Bricks Matter E-Book

Lora M. Cecere

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: SAS Institute Inc
• Sprache: Englisch

Seitenzahl: 419

Veröffentlichungsjahr: 2012

Beschreibung

Get proven guidance to build a market-driven supply chain management system Supply chain management processes have gradually shifted from a supply-driven focus to a demand-driven one in order to better synchronize demand and supply signals. Bricks Matter shows you how you can identify market risks and opportunities and translate these into winning tactics. Business cases highlight how business leaders are winning through market-driven approaches. * Helps you understand how to apply the emerging world of predictive analytics for the better management of value networks * Includes business cases illustrating the market-driven approach * Reveals how businesses can identify market risks and translate these into supply-side tactics As companies transition from demand-driven to market-driven approach, the focus in organizations shifts from one of vertical excellence to building strong market-to-market horizontal processes. Improve revenue by increasing market share, improve profit margins, and maintain high levels of customer service with the indispensable guidance found in Bricks Matter.

Leseprobe

Contents

Foreword

Preface

Chapter 1: Why Bricks Matter

Implications

Building the Right Bricks

A Look at History

Supply Chain Pioneers: The Tipping Points

Meet the Pioneers

Why It Matters

Supply Chain Process Evolution

Who Does Supply Chain Best?

Meet the Supply Chain Leaders

Procter & Gamble: The Quiet Leader

Apple and Dell: Inventing New Models

Summary

Notes

Chapter 2: Building Value Networks

The Journey from Cost to Value

Aligning for Success

Building of Value Networks

Building Value Networks

Why Are Value Networks So Hard to Build?

A Close-up: Taking a Closer Look at a Value Network within the Consumer Value Chain

Value Chain Case Studies

Success in Creating Value in Value Networks

Mistakes in Building Value Chain Networks

Risk Management

Shift to Value-based Outcomes

Summary

Notes

Chapter 3: The New World of Demand Management: Demand Sensing, Shaping, and Translation

What Is Demand Management?

Learning a New Language to Build Market-Driven Demand Management Processes

What Is Market-Driven Demand Management?

What Is Demand Sensing?

What Is Demand Shaping?

Achieving Market-Driven Capabilities

Why Is Becoming Market Driven Important for Industrial Companies?

Driving the Market-Driven Demand Management Advantage

Social: A New Form of Demand Signal

How Can a Company Improve Demand Management?

Summary

Notes

Chapter 4: Supply Management Evolution

Current State

Supply Chain Matters

Procurement of Raw Materials

Manufacturing: The Making of Products

Transforming Manufacturing

Logistics

Summary

Notes

Chapter 5: Building Horizontal Connectors

The Building of Horizontal Supply Chain Processes

Revenue Management

Sales and Operations Planning

Supplier Development

Summary

Notes

Chapter 6: Supply Chain 2020

Leading the Journey to Drive Market-Driven Value Networks

Building a Guiding Coalition

Running the Race

Making the Right Investments

Supply Chain 2020

Demand Orchestration

Big Data Supply Chains

Winning the Race

Notes

About the Authors

Index

WILEY & SAS BUSINESS SERIES

The Wiley & SAS Business Series presents books that help senior-level managers with their critical management decisions.

Titles in the Wiley & SAS Business Series include:

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Big Data Analytics: Turning Big Data into Big Money by Frank Ohlhorst

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Business Analytics for Managers: Taking Business Intelligence beyond Reporting by Gert Laursen and Jesper Thorlund

The Business Forecasting Deal: Exposing Bad Practices and Providing Practical Solutions by Michael Gilliland

Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy by Olivia Parr Rud

CIO Best Practices: Enabling Strategic Value with Information Technology, Second Edition by Joe Stenzel

Connecting Organizational Silos: Taking Knowledge Flow Management to the Next Level with Social Media by Frank Leistner

Credit Risk Assessment: The New Lending System for Borrowers, Lenders, and Investors by Clark Abrahams and Mingyuan Zhang

Credit Risk Scorecards: Developing and Implementing Intelligent Credit Scoring by Naeem Siddiqi

The Data Asset: How Smart Companies Govern Their Data for Business Success by Tony Fisher

Demand-Driven Forecasting: A Structured Approach to Forecasting by Charles Chase

The Executive’s Guide to Enterprise Social Media Strategy: How Social Networks Are Radically Transforming Your Business by David Thomas and Mike Barlow

Executive’s Guide to Solvency II by David Buckham, Jason Wahl, and Stuart Rose

Fair Lending Compliance: Intelligence and Implications for Credit Risk Management by Clark R. Abrahams and Mingyuan Zhang

Foreign Currency Financial Reporting from Euros to Yen to Yuan: A Guide to Fundamental Concepts and Practical Applications by Robert Rowan

Human Capital Analytics: How to Harness the Potential of Your Organization’s Greatest Asset by Gene Pease, Boyce Byerly, and Jac Fitz-enz

