Supply Chain Frontiers issue #48
On January 14, 2013, Dr. Albert Tan, Director of Education, Malaysia Institute for Supply Chain Innovation, held a three-day executive development program entitled: The Art and Science of Supply Chain Management using Sun Tzu Art of War.
Sun Tzu was an ancient Chinese military general, strategist, and philosopher, as well as the author of The Art of War, a timeless masterpiece of strategy. The program explored how the principles taught by Sun Tzu can be applied to supply chain management (SCM).
Strategic planning in SCM is very much the same as planning for a war. In business, as in war, your ability to plan ahead and anticipate your competitor’s move is essential to the health of the business. In the framework derived from Sun Tzu’s teachings on strategic planning, five critical elements are specific to SCM:
- The Tao: Whatever you do must follow the laws of the universe, collectively known as “the Tao.” Even when you are waging a war, you must not neglect the moral values of the undertaking. In this respect, it is very important that whatever you do benefits customers. Only then can you expect your “army” to stay loyal through thick and thin.
- Climate: Simply put, the timing must be right. You need to deliver the products and services at the right time, and in the right place and best condition.
- Terrain: You must know the terrain. In the supply chain case, this means both the physical and the virtual marketplaces.
- Leadership: You need good leadership to see things through. In supply chain management, execution is just as important as planning.
- Discipline: You need a system of control to ensure that members of your team do what is required of them. A well-established supply chain process is equally important to ensure reliable and consistent delivery of services.
Like strategic planning in other business areas, it is important that you consider the chances of success from all critical angles, thus ensuring that you are better prepared to win the war or beat the competition. Waging a war from Sun Tzu’s perspective requires you to understand the economy of warfare, and how it is necessary to win decisive engagements quickly in order to succeed. The book advises that successful military campaigns require limiting the cost of competition and conflict.
These observations apply to SCM costs in that it is important to examine the Total Cost of Ownership (TCO) for customers. This exercise is a delicate balance between service-level and inventory costs. Regardless of how well prepared you are, the response from customers and competitors may find you unprepared.
As Dr. Tan explains, the executive development program is a blend of east and west perspectives, Sun Tzu’s The Art of War, and supply chain concepts. The mission is to provide participants with the business know-how and up-to-date intelligence to enable them to win battles and defeat the competition. As Sun Tzu says, “Know thyself, know thy enemy, hundred battles, hundred victories.”
For more information on The Art and Science of Supply Chain Management using Sun Tzu Art of War executive education program, contact Dr. Albert Tan, Director of Education, MISI.