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PURPOSEFUL ABANDONMENT

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PURPOSEFUL ABANDONMENT-An Approach for Supply Chain Management Improvement

"Without systematic and abandonment, an organization will be overtaken by events."
Peter Drucker

"All organizations need a discipline that makes them face up to reality."
Peter Drucker

"The definition of insanity is doing the same thing over and over and expecting different results."
Attributed to Benjamin Franklin.

These quotes are very relevant to the business world and especially to supply chain management (SCM). This is true for manufacturers, retailers, wholesalers, distributors and even 3PLs.

The need for purposeful abandonment may be viable with the repetitive nature of the problems that occur. Often chains operate in a zone of tolerated discomfort. Fire-fighting, expediting, crisis management, band-aids and written procedures show weaknesses in processes and programs. Many resources are expended on supply chain management.

Much of the effort reflects the reality that companies are structured and function as they did 90 years ago. This is in spite of changes such as:

Companies are designed, built and staffed at a time and for reasons that are not valid as the business evolved. The original organization configuration often does not work effectively and efficiently for the resources expended. Technology may be used as a tool to try to make these legacy structures endure.

Businesses should change; it is necessary for growth, profitability and sustainability. The risk of not changing is to be overtaken by events rather than taking advantage of events. A company should be capable of change. However, significant change is not easy for a company to absorb and do. Change management can be the challenge.

Purposeful abandonment is meant to leave the past behind, to put resources where they are needed and to organize and do it in a way to best exploit the future and the opportunities that it brings. It also recognizes the reality that constantly trying to fix a broken process is a waste of people, time and cost.

The serious potential for purposeful abandonment and starting over or restructuring arises with significant changes in the company. These can involve a merger or acquisition, shifting into new markets with new demands or changing strategy to be different in how you serve a market or customers, rather than a strategy of meeting the competition. Such change presents opportunity for someone to lead and drive the effort to abandon the present supply chain management approach and to design, develop, implement and manage the new and improved SCM. Out with the old structure and practices, and in with the new.

Depending on how visionary the company management is and how great the opportunity for abandoning the legacy SCM, there is still some reality. Not all the issues mentioned above, that have existed for 90 years, can be undone. But that should not stop the firm from abandoning what does not work well for the resources expended and the results obtained.

The new supply chain approach should be a strategy. While the exact details can vary depending on the company and where, why and how it is trying to position itself, it should:

Purposeful abandonment is an approach that does not receive enough recognition and use for effective management in all industries and sectors of business. Significant changes in a company's strategy, market or direction can create the opportunity to use it.