Supply Chain Transformation E-Book

Richard Sherman

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Corporate F&A
• Sprache: Englisch

Seitenzahl: 423

Veröffentlichungsjahr: 2012

Beschreibung

Achieve best practices in supply chain management Much is being written about global supply chain and sourcing options emerging in today's marketplace. Transforming supply chain management to achieve operations excellence is a mandate for many companies globally. Supply Chain Transformation walks you through this potentially difficult process and gets you started on the journey. Much more than just a how-to book, it's a why-to book that is as compelling for any business person as it is for supply chain management professionals. This book provides an invaluable road map to companies looking to transform their supply chains and organizations to achieve best practice results, beginning with guidance on how to make the case for change. Change is inevitable; growth is optional. * Includes real world cases and illustrations * Offers a step-by-step road map to transforming your supply chain * Explains how to obtain "senior management" commitment to transformation * Covers sourcing, production, and logistics process integration points with product development, marketing, sales, and finance processes as well as emerging technologies (RFID, Cloud computing, telematics, ERP, GPS/LBS & others) One of the biggest hurdles to supply chain transformation is overcoming a culture that is resistant to change. Supply Chain Transformation helps you understand the cultural resistance and evaluate where change is needed most, and then develop the game plan for overcoming resistance to achieve best practice results.

Leseprobe

Contents

Cover

Series Page

Title Page

Copyright

Dedication

Foreword

Preface

Acknowledgements

Chapter 1: Change Is Inevitable, Growth Is Optional

Globalization Changes the Game

Paradigms Drive Organizational Behavior and Culture

Assessing Your Company's Culture

Levels of Cultural Maturity

Building a Case for Change

Paradigms Can Encourage or Constrain Innovation

Chapter 2: Putting the Business in Perspective

Defining and Understanding Business Objectives

Defining the Business within the Context of the Market

Developing Your Vision

Adding SWOT Analysis Puts the Business in Perspective

Principle of Creative Tension

Chapter 3: Market Drivers and the Dynamics of Change

Supply Chain Is Marketing: A Tool for Analyzing the Market Environment Impacting the Supply Chain

Scanning the Market Environment for Drivers of Change

Systems Thinking: Your Strategy for Managing in a Changing Market

Chapter 4: Business Structures Are the Levers of Change

You Can't Break Down the Silos: Collaboration Is the Key

Understanding the Business Structures and Processes That Govern the Behavior of the Organization

Vertical and Horizontal Business Structures and Drivers

Everything That Gets Done Gets Done through a Process...Business Process Management

Chapter 5: If You're Driven by Demand, You're Probably Being Driven Crazy

What Are the Demand Creation Structure Process Types?

Demand Creation Processes Impact Demand Fulfillment Behavior Dramatically

Guess What? The Forecast Is Wrong, Deal with It

Forecasting Is as Much about Art as It Is about Science

Event-Driven Forecasting Is a Best Practice Imperative

Extend Collaborative Processes to the Customer (and Supplier)

Chapter 6: Supply Chain Management: A Pipeline of Opportunity

Understanding the Demand Fulfillment Structure

Major Operating Functions of the Demand Fulfillment Structure: Procurement, Production, and Logistics

Lean Six Sigma Is Not an Option—It's a Requirement

Leveraging Supply Chain Capability for Synchronization: Strategy, Planning, and Execution

Chapter 7: Okay, We Need Management Commitment; So, How Do We Get It?

Understanding the Demand Performance Structure

You Can't Manage What You Can't Measure

Process Types That Drive the Demand Performance Structure

What Keeps the CEO and CFO Up at Night?

How Does Operations (Supply Chain) Excellence Impact the Income Statement and Balance Sheet to Drive Return on Invested Capital?

Chapter 8: Technology Drives the Waves of Change

Scanning the Horizon for Technology Developments

What Emerging Technologies Are Likely to Impact the Supply Chain?

How Does Technology Impact the Organization?

How Can Information Technology Enable Business Operations to Maximize Return?

Chapter 9: Making the Journey Happen

We Got Management Commitment, What Do We Do Now?

