As supply chain consultants, we can’t help but apply a lens of process improvement to everything we encounter. It’s part of our DNA. Warehouse design, process improvement, parking lot spacing, reruns of The Office — nothing is immune. To say we live and breathe our work would be an understatement.
So with all the hype generated by the recent release of not one but two documentaries (Hulu’s “Fyre Fraud” and Netflix’s “Fyre: The Greatest Party that Never Happened”) focused on the 2017 blunder of a musical festival, some of my colleagues and I pulled together a quick “Top Ten” list of supply chain issues which led to the absolute failure (and a bit of jail time).
10. Scope definition: The approach of “we’ll adjust our scale as we go along” was just a disaster waiting to happen. Start with strongly developed goals (and realized limitations) to keep the project on track.
9. Demand forecasting: Not having the appropriate visibility to accurately capture demand obviously impacted delivery to customer expectations.
8. Supplier capacity planning & diversification: Having a variety of suppliers is necessary in case one or several of your partners suddenly lack the capacity to meet your needs. This is Procurement 101.
7. Contingency/risk mitigation planning: The assumption that all will go to plan and failing to have a Plan B through F paints you into a corner very quickly and renders your entire operations a failure if one aspect falls short.
6. Supply chain visibility: Process alignment is crucial to successful achievement of the broader business strategy. A lack of communication and transparency across the organization creates siloed environments where each does what is best for themselves instead of supporting the organization as a whole. Visibility is key.
5. Inaccurate order quantities & safety stock calculation: Without a proper demand forecast, quantity ordered will be wildly off base. Safety stock needs to account for lead time variability, supplier performance and demand deviation.
4. Product lead times & fulfillment rates: Creating an unrealistic timeline between initiation and execution ultimately results in gaps in fulfillment ability and customer satisfaction, both of which must be avoided in order to maintain supply chain success.
3. Insufficient implementation timeline: It’s no secret that large scale operations take a great deal of time to get rolling and often encounter setbacks along the way, meaning you should always incorporate additional runway in your timeline to avoid a total collapse later.
2. Over allocation of operational resources: There are only so many hours in the day and staff members only have two hands. Trying to force additional leverage from already stretched resources is always a recipe for disaster.
1. Project management and oversight: Someone with experience and trusted expertise needs to be in charge of operations and have a seat at the planning table to make sure everything being proposed is both feasible and warranted.
Although it took a multitude of supply chain and project management issues to ruin this “project,” many of these same issues can plague a legitimate supply chain, leading to inefficiencies, customer service issues or even regulatory violations. Every project boils down to time, scope and resources. If one fails, the entire result can be put at risk. Chainalytics has worked with several organizations who have experienced one, if not all, of the challenges above at some point in time, regardless of the size of their supply chain or the success they have built overtime.
The best way to avoid falling victim to any of the issues above is to review processes and systems on an ongoing basis to verify they’re both effective and aligned with customer requirements; assess your organizational needs on a periodic basis to ensure you have the right people and skills in place to meet operational requirements; and for any major implementation or transformation, ensure you have the right project management skills, structure and governance in place to drive the project to the expected results. Also, don’t hire C-list celebrities to promote your project.
Sean Delaney is a manager, and just one of many brilliant minds in Chainalytics’ Supply Chain Operation practice. In addition to years of progressive supply chain management experience within the for-profit industry, he has also consulted for multiple healthcare nonprofits and NGOs. Sean specializes in warehouse and distribution process design and improvement while providing freelance social commentary in his spare time.