OC Reilly Blog: Sweat the Small Stuff

By George Vunovic, VP of Technology Solutions, OC Reilly Inc.

One of the most familiar sayings, when you want to pick up somebody’s spirits or give a little pep talk, is the classic, “Don’t sweat the small stuff.”  But when it comes to effective supply chain management, the small stuff counts every bit as much as the larger-ticket items that usually demand the most attention.

In the January/February 2014 issue of Supply Chain Management Review magazine, an article titled “When it Comes to Risk Management, Think Small” discusses the importance of a complete and comprehensive approach – one that keeps close tabs on every element in the supply chain, regardless of size or scope.

The article reads, in part: “When applied to Ford Motor Company’s supply chain, the quantitative analysis by Professor David Simchi-Levi of MIT’s Department of Civil and Environmental Engineering and Engineering Systems Division shows that the supply firms whose disruption would inflict the greatest blow to Ford’s profits are those that provide the manufacturer with relatively low-cost components.”   

A chain – even a supply chain – is only as strong as its weakest link.  The humble slingshot can bring down the greatest giant.  A tiny leak in the wall can cause a dam to burst.  And even the most seemingly insignificant repair part, or an untimely shipment of that part, or failed software download, can bring an enterprise to a halt – or, at the very least, a potentially expensive slowdown with the resulting loss of revenue.

Independent, objective analysis of an organization’s total supply chain picture, performed by highly trained and experienced professionals, can identify and address these types of financial landmines, helping to not only achieve meaningful cost savings in the short-term, but just as important, preventing unexpected problems in the long-term.

Don’t sweat the small stuff?  Only if you don’t care about maintaining improved margins.  Because the hard truth is – when it comes to solid supply chain management, there is no small stuff.