What is Supply Chain?

From a company perspective, while dealing with flows of goods, supply chain is the mastery of optionality when facing variability. This episode focuses on what the term ‘Supply Chain’ means, and what are the organisational implications of this definition.

There are many things to be gained from clarifying what supply chain is. It’s an important element of progress, especially when it comes to technology, because without the proper vocabulary it is practically impossible to reason about things. With supply chain being such a broad domain, it’s crucial to be able to define which aspect is being discussed and to structure solutions.

With the Covid crisis, many media sources talked rather a lot about “supply chain problems” - linked to toilet paper for instance -, when what they were obviously referring to were in fact “stock-outs”. In the same vein, “supply chain issues” were cited when referring to an over-reliance on China for electronics manufacturing. Increasingly, the word “supply chain” is becoming somewhat of a catch-all term used to make statements appear more elaborate.

We, as so many students likely do, take a look at Wikipedia’s definition of supply chain and see how well it holds up. This definition of supply chain, so often found in textbooks and most supply chain literature, can be problematic. Mainly, the issues within these definitions lie in the confusion between supply chain as a field of expertise and the objects themselves that are involved within the supply chain.

We go into more depth about how, contrary to many other disciplines, most supply chain literature is not being written by academics, but by consultants. This is often because the only way to really learn about supply chain is to interact with multiple large companies, which consultants naturally do. However, the way that this knowledge is generated creates biases, namely because there is a financial initiative as well as a need for branding.

To wrap things up, we talk more about the positive, synergetic effects on a business that can come from adopting a clear definition of what supply chain is. This definition gives you the criteria to be able to construct consistent teams within your company, with the right dynamics and assigned with the correct roles. In addition, we ask how the definition of supply chain may evolve in the future.

Timestamps

00:08 Introduction

00:23 Is there anything to be gained by defining what Supply Chain is?

02:02 The media in the last few months talked about Supply Chain in a broad way. Whereas, when we discuss about Supply Chain in terms of a company, there is usually a more narrow focus. Are we talking about the same thing?

04:55 How well does the Supply Chain definition provided by Wikipedia work?

09:43 What about the definition of Supply Chain Management? The two definitions look very similar, so why should we make a distinction?

13:05 In your opinion, what would be a good definition of Supply Chain?

13:17 What do you mean by optionality?

18:44 A definition is just a convention, therefore why should a company really care?

21:11 If we look at the future, how do you see the definition of Supply Chain evolve?