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By Dr. William Oliver Hedgepeth
Faculty Member, Transportation and Logistics Management, American Public University
In my supply chain management class, one of the first things I ask of my students is to define a supply chain in their own words. I typically get a wide range of answers, such as:
- “Supply chain is the process, supervision, and consistent re-evaluation of how products are delivered to the customer and how supplies are utilized and managed by an organization.”
- “Every facet of bringing a product to market is part of the supply chain.”
- “It is the contributors that are involved in creating a product from raw materials to a finished product that is ready to be sold to consumers.”
- “It is to keep military operations moving smoothly 24 hours, Monday through Sunday.”
- “I had actually never heard the term ‘supply chain management’ until I signed up for this class.”
- “The supply chain begins with the purchase of a product or services from a supplier, a local store or online retailer.”
- “My understanding is that a supply chain is every stop on the road that it takes for a product to get to the user or customer.”
From that point on, my students dutifully dive into the textbook. Later in the class, I’ll often get standard definitions of a supply chain and supply chain management that have been copied and pasted from the textbook.
Supply Chains Are Not Easy to Define
My students’ various definitions of a supply chain are always fun to read. But a supply chain is too big to see in one glance.
To create a picture of the many supply chains that defines a business or military warehouse is a study in the science of complexity. Even for each person working in logistics operations, a transportation hub or a warehouse, the supply chain is not easily defined.
The Yellow Pencil Supply Chain Analogy
One way to understand the concept of a supply chain is to read the classic story of the yellow wooden pencil. I obtained this story from a Nobel Prize-winning economist when he was a visiting scholar at the University of Alaska where I taught.
Leonard E. Read’s story of a simple No. 2 yellow wooden pencil and all the complex supply chains involved in creating that pencil lays the foundation for a complex set of supply chain metaphors. Two of these metaphors, spider web and network, describe the supply chains of every product around you.
As Read said about the pencil, “Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others.”
But there is a supply network that exists for a pencil, your clothing and your vehicle. But often, it seems that the workers involved in transportation, logistics or supply chains do not care to know all the links that brought that product to their hands.
So why do we write textbooks and publish articles by noted scholars on the supply chain? Because it’s important to understand how raw materials flow into the making of a product like a pencil and to follow that product to its reverse logistics life.
It’s equally useful to understand that supply chains involve five different transportation systems – road, water, air, rail and pipeline. All five deliver some part of the objects around you.
Tyson and Its Supply Chain
John Tyson, the chairman of Tyson Foods, wanted to innovate its products and complex supply chain, which involved:
- Chicken coming from farms to Tyson’s 50 plants
- Packaging, including label ink, plastic wrap, foam containers, Alaskan oil used for the plastic wrap and foam containers, and trees for cardboard boxes
- Transportation, such as trucks, planes, ships, trains, cargo containers and packing crates
- S. weather patterns during the year that could affect delivery dates
- Errors that human workers make along the way
- Machine breakdowns in manufacturing
- Timely distribution of packaged products to wholesale customers
- Delivery on their promise of high-quality products to customers
Supply of Drivers for Supply Chains Is Shrinking
Today, there is a critical shortage of truck drivers. You’ll often hear reports that “It’s never been harder to hire long-haul truck drivers, even though companies are making the job more lucrative, less aggravating and more inclusive.” This shortage is currently estimated at about 60,000 and expected to increase to 100,000 in a year or two.
Good Supply Chain Management Is Critical for Business and the Military
It’s important for everyone in business and the military to understand what constitutes a supply chain. Knowing how a supply chain works and keeping it running smoothly without shortages or delays could make the difference between staying employed, achieving a promotion or losing that job.
If you want to get ahead in a company, look as far down the supply chain coming to you as possible. Pay attention to world news and weather events, and how they can create a shortage of a simple grocery product such as vanilla. What you don’t know about your supply chains can cause adverse effects in your business or branch of military service.
About the Author
Dr. Oliver Hedgepeth is a full-time professor at American Public University (APU). He was the program director of three academic programs: Reverse Logistics Management, Transportation and Logistics Management and Government Contracting. He was Chair of the Logistics Department at the University of Alaska Anchorage. Dr. Hedgepeth was the founding Director of the Army’s Artificial Intelligence Center for Logistics.