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  • Writer's pictureZsofia NAGY

Commercializing supply chain 😉

Updated: Nov 15, 2023

how to win with aligning supply chain and commercial functions
Functions in disagreement

Do you know that meme that shows how well supply chain and commercial teams work together?

Me, neither. 😂

They don't exist.

Only those memes are in circulation that depict these two teams as people stuck in dead-end marriages, or simply just needing a special dictionary to talk as they don't speak the same language, or not getting along at all (just picture a ping-pong of snarky comments). 🤦‍♀️

I'm sure these pop in mind immediately for most of us, if you work in any of the commercial teams.

Furthermore, you might remember your supply chain counterparts desperately trying to deliver against all odds and promises to customers (that you made, as a commercial counterpart), yet royally failing at critical times that might have left you in really hot water with your customers.

A few examples of such misalignments (which I witnessed over and over):

  1. New product launches where you are waiting for that delivery to come in refreshing your ERP (or browser )every 5 seconds, hanging by a thread and sweating towards the end of the day as the customer might not get what they already ordered and you simply cannot get updated info out of anyone in supply chain

  2. Lack of collaboration when there was a quality issue during shipment to DC (distribution centre) and your QA colleague is simply not willing to go that extra mile to do a more thorough check (for many reasons not openly talked of - I'm not blaming anyone), while you are out of stock in market

  3. Your volumes are small to reach MOQ (minimum order quantity), therefore every time you need resupply, you brace yourself and lose sleep due to stress as you always have a gap in supply to your customers, but there is no viable solution in sight (again, God knows why)

  4. Refusing delivery to a customer without notice or a call, but you didn't know they ordered less than MOQ (min. order quantity) and you never included this in the contracts (or other Terms & Conditions you can apply in this case)

These issues are still happening, and the list is much longer, I just named a few examples. It might feel like you are stuck and you'll never know for sure what goes on in the background (or in the head of the supply chain gang).

During my career, it became clear to me over the years, why I was usually more successful in:

  1. Bi-directional (or multi-directional) communication

  2. Ensuring alignment between commercial & supply chain functions

  3. Understanding of the different aspects of both sides and why these are important

The answer is:

I worked on both sides, actually in more functions, but in our case in commercial and supply chain both, which helped me to understand the needs and the impact of information sharing on both sides.

So I've tried to summarise the key points here, where I believe commercial teams can

  • Improve their position when asking for input from supply chain colleagues

  • Understand the answer they get much better (and therefore challenge it better too)

  • Provide better insights for their supply chain colleagues

  • All in all arrive to a healthier mutual understanding, appreciation and successful collaboration

So, what can you do, if you are on the commercial side and you don't want to spend years in supply chain to know what's what?

The top actions you can take (depending on your seniority as well):

  1. Gain at least a baseline understanding of how supply chains work in a learning session - take the time to familiarise yourself with some of the terminology (1-2 day learning sessions / interactive workshops already help a lot!)

  2. Join sessions where your supply chain counterparts want to do VCM (value chain mapping) - it is a time & effort commitment, but you will know details you never dreamed of having and your colleagues will get to know your requirements (and undocumented wishes) better too. It is a straight win-win!

  3. Set up if it isn't (as a leader for your teams), or ask to join monthly supply chain reviews with your local team. They will appreciate your input and it will also make them see how committed you are to the bi-directional insight exchange.

  4. If you don't have regular S&OP (SIOP, if you will = sales, inventory & operations planning) meetings, please support your supply chain leader in setting one up. If you do and you aren't invited, sign up and do contribute!

  5. Do visit your supply chain and customer service teams regularly - in the office, just like an everyday chat (if the CS team is not part of your organisation). If you approach them also when you don't have an urgent need and they see that they can rely on you, when they are in trouble, then they will repay you multifold when you get on the short end of doing business with your customers.

Are you ready to take that daily interaction and professional relationship with your supply chain and operations colleagues to the next level?

If yes, give me a call or write a quick note via my website (or via LinkedIn)!

  • I helped guide many lunch & learn sessions, full day workshops to onboard commercial teams into the world of supply chain & operations (it is actually fun).

  • I led probably one too many VCM sessions (value chain mapping), where commercial was and wasn't present and I can tell you the difference in the quality of the outcome.

  • I helped set up local joint / cross-functional processes that led to better understanding and more successful collaboration between commercial and supply chain & operation teams.

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