Herb Kelleher and aligning supply chains with business strategy

"We are THE-low fare airline" said Herb Kelleher to succinctly capture the strategy of South West Airlines. The Heath Brothers call this "Commander’s Intent" in their new book "Made to stick." Once you have the commander’s intent simply defined , everyone else in the organization and stake holders expect and do things that match up with the strategic intent. Herb_on_plane_tail_3
The Heath brothers go on to explain (pg 29, quoting from Carville and Begala) that suppose a market research executive came in with customer feedback and suggestion that chicken Caesar salad would really make the
Houston-Vegas passengers happy. Herb Kelleher would simply measure whether this helped or did not help the strategic mission of "We are THE-low fare airline." Obviously the streamlined, literally low cost South West peanut supply chain  would win every time over chicken Caesar salad. And whoa! you’d ignore customer feedback….. and stay with peanuts! Customers will keep coming back…..

Having just read the above I had to agree with the Manufacturing Insights-IDC’s recent research that mis-alignment of supply chain with corporative objectives is a big problem in industry. Increased quality and customer satisfaction is the top priority of supply chain executives and not low cost alone. No one wants to recall Colgate

The supply chain digest is provoking its readers to respond to the "low cost" priority and it is precisely this low cost orientation that has left executives in the upstream supply chain i.e. the supply managers and the downstream distribution channel i.e. sales managers responsible for distribution out of the center-stage in the company. As soon as these value chain mangers start figuring out that they add value and don’t simply reduce cost these managers  and their companies will do better.

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