Book Summary of “Good to Great” Applied to Supply Chain.

“Good to Great: Why Some Companies Make the Leap… and Others Don’t” is a business book written by Jim Collins. The book is the result of a comprehensive research project that aimed to identify the key factors that enable certain companies to transform from good, or merely average, to truly great and sustain that greatness over time. Several principles and concepts can be applied to supply chain management to help organizations improve supply chain performance and achieve sustained greatness. Here are examples of how the book’s ideas can be applied to supply chain:

The Hedgehog Concept:

In supply chain management, the Hedgehog Concept can be applied by focusing on what your organization can be the best at. Identify a specific aspect of your supply chain that you can excel in, such as lead time reduction, cost efficiency, or customer service, and make it a core focus.

Level 5 Leadership:

Effective supply chain leaders should exhibit Level 5 leadership qualities, emphasizing humility and a commitment to the organization’s success. Leaders who prioritize the overall supply chain performance over personal recognition can foster a culture of collaboration and continuous improvement.

First Who, Then What:

When building a supply chain team, prioritize hiring the right people with the necessary skills and a strong commitment to the organization’s objectives. A talented and motivated supply chain team is essential for achieving supply chain excellence.

The Culture of Discipline:

In supply chain management, a culture of discipline is vital. It means adhering to standard operating procedures, maintaining inventory control, and rigorously tracking performance metrics. By instilling discipline within the supply chain, you can reduce errors, improve efficiency, and ensure consistent results.

The Flywheel:

Apply the concept of the flywheel to supply chain optimization. Continuously build momentum by making incremental improvements in various aspects of your supply chain, such as demand forecasting, inventory management, and transportation logistics. Over time, these improvements will compound and result in a more efficient and responsive supply chain.

Technology Accelerators:

While technology can significantly enhance supply chain performance, it’s essential to use technology as an accelerator for your supply chain strategy rather than the strategy itself. Choose technology solutions that align with your supply chain goals, whether that’s improving visibility, automating processes, or enhancing collaboration with partners.

The Stockdale Paradox:

In supply chain management, it’s crucial to confront the brutal facts of supply chain challenges, such as disruptions, capacity constraints, or quality issues. At the same time, maintain unwavering faith in your ability to overcome these challenges and continually improve the supply chain’s resilience.

The Flywheel and Doom Loop:

Avoid the “doom loop” by consistently pursuing a well-defined supply chain strategy. Refrain from frequently changing course and stick to a clear and well-communicated plan. Supply chain stability and continuous improvement can help you avoid the pitfalls of reactive decision-making.

Incorporating these principles and concepts from “Good to Great” into supply chain can help organizations develop a high-performing and sustainable supply chain that contributes to overall business success. By focusing on disciplined execution, the right team, and strategic alignment, companies can achieve greatness in their supply chain operations.

Good to Great Quotes

“Good is the enemy of great. And that is one of the key reasons why we have so little that becomes great. We don’t have great schools, principally because we have good schools. We don’t have great government, principally because we have good government. Few people attain great lives, in large part because it is just so easy to settle for a good life.” ~Jim Collins, Good to Great: Why Some Companies Make the Leap… and Others Don’t

“The purpose of bureaucracy is to compensate for incompetence and lack of discipline.” ~Jim Collins

“Letting the wrong people hang around is unfair to all the right people, as they inevitably find themselves compensating for the inadequacies of the wrong people. Worse, it can drive away the best people. Strong performers are intrinsically motivated by performance, and when they see their efforts impeded by carrying extra weight, they eventually become frustrated.” ~Jim Collins

“Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.” ~Jim Collins

“The good-to-great companies made a habit of putting their best people on their best opportunities, not their biggest problems. The comparison companies had a penchant for doing just the opposite, failing to grasp the fact that managing your problems can only make you good, whereas building your opportunities is the only way to become great. There is an important” ~Jim Collins