Supply chain transformation : practical roadmap to best practice results

210 Pages·2012·3.328 MB·English

by  Richard J. Sherman

FACK 08/23/2012 15:28:0 Page20
FFIRS 08/23/2012 13:52:5 Page1
Supply Chain
Transformation
FFIRS 08/23/2012 13:52:5 Page2
Foundedin1807,JohnWiley&Sonsistheoldestindependentpublishingcompanyin
theUnitedStates.WithofficesinNorthAmerica,Europe,Asia,andAustralia,Wileyis
globally committed to developing and marketing print and electronic products and
services for our customers’ professional and personal knowledge and understanding.
The Wiley Corporate F&A series provides information, tools, and insights to
corporateprofessionalsresponsibleforissuesaffectingtheprofitabilityoftheircompany,
from accounting and finance to internal controls and performance management.
FFIRS 08/23/2012 13:52:5 Page3
Supply Chain
Transformation
Practical Roadmap to Best
Practice Results
RICHARD J. SHERMAN
JohnWiley&Sons,Inc.
FFIRS 08/23/2012 13:52:6 Page4
Coverimage:#diegocervo/iStockphoto
Coverdesign:JohnWiley&Sons,Inc.
Copyright#2013byJohnWiley&Sons,Inc.Allrightsreserved.
PublishedbyJohnWiley&Sons,Inc.,Hoboken,NewJersey.
PublishedsimultaneouslyinCanada.
Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmittedinanyform
orbyanymeans,electronic,mechanical,photocopying,recording,scanning,orotherwise,exceptas
permittedunderSection107or108ofthe1976UnitedStatesCopyrightAct,withouteithertheprior
writtenpermissionofthePublisher,orauthorizationthroughpaymentoftheappropriateper-copyfee
totheCopyrightClearanceCenter,Inc.,222RosewoodDrive,Danvers,MA01923,[phone],
fax [phone], or on the Web at www.copyright.com. Requests to the Publisher for permission
shouldbeaddressedtothePermissionsDepartment,JohnWiley&Sons,Inc.,111RiverStreet,
Hobok en, NJ 07030, [phone], fax [phone], or online at http://www.wiley.co m/go/
permissio ns.
LimitofLiability/DisclaimerofWarranty:Whilethepublisherandauthorhaveusedtheirbestefforts
inpreparingthisbook,theymakenorepresentationsorwarrantieswithrespecttotheaccuracyor
completenessofthecontentsofthisbookandspecificallydisclaimanyimpliedwarrantiesof
merchantabilityorfitnessforaparticularpurpose.Nowarrantymaybecreatedorextendedbysales
representativesorwrittensalesmaterials.Theadviceandstrategiescontainedhereinmaynotbe
suitableforyoursituation.Youshouldconsultwithaprofessionalwhereappropriate.Neitherthe
publishernorauthorshallbeliableforanylossofprofitoranyothercommercialdamages,including
butnotlimitedtospecial,incidental,consequential,orotherdamages.
Forgeneralinformationonourotherproductsandservicesorfortechnicalsupport,pleasecontactour
CustomerCareDepartmentwithintheUnitedStatesat(800)762-2974,outsidetheUnitedStatesat
[phone]orfax(317)572-4002.
Wileypublishesinavarietyofprintandelectronicformatsandbyprint-on-demand.Somematerial
includedwithstandardprintversionsofthisbookmaynotbeincludedine-booksorinprint-on-
demand.IfthisbookreferstomediasuchasaCDorDVDthatisnotincludedintheversionyou
purchased, you may download this material at http://booksupport.wiley.com. For more information
about Wiley products, visit www.wiley.com.
LibraryofCongressCataloging-in-PublicationData:
Sherman,RichardJ.,1950-
Supplychaintransformation:practicalroadmaptobestpracticeresults/RichardJ.Sherman.
p.cm.—(WileycorporateF&Aseries)
Includesbibliographicalreferencesandindex.