Developing an Operating Plan and Creating a Culture for Change

Benchmarking: Perception versus Reality

How Do We Eat the Elephant? Identifying Projects and Setting Priorities

Jump on the Bandwagon: Communicating the Game Plan and Building Operations Support

Conclusion: Business As Usual Has Been Canceled, Now What?

References

About the Author

Index

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Library of Congress Cataloging-in-Publication Data:

Sherman, Richard J., 1950-

Supply chain transformation: practical roadmap to best practice results / Richard J. Sherman.

p. cm.— (Wiley corporate F&A series)

Includes bibliographical references and index.

ISBN 978-1-118-31444-9 (cloth); ISBN 978-1-118-41992-2 (ebk); ISBN 978-1-118-42174-1 (ebk); ISBN 978-1-118-43413-0 (ebk)

1. Business logistics. I. Title.

HD38.5.S554 2013

658.5—c23

2012022693

To my wife, for driving me to, for the first time ever, beat a deadline and “git ‘er done” ahead of schedule. And to my family who have supported me through years of travels, ups and downs, and life in general.

Foreword

As CEO's, we are reminded daily of the critical role supply chain plays in driving value. Please consider:

Consumer loyalty is a by-product of our ability to get innovative product to market quickly and efficiently and to maintain the highest affordable levels of in-stock possible.

Shareholder satisfaction will follow the enterprise's actual success to achieve lean...and to focus not just on working capital but that capital that doesn't work.

Management teams thrive when an integrated approach to supply chain delivers great results through seamless execution of a long-range strategy linking your business objectives, systems, and logistics capabilities.

Supply chain excellence truly is at the core of our need to be lean, customer-driven organizations that collaborate for the highest and best use of capital.

So we are all fortunate that Rich Sherman, a truly distinguished international supply chain thought leader, has written this book. Unlike so many academic approaches, you will find his work to be refreshing, practical, insightful, and helpful in every respect. It is authentic, as it is grounded based on practices in real companies across a number of vertical businesses with conclusions that go far beyond mere theory.

It is also thought provoking.

After 40 years in the retail industry, having held senior positions in five different companies and board experience with ten companies with heavy reliance on supply chain success, Rich's work made me really think again. It raises some fresh questions that we must all answer:

What are the organizational mis-alignments that block improved performance? Are they cultural? Are they ego-driven?

Does your dashboard adequately address the right business drivers?

Do your rewards systems properly reinforce supply chain performance?

Are your execution shortfalls a result of poor planning? Poor forecasting? Poor operations? Poor vendor collaboration? Are structural or leadership changes in order?

Do your processes identify and address products that seldom move? Especially those that are highly seasonal and those with strong climatic variables?

What systems enhancements are necessary to achieve speed and accuracy at low cost?

With a focused change agenda, how much capital can be unleashed for higher returns and subsequent reinvestment?

Does your board membership include deep expertise in this discipline?

Sherman provides us with a valuable roadmap to help guide us, challenge us, and answer these and other questions that are certain to be raised. It is a read to be shared by your top team to revisit (or perhaps elevate) your supply chain strategy and create a fresh approach that can lead not just to improved performance but also to differentiation in your vertical space.

Wishing you success as you read, reflect, and react!

Marty Hanaka

Austin, TX

Mr. Hanaka is Chairman and CEO of Golfsmith International and formerly served as Chairman and CEO of The Sports Authority as well as COO and a Director of Staples, Inc. His retail career spans forty years. He also has served on the Boards of five public companies as well as numerous private boards and as a National Governor of the Boys and Girls Clubs of America.

Preface

Facing unprecedented global competition and economic volatility, companies must turn their attention to the strategic leverage and value locked in traditional supply chain management. The supply chain impacts virtually every financial metric included in the company's balance sheet and income statement, and supply chain operations excellence can create gains of more than a 35 percent increase in return on capital employed. According to APQC's Open Standards Research benchmarks, best-in-class companies outperform their median competitors by a 50 percent or more supply chain cost advantage across all industries—a gap that hasn't closed in more than 25 years. Transforming your supply chain management into a journey for continuous performance improvement and operations excellence is no longer an option; it's a strategic mandate.

