Back when most people were hailing quality as the definitive source of competitive advantage, George Stalk had another idea: Although cost and quality matter, the real key to success is time.
Stalk, author of Competing Against Time, still thinks so today, as he notes in this excerpt from an interview with Group Editorial Director Mitch Mac Donald.
Q: What distinguishes one company's supply chain from another in terms of competitive advantage?
A: First and foremost is that the CEO has to know he's in charge of the supply chain. The companies doing the best job of competing on the basis of their supply chain are the ones where the guy at the top knows that and everybody who works for him knows that.
Second, people are measured on system performance, not on individual functional performance. Success in a functional silo, like achieving lower transportation costs, is all well and good, but what are the ramifications? Is it causing problems in other parts of the company or hurting the bottom line?
Third, they understand time and are hell-bent on taking time out of the system. The objective has to be taking time out of all steps in the chain. It might be the hardest part of improving the supply chain because you've got to start changing things—factories, lot sizes, shipment sizes, and so on.
If you give me two companies, both the same size, but one with great merchandise and a lousy supply chain and one with mediocre merchandise and a great supply chain, the one with the … great supply chain will win every time. They can just react faster.
Note: To read the complete interview with George Stalk, which originally appeared in DC Velocity (December 2007), click here.