The Bizzaro Supply Chain

My dad never outgrew his comics, even to this day, he is a huge fan of Superman. Which made me a fan and thinking back Superman had an arch nemesis called Bizarro Superman, who would do the opposite of everything superman would do. After reading the NY Times article last week with the headline "Supplier Under Scrutiny on Arms for Afghans" I think I discovered the bizzaro supply chain.

One of the key staples of any successful supply chain are partners you work with. Any supply chain worth a damn has a procurement team that established a secure, reliable and trusted partner network. It's just a must. But in the bizzaro supply chain, its just the opposite. For example, the NY Times reports that the US Military is procuring $300 million in ammunition from a 21 year old in Miami, that is buying old Soviet era equipment and reselling it to them. I mean this is procurement 101. But the bizzaro supply chain doesn't stop there, apparently, some of the ammo arrived to the troops in paper bags! Hello logistics team, where are you? Can you imagine the look on the troops when they receive a paper bag of ammo that they are suppose to then depend on with their life?

My suggestion to the US Military, stick to your core competency of organizing strategic military attacks and outsource your supply chain to a trusted expert.

IKEA and the Supply Chain Super Hero

For the past several weekends I have been spending countless hours at IKEA as I furnish my new flat in Vienna, Austria. IKEA has four locations in the region, not to mention one in Brno, so its very convenient. As I assemble everything from tables to chairs to desks I am somehow drawn to the "Made in" stickers that are located on each product. I don't know if there is a such thing as "supply chain instincts", but what else would force me to search for these tiny stickers each time I complete the assembly? I digress, but if I did have these so-called "supply chain instincts" perhaps I should put them to good use and become a supply chain super hero? Let me ponder this some more and get back to you. But in the meantime, I've just revealed my secret identity, so I am not off to a good start.

Anyway, back to IKEA. As I peeled off the "Made in" stickers I began to keep track of all of the countries that IKEA sources from and the list is mind boggling. My shelves were from Russia, the computer desk Poland (pictured above), the chairs Thailand, the screws from China and the carpet from India. And despite what Lou Dobb's says on CNN, its not that they make cheaper shelves in Russia compared to Poland. It's about the supply chain, being close to the suppliers and the natural resources. I wouldn't be surprised if IKEA in the US sources the same shelf unit from Canada for example.

The point is, just like in outsourcing and services delivery, you go to where the talent and skills can be found or to complete my analogy you can get the best natural resources. And IKEA seems to have a very good understanding of that, because if they didn't they would be shipping everything out of China and Sweden, which would have a serious impact on quality and cost.