9780357132302_Langley11e_ch15_LEAP-N.pptx

1
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Supply Chain
Management,
11e
Chapter 15: Strategic Challenges and
Change for Supply Chains

2
Discussion Outline
• Principles of supply chain management
• Game-changing supply chain technologies
• Supply chain analytics
• Supply chain talent management
• Sustainability
• Supply chain innovation and transformation

3
Principles of Supply Chain
Management

4
Seven Principles of Supply Chain
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.
Source
Figure
15.1:
David
L.
Anderson,
Frank
F.
Britt,
and
Donavan
J.
Favre,
“The
Seven
Principles
of
Supply
Chain
Management,
Supply
Chain
Management
Review
(April,
2007):
46.
Copyright
©
2007
Reed
Business,
a
division
of
Reed
Elsevier.

5
Game-Changing Supply
Chain Technologies

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Game-Changing Technologies
• Mobility
• Digitization
• Automation

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Mobility
Mobile internet (MI) and communication
Combinations of mobile devices (e.g. smartphones
and tablets), high-speed wireless networks, and
associated applications.
Multipurpose mobile computing device
Commercial grade device with features such as built-
in processor, memory and operating system (OS);
camera; barcode and label printers; scanners; RFID
readers; GPS; voice recognition software.
Mobile cloud
The combination of mobile development with cloud-
based storage, applications, computing and services.
• GPS technologies integrated with
wireless telecommunication and
computing devices
• Maximize fleet and asset utilization
− Real-time routing
− Response to weather conditions
− Dynamic driver dispatching

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Digitization
Deep Learning
Emphasize “autonomous”
learning that has become
an AI aspect of assets,
advanced (predictive and
prescriptive) analytics, AI-
driven automation, and
business intelligence
software.
Additive Mfg.
3D printing technology
creates physical objects
from digital models.
Potential uses of will
continue to broaden as the
range of printable materials
continues to expand.
Augmented Reality (AR)
AR in warehouse operations
AR technology, which could come
in the form of integrated smart
phone cameras or wearable
headsets and accessories, could
guide a worker who needs to find,
move, pick, pack, and ship a
particular product; and allow
him/her to scan barcode and
capture image.
Cloud Computing
Offering access to a shared
pool of computing
resources (e.g. servers,
storage, software) over the
Internet.
Augmented Reality
Integrates contextual
information into individuals’
field of view through an AR
headset, providing virtual
images, videos, animation
or informational content to
users who wear them.

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Automation
Intelligent Robotics
Emphasize “autonomous” learning
that has become an AI aspect of
assets, advanced (predictive and
prescriptive) analytics, AI-driven
automation, and business
intelligence software.
Internet Of Things (IoT)
3D printing technology creates
physical objects from digital models.
Potential uses will continue to
broaden as the range of printable
materials continues to expand.
Automation: M2M
Vehicle-to-Infrastructure (V2I)
Car manufacturers such as Volvo
and Ford have V2I vehicles in
production that are capable of
reading new smart road signs now
used in France and Germany.

10
Supply Chain Analytics

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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.
Understanding
Information that has been examined & studied in context of specific business situations
(e.g., inventory levels in relation to overall economic conditions)
Information
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)
Data
Unorganized facts that need to be processed
(e.g. levels of inventory at ends of financial periods)

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The Velocity of Data
Every 60 seconds:
• 98,000+ tweets
• 695,000 status updates
• 11 million instant messages
• 698,445 Google searches
• 168 million+ emails sent
• 1,820TB of data created
• 217 new mobile web users
Kalakota, R. (2012, October 22). Sizing “Mobile + Social” Big Data Stats. Retrieved from http://practicalanalytics.wordpress.com/

13
Supply Chain Analytics Maturity
Figure
15.2:
C.
John
Langley
Jr.,
Ph.D.,
Penn
State
University.
Used
with
permission.

14
Analytical Resources
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
Table
15.1:
C.
John
Langley
Jr.,
Ph.D.,
Penn
State
University.
Used
with
permission.

15
Big Data and the Supply Chain
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.
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.

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Supply Chain Talent and
Management

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Supply Chain Talent Management
Key Steps to Building A High Quality SCM Team
Acquiring new staff
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.
Developing talent
Development programs that
include effective
onboarding, ongoing
training, and individual
guidance, coupled with a
strong culture of
development and supply
chain–human resources
collaboration.
Fostering the
advancement of top
supply chain talent
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.

