Protean Supply Chains E-Book

James A. Cooke

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 457

Veröffentlichungsjahr: 2014

Beschreibung

Features emerging trends that are shaping supply chain operations worldwide as well as impacting the global business landscape

Beginning with the assertion that supply chains are an overlooked factor behind anemic economic growth, Protean Supply Chains: Ten Dynamics of Supply and Demand Alignment provides a comprehensive overview of the developments occurring in the field of supply chain management. A broad range of topics in facility location, inventory, strategic sourcing, and supply chain coordination are addressed in addition to coverage of major developments within the field. The author's main position is that supply chains must be more than agile or flexible; rather, they must become protean and capable of changing shape in response to a volatile global business landscape.

The author, a well-known editor and researcher in the field, presents current real-world examples combined with insights into the impact of recent trends that are expected to affect the global business landscape over the next decade. Highlighting companies with leading-edge supply chains as examples, the book discusses methods to reduce spending, increase revenues, and achieve streamlined productivity in a changing economic climate. The book utilizes further examples from the growth of online retailing and automation in distribution centers, as well as the use of protean supply chains to gain competitive advantages internationally. In addition, the book features the following ten emerging trends, which are shaping supply chain operations worldwide:

• The rise of regional theaters of supply
• Global risk management through control towers
• Customer segmentation
• Real demand realization
• Demand swing alignment with production and distribution
• Omnichannel retailing challenges
• Customer of one service
• Sustainability challenges
• Collaboration vs. competition in the new economy
• Financial dynamism

The book is an ideal reference for professionals and practitioners in operations research, business/management science, applied mathematics, and industrial engineering as well as an appropriate supplement for undergraduate and graduate-level courses in supply chain management.

Leseprobe

Copyright © 2014 by John Wiley & Sons, Inc. All rights reserved

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

Published simultaneously in Canada

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To Lee

Preface

Six years ago, I was asked to become editor of a new magazine aimed at providing thought leadership for the global supply chain. The magazine, Council of Supply Chain Management Professionals' (CSCMP) Supply Chain Quarterly, was a joint venture between the professional organization CSCMP and Agile Business Media, which publishes the North American logistics magazine, DC Velocity.

As editor of the magazine, I have written about the transformational supply chain practices of leading companies, reported on business trends sweeping the globe, and had the opportunity to edit the writings from some of the finest thinkers in the field. My work on the Supply Chain Quarterly provided the basis for many of the ideas explored in this book. In my talks with supply chain chiefs, management consultants, industry analysts, and academics, it occurred to me that businesses across a number of industrial sectors would have to move beyond agility and flexibility in their operations to master the volatile business environment in the global economy. They would have to develop “protean” supply chains capable of quick adaptation to unfolding events to ensure the continued profitability of their enterprises. The why, the what, and the how of protean supply chains are the subject of this book.

My thinking about protean supply chains has evolved over the course of editing Supply Chain Quarterly. The core ideas outlined in this book have appeared in a much briefer form in the column that I write every month on supply trends and developments for a monthly electronic newsletter, Supply Chain Quarterly Executive Insight. Writing this book gave me the opportunity to delve into those ideas and to provide more depth and detail. It also gave me the opportunity to provide some context for people who do not work in the field of supply chains. In writing the column, I assume that my readers work in supply chains and understand the references, but in this book, I assumed the opposite was the case. One of my hopes for this book is to open the eyes of the general reading public to what is taking place in supply chains. Supply chain synchronization plays a major factor in the current high rate of joblessness affecting the United States. The development of protean supply chains will have an even greater impact on the United States and on world economy and will ultimately change how many people earn their livelihoods.

Although to my knowledge no company has a true protean supply chain, many companies are hard at work putting in place many of the elements of such a supply chain. Some of those companies are mentioned in this book. Unfortunately, most big companies do not like to discuss what they are doing, as they believe that their supply chain provides a competitive advantage in the marketplace. In a few instances, I mention the names of these companies, as their executives have been willing to discuss what they have done in articles in Supply Chain Quarterly and in DC Velocity magazine.

Although I quote many individuals in this book, I should note that the opinions on supply chain trends are mine. Some will disagree with my views; in fact, many will dispute my opinion on sustainability. Others will say that companies have tried to be agile in their supply chains for the past decade. The difference, in my opinion, is the pace of change. As companies look to match demand with supply, they will need to change manufacturing, distribution, and procurement operations frequently and easily. That is the essence of being protean.

James A. Cooke

Acknowledgments

After working on this project, I have come to the conclusion that it takes a village to write a book. In the year and half I spent on this project, I was fortunate to have help from many individuals who were kind enough to answer questions and, in some cases, point me in the right direction. There is a long list of folks to thank for their time and help.

Let me start with the academic community. During my research, I received help from many professors who both conduct research and teach supply chain practices and information technology in university classrooms. In particular, a number of professors at the Massachusetts Institute of Technology assisted me in my research. Edgar Blanco, Jonathan Byrnes, Chris Caplice, Yossi Sheffi, and David Simchi-Levi, all at MIT, patiently answered my questions. Other professors who offered input for this book are Larry Snyder at Lehigh University and Sean Williams at Boston University.

Gartner Research is the leading research firm covering business software and supply chains. Several Gartner analysts were willing to share their insights on software developments impacting supply chains. They include Stan Aranow, Dwight Klappich, Tim Payne, Kevin Sterneckert, and Noha Tohamy. Another analyst who provided assistance was Steve Banker of the ARC Advisory Group, with whom I worked on a research study about omnichannel issues in distribution that is cited in this book. I kicked around many of the ideas about the macroeconomic trends in this book with economist Chris Christopher of IHS Global, who writes a column for the Supply Chain Quarterly.

