Competitive Analysis

Competitive Supply Chain Resilience: Gaining Competitive Advantage Through Innovation & Collaboration Prof.Dr.
Richard Wilding
Competitive Supply Chain Resilience:
Gaining Competitive Advantage Through Innovation & Collaboration
Professor Richard Wilding Cranfield School of Management www.cranfield.ac.uk/som www.richardwilding.info & www.supplychainpodcast.info
Prof. Dr. Richard Wilding Centre for Logistics & Supply Chain Management Cranfield School of Management, Cranfield, Bedford, England, MK43 0AL. Tel: +44 (0)1234 751122 Fax: +44 (0)1234 751712 Email: Richard.Wilding@cranfield.ac.uk
Agenda
Innovative methods for improving supply chain process, systems and structure
The 3Ts of highly effective supply chains Collaboration to achieve perfect order: y this is not a single g company p y concept p why
Maintaining your competitive advantage in a changing environment

Creating resilient supply chain environments Competitive supply chain resilience: methods to gain advantage
The new supply chain skill set: the qualifiers and winners
IQ & EQ Implications for learning and development
Innovation
Innovation is all about creating value, economic value, social value and/or environmental value through the application of ideas that are new to you
Look around - outside of your own environment
The screen versions of these slides have full details of copyright and acknowledgements
Competitive Supply Chain Resilience: Gaining Competitive Advantage Through Innovation & Collaboration Prof.Dr. Richard Wilding
Supply chain innovation process, infrastructure, information systems and organisation
Corporate strategy Competitive strategy Supply chain objectives
Supply chain process & product design
Supply chain Infrastructure design
Supply chain Information system design
Supply chain organisation design
Linking customer value to supply chain strategy

Identify value segments
What do our customers value?
Define the value propositio n
How do we translate these requirements into an offer?
Identify the market winners
What does it take to succeed in this market?
Develop the supply chain
How do we deliver against this proposition?
The 3Ts of highly effective supply chains
Trust
Trust
Agility
Transparency
Time
Time
Transparency
To achieve perfect order you need to move people from I to T
I shaped people only understand their own function T shaped people understand the process they are part of and also their functional strengths
Its all about perceptions!
Customer value is created when perceptions of benefits received exceed the costs of ownership
Defining the perfect order

The perfect order is achieved when customer requirements/perceptions are met in full Likely elements of the perfect order include: On-time delivery Order filled completely Error-free documentation and invoice
Delivering the perfect order experience through the supply chain
Pre-transaction Written customer service policy Accessibility Organisation structure System flexibility Transaction Order cycle time Inventory availability Order fill rate Order status information Post-transaction Availability of spares Call out time Product tracing/warranty Customer complaints, claims etc.
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Supply chain management
Supply chain management can be defined as the management of upstream and downstream relationships with suppliers, distributors and customers to achieve greater customer value-added at less total cost
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C3 behaviour an essential for supply chain success
Cooperation
Coordination
C3
Collaboration
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Multiplying the benefits: C3 behaviour and trust
High
Win/win [1+1=8!]
Tru ust
C Compromise i [1+1 [1+1=1.5!] 1 5!]
Win/lose or lose/win [1+1=1!]
Low Low
Adapted from: Covey, 1989
C3 behaviour
High
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C3 behaviour and trust in 54 collaborative environments

110
Highly creative!
100 90 80
Trust
70 60 50 40 30 20 20 30 40 50 60 70 80 90 100 110
Total disaster!
C3 behaviour
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Collaboration to achieve the perfect order

Customer: does the supplier deliver OTIF when we say we want it Supplier: do we deliver to the customer OTIF when we say were going to deliver it
Consumer focus
Data sharing
Agreed A dj joint i t processes
Trust
Integrate into internal applications Flexibility responsiveness Shared KPIs
(e.g. on time in full OTIF)
Adapted from: Barrett, 2000
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To measure is to know.
If you can not measure it, you can not improve it
Lord Kelvin (Sir William Thomson) 1824 - 1907
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The questions we all need to ask

If relationships are so important why do we rarely measure them?
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Collaboration: success or failure? we can measure it & make it transparent!
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SCCI barometer
www.sccindex.com
Bandings 0 49 50 59 Poor Moderate (2b) Moderate (2a) Good
60 74
75 - 100
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Collaboration: success and failure across the overall supply chain
Consumer Farm Distributor Manufacturer Retailer
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Extended chains accumulate risk

Suppliers suppliers Supplier Inbound Manufacturer Intermediate distribution/ finishing Distribution Retail
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What can destroy your supply chain and your competitive advantage?
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A day without coffee?
WWF 2009 - http://www.worldwildlife.org/ted/change.html
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Water is the new CO2!?