For the past 30 years, I have been “infotaining” audiences around the world with presentations both informative and, at least I think, entertaining. Commonly, though, across all of the feedback I receive following a conference or symposium, is the comment that people felt a bit “fire hosed.” Despite the great content, fast pace, and a few chuckles, they wished that they had had more time to digest the material. So, I started breaking up my presentations into more digestible topics and scope, and kept the pace and chuckles, but I was less satisfied. The problem is that the intricacy of the complexity of supply chain management can't be captured in sound bites, or panel discussions, or even necessarily case studies. Certainly, the solution isn't a 40-minute case study concluded by “We had executive sponsorship.”

Surveying the literature, I found lots of great “how-to” books, textbooks, technical dissertations, and, quite frankly, pretty dry material on what I think is a very dynamic, exciting, and virtually endless career...supply chain management. It has also frustrated me that the gap between the Leaders and Laggards continues to be so large, especially when I know what the leaders do; I know what the technology is capable of; I know the difference is often corporate culture; and I know that the justification is there to garner executive sponsorship!

When Wiley approached me about writing a book on supply chain transformation, my first inclination was to call it “Why Do We Have to Wait for People to Die?” The story behind that, based on a meeting with Professor Jay Forrester, is in Chapter 1. Fortunately, Tim Burgard from Wiley convinced me otherwise. But I really wanted to write more than a “how-to” book. I hope that you will find this more of a “why to” book. It's not that people are unwilling to change or to improve their performance or to transform the organization. Most of them just don't know why. There is a level of transformation maturity in every company's culture that needs to evolve to influence behavior. Transformation is perceived as being a lot of work. The reality is that the Laggards work every bit as hard as the Leaders. I'd rather be working on winning than losing. Wouldn't you? The difference between Leaders and Laggards is output, not input.

As I guide you through the “why's” of transformation, my hope is that you will see, as I have experienced, that the transformation journey, building a House of Excellence, and living in Leader City can be satisfying work and any organization can take the journey. As Ron Johnson, CEO of J.C. Penney, stated upon his appointment, “The journey is the reward.” It's actually a lot of fun. Working for success, winning, growing, in a culture of learning and self-actualization is a heckuva lot more fun than just “showing up.”

So, for once, I can give a presentation that has no time limit. I can speak to as many supply chain challenges, processes, approaches, and solutions from end to end, no matter how complex, as I want to. And you can take as little or as much time as you want to digest the material. The pace, though, will be rhythmic; there will be stories (I am a storyteller); and there will be, I hope, a few chuckles. I love being in the supply chain...real work, real people.

Collaboration is the key to Leader City and I will share with you my experiences cross-functionally, working in and with sales and marketing, R&D, finance, procurement, production, and logistics. I will also share my experience across the channel with retailers, distributors, manufacturers, suppliers, and growers. Did you know the corn cost content of a box of cornflakes is about 10 cents on a dollar? It's like waking up one morning and finding out Santa Claus spent 10 times as much on the wrappings as he did on the gift inside.

You can't break down the silos. It's how work is organized to achieve business goals. But processes cross those silos, and you have to know the points of intersection for people to collaborate to ensure a synchronous flow of goods, information, cash, and capital from their source to consumption and back again. And you need to know and understand your processes and their contribution to your success to be able to evaluate outsourcing opportunities. I have seen the third-party services industry grow up, and I have had the opportunity to work with many of the leaders over the years.

My experience spans virtually every industry and nearly every continent and is just deep enough to understand that globalization is a game changer. I am going to share with you not just why every case study ends with the need for management commitment and support; I am going to share how to get it! Don't skip to Chapter 7!

