This is a series on Supply Chain Basics looking at the discipline from the Society of Operations Management perspective. Supply chain is also essential to project management as PMs are typically trained in world class contracting. For example, my Masters program had several courses involving contracting and the Defense Acquisition Workforce Improvement Act, DAWIA, certification highlights the combination of project management and supply chain. In this post, we will explore Supply Chain and Corporate Strategy adding some additional support as well.
Aligning Supply Chain and Corporate Strategies
Regardless of the supply chain design success depends on the supply chain's alignment with the corporate strategy. The supply chain is constructed with resources such as organizations, people, processes, and information that must be aligned to the strategies. After alignment other essential factors of the chain become a focus such as infrastructure which gives the resources the power to act synergistically in order to achieve competitive objectives under the strategies.
Strategic Planning is the process by which customer value and financial value is achieve in the following areas:
Organizational design refers to the structural relationships in an organization between the elements. Design includes the nature and arrangement of elements to include communications, authority and responsibilities, financial management, and job descriptions. An effective supply chain necessitates development of the organization through design in order to support the supply chain's alignment to corporate strategy. NOTE: In the leadership process post, I discuss organizational design as a function of the leadership process.
According to APICS, there is a four stage process to organizational design. The first stage focuses on decisions and matters related to supply and distribution on an ad hoc basis. The second stage is centered on functional lines within the business acting as stove pipes or silos of self interest. The third stage expands to cross functional teams that measure and improve business wide processes usually emerging from second stage continuous improvement efforts within functional areas. The fourth stage begins integrative operations forming supply partnerships or customer alliances.
In short, organizational design integrates all the elements and progresses from a highly functional organization to a process orientation.
Supply Chain processes have transitioned away from functional operational processes like buying, planning, etc... towards business excellence or world class operations that involve complex information exchanges and a network of relationships. Effective supply chain management means mastery of the interconnected processes. NOTE: Complex information exchanges in the information operations realm are known as Information Exchange Requirements, IERs. IERs can be either static or dynamic. Static IERs usually relate to stable metadata needs that rarely change. Dynamic IERs occur when the metadata needs change regularly which is more common in emergent conditions and when uncertainty is high. The task of supply chain or business analyst and systems analyst is to know what metadata is available and how to source the information in short order.
In summary, key supply chain processes are emplaced and function at a competitive velocity.
Systems and Technologies points to the information systems and software technologies that makes complex supply chain operations possible. Technologies such as barcodes, RFID tags, GPS, and global networks track goods in motion and exchange information critical to corporate and supply chain strategies. However, the systems and technologies are not without challenges that stem from poor system designs, incompatible protocols and languages, and arcane technologies still in use. Even character sets can pose huge obstacles to overcome. Perhaps the greatest challenge are humans who erect barriers and reject new technologies or technology as a whole. Managing the human aspect requires patience and training. After all, processes are designed and managed by human beings. The purpose of systems and technologies is to facilitate the supply chain information exchanges at world class competitive velocities.
Supply chain excellence is reliant upon sage implementation of systems and technologies that not only promote world class operations but also strategic alignment. In reality, the network is very real. The supply chain's infrastructure is what is really virtual as a set of cooperating entities. NOTE: Many companies tend to develop model financial performance statements, pro forma, then seek to force fit operations and systems to that financial model. While they have some level of success at this approach, the operations and systems seem to suffer often with processes out-of-control and/or a hodge-podge of systems. Under these conditions the organizational focus transitions to constant trimming, cutting, and reduction of costs to force fit the financial models. There is often a rush to market that also leaves the operations and systems in disarray. A tale-tale sign of this kind of activity is the presence of expeditors which are often labeled tiger teams, firefighters, and project managers. Not all tiger teams and project managers are expeditors. However, a vast majority of the expeditors, if not all, are seemingly project managers today.
APICS alludes to this combination of operations and systems in their training. They discuss bringing processes under control and aligning systems in support of the strategies. This is putting strategy-to-task. With the right designs and tools, an organization can move and adapt swiftly to emergent conditions or adjust efficiently to new financial models; without major organizational redesigns or disruptions to processes and operations that are being forced fit into financial models; without expeditor-PMs pulling together the disparate mess of hodge-podge systems and poor processes. I have highlighted an approach in my posts on adaptive organizations that leverages systems and operations in favor of emergent conditions and adapts quickly reducing organizational latencies. Operations Management Series Posts.
In conclusion, technology is sufficiently advanced to tie all the processes together into a collaborative and transparent supply chain based on common information and data.
People are the ones who effect a supply chain despite the lack of a supply chain office or clear supply chain management structure. Supply chain management requires training and education in supply chain thinking vice functional thinking. Supply chain duties tend to be collateral duties rather than primary duties as it is an application of thought rather than supply chain tasks. Supply chain means leadership through out the organization and chain by having the right people, in the right positions, throughout the chain. Supply Chain managers act as diplomats, go-betweens, and inspirational leaders keeping the supply chain together and effective. Supply chain managers must be holistically oriented.
One of the challenges in supply chain talent development, especially in large organizations, are misaligned human resources practices and policies. Supply chain management and responsibility must begin with executive leadership who champion the discipline.
A supply chain professional must:
Supply Chain Metrics are the ratios, generally speaking, that baseline then indicate out-of-limits performance of the objectives. There are many ways of measuring performance and since the supply chain is a flow and has a velocity many of the metrics are temporally based. ie items per unit of time. A checklist can also provide performance information such as a T1 line is installed since a T1 transmits so many bytes per second verses a frame relay that transmits at a lower level of performance.