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Supply Chain Talent Management
Effective Talent Management
Linking People Strategy to Business Strategy
Source
Figure
15.4:
Langley,
C.
John
Jr.,
and
Capgemini,
LLC,
2015
19th
Annual
3PL
Study,
Capgemini,
LLC.
Figure
courtesy
of
KornFerry
International.

19
Sustainability

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Sustainability Considerations
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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Sustainability Includes Many Dimensions
Sustainability:
• Political
• Economic
• Social
• Technological
• Environmental
• Legal

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Sustainability
The Business Case for Sustainability
• Regulation
− Legislation & compliance
• Risk
− Short-term cost & long-term supply
• Reputation
− Brand loyalty, sentiment & awareness
• Profit
− Cost reduction & competitive advantages

23
Sustainability
Four “R’s” of Sustainability
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
15.2:
Center
for
Supply
Chain
Research
TM
,
Penn
State
University.

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Sustainability
Reverse Flows: Key Observations
• Global supply chains
− Global supply chains present both challenge and opportunity for reverse flows.
• Cash/value & technology
− Cash/value from returns, and power of technology has not received enough emphasis in return flows.
• Necessary evil/cost center
− Reverse direction needs continual scrutiny to control and reduce.
• Increased reverse flow
− Easy return as part of customer service policies.
− Increased consumer recycling programs.
− High obsolescence rate in technological products.

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Supply Chain Innovation
and Transformation

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Supply Chain Transformation Process Model
Source
Figure
15.5:
C.
John
Langley
Jr.,
Ph.D.,
Penn
State
University.
Used
with
permission.

27
Example Process Elements and Details (1 of 2)
Process
Elements
Description Examples Examples (cont.)
INPUT
Basically, the state
of the supply chain
prior to the intended
transformation (“as-
is” state)
 Supply chain goals and objectives
 Configuration/mapping of current
supply chain
 Details relating to facilities, customers,
suppliers, capital, cost, and growth
 Economic and competitive
environments
 Macro and micro changes
in product and service
markets
PROCESS
Conversion or
transformation of
inputs into outputs
 Supply chain innovations
 Flows of products, information, capital,
throughout the supply chain
 Alignment within and
among organizations
 Essentially, what needs to
be converted, changed, or
added to achieve results
of the transformation
OUTPUT
Results of the
transformation (“to-
be” state)
 Improvements in supply chain
processes
 Measurable results
 Impacts on customers,
cost, capital, and growth
of organization
 Enhanced competitive
advantage
Source
Table
15.3:
C.
John
Langley
Jr.,
Ph.D.,
Penn
State
University.
Used
with
permission.

28
Example Process Elements and Details (2 of 2)
Process
Elements
Description Examples Examples (cont.)
Resources
Capabilities needed to accomplish
the transformation
 People
 Information
 Technology
 Financial support
 Change management
capabilities
Constraints
Constrain the process and/or
outputs
 Organizational policies
 Budget/financial capabilities
 Supply chain partner capabilities
 Culture/environmental
 Government/regulatory
 Contract terms
 Risk
Feedback
Assess process and process
outcomes with desired goals and
objectives—use as basis for
needed revisions to process inputs
or changes to process steps
 Comparisons of outputs with
goals and objectives
 Identify elements of the process
map that are in need of re-
thinking or revision
 Valuable step to make
mid-course
modifications to
improve process
outputs
Governance
Rules or policies of how the
process works—actually,
governance itself is a process
 Who is to be involved, and what
are their roles
 Protocols for decision making
 Documentation of
information and status
relating to steps in
transformation process
Source
Table
15.3:
C.
John
Langley
Jr.,
Ph.D.,
Penn
State
University.
Used
with
permission.

29
Supply Chain Transformation in the
Digital Disruptive Age
• Commerce is changing (rapidly).
• Supply chain must evolve to meet strategic needs.
• Tradeoffs between efficient and customer-focused.
• People, process and tech must be aligned.
• Added complexity and expectations.
• View supply chain as “end-to-end” and not as function(s).
• Collaboration and leadership is KEY.
• Four themes—technology, analytics, ecosystems, and talent.

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Summary
• Seven landmark principles of supply chain management have withstood the test of time. These principles
contribute to the objectives of revenue growth, asset utilization, and cost reduction.
• Supply chains are impacted by a wide variety of external and internal factors, among which the
importance of game-changing technologies 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.
• A shortage of qualified supply chain talent requires a proactive SCM talent management process to
acquire, develop, and retain key individuals.
• The importance of sustainability to supply chains cannot be over-stated. The four “R’s”
of sustainability provide useful guideposts for action.
• The extent to which organizations and supply chains are able to remain relevant and
competitive will be directly related to their abilities to innovate and transform themselves.

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