September 28, 2023

Why Just Understanding Supply Chain Management Is Not Enough To Make Supply Chain Operations Better

Mastering all the theories and concepts about supply chain management is not enough to make someone successful in running, let alone improving, the supply chain operations where he works.

Why is that?

I’m going to tell you about a person who really knows everything about supply chain management theory and concepts. He is like a walking dictionary. Whatever you want to ask, he can answer in detail.

Armed with this knowledge, he is able to analyze the supply chain operating conditions at his current workplace. And from there, he can make various kinds of plans to improve the performance of the company’s supply chain operations.

He can make all kinds of supply chain models and calculations with ease. He is very familiar with any formula regarding supply chain operations.

Top Management certainly has high expectations to change and improve the company’s current supply chain operations. That’s what he was hired for. Able to bring positive changes to the company’s business.

However, after some time, the expected changes did not come. Nothing has changed from what was running.

What is the problem?

Why can’t all the abilities that person have make him bring positive change to the company?

What is wrong?

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First task

Seeing that there were no positive results achieved by this person, Top Management began to wonder what went wrong.

They really wanted to know why such a competent person had not brought about the expected improvement.

And they started investigating what might have gone wrong compared to what was written on paper.

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The reason behind the failure

After conducting an investigation, it turned out that the problem was not the person’s understanding of supply chain management.

He knows exactly what is going on in the company’s supply chain operations based on the results of his analysis.

supply chain management skills

And he really knows what to do to correct a wrong operation.

However, supply chain management is not an individual job.

Supply chain management involves many functions, if not all of them, within a company, even those outside the company.

And it turns out that the person is unable to drive these various functions to make the desired improvements.


Because everyone has their own interests. And they also have their own understanding of what supply chain management is. Indeed, there are those who have the right understanding, but it is not uncommon for people to think that supply chain management and logistics are the same thing.

Also, not everyone is willing to sacrifice their department’s KPIs to achieve better overall supply chain operating results. Because trade-offs are often needed between KPIs from one department to another, right?

For example, a sales team may want to ensure that the inventory they need is always available. Maybe they want to have as much inventory as possible. Meanwhile, the warehouse team doesn’t want to keep too much inventory in their warehouse. This is where there is a trade-off of what to do.

Plus, the changes can be downright scary. People tend not to want to change. Especially if it requires them to change what they have been doing. They are too comfortable with their current way of working. Why should it be changed huh?

A supply chain manager must be able to solve this obstacle. He must be able to convince related functions to support the expected positive changes.

You can’t force your goals on them. As I said above, each person or department also has its own goals. These goals must be unified and aligned to achieve a larger goal, namely the company’s goals.

If you as a supply chain manager push your plans without first changing the perceptions of people across functions, you will be shunned by them. People will withdraw from you. You won’t get the support you need.

In the story above, people fail not because they don’t know what to do. But he failed, because he was unable to establish good relations with people working in various functions related to supply chain management.

Again I say, supply chain management involves many functions to be successful. This work involves many people with their own thoughts and capacities.

And it’s not just about people who are organizationally equal to or below you, but also about people who are in a position higher than you. And driving a person in that position would be much more difficult.

As a supply chain manager, you must have the ability to direct people. Your interpersonal skills need to be honed better and better. Of course without reducing the understanding of supply chain management itself.

If you want to be successful in supply chain management, you need to be good at both.

Hope it is useful!

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Dicky Saputra

16+ years of experience in supply chain management. I help companies improve their end to end supply chain performance.

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