Supply Chains Fail When They Don’t Flow

In the natural world, we are continuously aware of movement and flows. Snow falls onto mountains, melts in the spring and flows into the rivers, which flow into the ocean. Birds flow from northern hemispheres to southern climates, and then go back again. The tides flow back and forth with the moon, and gravity pulls objects to the center. We learn from natural flows about how things move. In the last several years, supply chains stopped moving. The reasons for this range from the COVID-19 pandemic’s direct impacts on production output in China, and material supply chain disruptions, labor shortages as well as unexpected demand surges. All of these have one common denominator: The flow or movement of materials is constrained by their physical design.

What are the barriers that prevent our global supply chains from flowing?

We need to unleash supply chains, not control them

Prior to the COVID-19 pandemic, parts and products flowed quickly and fluidly, navigating their way around barriers to reach their destinations. By applying principles from the physical world, we can reduce the friction that disrupts our supply chains since the onset of the COVID-19 pandemic. But doing so will require managers to rethink their concept of how global supply chains are governed and will necessitate bold investments in technology, tighter supplier relationships, and a change in traditional supply chain thinking.

The principles of flow are grounded in physics, which provide a number of simple and important laws that are irrefutable; these laws determine how fluids, electricity and matter travel. Physical flows are measured using metrics such as speed, distance, electrical flow and other dimensions. But these physical flows can also be used to assess the design and management of supply chains. Drawing from our recent book, we propose a set of five simple guidelines that can be applied to improve the simplicity, efficiency and cost-effectiveness of supply chains.

The original article can be found at: Supply Chain Management Review