ISBN978-1-118-31444-9(cloth);ISBN978-1-118-41992-2(ebk);ISBN978-1-118-42174-1(ebk);
ISBN978-1-118-43413-0(ebk)
1. Businesslogistics. I. Title.
HD38.5.S5542013
658.5—c23
2012022693
PrintedintheUnitedStatesofAmerica.
10 9 8 7 6 5 4 3 2 1
FFIRS 08/23/2012 13:52:6 Page5
To my wife, for driving me to, for the first time ever, beat a deadline and
‘‘git ‘er done’’ ahead of schedule. And to my family who have supported
me through years of travels, ups and downs, and life in general.
FFIRS 08/23/2012 13:52:6 Page6
FTOC 08/23/2012 14:6:43 Page7
Contents
Foreword xi
Preface xiii
Acknowledgments xvii
Chapter1:ChangeIsInevitable,GrowthIsOptional 1
GlobalizationChangestheGame 3
ParadigmsDriveOrganizationalBehaviorandCulture 5
AssessingYourCompany’sCulture 7
LevelsofCulturalMaturity 9
BuildingaCaseforChange 14
ParadigmsCanEncourageorConstrainInnovation 16
Notes 18
Chapter2:PuttingtheBusinessinPerspective 19
DefiningandUnderstandingBusinessObjectives 21
DefiningtheBusinesswithintheContextoftheMarket 24
DevelopingYourVision 25
AddingSWOTAnalysisPutstheBusinessinPerspective 29
PrincipleofCreativeTension 32
Notes 34
Chapter3:MarketDriversandtheDynamicsofChange 35
SupplyChainIsMarketing:AToolforAnalyzingthe
MarketEnvironmentImpactingtheSupplyChain 38
ScanningtheMarketEnvironmentforDriversofChange 40
SystemsThinking:YourStrategyforManaginginaChangingMarket 43
Notes 52
Chapter4:BusinessStructuresAretheLeversofChange 53
YouCan’tBreakDowntheSilos:CollaborationIstheKey 54
UnderstandingtheBusinessStructuresandProcessesThat
GoverntheBehavioroftheOrganization 57
VerticalandHorizontalBusinessStructuresandDrivers 58
vii
FTOC 08/23/2012 14:6:43 Page8
viii & Contents
EverythingThatGetsDoneGetsDonethroughaProcess ...
BusinessProcessManagement 60
Chapter5:IfYou’reDrivenbyDemand,You’reProbably
BeingDrivenCrazy 69
WhatAretheDemandCreationStructureProcessTypes? 73
DemandCreationProcessesImpactDemandFulfillment
BehaviorDramatically 76
GuessWhat?TheForecastIsWrong,DealwithIt 79
ForecastingIsasMuchaboutArtasItIsaboutScience 82
Event-DrivenForecastingIsaBestPracticeImperative 84
ExtendCollaborativeProcessestotheCustomer(andSupplier) 86
Note 89
Chapter6:SupplyChainManagement:APipelineofOpportunity 91
UnderstandingtheDemandFulfillmentStructure 92
MajorOperatingFunctionsoftheDemandFulfillmentStructure:
Procurement,Production,andLogistics 94
LeanSixSigmaIsNotanOption—It’saRequirement 99
LeveragingSupplyChainCapabilityforSynchronization:
Strategy,Planning,andExecution 103
Notes 119
Chapter7:Okay,WeNeedManagementCommitment;
So,HowDoWeGetIt? 121
UnderstandingtheDemandPerformanceStructure 122
YouCan’tManageWhatYouCan’tMeasure 125
ProcessTypesThatDrivetheDemandPerformanceStructure 130
WhatKeepstheCEOandCFOUpatNight? 131
HowDoesOperations(SupplyChain)ExcellenceImpact
theIncomeStatementandBalanceSheettoDriveReturn
onInvestedCapital? 134
Notes 140
Chapter8:TechnologyDrivestheWavesofChange 141
ScanningtheHorizonforTechnologyDevelopments 142
WhatEmergingTechnologiesAreLikelytoImpactthe
SupplyChain? 143
HowDoesTechnologyImpacttheOrganization? 147
HowCanInformationTechnologyEnableBusiness
OperationstoMaximizeReturn? 149
Chapter9:MakingtheJourneyHappen 153
WeGotManagementCommitment,WhatDoWeDoNow? 154
DevelopinganOperatingPlanandCreatingaCultureforChange 154
Benchmarking:PerceptionversusReality 161