Information Revolution: Using the Information Evolution Model to Grow Your Business by Jim Davis, Gloria J. Miller, and Allan Russell

Manufacturing Best Practices: Optimizing Productivity and Product Quality by Bobby Hull

Marketing Automation: Practical Steps to More Effective Direct Marketing by Jeff LeSueur

Mastering Organizational Knowledge Flow: How to Make Knowledge Sharing Work by Frank Leistner

The New Know: Innovation Powered by Analytics by Thornton May

Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics by Gary Cokins

Retail Analytics: The Secret Weapon by Emmett Cox

Social Network Analysis in Telecommunications by Carlos Andre Reis Pinheiro

Statistical Thinking: Improving Business Performance, Second Edition by Roger W. Hoerl and Ronald D. Snee

Taming the Big Data Tidal Wave: Finding Opportunities in Huge Data Streams with Advanced Analytics by Bill Franks

The Value of Business Analytics: Identifying the Path to Profitability by Evan Stubbs

Visual Six Sigma: Making Data Analysis Lean by Ian Cox, Marie A. Gaudard, Philip J. Ramsey, Mia L. Stephens, and Leo Wright

Win with Advanced Business Analytics: Creating Business Value from Your Data by Jean Paul Isson and Jesse Harriott

For more information on any of the above titles, please visit www.wiley.com.

Cover image: Bricks image: © def1981/iStockphoto; Refinery image: © Teun van den Dries/iStockphoto; Globe image: © Oxford/iStockphoto

Cover design: Andrew Liefer

Copyright © 2013 by SAS Institute Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Cecere, Lora M.

Bricks matter : the role of supply chains in building market-driven differentiation / Lora M. Cecere, Charles W. Chase.

pages cm. — (Wiley & SAS business series)

Includes index.

ISBN 978-1-118-21831-0 (cloth); ISBN 978-1-118-28272-4 (ebk.); ISBN 978-1-118-28294-6 (ebk.); ISBN 978-1-118-28472-8 (ebk.)

1. Business logistics. I. Chase, Charles W. II. Title.

HD38.5.C343 2012

658.7—dc23

2012037486

This book is dedicated to first-generation supply chain pioneers.

Foreword

Historically, successful companies were typically known for their marketing expertise or technological innovation. Today, great companies are also defined by supply chain excellence. Throughout my 40 years at Procter & Gamble (P&G), I watched the concept of a well-run supply chain evolve from one that was barely on anyone’s radar screen to one that is front and center as part of any company’s business strategy.

The fact that supply chain management is now an academic discipline further changes the game. PhDs enter the market with strong business backgrounds; they bring a new and an important focus to topics such as data synchronization, information systems, and demand shaping—the horizontal structures within a supply chain organization.

While it is gratifying to see this evolution, part of the challenge is integrating this data-driven approach with an appreciation for what, in my opinion, makes a great supply chain organization great: a foundation of functional excellence. The vertical supply chain functions—manufacturing, logistics, engineering, procurement, and quality—are what allow a company to leverage the capabilities that information can provide. A company’s synchronization and information systems may be the best in the world, but without outstanding execution and support, systems alone cannot deliver.

The companies that view both elements as essential—cutting-edge systems and strong functional organizations—are the companies that knit the horizontal and vertical together in ways that truly add value to the business.

The second challenge I see is one that is critical to every business: leadership. Just as any company is always tweaking its marketing or innovation strategies to better anticipate and respond to marketplace dynamics, its supply chain strategies need to evolve as well. It is the supply chain leader’s job to recognize how things are changing, where they are going, and when it is time to tear down and rebuild.

While we like to think that our people on the ground are best positioned to identify what is not working or what could work better, in my experience that is not how it happens. Organizations, by nature, generate inertia; there is always a tremendous investment in the status quo. The supply chain leader must be the one to take on transformation—the organization simply won’t go there on its own.

I served as P&G’s global product supply officer from 2001 through 2011. One example of rethinking our organization resulted in the creation of centralized purchasing spend pools; another was the consolidation of P&G’s planning function within the supply chain organization. In both cases, each of our business units was managing these activities in its own way. The redesign led to increased scale and flexibility, greater focus, and stronger supply chain capabilities.

Another critical and closely related element of supply chain leadership is perspective: supply chain excellence is about continual improvement. To be clear, we sometimes innovate with big ideas that have immediate impact; however, that is rarely the case. Supply chain organizations are large and complex; they require persistent, day-in and day-out focus. The core work of creating a world-class supply chain is a journey.

I would also like to say a few words about culture, and the power that comes from building an entire organization focused on excellence. A strong supply chain culture starts with communication—making sure that people understand the business need and how their roles within the supply chain support and drive the business. It requires leaders who see themselves as coaches—leaders who explicitly model what “good” looks like and show up as being there to help solve problems.

