SUPPLY CHAIN MANAGEMENT

THE WAR ARENA OF SUPPLY CHAIN MANAGEMENT

 By Muhammad Ali Haider

It was 7 pm and I was just three kilometers away from the Royal Naval Base of Oman. The base was itself situated in a very isolated location, about some hundred kilometers from the capital. On my way darkness started invading and I could not find any trace of human civilization. It was a very secluded & peaceful place. With no sign of life what so ever in such a distant location, suddenly, one thing grasped my attention-- a Coca Cola cabin in the middle of nowhere!! At first I was astonished to see this cabin in such a far-flung place on earth, where even mobile signals fail to trace locations out, but then I realized that it is a wonder…a wonder of the amazing management of Supply Chain.

In a day 1.8 billion Coca Cola bottles are manufactured, which are then distributed across each and every nook of more than 200 countries. All of this happens in a single day! Coca Cola’s top rival is Pepsi. There is actually a war between the supply chains of these two giants, where they have to go to every extent to win the market. Hence when it comes to supply chain management, there is no doubt that companies are in the thick of a battle to beat their competitors and gain dominance in market share. If you fail to supply your product to the market on right time, at right place and in right amount,  you are kicked out of the completion! In fact most cooperates choose to invest more on supply chain rather than on marketing strategies. According to a crazy stats, every second, five babies are born, while six iphones are sold! The major challenge being not the production, but distribution of these products on such a massive scale.

Napolean who famously said, ‘An army marches on its stomach,’ understood the importance of supply chain very well and leveraged it with great effect. One of his great innovations was to create the first train regiments, entirely dedicated to the supply and the transport of equipment. Interestingly, supply chain failure was also a cause of his downfall, as he mounted his Russian campaign relying on foraging, an insecure source of supply, when the Russians adopted a scorched earth policy. There are numerous other examples of how wars have been won or lost on the strength of supply chains. In World War 2, Britain’s success against the Nazi’s tonnage war --a military strategy aimed at destroying merchant navy supply ships --helped the allies to stay in the war and establish a second front, which defeated Germany. The speed with which the US overwhelmed Iraq in Desert Storm was underpinned by US military supply chain capabilities. 

Let’s just say Iran  makes good on its recent threats to shut down the Strait of Hormuz- a narrow water channel where from 40% of the world's oil is supplied across the globe. And let’s say that with one-fifth of the world’s oil supply bottled up, the price of a barrel of oil then almost doubles, as some analysts predict, to more than $200. Besides, it’s about good supply chain strategy which made NATO to suffer less from the adverse impact of blocking of NATO supply in Pakistan. 

Also recently, after the strike of the “Dabbawalas” (Tiffin carriers in India) who supply more than two lack tiffens to their required destinations (offices, homes, restaurants etc), the entire India went literally starving! From the business world to the warring grounds, everywhere on this planet, supply chain govern the competition.

With the shaky financial markets and talk of a second wave of the 2008 global financial crisis heating up, companies are scrambling to prepare, defend and fight for survival. Retailers are realizing that to survive, the real battle they need to win against their competitors is not about price or brand, but supply chain versus supply chain…!                                                                                                                       

   By Muhammad Ali Haider

Read More »