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The Seven Deadly Sins of Supply Chain Crisis Management

By Clifford F. Lynch

DC Velocity, January 2009

"A crisis unmasks everyone."

- Mason Cooley

It’s official: on Dec. 1, 2008, the National Bureau of Economic Research confirmed what most supply chain managers already knew or suspected – the U.S. economy has been in recession since December 2007. Although they may not have known precisely when the recession began, supply chain managers, like their counterparts throughout the corporation, have been all too aware of deteriorating business conditions in recent months and the challenges they have presented. Certainly, many companies, service providers and users alike, are feeling the pain.

That does not mean all is lost, however. As Friedrich Nietzsche said, "That which does not destroy us makes us stronger."

As we prepare to navigate new courses in these challenging times, I suggest we endeavor to avoid what I call the seven deadly sins of supply chain crisis management. (These are not to be confused with the original seven deadly sins – lust, gluttony, greed, sloth, wrath, envy, and pride – although I suspect a case could be made for at least two or three of these.) What follows is a rundown of those supply chain crisis management sins:

      Fear – The first emotion many of us feel in times such as these is fear – fear of losing our jobs, our 401(k) funds, our credibility. While it would be naďve not to be concerned, fear can be a very destructive emotion. We don’t work well when we’re afraid. In the final analysis, most of us will survive this turmoil, and we must try to push the fear aside and channel our energies toward problem solving.

      Panic – Panic usually follows on the heels of fear, and now is not the time to make drastic and sudden changes in carriers and other types of service providers, or in distribution networks. Planning should be substituted for panic. Move deliberately and cautiously. These are volatile times. What is true today may not be so tomorrow.

      Short-term Thinking – There will be a temptation to make decisions based on quick fixes and immediate savings. This can be particularly true with technology. We have spent years developing information systems in the supply chain industry, some of which are not inexpensive. There may be a temptation to say, "Forget information is power; show me the money." But this course of action will not serve you well over the long term.

      Greed – Now is not the time to take advantage of carriers and other service providers that are burdened with excess capacity. It is in our best interests for our logistics providers to stay healthy and remain available to provide the resources and choices that we will need to do our jobs effectively.

      Hostility – When we get stressed, we sometimes treat our supply chain partners poorly. Negotiations can quickly turn adversarial or hostile. Even though we may not agree on courses of action, we will be more successful over the long run if we treat our partners with sensitivity and courtesy.

      Dishonesty – Hopefully, this requires no explanation. But be aware that adversity can bring out the worst in people. Don’t be tempted to relax your standards of moral and ethical behavior.

      Complacency – Finally, the worst option you can choose is to do nothing. While we shouldn’t panic, neither should we sit idly by and expect everything to work out in the end. Whether in good times or times of crisis, the supply chain managers who succeed will be those who are proactive, thoughtful, and unafraid to make bold, but well-planned, moves.

 

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