In short, measures are based on a relevant standard and strengths in order to assess performance then amend weaknesses.
Overall, the supply chain and corporate strategies all conform to ethics, regulations, taxes, and laws. As well as licensing and security policies.
Strategic Planning is the process by which customer value and financial value is achieve in the following areas:
- Organizational design
- Supply Chain processes
- Systems and Technology
- People
- Supply chain metrics
 |
| Figure 1: Aligning Corporate and Supply Chain Strategies. Source: APICS Supply Chain Fundamentals, Module 1, p 1-78 |
According to APICS, there is a four stage process to organizational design. The first stage focuses on decisions and matters related to supply and distribution on an ad hoc basis. The second stage is centered on functional lines within the business acting as stove pipes or silos of self interest. The third stage expands to cross functional teams that measure and improve business wide processes usually emerging from second stage continuous improvement efforts within functional areas. The fourth stage begins integrative operations forming supply partnerships or customer alliances.
In short, organizational design integrates all the elements and progresses from a highly functional organization to a process orientation.
Supply Chain processes have transitioned away from functional operational processes like buying, planning, etc... towards business excellence or world class operations that involve complex information exchanges and a network of relationships. Effective supply chain management means mastery of the interconnected processes. NOTE: Complex information exchanges in the information operations realm are known as Information Exchange Requirements, IERs. IERs can be either static or dynamic. Static IERs usually relate to stable metadata needs that rarely change. Dynamic IERs occur when the metadata needs change regularly which is more common in emergent conditions and when uncertainty is high. The task of supply chain or business analyst and systems analyst is to know what metadata is available and how to source the information in short order.
In summary, key supply chain processes are emplaced and function at a competitive velocity.
Systems and Technologies points to the information systems and software technologies that makes complex supply chain operations possible. Technologies such as barcodes, RFID tags, GPS, and global networks track goods in motion and exchange information critical to corporate and supply chain strategies. However, the systems and technologies are not without challenges that stem from poor system designs, incompatible protocols and languages, and arcane technologies still in use. Even character sets can pose huge obstacles to overcome. Perhaps the greatest challenge are humans who erect barriers and reject new technologies or technology as a whole. Managing the human aspect requires patience and training. After all, processes are designed and managed by human beings. The purpose of systems and technologies is to facilitate the supply chain information exchanges at world class competitive velocities.
Supply chain excellence is reliant upon sage implementation of systems and technologies that not only promote world class operations but also strategic alignment. In reality, the network is very real. The supply chain's infrastructure is what is really virtual as a set of cooperating entities. NOTE: Many companies tend to develop model financial performance statements, pro forma, then seek to force fit operations and systems to that financial model. While they have some level of success at this approach, the operations and systems seem to suffer often with processes out-of-control and/or a hodge-podge of systems. Under these conditions the organizational focus transitions to constant trimming, cutting, and reduction of costs to force fit the financial models. There is often a rush to market that also leaves the operations and systems in disarray. A tale-tale sign of this kind of activity is the presence of expeditors which are often labeled tiger teams, firefighters, and project managers. Not all tiger teams and project managers are expeditors. However, a vast majority of the expeditors, if not all, are seemingly project managers today.
APICS alludes to this combination of operations and systems in their training. They discuss bringing processes under control and aligning systems in support of the strategies. This is putting strategy-to-task. With the right designs and tools, an organization can move and adapt swiftly to emergent conditions or adjust efficiently to new financial models; without major organizational redesigns or disruptions to processes and operations that are being forced fit into financial models; without expeditor-PMs pulling together the disparate mess of hodge-podge systems and poor processes. I have highlighted an approach in my posts on adaptive organizations that leverages systems and operations in favor of emergent conditions and adapts quickly reducing organizational latencies. Operations Management Series Posts.
In conclusion, technology is sufficiently advanced to tie all the processes together into a collaborative and transparent supply chain based on common information and data.
People are the ones who effect a supply chain despite the lack of a supply chain office or clear supply chain management structure. Supply chain management requires training and education in supply chain thinking vice functional thinking. Supply chain duties tend to be collateral duties rather than primary duties as it is an application of thought rather than supply chain tasks. Supply chain means leadership through out the organization and chain by having the right people, in the right positions, throughout the chain. Supply Chain managers act as diplomats, go-betweens, and inspirational leaders keeping the supply chain together and effective. Supply chain managers must be holistically oriented.
One of the challenges in supply chain talent development, especially in large organizations, are misaligned human resources practices and policies. Supply chain management and responsibility must begin with executive leadership who champion the discipline.
A supply chain professional must:
- View the supply chain as a continuous linked process.
- Manage relationships among team members and between teams to coordinate different temperaments and visions
- Understand the corporate business model and its alignment with the supply chain
- Manage cost skillfully throughout the entire chain
- Identify and buy or develop technologies that share information with the chain in real time.
Supply Chain Metrics are the ratios, generally speaking, that baseline then indicate out-of-limits performance of the objectives. There are many ways of measuring performance and since the supply chain is a flow and has a velocity many of the metrics are temporally based. ie items per unit of time. A checklist can also provide performance information such as a T1 line is installed since a T1 transmits so many bytes per second verses a frame relay that transmits at a lower level of performance.
In short, measures are based on a relevant standard and strengths in order to assess performance then amend weaknesses.
Overall, the supply chain and corporate strategies all conform to ethics, regulations, taxes, and laws. As well as licensing and security policies.
Reference:
(2011). APICS Certified Supply Chain Professional Learning System. (2011 ed.). Version 2.2.
(2011). APICS Certified Supply Chain Professional Learning System. (2011 ed.). Version 2.2.
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