Responsive Supply Chain: A Competitive Strategy in a Networked Economy

Transcription

1 Responsive Supply Chain: A Competitive Strategy in a Networked Economy Angappa Gunasekaran Department of Decision and Information Sciences University of Massachusetts, North Dartmouth, MA , USA agunasekaran@umassd.edu

2 Background for the Research Global market and networked economy Agile manufacturing (AM) and supply chain management (SCM) AM is about casting off old ways of doing things SCM is an integrated approach to value chain SCM Vs. AM --> Responsive supply chain (RSC) Global Market

3 Purpose of the Research What is RSC? Previous research on AM & SCM Some case examples A framework for developing RSC Some recommendations to achieve RSC Future operations strategy Conclusions Innovation & Human Intelligence!!

4 What is Responsive Supply Chain? A set of business processes that is capable of creating wealth in a competitive environment by reacting quickly and effectively to changing market requirements (as a strategy) It needs to meet changing market requirements by developing a suitable network of collaborative firms based on core-competencies, and leveraging people and information as quickly as possible and that too in a most cost effective manner (as a set of tactics) Flexibility and Responsiveness

5 Definition of RSC Supply Chain (collaborative network of partners) Information & Knowledge Management Resulting in Virtual Enterprise Leading to: Flexibility, Speed and Cost Effective E-Commerce

6 Network of Partnering Firms Information Technology and Systems Responsive Supply Chain Responsive and Flexibility Knowledge Management Responsive Supply Chain (RSC) Integration!!

7 Previous Research on SCM and AM Strategic Planning Long-term business and operational policies Virtual Enterprise/Organization Partnership based on core competencies Knowledge and Information Technology Management Electronic Commerce and ERP Systems Training and education Knowledge and Collaboration

8 Review of Selected Literature on RSC and AM Classification Criteria References RSC/AM - Strategies, Techniques, and Technologies Strategic Planning Abair (1997), Forsythe and Ashby (1996), Pellew (1996), Williams et al. (2002), Rich and Haines (1997), Kusiak and He (1997), Noonan and Wallace (2004), Weston (1998), Noori and Mavaddat (1998), Holweg and Miemczyk (2002, 2003), Ritchie and Brindley (2002), Gunasekaran (1998, 1999), Yusuf (1999), Fraret et al. (2001), Stratton and Warburton (2003), Waller (2004), Wisner (2003), Chiou et al. (2002), van Hoek (2000), Hoffman and Mehra (2000) Multidisciplinary teams, Network of partnering firms, IT and KM systems, Self-directed teams, Top management support, Logistics chain, Collaborative relationship with suppliers, Flexible software for agility, Development of contract manufacturers, Concurrent Engineering, Enterprise Information Systems, Customersupplier relationship strategies, Postponement strategy, Distributed enterprise, Employee empowerment, TRIZ, TOC, BTO-SCM Virtual Enterprise/Organization Abair (1995), Gunasekaran (1998, 1999), Mills (1995), Gupta et al. (1995), Mehdat and Rook (1997), Manrodt and Vitasek (2004), Hessney (1997), Monplaisir et al. (1997), Clarke (1998), Krikke et al. (2003), Offodile and Abdel-Malek (2002), Sarkis and Sundarraj (2002), Martinez et al. (2001) Network of suppliers, Core competencies, Strategic alliances, Education and training, Communication, IT such as ERP, Communication for global supply chain, Managing processes, Partnership development, Streamlined logistics network, Empowered teams, Legal protection, Virtual logistics, Virtual manufacturing, Computer and communication technologies, Organizational structure and relationship Knowledge and Information Technology Management Bocks (1995), Rahman (2004), Abair (1995), Forsythe and Ashby (1996), Subba Rao (2002), Wilding (1998), Kurnia and Johnston (2003), Parkinson (1999), McAfee et al. (2002), Daugherty et al. (2002), Al-Mashari and Zairi (2000), Coronado et al. (2002), Sanders and Premus (2002), Stefansson (2002) Intelligent sensing and decision-making systems, CAD/CAM, MRPII, EDI, Internet, WWW, E- Commerce, RFID, Data Management Framework, ECR, Human resource management, IT/IS on reverse logistics, Choice of IT/IS, CRM and ERP, AGVS, and Robots

9 Previous Research on AM & SCM The major enablers of AM & SCM: SCM facilitates transparency and alignment Virtual supply chains Sharing information Process integration Timely and accurate information flow along the value chain Proactive Management

10 Previous Research on AM & SCM Postponement and information decoupling Collaboration -----> Vertical Integration Partnership/supplier development Physically distributed operations Enterprise integration and management with IT/IS Partnership & E-Integration

11 Comparison of Lean/SCM and AM Objectives and Major Determinants Lean/Supply Chain Agility RSC Objectives/Goals Reduced costs, moderate speed, and flexibility Increased speed and flexibility. Cost is not a major criteria Reduced costs, increased speed and flexibility Strategic Planning Fewer suppliers, outsourcing, Information technology Core competencies, Global outsourcing, Virtual enterprises Supply management, Strategic alliances, Virtual enterprises, Global outsourcing, and IT Organizational Structure Supplier development Virtual enterprise, partnership formation based on core competencies Virtual Enterprise, Supply chain integration, and information technology Knowledge and Information Technology Supply chain integration, knowledge workers Agile and knowledgeable workforce, Enterprise resource planning systems Training and education to operate in a global environment, ERP systems SCM & AM

