Supply chain versus supply management

[cakadu]

I was recently asked if I thought there were much difference between working within a supply chain versus supply management as they were both "controlling" the supply of the product to the consumer.

In thinking about it I would have to say that the two are different in that a supply chain you bring togther people that are willing to work together towards a common goal and a win-win situation. That is the whole premise behind a chain.

In supply management all of that is taken care of for you and in many cases you have no choice about whom you work with. That is already pre-determined.

For me, I guess it's a matter of choice versus no choice. What are your thoughts/ideas/comments?

[cowman]

Linda: I don't think there is a whole lot of difference in the sense that you either do it our way or you don't do it! Which is okay...I mean you sign on with that understanding. I think the difference is one is run by the people involved; the other by regulations set up by the government. So the value chain can evolve with circumstances while supply management is locked into a fairly rigid formula. One of the great failings of any state beuracracy! A classic example would be the recent increases in milk prices...it in no way reflects the real marketplace! And may just end up in the elimination of supply management. Supply management has got a bad rap over the years, mostly because the government has been running it!

[cakadu]

The basic premise behind a value chain is that you respond to consumer wants with the product or products that they desire, not with what you think will sell. There is plenty of room for innovation, whereas in supply management it is almost non-existant, from what I can gather.

You're quite right - everything in supply management is backed by legislation. Do you recall a while back where there was a huge brouhaha over using some edible oil product that replaced milk in ice cream? It is legislated that you can't use anything else, so it had to be dropped. Look at how that restricts companies from being able to get their inputs at a reasonable price and/or to find alternatives. Could you imagine what would happen if someone like Nestle were able to find a comparable substitute to dairy to put into chocolate? I understand that considerable research money is going into doing something like that. Please correct me if I'm wrong.

What about the rise of soy products? There are growing numbers of lactose intolerant people out there and people who want an alternative to milk. (As soon as they get the taste thing worked out and have it available at a reasonable cost - they could prove to be a challenge for dairy). It goes back to the vegetarian thing. Have they even considered that people would want a substitute? It is also my understanding that the makers of soy products have even made those little flavored creamers that you can put into coffee.

Things like supply management served a purpose at one time, but things have changed enough that it's time to revisit the efficacy of the whole supply management system. A friend of mine believes that supply management will be the "sacrifical lamb" when push comes to shove at WTO talks. Who knows?