426 W7: Case Discussion
CHAPTER 15
Strategic Challenges and Change for Supply Chains
Supply Chain Management: A Logistics Perspective (10e)
Coyle, Langley, Novack, and Gibson
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Discussion Outline
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Principles of supply chain management
Supply chain analytics and Big Data
Omni-channel
Sustainability
3-D printing
Supply chain talent management
Update on the Seven Principles:
The seven principles basically survive the test of time.
We still have a long way to go on supply chain strategy implementation.
Technology and data will be the major game changer going forward.
Principles of Supply Chain Management
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Source: Figure 15.1
Supply Chain Analytics & Big Data
Supply Chain Analytics and Big Data From Data to Information to Understanding
One major topic of great contemporary interest is that of supply chain analytics that center on taking a giant leap from data to information, and then from information to understanding.
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Data
Information
Understanding
Unorganized facts that need to be processed
(e.g. levels of inventory at ends of financial periods)
Data that has been gathered, processed, organized & structured in a given context (e.g. average levels of inventory and/or levels of inventory by SKU)
Information that has been examined & studied in context of specific business situations (e.g., inventory levels in relation to overall economic conditions)
Supply Chain Analytics and Big Data Supply Chain Analytics Maturity
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Source: Figure 15.2
Supply Chain Perspective
SC Analytics Maturity
High
Low
Operational
Strategic
Descriptive
Predictive
Prescriptive
Cognitive
Supply Chain Analytics and Big Data Analytical Resources
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| Level of Analytics | Analytical Resources |
| Descriptive | Standard and ad hoc reporting |
| Data from supply chain partners | |
| Alerts and notifications | |
| Query/drill down | |
| Predictive | Forecasting |
| Heuristic analysis | |
| Simulation | |
| Statistical analysis | |
| Predictive modeling | |
| Prescriptive | Stochastic optimization |
| Scenario planning | |
| Cognitive | IBM Watson Analytics |
Source: Figure 15.3
Supply Chain Analytics and Big Data Big Data and the Supply Chain
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Big data may be thought of as the process of accumulating, organizing and analyzing very large sets of data to identify patterns, trends and other information of interest.
A primary goal of big data is to help organizations better understand the information that resides within the data, and to focus attention on those factors that are most relevant to making well-informed supply chain decisions.
Images courtesy of Aico Groups
Omni-Channel
Omni-Channel
The omni-channel concept can be defined as “anytime, anywhere, anyhow, and any device.”
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Images courtesy of St. Joseph Communications
Omni-Channel Retails Strategies for Omni-Channel Retailers
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One view of the customer regardless of whether it is a store or internet purchase
Short-term forecasts based on understanding of what, where, and when customers buy.
Seamless order entry and order management
One view of inventory for real-time inventory status availability at all stocking points
Flexible fulfillment network in terms of delivery options, meeting seasonal patterns, and handling returns
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Store operations that replicate many of fulfillment center operations while maintaining the focus of being a retail store.
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Images courtesy of rishabhsoft.com
Sustainability
Sustainability
Sustainability requires companies to consider and manage the impact that their supply chain has on both the ecological and social environment in which they operate.
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Images courtesy of Buddha Jeans
Sustainability The Business Case for Sustainability
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Regulation
Risk
Reputation
Profit
Legislation & Compliance
Short-term cost & Long-term supply
Brand loyalty, sentiment & awareness
Cost reduction & Competitive advantages
Images courtesy of First Alliance
Sustainability Four “R’s” of Sustainability
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| Sustainability Approaches | Description |
| Reuse | Reuse often requires disassembly, which is a systematic method of separating a product into constituent parts, components, subassemblies, or other component parts. The parts or components may be reassembled for reuse after cleaning, checking, and repair, or the individual components may be reused. |
| Remanufacturing | Remanufacturing essentially means that a product or part is returned to the market as “good as new.” Auto parts, tires, and electronics are frequently remanufactured. |
| Reconditioning | Reconditioning usually means returning used products to working order but not “as good as new.” |
| Recycling | Recycling generally refers to the secondary use of materials. It usually includes glass bottles, cans, newspapers, corrugated material, tires, etc. The recycling is usually performed for individual households by municipal government agencies |
Source: Table 15.1
Sustainability Reverse Flows: Key Observations
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Easy return as part of customer service policies.
Increased consumer recycling programs.
High obsolescence rate in technological products.
Reverse direction needs continual scrutiny to control and reduce.
Cash / value from returns, and power of technology has not received enough emphasis in return flows.
Global supply chains present both challenge and opportunity for reverse flows.
3-D Printing
3-D Printing
Also referred to as “additive manufacturing,” 3-D printing has exceptional potential not only to facilitate processes and activities in the supply chain, but also to become a “game-changing” innovation.
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Quick turnaround from design to production
Cost-effective production of small lots with special-purpose tooling
Design flexibility for complex product structures
Ability to enable product customization
High costs of:
3-D printing machines
Maintenance
Materials
Advantages of
3-D Printing
Adoption Inhibitor of
3-D Printing
3-D Printing Outlook
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Near Term
In the near-term, 3-D printing is advantageous for fit-to-scale prototypes, low-demand parts with long lead times, and inventory management.
Longer Term
In the longer-term, 3-D printing technologies may play a key role in “open-source collaboration.”
3-D Printing Strategic Impacts on Supply Chains and Logistics
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Demand-driven
Customization/ Segmentation
Adaptability & Flexibility
Ranges of product types
Service & replacement parts
Workflows, value chains & processes
Decentralized supply chains
Total landed cost
Sustainability
Inventory
Small batch capabilities
Transportation
Globalization
Supply Chain Talent Management
Supply Chain Talent Management Key Steps to Building A High Quality SCM Team
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Acquiring new staff
Developing talent
Fostering the advancement of top supply chain talent
Deploy active recruiting techniques such as building recruiting relationships with leading universities, leveraging employee referrals, and creating online communities via LinkedIn and other sites to facilitate candidate interaction.
Development programs that include effective onboarding, ongoing training, and individual guidance, coupled with a strong culture of development and supply chain–human resources collaboration.
Deploy a proactive combination of career guidance and challenging assignments, while providing compelling SCM advancement opportunities via logical career paths, retention strategies, and succession planning.
Supply Chain Talent Management Effective Talent Management
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Source: Figure 15.4
Linking People Strategy to Business Strategy
Summary
Supply chains are impacted by a wide variety of external and internal factors, among which the importance of technology, notably 3-D printing, to the future of SCM cannot be overstated.
Supply chains generate a wealth of data that can be transformed into information and insight through the use of supply chain analytics.
Strategies for success in the omni-channel environment start with a new view of the customer and end with how order entry and order fulfillment/delivery are executed.
A useful way to consider sustainability is on a broad functional basis: inbound, production and operation, and outbound or distribution.
A shortage of qualified supply chain talent requires a proactive SCM talent management process to acquire, develop, and retain key individuals.