Netflix – Squid Games is a remarkably engaging series. World of Supply chain is also quite fascinating. This is a world where math (probabilities, theoretical distributions, optimizations, statistics etc) is mixed with emotions (shortage gaming, bull-whip effect, psychological sales targets & supply commitments etc) in real time and hence while managing supply chains is not a game, it has its own thrills and perils.
Three key games that were played in Squid Games have a clear relevance and learning for Supply Chains. Here is my take on them:
Red light, green light: Anticipate changes and react fast and don’t overdo it just because it is working fine.
Most key Supply Chain decisions will usually come down to one fundamental question: Cost vs Service.
Usually, all Supply Chains would work best when a sweet point on this equation is found and the whole supply chain is geared towards that. However, often, you will find supply chains going overboard with one objective (usually cost). When things are good (music is playing, or say Green Light), things look good. Supply Chain leaders are so pleased with themselves as they could cut costs, reduce redundancy (that looked so .. well.. redundant) and still the supply chain seemingly looks to be doing fine.
Going back to the game analogy, this is when the player is walking towards the finishing line in a carefree manner. This player is pleased with his progress and amused by the fact that other players are taking it so slow.
However, when the music is about to stop (Red Light), very few Supply Chains can re-calibrate. Best example for us is Covid-19 and how it exposed many (proudly)efficient Supply Chains. Supply Chains that went overboard with outsourcing, cost cutting, supplier consolidation, logistics footprint consolidation etc.. all that looked so good on paper till 2019, but then.. one jolt and the value of having a risk hedged supply chain became so obvious. Just like the creepy doll in the game, real world is ruthless with Supply Chains that are caught off guard (too efficient to handle a bit of variability, or too risk hedged to be cost competitive in the usual years).
Honeycomb: Patience is a virtue; else things break down.
Supply Chains are complex systems, and mistakes are costly.
Supply Chains are super complex, you have a sales/distribution network, then one step back, your suppliers also have a similar network, then their supplier, and the list goes on. Any one leg breaking down could seriously impact the whole supply chain.
Hence any changes (separating your shapes from the cookie) have to be dealt in a very delicate manner and after giving it a thorough thought.
Dealing with such complex systems needs system thinking rather than linear thinking. For example, imagine you wanted to reduce costs, one option was to cut usage of Full Truck Loads (FTL) on routes where volume is low and truck fill rates is a challenge. Maybe on paper, using courier service made more sense(say 20% cheaper). So, you change your FTL to courier. But then few weeks later you realize that delays, customer complaints, damages(breakages) & shortages have skyrocketed on such routes. Also, your relation with your FTL partners took a hit and they diverted their best personnel & assets to other account. What went wrong here? Hasty decision without thinking through full system impact.
Or say a hasty move that broke your cookie : )
Tug of War: Coordination is key!
Supply Chains should perhaps be called Supply Maps, as several interconnected processes take place at the same time in the overall system. For a successful supply chain, you need coordination among all key processes. Demand Planning, Supply(Capacity, MTP, STP), Logistics, Manufacturing all must work in tandem to overcome the challenges thrown by the mighty opponent: Uncertainty!
The whole team has to feel the same beat(tension on the rope). For Supply Chains, this beat is provided by the KPIs that are measured and more importantly talked about by the leadership. If all KPIs are compatible and talking to each other, it will mean that all sub-functions will also align their energies on solving the supply chain challenges.
Lastly, a well-coordinated supply chain even with sub optimal sub systems is better than a disjointed best in class implementation of sub-processes.