Supply Chain Management and Importance of People | Chethan Kote

Supply Chain Management and Importance of People | Chethan Kote | TEDxUniversityofStrathclyde

Introduction

People are the most important asset of any company. This quote, attributed to Jorge Paulo Lemann, co-founder of Banco Garantia in Brazil, underscores the importance of human resources in the success of any business. Lemann's bank eventually became Banco Investimentos Credit Suisse. In this article, adapted from Chethan Kote's TEDx talk, we delve into the significance of supply chain management and the crucial role people play in it.

Chethan Kote's Journey into Supply Chain Management

Kote's journey began as a software engineering student in India. While studying, he realized coding wasn't his passion and began exploring other fields. Inspired by his brother's friends in logistics, he turned his attention to supply chain management, which was gaining popularity around 2010-2011, especially in the UK.

After completing his computer science degree, Kote pursued a Master's in Supply Chain and Operations at the University of Strathclyde. His studies coincided with one of Glasgow's harshest winters in 2010, giving him firsthand experience of supply chain disruptions.

Understanding Supply Chain Management

Supply chain management involves the centralized management of the flow of goods and services and encompasses all processes that transform raw materials into finished products. This definition from Investopedia aligns well with Kote's experience in the manufacturing sector.

A typical supply chain comprises a focal company providing a product or service, with suppliers and customers forming links upstream and downstream of this core entity. Demand flows upstream, processes flow downstream, and information flows bi-directionally.

Real-World Example: Volkswagen and Audi R8

Kote uses the example of Volkswagen, which owns brands like Audi, Bentley, and Lamborghini, to illustrate supply chain dynamics. Volkswagen's Wolfsburg plant in Germany employs around 60,000 workers and relies on approximately 2,600 suppliers.

For a specific example, Kote discusses the Audi R8, a premium sports car. Unlike typical automotive production, the R8's manufacturing process is only 25% robotic, highlighting the importance of human touch in creating this high-end product. Bang & Olufsen supplies audio systems for the R8, adding another layer to the supply chain.

The Importance of People in Supply Chain Management

Managing multiple organizations within a supply chain requires a human element to bridge different systems, tools, and processes. Kote shares an example of a supplier who increased turnover from £2 million to £6-8 million by implementing effective leadership and team management.

The key takeaway is that people are pivotal in realizing the full potential of tools and systems. Steve Jobs once said, "It's not the tools you have faith in. Tools work, but they don't work if the people haven't learned how to use them."

Conclusion

Events like TEDxUniversityofStrathclyde are successful not because of tools and systems but because of the people who organize and participate in them. Glasgow's rebranding as "People Make Glasgow" reflects this sentiment. In supply chain management, the success of an organization hinges more on its people than on its processes and tools.

Keywords

Supply Chain Management
Importance of People
Manufacturing
Volkswagen
Audi R8
Leadership
Human Resources

FAQ

Q: What is supply chain management? A: Supply chain management involves the centralized management of the flow of goods and services and encompasses all processes that transform raw materials into finished products.

Q: Why did Chethan Kote switch from software engineering to supply chain management? A: Kote realized coding was not his passion and became interested in the evolving field of supply chain management after researching its growing significance.

Q: How does the Audi R8 production line differ from typical automotive production? A: While most automotive production lines are 95% robotic, the Audi R8 line is only 25% robotic, emphasizing the human touch in manufacturing this premium sports car.

Q: How can effective management impact a company's performance? A: Effective leadership and team management can significantly improve a company's performance, as illustrated by Kote's example of a supplier who increased turnover from £2 million to £6-8 million.

Q: What did Steve Jobs say about tools and people in a company? A: Steve Jobs stated, "It's not the tools you have faith in. Tools work, but they don't work if the people haven't learned how to use them," highlighting the importance of the human element in an organization's success.