Because their work involves solving problems for companies, business management consultants are very close to what is happening in today's supply chains. A number of top consultants made themselves available to answer my questions. The folks at Tompkins Associates were generous with their time. The head of the firm, Jim Tompkins, as well as Gene Tyndall and Michael Zakkour, provided valuable input. Justin Rose and Claudio Knizek of Boston Consulting Group offered assistance, as did Kevin O'Laughlin and Rob Barrett from KPMG. Other consultants who contributed information are Ron Ash of Accenture, Paul Brody of IBM, Marilyn Craig of Insight Voices, Tom Craig of LTD Management, Sean Culey of Aligned Integration Ltd., Goetz Erhardt of Accenture, Frode Huse Gjendem of Accenture, John Haggerty of IBM, Helgi Thor Leja of Fortna, Rob O'Byrne of the Logistics Bureau, Martin O'Grady of Outsource Management Services, John Sewell of Crimson & Co., Daniel Swan of McKinsey, and Rob van Doesburg of Capgemini. For more information about control towers, which are discussed in this book, I recommend the white papers on this topic by Rob van Doesburg.

Many software vendors provide the applications that will enable the strategies outlined in this book. The following individuals from software firms offered their help: Hemant Bhave of Barloworld, Greg Brady of One Network Enterprises, Don Hicks of Llamasoft, Justin Honaman of Teradata, Howard Jensen of Viewlocity, John Lash of Terra Technology, Trevor Miles of Kinaxis, Kirk Monroe of Kinaxis, Kelly Thomas of JDA, Michael Watson of Opex Analytics, and Dennis Weir of Barloworld. I am especially indebted to D'Anne Hotchkiss at Teradata, who went beyond the call of duty to provide material from her company's conference. Terry Wohlers, one of the foremost experts on 3-D printing, provided background on that emerging technology, as did Sandeep Rana of AMT. Marcel Goldstein of CSC was helpful, as was Gordon Fuller of CSC. By the way, CSC has issued a few white papers on 3-D printing that I recommend as some of most detailed writing on this subject.

The following also provided input for this book: Charles Bogoian of Kenai Sports, John Gattorna, Jeff LeRoy of P&G, Harry Moser of the Reshoring Initiative, company owner Justin Norman, and inventory software expert Shaun Snapp. Others who provided assistance were Dexter Galvin of the Carbon Disclosure Project, Haley Garner with Eyefortransport, and Jamie Plotnek of the Carbon Trust. I would like to especially thank Matt Davis for his help as well on the topic of segmentation. I also have to give a special thanks to Peter Surtees and Alan Waller.

In addition to having the opportunity to learn from some of the best practitioners, academics, and consultants working in supply chains, I have been lucky to also work with some of the finest business journalists around. The quality of the Supply Chain Quarterly's content owes much to the editorial skill and acumen of my coworkers, Toby Gooley and Susan Lacefield. Since I also write for DC Velocity and write a monthly column on technology trends for that magazine, I have also had the opportunity to work and learn from its editors: Karen Bachrach, Peter Bradley, David Maloney, Mark Solomon, and Jeff Thacker. This book draws in part on some of the industry coverage that has appeared in both publications. I also thank Mitch MacDonald, who oversees the editorial direction of both publications, for the good fortune to be involved with the Supply Chain Quarterly.

Finally, I'd like to thank Mini Villamayor, who copyedited this book, and my editor at Wiley, Susanne Steitz-Filler. And if I left anybody out, I offer my sincerest apologies.

J.A.C.

CHAPTER 1Supply Chain Synchronization

Since the Great Recession, the United States remains stuck in a jobless recovery. The same holds true for many other parts of the world. The U.S. economy is witnessing a profit recovery. Stocks have soared on Wall Street due to strong corporate profits, while unemployment in the United States has stayed stubbornly high above traditional norms. Although U.S. unemployment had dropped from its peak of 10% in October 2009, the Bureau of Labor Statistics still had the unemployment rate around 7% in late 2013. And it is not just the United States that is wrestling with joblessness. Unemployment remains high in other parts of the world as well. The 17-member Eurozone had unemployment rates above 12% in 2013.

This condition has been dubbed “the New Normal economy,” a term coined by William Gross, the founder of the global investment firm Pacific Investment Management (PIMCO), back in 2009. Gross used the term to describe a lackluster economy he predicted would occur for a decade, an economy that would witness high unemployment and a reduced standard of living for Americans as well as most other citizens around the globe.

One of the reasons behind the continued high employment rate, ignored by both economists and the media pundits, is the impact of supply chains on business efficiency that has resulted in strong corporate earnings. Companies have moved closer to achieving supply chain synchronization, although it should be noted they still have a long way to go before reaching perfection. But even a modest movement in that direction is having a strong economic effect. In theory, synchronization means that companies would make only the exact amount of goods necessary to meet actual consumer demand. Synchronization means that there is no excess inventory throughout a supply chain spanning continents. Synchronization of supply with demand leads to increased output without the need for additional labor.

Aligning production with consumption has been a business goal for decades. Manufacturers, wholesalers, and retailers have tried setting their inventory levels using forecasts based on historical data of past years' sales. But what has changed since the onslaught of the Great Recession is that business enterprises have worked very hard at making their supply chains more efficient in a drive to align inventory with consumer demand. As a result of that early, albeit modest success, there are fewer spikes in production.