Supply Chain Excellence

Overview

"If you are involved in supply chain management, read this book!"

-- Paul Harmon, Executive Editor, Business Process Trends

The Supply Chain Council (SCC) is a nonprofit organization dedicated to developing best practices in supply chain management. Now in a newly revised, second edition, Supply Chain Excellence is the first and only book on the DCOR, CCOR, and SCOR Models. It gives professionals implementing new supply chain projects a clear, step-by-step guide to adopting the accepted and proven methodologies developed by the SCC. This book shows readers how they can:

• align strategy, material, workflow, and information

• conduct the proper competitive analysis to define business opportunity

• establish the metrics that will determine the project's level of success

• gain internal support by educating employees and executives

Complete with new case studies, a Value Chain Excellence project roadmap, and the addition of the DCOR and CCOR process frameworks, the second edition of Supply Chain Excellence gives readers all the practical tools they need, whether they're trying to improve the performance of an existing supply chain system or implement a new one.

About the Author

Peter Bolstorff (Minneapolis, MN) is President and CEO of SCE Limited, which supports "do-it-yourself" supply chain performance through education, coaching, and process expertise.

Robert Rosenbaum (Cleveland, OH) is an award-winning journalist and the publishing director of Penton Media's American Machinist and Welding magazines. Previously he was the publisher and editorial director of Supply Chain Technology News.

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Review Quotes

"If you are involved in supply chain management, read this book!"

-- Paul Harmon, Executive Editor, Business Process Trends

"Supply Chain Excellence is a superb offering for organizations encountering their first supply chain difficulties, or for use as a detailed, practical how-to manual for properly managing a supply chain. It provides vaulable guidance for forming a project team, gaining top management commitement, conducting environmental analyses and managing a critical-to-quality, strategically driven project with the potential for huge payoffs.? --Quality Progress

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Excerpt

Building Organizational Support for Supply Chain Improvement

Planting the Seeds for Organizational Change: Educate for Support

Brian Dowell called out of the blue after getting my name from a Google search; his keywords included SCOR, Supply Chain, Metrics, and Value Chain. He was looking for some direction for his company, Fowlers Inc., and had enough motivation within the company to justify a visit.

We showed up a week later, and Brian, the company's chief operating officer, gave us a warm greeting. His introductory overview demonstrated Fowlers to be a well-run manufacturing conglomerate with the seeds of a supply chain improvement already in place.

The action plan had been developed at the division level by David Able, vice president of operations in the technology products group—one of the four operating units. He had pieced it together with just a little background in supply chain management and a whole lot of operating pain. His efforts had been encouraged by his boss, the division president, who had brought the strategy to the attention of other executives in the company.

They had become an informal "gang? with a common feeling that, although David's ideas would solve some short-term issues, there had to be a way to solve the company's supply chain problems at a more strategic level. It didn't take much prodding to get this gang to start sharing their thoughts.

"Our products are good for a week, maybe ten days, in the store,? said Doris Early, president of the food products group. "We've got to move a lot of product around with a lot of speed. And if regulators were to bring in the label from something we processed six months ago, we need to be able to identify the plant, the line, the day, and the names of everyone on the shift who produced it.?

"Our shelf life is short, but not that short,? added Martha Tekitch, president of the technology products group. "We also have some other things in common with the food group; we buy a lot of commodities. The prices we pay change day-to-day, but our customers won't let us be quite that flexible. There's some seasonality in our sales, and many new products that are harder to forecast—all of which make it difficult to maintain consistent margins.? She added, "Much of the cost of our products is locked in during the product design phase. In hindsight, many times we start out inefficient because the supply chain design evolved as an afterthought.? Joe Farelong, president of the durable products group, jumped in: "On a more tactical note, we have tried to tackle the performance issues through our continuous improvement program. Four years ago, we invested in a Lean Six Sigma program that has trained hundreds of black, green, and yellow belts. We have been pretty disciplined as an executive team managing the project list. We started out fast and furious with most projects aimed at our manufacturing plants. In the past year, it seems we started to run out of steam; most of our projects now are aimed at what seem to be smaller and smaller scopes and ultimate pay backs. But we still feel like there are big issues to address. So how do we identify a more strategic list? How do we integrate Supply Chain Operations Reference (SCOR) with Lean Six Sigma??

Last, Sally Vesting, the Chief Executive Officer, added, "In our strategic planning session last month we—the business presidents and I—theorized which supply chain functions could or should be centralized corporately and the level of benefit that could be achieved. It raised the question: How should we organize ourselves for the future??

It all came together as they spoke: many products that have short shelf life and short life cycles; disconnected supply chain and product development; price-sensitive customers sold through various and sophisticated channels with volatility on both ends—demand and supply; a continuous improvement program that needs rejuvenating; and an organization that needed the right focus.

The executives described how a chosen leader, David Able, had outlined a strategy and its main components. They then assigned it to their direct reports in other divisions to execute.