12 Some Case Examples RSC ---> (i) sourcing, (ii) manufacturing, and (iii) delivery External factors <-----> SC agility Logistics (3PL) and E-Commerce Real-time information exchange Co-operatıon

13 CEMEX (Largest producer of cement in the US) Internet-based solutions for ERP EDI, MRP and ERP, and CRM --->B2B and B2C Reduce cost and improve customer service level Accurate forecasting Vendors systems for SCM Strong distribution channels Global sourcing JIT deliveries Implementation

14 AT&T Electronic Consumer Products (Number one in market share for its core product lines) Focus on core competency areas Improve reliability of SC Consolidating supplier-base Co-located manufacturing & distribution processes IT strategy to reduce the number of distribution centers Information & knowledge sharing at all levels Suitable performance measures and metrics Consolıdatıon of Supplıer-Base

15 Libbey, Inc. (Leading supplier of glass tableware in North America) Focuses on ERP Big bang approach for business process reengineering APS (Advanced Planning and Scheduling) Supply Chain/Logistics Responsiveness Strategic alliances by joint ventures and designing new products Extensive sales and distribution network Improved flexibility and responsiveness Knowledge Sharing

16 Nissan (producers of cars) and Wedgwood (porcelain and luxury ceramics in the US) Web-based solutions for ERP Customer-centric business model Demand chain to integrate production facilities and dealers Supplier-base Cross-functional teams Modularization Quality management Collaborative network linking production facilities Pull system Benchmarking for structural changes E-commerce applications Implementation

17 Summary of Case Experiences Company Details Strategies Technologies CEMEX Largest cement producer, Better customer service and reduce costs, improved profitability, higher marker share, Greater responsiveness Global supply chain, B2B, B2C, ERP, CRM, Customer demand forecast, JIT, ERM, E-Commerce, Internet-based solutions, EDI, MRP, Transport systems, AT&T Electronic Consumer Products Produces consumer electronics, Number 1 in market share for its core product lines, Highly positive consumer brand, Core competence in manufacturing Supply chain reliability, flexibility/responsiveness, costs and assets utilization, Consolidated supplier base and reduced number of distribution centers, co-located manufacturing and distribution operations Electronic execution of transactions, electronic sharing or exchange of information, electronic collaboration on strategic tactical and operational planning. Libbey Inc. Leading supplier of glass tableware in North America and a leading provider of tabletop products to the food service industry Business process reengineering, Big bang approach using an integrated systems, JD Edwards, Enterprise resource planning (ERP), Advanced Planning and Scheduling (APS), and Supply Chain/Logistics (SCE) Nissan (North America) Producers of cars (Nissan and Infiniti) Plans to enhance the ability of its Web customers, Guaranteed delivery. Web-based solution, Customercentric business model, resulting in higher sales, higher customer satisfaction, Automotive demand chain, Collaborative network linking production facilities with dealerships. ERP, Web-based solutions, Enterprise profit optimization (EPO) solutions, Integrated application suites. Wedgwood Porcelain maker, luxury ceramics Reduce inventory, cut supply cycle time, and improve customer relations, and cut costs, Pull model, Structural change, Benchmarking, Best people on the team, Multidisciplinary teams, new performance indicators. Information Technology/Systems Learning Organization!

18 A Framework for developing RSC Strategic Planning Virtual Enterprise/Organization Knowledge and Information Technology Management A Model for RSC

19 Virtual Enterprise Global Partnership, Core Competencies, Temporary Alliances Performance Measures Outcome Multiple Competitive Performance Objectives, Strategic Alliances, Proactive Approach, Top Management Support Responsive Supply Chain Increased Speed, Flexibility, and Reduced Cost Strategic Planning Metrics Training and Education, Learning Organization, Information Technology, Flexible Workforce Knowledge and Information Technology Management A Framework for the Development of RSC Change of Attıutude and Culture?

20 RSC <-- Strategic Planning Corporate and Business strategies Global outsourcing Strategic alliances Organizational, Technology and People Continuous improvement Alıgnments

21 RSC <-- Virtual Enterprise/Organization Partnership based on core competencies Distributed network of partners Integration by Information Technologies Learning organization Co-operate to Compete!!

22 RSC <-- Knowledge and Information Technology Management Automation and Information Technology Strategy formulation, tactical management, operations control E-Commerce (B2B, B2C and B2A),EDI, ERP, and CRM Education and training Education & Training

23 Some Recommendations to Achieve RSC Optimal architecture for supply chain Integration of virtual supply chain using ERP Criteria for the selection of partners Performance measures and metrics in RSC Cost management in RSC Quality Management in RSC Opportunities

24 Future Operations Strategy Economic boom followed by technological innovation Demand management/creation New and innovative products/process Risk Assessment Success!

25 Future Operations Strategy Innovation by collaboration Collaborative network of firms Environmental and safety issues Educate customers Radical Change?

26 Conclusions Responsive Supply Chain Management Collaborative network of firms Internet & WWW Enterprise Resource Planning Customer Relationship Management JIT and BPR Some future operations strategies It is time for more changes!