The supply chain is a pipeline of opportunity, essential to civilization (we do feed, clothe, and shelter the world), an unlocked chest of free cash flow and return on invested capital—and it will never go away (Chapter 2). So I wanted to write this book so that everyone and anyone can and should be able to gain an understanding of the strategic value of supply chain, how it works, and its value to the organization and to global commerce, and why, for many, it is and will be a great career choice. This is not a textbook, but it can be the reason why students want to open their textbook. It should be why every executive will want to spend some time understanding the financial levers and fulcrums of supply chain management and operations. It should by why every supply chain professional will want to jump on that journey to supply chain transformation. And it's why everyone at the cocktail party should buy a drink for the supply chain professional to say “Thank you.” I told you it's a “why to” book! Enjoy! And send me a note when you “git ‘er done!”

Acknowledgments

It has been a long career journey with lots of people contributing to my growth and inspiring me. While the dedication is to my wife and family, I would be remiss not to acknowledge the inspiration of my mother for my “stage presence,” theatrical aptitude, and positive outlook...her optimism has moved me through the years.

When I was getting a bit full of myself for scoring in the 99th percentile in aptitude tests, my father pointed out to me that it meant that 1 percent of the population was as smart as or smarter than me. While I may not be a math major, I've learned there are a lot of smart people out there. If I were one in a million, there would be at least 6,000 or more as smart or smarter people than me in the world. We all have an aptitude for greatness in some aspect of our lives, and the really smart people are the ones who look for it in everyone they meet.

That came from my father's inspiring and guiding me to always keep learning and be humble in my learning. He always told me that regardless of the diversity in the people I would meet in my life, there was always something I could learn from each of them. And, as I have met many different people in my career, I have learned, been influenced by, and inspired by all of you past, present, and future. Thanks, Dad, for opening me up to the wonder of people.

I am particularly thankful to Robert Meshew, a Microsoft colleague, for introducing me to Michael Hugos, author of Essentials of Supply Chain Management (Wiley, 2011). Michael introduced me to Tim Burgard at John Wiley & Sons, who was amazingly supportive and helpful to me in preparing the book proposal and subsequently obtaining approval. And, of course, thanks goes to Stacey Rivera, development editor and Chris Gage, production editor, at Wiley, for the guidance and suggestions in developing the content.

Throughout this book, I will introduce many people who have influenced and inspired my thinking on supply chain management. I am particularly grateful to the academic community: the late Don Bowersox at MSU; Pat Daugherty at MSU; Dale Rogers at Rutgers; Glenn Richey and Alex Ellinger at Alabama; Bud LaLonde, Doug Lambert, and Martha Cooper at Ohio State; Ray Mundy and John Langley from Tennessee and now at Missouri and Penn State, respectively; Bob Novack, John Coyle, and Skip Grenoble at Penn State; Jack Crumbly at Tuskegee University; John White at Georgia Tech; the late Don Taylor at MSU; and George Wagenheim, Bixby Cooper, Keith Helferich, Nick Little, and Dave Closs at MSU; Mary Holcomb, Jim Foggin, Lloyd Rineheart, Rhonda Barton, Bric Wheeler, and Ted Stank at Tennessee; Tom Speh at Miami of Ohio; John Gaski at Notre Dame; Karl Manrodt at Georgia Southern; Yossi Sheffi, Peter Senge, and Larry Lapide at MIT; Arnie Maltz at ASU; Madhav Pappu at Texas A&M; Mike Hasler and Doug Morrice at Texas; and the many students, staff, and faculty at the many universities and colleges that have opened their classrooms and minds to me over the years.

From the many people I have worked for and with over the years, Mike Prusha at Burroughs and DEC; Dave Alcala at EXE and Pelion; Andre Martin and the late Jim Andress at IRI; Hank Phelps at DEC; and Bob Sabath at AT Kearney, Mercer, and now at Trissential have been great leaders, mentors, and influencers in my management thinking in particular. They inspired me to be a good leader and mentor to the people on my teams, at least based on how many of them still keep in touch, such as Rob Gilson, Ron Griggs, Dave Montgomery, Keri Schoonderwoerd, Patricia Bertoni, Sue Hoxie, Steve Goldsmith, Laura Twite, Erin Burr, and Kim Pacheco. Scotty and Katrine at Comedy Industries are real inspirations. They made every trade show a major success. I really want to acknowledge my co-workers. There are too many to name; but each of you have a special place in my heart and I thank you for the person you inspired me to be.