Brian wasn't quite ready to admit this at our first meeting, but it was clear what happened: The managers at the next level down thought they'd just been briefed on the latest program-of-the-month and did very little with the strategy. To placate the executives, they did take some small steps: identifying a few projects, assigning some green belts, and improving a metric here or there—generally at the expense of others. But after three months, Brian pushed Joe, Martha, and Doris to join him in looking for an outside perspective. "We can't be the only ones with this dilemma,? he said.

Without realizing it, Brian had already taken a few important steps to ensure a successful approach. Selling supply chain management to an organization is tough. It's an educational sell to everyone involved. Not only is the reality of an integrated supply chain complex; everyone has his or her own pre-existing ideas of what supply chains are all about, how they fit in with operational strategy, and what to do to fix them.

SCOR, as an industry standard, makes the sell easier because it has gained credibility from a long list of successful case studies, but the model can't sell itself, and it can't teach people who aren't ready to learn. That's why any SCOR project will depend on four key roles in the education process. These are the evangelist, an active executive sponsor, the core members of an executive steering team, and the analytical design team. Without these, you can't hope for a project's success.

The Evangelist

As is the case with any successful SCOR application, the people who brought SCOR to Fowlers started by educating the organization to support the effort. Their first step was to develop an evangelist. This is the person who is best able to learn the SCOR model; who can sell it to upper management; who has the experience to pilot a project and gain early results; and who can become the executive-level project manager for spreading it throughout the business. If nobody steps up to this role, then a SCOR-based project probably cannot succeed.

The evangelist may be self-selected or appointed from above, and his or her first role in this position is typically as project manager of the first SCOR project.

At Fowlers, David Able, vice president of operations in the technology products group, placed himself into the role of evangelist based on his interest in supply chain integration, his diverse background, and his reputation as an effective, influential leader. He was readily confirmed by Brian Dowell, the company's chief operating officer and the man who would quickly assume another important role as the executive sponsor (Figure 2-1).

The Evangelist's Resume

As the appointed evangelist, David Able had a portfolio of experiences that would help create general understanding of the relationship between financial performance and the central factors of organization, process, people, and technology. Over the course of 15 years at the company, he had demonstrated knowledge of "how things work? and built a strong foundation of leadership roles. He had participated on a large-scale re-engineering effort a few years before, so he had seen the way an enterprise project works. Those who worked for him also confirmed such important qualities as the ability to teach, communicate, resolve conflict, and add humor at just the right time.

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Table of Contents

Contents

Preface xi

Introduction xiii

Acknowledgments xxiii

Chapter 1:

About the Supply Chain Operations

Reference Model 1

Chapter 2:

Building Organizational Support for Supply

Chain Improvement 11

Phase 1: Discover the Opportunity

Chapter 3:

Week One: Planning and Organizing 28

Phase II: Analyze Basis of Competition

Chapter 4:

Week Two: Project Kickoff and SCOR Metrics 46

Chapter 5:

Week Three: Benchmarks, Competitive Requirements,

and Steering Team Review Number One 66

Chapter 6:

Week Four: Scorecards 75

Phase III: Design Material Flow

Chapter 7:

Week Five: Initiating AS IS Material Flow and

Steering Team Review Number Two 85

Chapter 8:

Week Six: The Planning Process Matrix, Thread Diagram,

and Metric Defect Analysis 98

Chapter 9:

Week Seven: Material Flow Disconnect Analysis

and Steering Team Review Number Three 111

Chapter 10:

Week Eight: The Project Portfolio 129

Chapter 11:

Week Nine: Opportunity Analysis and

Steering Team Review Number Four 149

Chapter 12:

Week Ten: TO BE Material Flow 158

Chapter 13:

Week Eleven: Quick-Hit Plans, Steering Team

Review Number Five, and Initiating the Work and

Information Flow Analysis 166

Phase IV: Work and Information Flow

Analysis and Design

Chapter 14:

Week Twelve: The Staple Yourself Interview 174

Chapter 15:

Week Thirteen: The AS IS Process, Understanding Functional

Responsibility, and Steering Team

Review Number Six 186

Chapter 16:

Week Fourteen: The Process Performance Summary 197

Chapter 17:

Week Fifteen: The TO BE Work and Information

Flow Blueprint and Steering Team Review

Number Seven 208

Chapter 18:

Week Sixteen: Level Four Process Development 220

Chapter 19:

Week Seventeen: Implementation Planning,

Program Management and Steering Team

Review Number Eight 230

Chapter 20:

Extending Excellence Beyond the Supply Chain 240

Index 267

Reference files for the Supply Chain Operations Reference Model, the Design Chain Operations

Reference Model, the CCOR Process, a partial list of SCOR Model Leading Practices, Fowlers'

Business Context Summary, Fowlers' Supply Chain Excellence Project Charter, a SCOR Quick

Reference, and a SCOR and Six Sigma DMAIC Comparison are all available at www.amacom

books.com/go/SupplyChainExcel.

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