A strong supply chain culture is about cultivating people with a healthy dissatisfaction, people who believe that what is good enough—or even great—today isn’t good enough for tomorrow. When you develop a critical mass of people who take ownership for their results, that is when magic happens. When everyone is pulling in the same direction, people transcend their functional boxes because they are aligned to a bigger idea—a larger vision of success.

I am proud to have been a part of Procter & Gamble’s supply chain journey—a journey outlined here. This is the right place to start. I know from experience that it works.

I wish each of you success on your quest for a world-class supply chain. As you progress, remember that it is a journey, not a sprint. It requires leadership, tenacity, a deep understanding of the fundamentals, and a commitment to be in it for the long haul.

R. Keith Harrison

Retired Global Product Supply Officer Procter & Gamble

Preface

We firmly believe that bricks matter. Behind every shipment, there is an order. It is satisfied by a manufacturing and a logistics process. The customer’s expectation is that the order will be perfect. Getting it right requires the alignment of the organization from the customer’s customer to the supplier’s supplier. It sounds easier than it is.

Supply chain management is three decades old. It is still evolving. While the term supply chain was used in logistics and warfare for decades prior, 2012 is the 30th anniversary of the use of the term supply chain in commercial manufacturing.

Over the three decades, the processes have changed greatly. Technology has been a major driver. Connectivity, business analytics, and e-commerce increased the pace of fulfillment and the customers’ expectations. While clicks (the world of the Internet) are sexier than bricks (the world of fulfillment), companies cannot move forward without effective and efficient operations.

Like the annealing of steel, the processes were challenged and refined by many forces. This included the evolution of global markets and increasing business complexity. Many companies failed first before they could go forward. The greatest moves forward came not from success, but from failure. Material event after material event created a boardroom understanding of why bricks matter. This book is a synopsis of this journey.

For manufacturers, retailers, and distributors, the supply chain is business. The book is a compilation of stories, quotes, and anecdotes. The stories are rich. In telling them, we tried to make it anything but mundane. To understand the evolution, we interviewed 75 supply chain pioneers, and analyzed 25 years of financial data. We wanted to understand why the supply chain matters today, and how companies need to prepare for the next decade. The book is dedicated to the first-generation supply chain pioneers that cobbled together those first processes.

The book also predicts the future, giving advice to supply chain teams on the evolution of processes for 2020. To run the race for Supply Chain 2020, these teams have to have the right stuff. They must have the right balance between flexibility and strength, they have to be balanced in their approach between go-to-market strategies and fulfillment activities, and they need a clear understanding of supply chain strategy. This requires a multiyear road map and a cross-functional understanding.

It also requires an understanding of the future of technologies. The road before us will be quite different from the road that got us here. The world of big data, the Internet of Things, new forms of predictive analytics, and the evolution of digital manufacturing offer great promise. The adoption of new technologies is part of winning the race for Supply Chain 2020.

When we submitted the abstract of this book to many publishers, to celebrate this 30-year journey of supply chain management, we were told that it was “boring.” Publisher after publisher turned us down. However, we persevered. We think it is an important story. It is the progression of the manufacturing age of business, the underpinning of the middle-class economy, and the essential component of many new business models.

Writing this book took six months. It would not have happened without a team of people. We would like to thank Regina Denman, Michael Hambrick, Heather Hart, Marie LeCour, Abby Mayer, and Jill Smith for their patience and help. Without this team, the book would not have happened.

CHAPTER 1

Why Bricks Matter

We had to learn supply chain practices. We then had to unlearn them as technologies evolved, and then relearn them based on new capabilities.

—First-Generation Supply Chain Pioneer

The story is old. When generations come and go, at the end, the bricks remain. They last through the ages. They are a symbol of prosperity, solidity, and strength. Found in many forms, they give a culture countenance. This book is a variation on this old theme. In the end, bricks matter.

The foundation of business is built on bricks. Manufacturing plants, warehouses, and sales operations centers are built to deliver on a brand promise. Each is run by people. Collectively, their effectiveness can make or break a company’s ability to fulfill customer promises. To drive success, these processes need to be synchronized. They need to be carefully architected and adapted to meet strategy. The design has changed over time as business complexity increased.

In business, while there are fads, true value is built through continuous improvement of processes to deliver real products to real people along with market differentiating services to build brands. To make year-over-year progress, companies learn—although, sometimes the hard way—that the ability to successfully deliver on the brand promise requires proficiency in supply chain management.

I found Rome a city of bricks and left it a city of marble.

—Augustus

The term supply chain is not new. It is fundamental to military strategy. It was the difference between winning and losing in the Napoleonic wars and the Battle of the Bulge in World War II. The application of supply chain practices as a fundamental business process is newer. First coined in 1982 to be used as an overarching business concept, it is now 30 years old. Over the last three decades, it has morphed in definition.