To the many business associates, clients, and pundits that I have worked with over the years, especially Gus Santelli, Doug MacLean, and the late Mike Bonelli from Lead Time Technology whose work on end-to-end supply chain decision support has been truly inspiring. Thanks to Jeremy Geiger, founder of Retailigence, who has given me the opportunity to participate in a game-changing new market segment, data as a service and Big Data. Also, special thanks to the late John Fontanella whom I worked with at Digital, Microsoft, Skyway, and later when I was a client of AMR. John was a great colleague and thought leader. Certainly, Bob Ferrari, Greg Aimi, John Bermudez, Roddy Martin, Simon Jacobson, Michael Di Pietro, Rob Cerulle, Bob Saltz, Tony Friscia, Kevin Doyle, Dwight Klappich, and Jeff Woods at AMR/Gartner; Steve Banker, Andy Chatha, Adrian Gonzalez, Greg Gorbach, Ralph Rio, and Dick Slanski at ARC; Ed Toben at Colgate; Nick Lahowchic at Colgate, BD, and the Limited; Nancy Haslip at DEC and CSCMP; Joe Andraski at Nabisco and VICS; Rick Blasgen at Nabisco, Kraft, and CSCMP; Hoon Chung, Ed Sitarski, and Brian Nickerson at Numetrix; my good friend and colleague in thought, Ron Richter; Rich Cialabrini, Rob Getz, and Tom Alioto at “The Band”; Michael Goodman and Bill Latshaw at Innovation Associates; John Perry, Tom Costello, and Mike Pajakowski at Burroughs; Tom Sharpe at WERC; Dave Simbari at IMI and Optum; Jeff Langley at Fletcher Challenge, EXE, and KPMG; Trevor Barrows at EXE; Nari Viswanathan at Aberdeen and Steelwedge; Joe Francis, Melinda Spring, and Caspar Hunsche at the Supply Chain Council; Kate Vitasek at Supply Chain Visions and University of Tennessee; Mike Massetti at AMD; Mike Gray at Dell, Penn State, and Oliver Wight; Lou Boudreau, Ralph Drayer, and Tom Ford at P&G; Ted Rybeck, Ann Grackin, and Jane Biddle at Benchmarking Partners; Dave Gleditsch at Pelion; Chris Sellers, Mike Cassettari, and Matt Johnson at Syncra; Tom Brunnell at Avicon; Ed Nieuwenhuis at Meijer; Bob Parker and Simon Ellis at IDC Manufacturing Insights; John Faldetta at Gillette; Marty Hanaka from Staples, The Sports Authority, and Golfsmith/Golf Town for the insight into what drives CEOs; my former roommates at ND, the late Mike Zikas for his inspiration and great friendship, Mike Murphy for conservative insights, and Paul Michaels for consumer marketing insights. Dave Anderson at TBS and Andersen Consulting; the late Bill Copacino at Andersen Consulting; Paul Fulchino at Mercer; Jim Morehouse and Mike Moriarty at A.T. Kearney, especially for “exacerbated”; Elcio Graccia at Integrare; Narayan Laksham at Ultriva; Ann Drake at DSC Logistics, Cliff Otto at CHEP and Saddle Creek; Dave Malenfant at Alcon; Enrique Carillo at IBM and Wipro; Ed Lange at Burroughs, Andersen Consulting and SAP; and many, many others, thank you for helping me shape my thoughts on this wonderful industry.

Chapter 1

Change Is Inevitable, Growth Is Optional

Charles Dickens may have been the first supply chain industry analyst. Back in the 1800s, he wrote: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair....” Sound like another day in the life of a supply chain professional? Nowhere in industry is there a profession that has so much volatility, variability, and certain uncertainty. And nowhere in a company is an organizational structure (you may say function) that has as many levers on free cash flow, return on invested capital, and shareholder value. Quite simply, if you can't ship it, you can't bill it. Create, Market, and Sell all you want; but if you can't Source, Make, and Deliver it, it will never be capital or revenue to Invest, Measure, and Value. And the total cost it delivers (landed) determines its profitability.