We are chairing a discussion panel at the upcoming Supply Chain Asia Forum in Singapore on July 9 and 10 (http://www.supplychainasia.com ) that will focus on the topic: "Supply Chain Excellence: The most misquoted concept in SCM?" It is an intriguing topic, indeed. But is the issue misquoted or misunderstood, due to lack of clarity?
There is, of course, a raft of ways to define what one means by any given term, including this "Supply Chain Excellence".
Certainly, in our professional work, we spend a lot of time clarifying what we mean by certain terms, performance measures or concepts. Also, for another example, we have written here in the past about the achievements of the Supply Chain Council in defining their Supply Chain Operations Reference (SCOR) Model, which is very specific about their views of excellence in processes and measures. There are many such references available to all of us.
The one reference that we use as the central part of our practice is the Oliver Wight Class A Checklist for Business Excellence, Sixth Edition. In this, the many aspects of how excellent organisations operate are very clearly and concisely documented in a practical format for people to use as a reference. For example, what are the essential elements of an excellent Sales and Operations Planning process? How do we know when we are truly "excellent"?
The Checklist documents the many elements of the Integrated Business Model, thus covering the best means of managing the following processes:
1. managing the strategic planning process;
2. managing and leading people;
3. driving business improvement;
4. integrated business management (sales & operations planning);
5. managing products and services;
6. managing demand;
7. managing the supply chain;
8. managing internal supply;
9. managing external supply.
We will write more about "excellence" in each of these nine areas next week, but we acknowledge that, on seeing this list of chapters in the Checklist, a likely reaction of many will be that the scope is more broad than just supply chain management. So, that takes us back to definitions and being clear, doesn't it?
We would counter that the characteristics of an excellent supply chain depends on what the organisation needs to execute its strategy. For example, are you striving to serve one or two particular segments of a customer/market base? Or, is the strategy ill defined or lacking focus and you are still trying to be all things to all people? In this way, managing your strategic planning process certainly has a very direct effect on the notion of Supply Chain Excellence.
One key basis for strategy, the appropriate value proposition for your organisation, as presented in The Discipline of Market Leaders by Treacy and Wiersema, has everything to do with defining what would be supply chain excellence for an organisation and its relationship with customers. What are you intending to do for and what do you promise to your customers with respect to products and services? Are they looking to you for lowest price and they are willing to allow extra time to get that or are they actually thinking that they are paying premium price because quick response is important to them? Are you clear in your proposition to them? Either of those approaches can be "excellent" if they are honouring your promise.
Decisions you make about your value proposition have an obvious effect on the sort of supply chain you need and how you deliver on your promises. Do you intend for customers to say about you, "Great prices and quality" as opposed to "Premium priced, but worth it"? The former will dictate one particular means of supply chain execution (perhaps sound, lean execution with no options offered) as compared to the latter (probably with latitude to offer more customised responses).
So, back to our initial question about supply chain excellence and whether or not it is a greatly misquoted concept. We see that basic notion of quoting or misquoting depends on clarity of thought.
Indeed, as Treacy and Wiersema said, the progress of strategic planning in the past couple of decades, including business process re-engineering and making things work better is about how to run a good race. The discipline in determining your value proposition is about choosing which race to run.
As we said above, next week we will elaborate on what we think "excellence" means as per the Oliver Wight Checklist for Business Excellence.
Weekly Link is co-ordinated by Barry Elliott and Chris Catto-Smith CMC of the Institute of Management Consultants Thailand. It is intended to be an interactive forum for industry professionals; we welcome all input, questions, feedback and news at: BElliott@OliverWight-AP.com, cattoc@cmcthailand.org
Source by bangkokpost.com
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