Supply Chain Excellence

A Handbook for Dramatic Improvement Using the SCOR Model

 Supply Chain Excellence

Authors: Peter Bolstorff, Robert Rosenbaum
Pub Date: December 2011
Print Edition: $45.00
Print ISBN: 9780814438466
Page Count: 304
Format: Hardback
Edition: Third Edition
e-Book ISBN: 9780814417720

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Excerpt

INTRODUCTION

During dinner at a recent supply chain conference, a senior execu-

tive asked me about the latest thinking on how to improve global

supply chain performance. Without hesitation I whispered, ‘‘Have

you tried the sardine strategy yet?’’ Anticipating the puzzled look, I

continued: ‘‘For schooling fish, staying together is a way of life. Fish

in a school move together as one.’’

For schooling fish, the ‘‘move as one’’ trait is innate. Separation

means likely death. For global supply chains, misalignment—failure

to move as one—means poor service, high inventory, unexpected

costs, constrained growth and profits, and loss of market share.

The purpose of this book is not to convince anyone of the impor-

tance of supply chain management (SCM). That case has been

well made many times in many industries since the first edition of

Supply Chain Excellence was published in 2003. Even then, only the

first two paragraphs of the book’s introduction argued the ‘‘why’’ of

SCM. The rest was about the ‘‘how.’’

While using the methodology of this book on roughly 100 supply

chain projects around the world, ‘‘how’’ has been further refined

into a series of processes to achieve the highest levels of supply

chain alignment: moving as one.

Here are the 15 most common contributors to supply chain misalign-

ment. Which ones are relevant to you?

Fifteen Common Causes of Misalignment

1. Lack of a Technology Investment Plan

A chief information officer deflected pressure to install the latest and

greatest advanced planning system—making the case that simply

having state-of-the-art tools was not a good enough reason to put

her entire company into the kind of upheaval that such implementa-

tions create. As she watched the rapid evolution of web-based appli-

cations, event management tools, and demand-driven advanced

planning systems, she found herself without a clear technology in-

vestment plan that supported the company’s business strategy.

2. Little or No Return on Investment (ROI)

A company bought its Enterprise Resource Planning (ERP) package

during the vendor’s end-of-quarter push to meet sales goals. The

deal included all the latest add-ons—things like customer relationship

management, transactional processing, advanced supply chain

planning, event management, and web portals providing self-service

for customers and suppliers. Now the executive team is looking for

an answer to a deceptively difficult question: When will a return on

investment start to show up in the earnings statement?

3. Isolated Supply Chain Strategies

Three executive vice presidents—for sales, marketing, and opera-

tions— assembled their own well-articulated strategies for developing

supply chain competence within their departments. Then they invested

in application technology, manufacturing processes, and product de-

velopment— all with measurable success. Now what’s missing is a

comprehensive blueprint that combines their individual efforts to drive

profit and performance across the entire company.

4. Competing Supply Chain Improvements

A company’s top executive for SCM assembled a dozen of his

brightest managers for a structured brainstorming process—resulting

in a list of 45 high-priority projects. But when the managers began

implementation, the results were not encouraging. General managers

were being asked to support multiple initiatives that used many

of the same financial, human, and technical resources. Goals seemed

in conflict. They needed to align their objectives and prioritize projects

to make good use of the available resources.

5. Faulty Sales and Operations Planning

The vice president of operations for one of the companies had serious

cash-to-cash problems and declining customer satisfaction—all

resulting from raw materials shortages, mismatched capacity, poor

forecasting, and inventory buildup. The challenge was to address the

planning and forecasting issues and put the balance sheet back in

shape.

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