I can get several good ones out of one topic, it makes my life a lot easier.

As regular readers know, earlier this year we took on the subject of supply chain best practice, asking if there really was such a thing. (See What is Supply Chain Management Best Practice?) That led to lots of feedback, and a column that summarizes that (See Readers Respond – Supply Chain Best Practice).

Fortunately for me, that second column led to still more feedback, which we highlight here, because there are again some insightful responses.

In truth, I was going to do a review this week of Dave Blanchard’s book “Supply Chain Management Best Practices,” a copy of which he kindly sent after the first column. The plan was to combine that review with some reader feedback, but I found there just wasn’t room, so it’s feedback first, the review a bit later this summer.

The real heart of the argument: Are there generic enough practices that they can really be applied across companies, situations, and strategies?

Not everyone thinks so. Friend of Supply Chain Digest Larry Lapide, currently at MIT, says, for example, that best practice is really the ability to selectively adopt the right practice for you.

Supply Chain best practices “support as well as enhance a company's ability to compete and win business in the marketplace,” Lapide said. But, “These will of course be company and industry dependent. So the real best practice is the ability to identify and assess what are the right practices to put in place in this context.”

Dave Pocklington of Amway Corp. offered a similar view: “It is my observation that often a 'best practice' is implicitly defined or assumed to be the 'right' way or 'only' way, without full understanding and recognition of the conditions and unique situations where it is to be implemented; and also recognition that these conditions are not static.”

In previous columns on this topic, many readers seemed to approve of two related thoughts. One was from SCDigest Expert Insight columnist Stephen Craig of CP Consulting, who said that while it wasn’t clear there was “best practice,” he certainly thought there was at least “good practice.” On the other side of that same coin, SCDigest Technology editor Mark Fralick said that before worrying about best practice, he has always focused on eliminating “bad practice” at clients.

With that as a backdrop, I must say I like what Paula Thornton of EDS had to offer, referencing a concept from Microsoft: “There's no such thing as correct...that's why we don't say best practices, we say proven practices.” The idea being, I would infer, that under certain circumstances, some practices have been shown to deliver improved results. For you gardeners, an analogy might be the “proven winners” flower selections that started showing up in nurseries a few years ago. I assume these proven winners are geographic location dependent. But in that specific area, they have been shown to thrive.

Bob Forshay of Brocade saw merit in both perspectives, which in the end I think is right: “If we are truly working to grow the [market] share, improve business process and become more competitive, then we are asking our customers what is best or world class as part of the journey, looking for those bad practices to eliminate,” he wrote.

“I would suggest that we cannot stop doing a bad practice until we have a replacement,” he continued. “We usually continue to take orders and ship product unless a safety issue surfaces while we study the problem. That said, it makes sense to apply Deming's concept of not shooting too low at a quantitative goal. For example to improve something 5% - should we choose to settle for an improvement thats simple and obvious? Or spend the effort evaluating options to instead choose what is the 'best possible" set of options available at that time and then implementing these for a yield of 105% improvement, from having focused on "best possible" or "ideal".

Bill Pritz of software provider Logility well captured the conundrum in his response: “A Best Practice is not universally a good thing to do for all companies. Every company is different, so a Brest Practice for one company may not be a best practice for another. In fact, a Best Practice that one company employs may be counter-productive for another. So, calling something a Best Practice may be a problem because they could be a Worst Practice for some.”

Onno Oosterhof of the Dehora consultant group in the Netherlands made an interesting point: “The majority of people and organizations are way back in the valley and are still contemplating whether to use SCM and if so how and where to start. For those companies, and those half way up the hill, I believe today's best practices can be a big help in formulating their own SCM strategy,” he wrote us. I think there is some merit in this view, but again it’s probably the other side of the coin in terms of eliminating bad practices first.

Jim Schultz of Texas Instruments also likes the idea of “good practice.”

“If having Best Practices means striving to be “perfect” then I would be an advocate for having Good Practices,” Schultz wrote us. “There was an article in Readers Digest years ago suggesting we should strive to be good versus perfect in our personal lives, for a variety of reasons. Though the reasons may be different in business, I believe the same basic concept is valid. Striving to be best could drive Supply Chain professionals to seek improvement that does not justify the costs.”

That’s all we have space for. The full responses of all these letters are nearby in the Feedback section. My thoughts on this later, but from our reader responses at least, the real value of best practices appears to be modest at best – but it depends.

Any reaction to our reader feedback? Do you think Supply Chain Best Practice is a concept that is useful – and worth pursuing? Or is there a better way to think about this?

Let us know your thoughts at the feedback link below.

  Send an Email