What we do in the shadows

Ah, yes. Shadow processes. The low bar, easily addictive and long-term unsustainable shortcuts, workarounds, and backdoor strategies we too often turn to when the tools we’re given for the job simply aren’t cutting it. They might be easy fixes, but here are five things you should remember before stepping into the shadows.

In the world of supply chain management, shadow processes might make or break your business. Shadow processes refer to unofficial or undocumented procedures and activities that exist within an organization's supply chain but are not part of the formal, standardized processes that have been established by the company. These shadow processes can be both intentional and unintentional, but they are always means to an end.

Initiatives for improved efficiency should be applauded, right? Well, yes. But also, no, not always.  Shining a light on shadow processes might expose some serious risks; risks that might turn into cracks, cracks that might turn into holes, and holes that might put your entire business in jeopardy.

Here are five things you need to remember in the dark:

1. Under the radar means unchecked

Since shadow processes are typically not documented or communicated, they often operate under the radar, making them difficult for management to track or control. This lack of visibility can lead to issues such as increased operational risk, inconsistency, and a lack of accountability.

2. Keep an eye on efficiency

While shadow processes may provide short-term efficiency gains by streamlining certain tasks, they can also create inefficiencies in the long run. Without proper oversight and coordination, these processes can result in bottlenecks, errors, and duplication of efforts.

Keep track of why you take shortcuts, where they lead to, assess whether they were worth it and if they are sustainable in the long run.

3. Bending the rules vs breaking the law

Shadow processes can pose compliance and risk management challenges for your business. This is closely related to point 1 in this list. They may inadvertently lead to violations of regulatory requirements or expose the company to legal and financial liabilities; violations that can not only pose a risk to your business, but for you as an individual.

History is packed with examples of disasters stemming from corners being cut; the infamous Macondo incident may be the most extreme example.

EASY TO LOSE SIGHT: Supply chain management shadow processes are tempting, and often useful means to an end, but the long-term effects are often severe.

4. Money gets lost in the dark

The hidden nature of shadow processes can make it difficult to assess their true costs accurately. Organizations may not realize the resources and time wasted on these informal activities until a problem arises. What may seem like a timely and resource-saving approach at first might lead to unforeseen bumps in the road down the line.

Examples can be missing out on possible bulk purchase discounts when ordering outside of company vendor lists, or inefficient inventory management due to ad hoc purchases of untracked parts or spares.

5. Use them to flip the script

If shadow processes are the norm, it might be time to reevaluate approved tools and guidelines. Identifying and addressing shadow processes can provide an opportunity for your business to improve your supply chain management, or processes in general.

Bringing these hidden activities to light is a great way to evaluate their effectiveness and integrate them into formal processes if they prove beneficial or replace them with more efficient alternatives.

The use of shadow processes in supply chain management is widespread and common, and for good reason: The supply chain domain is struggling with cumbersome and slow enterprise systems, outdated tools, and varying degrees of accountability. Shadow processes are often necessities to get things done.

It’s not ideal, though. Not by a long shot. That’s why we offer solutions that greatly streamline and improve the efficiency of official company procedures, by simplifying material data access, making it easy to identify stock and procurement needs and lowering the bar for stakeholder collaboration and communication.

Would you like to know more about how we approach the double-edged sword of shadow processes? Drop us a line or book a demo today.

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