The great strategist Sun Tzu wrote The Art of War over 2,500 years ago, but it’s still relevant today. Apply his teachings to your business to win the supply chain battle:

Supply and demand chain management can be likened to battle, in which companies struggle to defeat their competition and amass market share. So who better to give firms some tactical insight than legendary strategist Sun Tzu, whose writings form The Art of War?

Sure, The Art of War is over 2,500 years old, but its themes are surprisingly relevant to the modern rigors of supply and demand chain management. For example, Sun Tzu’s writings stress the importance of leadership, communication and preparation—all of which are essential to managing an effective supply and demand chain today. Not bad for a warrior who, according to historians, lived during the Wu Dynasty between the sixth century and the third century BC. Here’s how this historical figure’s teachings can help you take a fresh approach to supply and demand chain management this year:

Strategy

Sun Tzu wrote: “War is a matter of vital importance to the state; the province of life or death; the road to survival or ruin. It is mandatory that it be thoroughly studied.”

How this applies: Supply and demand chain management is similarly of critical importance to companies. For example, the dot-com bubble burst primarily because of companies’ ill-defined supply and demand chain strategies. To comprehensively examine their supply and demand chains, companies must benchmark the items that are crucial to customers, making sure that they can exceed customer expectations or the competition when providing these goods and services. Do not measure things that are not valuable to the customer or to customer support because these things are not significant to the company.

Sun Tzu wrote: “The supreme importance in war is to attack the enemy’s strategy.”

How this applies: The most important thing in supply and demand chain management is implementing a strategy that will satisfy customers’ needs.

Communication

Sun Tzu wrote: “The Grand Duke said…One who is confused in purpose cannot respond to his enemy.”

How this applies: In order to be powerful “combatants,” companies must clearly define and express their mission. Most importantly, they must ensure that all levels of the organization understand it.

Sun Tzu wrote: “Knowledge that does not go beyond what the generals know is not good.”

How this applies: This means that a mission is worthless if it’s not effectively communicated to all levels of the organization. Managers must make certain that the mission is easy to understand and is capable of giving the company forward momentum.

Leadership

Sun Tzu wrote: “Good Generals act in accord with events—not quick to anger, not subjected to embarrassment. When they see possibility, they are like tigers. Their action and inaction are matters of strategy.”

How this applies: Strong supply and demand chain leaders keep a clear head, responding to events without subjecting themselves or others to embarrassment. When an opportunity comes along, they are able to grab it because they are prepared.

Self-Knowledge

Sun Tzu wrote: “Know your enemy, know yourself; in a hundred battles you will never be in peril.”

How this applies: To become unbeatable, you must thoroughly study your own supply and demand chain as well as your competition’s. In particular, look at your company’s mission, the business environment, any outside variables that could come into play, your supply chain leaders and their sense of discipline. One way to assess your supply and demand chain is by outlining detailed process maps or flow charts. To do this accurately, you have to physically run through the process. This will allow you to identify steps that are non-value added and therefore unnecessary.

Speed, Not Haste

Sun Tzu wrote: “Speed is the essence of warfare.”

How this applies: Speed is similarly critical to supply and demand chain management, manifesting itself in shorter cycle times, speedier customer order times, quicker customer response times and faster time to market. You must be careful not to mistake haphazardness for speed, however. High-quality information is necessary to streamline your supply and demand chain so your company can ultimately trim supplies.

Preparation

Sun Tzu wrote: “If your troops do not equal his, temporarily avoid his initial onrush.”

How this applies: Do not initially engage a competitor unless you are prepared.

Sun Tzu wrote: “If officers are unaccustomed to rigorous training they will be worried and hesitant in battle…”

How this applies: Sun Tzu reiterates the importance of preparation with this statement. He is saying that training is crucial—the only way to prevent leaders from being indecisive or tentative when confronted with competition. Moreover, training should be distinguished from education. While the latter employs a classroom setting, the former provides hands-on learning. Additionally, cross-training is important, allowing employees to address a broader range of customer issues.

Learning from Successes & Mistakes

Sun Tzu wrote: “Therefore, when I have won a victory I do not repeat my tactics but respond to circumstances in an infinite variety of ways.”

How this applies: Supply and demand chain management is a learning process. Sun Tzu recommends examining what you did right or wrong and changing your strategies accordingly.

Source:

The Art of War and the Supply Chain
Joseph L. Walden, CPIM, Colonel, U.S. Army
Supply & Demand Chain Executive, October/November 2003
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