Redefining relationships in the supply chain Wednesday 1 Dr Chris Manning Where are we now?
Objectives <ul><li>By the end of this session you will be able to: </li></ul><ul><li>Where are we now - Compare best-of-class SCM relationship development with your current operations to evaluate your current state. </li></ul><ul><li>Where do we want to go - Evaluate the strategic implications of future business models and how these are/will drive strategy in your SC operations. </li></ul><ul><li>What are our changing requirements - Evaluate the potential for developing a knowledge-based view of SCM to grow new competencies and mitigate risks in a rapidly changing global business environment. </li></ul>
Changing requirements = changing relationships <ul><li>Relationships between supply chain parties describe what is valued in the supply chain: </li></ul><ul><li>What SC relationships are best-in-class firms developing currently? </li></ul><ul><ul><li>How do these examples fit with your current SCM strategy and operations? </li></ul></ul>
Best-in-class Trends <ul><li>Harris et al. (2009) reports best-in-class manufacturing SCM: </li></ul><ul><li>Focus on partnerships rather than contracts . </li></ul><ul><ul><li>To leverage economies of scale </li></ul></ul><ul><ul><li>To create new efficiencies & cost reductions </li></ul></ul><ul><ul><li>To manage complexity and focus on core business through outsourcing relationships </li></ul></ul><ul><ul><li>To improve reliability and long-term performance </li></ul></ul>
Assumed Control of Global Sourcing & Procurement Hidden purchase of strategic components directly from lower supplier manufacturers Resells components up the supply chain Leverage Global Buying Power to Reduce Costs Reduces risk of lower order suppliers feeling pressured to reduce prices Ensures distribution based on need Mitigates risk to Quality Mitigates risk from supplier cost blow-outs and fluctuations Increases SC transparency Ensures supply of critical components Opportunity to monitor quality & performance Reduces supplier costs & risks Keeps sensitive Information within The company
Reliability and long-term performance <ul><li>Solely cost-oriented competitive approaches have given way to long-term, value-driven relationships between parties. </li></ul>
Suppliers Open collaboration: Expertise & Knowledge Sharing Improved long-term relationships built on trust Shared supply chain risk Shared response to cost reduction from larger cost base Improved Time-to-market
Activity 1 <ul><li>Consider HP and Bombardier Case Studies: </li></ul><ul><li>Why have these companies developed different approaches to supplier relationships? </li></ul><ul><li>Give one fundamental assumption required for success in both case studies. </li></ul><ul><li>Is your business moving towards partnerships over cost-based competitive management? Why/Why not? Share your insights. </li></ul>
<ul><li>Innovation leadership in the supply chain </li></ul>where are we going? Wednesday 2 Dr Chris Manning
Industry Leadership through relentless Innovation <ul><li>Relentless capability to innovate is the engine of future competitiveness: </li></ul><ul><li>What is the basis for new competitiveness driving collaborative networks in the supply chain? </li></ul><ul><ul><li>How will these trends impact your SCM vision and strategy? </li></ul></ul>
Basis for new competitiveness <ul><li>Prahalad and Krishnan (2008) argue: </li></ul><ul><li>N=1 Customers will demand unique personalised experiences over products or solutions. </li></ul><ul><li>R = G satisfying customer demands will be resourced from a global talent pool. </li></ul>
N = 1 Focus on the centrality of the individual <ul><li>Value based on unique, personalised experiences </li></ul><ul><li>One customer experience at a time - even if you have a 100 million customers. </li></ul>
R = G Focus on access to, not ownership of resources <ul><li>No firm is big enough in scope and size to satisfy experiences of one customer at a time. </li></ul><ul><li>Firms will access resources from a “global ecosystem” of multiple, globally positioned, small & large suppliers. </li></ul>
Evidence of change ABB enters strategic partnering agreements in China for manufacturing and IT to focus on “ABB’s real art.” Phillips is teaming up with academics, industry peers and suppliers to create momentum for future directions. EADS is looking for innovation and people who think differently – student competitions to design aircraft parts, materials and systems. Bombardier had developed a industry-leading logistics, technical, maintenance, and field support network for its Learjet. TomTom collects customer innovations and feeds them directly into the design process.
OAIC Conference 2009 <ul><li>Office of Australian Industry Capability </li></ul><ul><li>Joint venture – DMO and Boeing US </li></ul><ul><li>Introduce “Best of Australia’s SME Defence Industry” to Boeing’s supply chain </li></ul><ul><li>4 day conference – St Louis (Defence) and Seattle (Civil) aviation supply chains </li></ul><ul><li>Meeting with Boeing supplier management and key suppliers to develop relationships and foster new opportunities </li></ul><ul><li>Tour of 787, 777, 747, 737 lean production lines – Everett and Renton </li></ul>Delegates at Everett 777 assembly line Examples of change
The basis for relationship Knowledge Management Connectivity Open Innovation Collaboration Collective Intelligence Knowledge Discovery Data and information Management LEARNING ACTION Sense-making EXPERIENCE Individual Expertise Collaborative Media Business Analytics Data and Information Infrastructure
Open innovation networks Customer Networks Professional Networks Business Networks Practice Networks Process Networks
Activity 2 <ul><li>Consider N = 1 and R = G </li></ul><ul><li>What is SCM’s roll in this scenario? </li></ul><ul><li>How relevant do you feel these drivers are to your future business? </li></ul><ul><li>How consistent is your strategic vision with these emergent business drivers? Why / why not? </li></ul><ul><li>What personal leadership competencies would be important in developing your SCM staff to meet these new challenges? </li></ul>
<ul><li>Adaptive SCM : A learning environment for SCM </li></ul>Wednesday 3 Dr Chris Manning Change requirements
Linking intent with knowledge & expertise <ul><li>N = 1 and R = G intent is fuelled by knowledge and expertise. </li></ul><ul><li>Knowledge & expertise are unique corporate assets that are the sole source of sustained advantage </li></ul><ul><li>Adaptive-SCM supports knowledge-enabling processes, which are fundamental to SCM’s future success in an N=1, R=G world. </li></ul>
Activity 3 <ul><li>The next two slides provide propositions that are the underlying assumptions of Adaptive-SCM: </li></ul><ul><ul><li>“ An N=1 Supply Chain” </li></ul></ul><ul><ul><li>“ An R=G Supply Chain” </li></ul></ul><ul><li>Are your SCM processes and systems suited to Adaption and Learning given these assumptions and the Adaptive-SCM model presented? </li></ul>
An N=1 Supply Chain <ul><li>Knowledge-enabled systems focus on providing individual experiences to LEARN and APPLY knowledge and expertise skilfully within a challenging and changing environment. </li></ul><ul><li>Data, information, and knowledge feeds must be customised to the SC participant’s capability, objectives, and current operating context. </li></ul>
An R = G Supply Chain <ul><li>Acquiring and aligning resources successfully from a complex global environment requires a rich understanding of context </li></ul><ul><li>Multiple data and information feeds describe the context. </li></ul><ul><li>Previous knowledge of similar contexts provides a structure for analysis & interpretation </li></ul><ul><li>Expertise enables us to select and ADAPT these interpretations to provide the BEST COURSE of ACTION </li></ul><ul><li>Leveraging collective intelligence and expertise via ADAPTION is imperative to an R = G supply chain. </li></ul>
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