Supply Chain Flywheel

In February Jim Collins came out with the small book “Turning the Flywheel: A Monograph to Accompany Good to Great“.

In it, Collins discusses the Flywheel concept, and how organizations like Amazon and a failing school on a military base leveraged the Flywheel concept, and made it their own to become GREAT.

I first heard about it on the Tim Ferriss Show. During the interview, Jim Collins discussed the monograph, how it applied to businesses, departments, and even our personal lives.

I shared that portion of the podcast (starting at 1:40:00 or so) with a colleague, and together we built the flywheel for our Supply Chain Division at the company I worked for.

The Supply Chain Flywheel

Here is the Flywheel we came up with.

  • Increased Stakeholder Engagement
  • Quality Scope of Work
  • Better Market Position
  • Better Market Relations
  • Reduced Total Cost of Ownership
  • Increased Stakeholder Buy-In

As described by Jim Collins, each step in the Flywheel cannot but help cause the next step.

Increased stakeholder engagement cannot help but lead to a better quality scope of work. A better quality scope of work cannot help but lead to a better market position. A better market position cannot help but create better market relations. Better market relations cannot help but reduce the total cost of ownership of the materials/services being sourced. Reduced total cost of ownership cannot help but lead to increased stakeholder buy-in. Increased stakeholder buy-in cannot help but lead to increased stakeholder engagement…

And so on, and so on, and so on.

Doom Loop

The Doom Loop, of course, is the exact opposite, and each step in the Doom Loop feeds the next.

  • Decreased Engagement
  • Poor Scope of Work
  • Poor Market Position
  • Poor Market Relations
  • Increased TCO
  • Reduced Stakeholder Buy-In

Conclusion

Supply Chain/procurement should strive to reach the flywheel described here and, of course, improve upon it. Maybe there’s an additional step your team or department needs to add. Try and develop it.

And if you do need a hand to start your flywheel, the MEYBEST Procurement Solutions: Strategic Sourcing Training is a great place to start.