208.1 litres:
0.1 for the water itself 2.5 to make the plastic lid 5.5 to make the paper cup and sleeve 7.5 to grow the sugar for one teaspoon 49.5 to feed the cows that make the milk 143 to grow the coffee
Water classification:
Green water (rain) Blue water (irrigation) Grey water (flushed effluent)
WWF 2009
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Creating the resilient supply chain
Mapping & critical path analysis Supply chain understanding 1. Supply chain (re)engineering Supply base strategy Sourcing decisions and criteria Supplier development Collaborative planning Supply chain intelligence
Supply chain risk register
Supply chain design principles
The resilient supply chain
2. Supply chain collaboration
Real options thinking
Efficiency vs. redundancy
4. Creating a supply chain risk management culture
3. Agility
Visibility Velocity & acceleration
Establish supply chain continuity teams
Board-led responsibility & leadership
Factor risk considerations into decision making
Professor Martin Christopher, Centre for Supply Chain Risk & Resilience, Cranfield School of Management 2006
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Competitive supply chain resilience

A unique way to increase resilience in your supply chain
The CSCR method d is
Focused on improving competitiveness Successful in delivering value Modular and flexible in design & use Built on cross industry experience and world class tools Takes an end-to-end and integrated view of the supply chain Recognises that supply chain must change to meet future visions
Und derstanding
Locate su upply chain risks
Select Solutions Options
Action
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1. Understand what are the success factors for a market or segment define the perfect order 2. Identify the supply chain processes that support these success factors 3. Classify the processes using the process triangle 4. Identify the risks/vulnerabilities in the supply chain 5 Understand how these risks/vulnerabilities impact on the supply chain processes 5. 6. Understand our current capability to deal with the risk and what capability is required to remove this 7. By investing in the capability to deal with the risk/vulnerability how this will impact on the success factors for the market or segment? Demonstrating the link between supply chain risk management and the success factors in a market and therefore improving our competitive position
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identify critical processes
Those processes which outperform the competition Processes that provide future required competencies Competitive processes Unique processes necessary to exist in your industry Innovation process
Common industry processes
Qualifying processes
Underpinning processes
Adapted from Edwards & Peppard 1997
The strategic diamond These processes determine the present and future success of the organisation
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Manage the supply chain processes that drive perfect order fulfilment
Flowchart the order fulfilment process (supply chain overview) Identify the critical elements - the potential fail points Use statistical process control to monitor the critical elements Manage the order on a cross-functional/cross-company basis
Get T shaped
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Emotional intelligence gains competitive advantage in the supply chain

Top 25% of companies selected for profitability, cycle times, output etc. showed the following characteristics: A passion for competition and continual improvement Organisational commitment to a basic strategy Open communications & trust-building with all stakeholders Building relationships both internally & externally that offer competitive advantage Collaboration, support, and sharing of resources Innovation, risk taking, and learning together
Source: Goleman Working with Emotional Intelligence 1998
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10
IQ the technical skills of the supply chain (the order qualifier?)
Logistics, transportation, warehousing, purchasing, production, planning, regulations, environment, quality, inventory management, performance measurement, computing supply chain accounting and finance, computing, finance supply chain strategy
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EQ relational skills of the supply chain (1) (the order winner?)

Self-mastery
Emotional awareness: the recognition of how our emotions affect our performance, and the ability to use our values to guide decision making Accurate self-assessment: a candid sense of our personal strengths and limits, a clear vision of where we need to improve and the ability to learn from experience Self confidence: the courage that comes from certainty about our capabilities, values and goals
Source: Goleman, Working with Emotional Intelligence, 1998
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EQ relational skills of the supply chain (2)

Empathy
Understanding others: sensing others feelings & perspectives and taking an active interest in their concerns Service orientation: anticipating, recognising and meeting stakeholder needs Developing others: sensing others development needs and bolstering their abilities Leveraging diversity: cultivating opportunities through diverse people Political awareness: reading the political and social currents in an organisation
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Social skills
Influence: using effective tactics of persuasion Communication: sending clear and convincing messages Conflict management: negotiating and resolving disagreements Leadership: inspiring and guiding Change catalyst: initiating, promoting, or managing change
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Social coordination
Building bonds: nurturing instrumental relationships Collaboration: working with others toward shared goals Team capabilities: creating synergy in working towards group goals
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Conclusion
For creating the perfect order the 4 Ts are key!
Trust
Trust
Transparency
Time
Time
Transparency
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Why customers stop doing business a final thought!
1% die, retire or are terminated 3% transfer to other jobs, companies or locations 5% give their business to other friends 9% competitive reasons 14% product dissatisfaction 68% attitude of supply company
Research by Miller Business Systems
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Collaboration for supply chain success is up to you
Is your organisation capable of collaboration? Do you have the skill set required, IQ and EQ?
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Links & further information

Cranfield School of Management www.cranfield.ac.uk/som Professor Richard Wilding www.RichardWilding.info Connect to me via LinkedIn www.linkedIn.com/in/richardwilding Download the free The Supply Chain Podcast www.supplychainpodcast.info or visit iTunes.com View free videos on www.yourtechtv.com and www.youtube.com/supplychainpodcast
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Cranfield - a distinguished reputation
Financial Times Executive Education Rankings 2008
Ranked by clients as the top UK business school for customised executive development and one of the top 5 in Europe Ranked No.1 in the UK for programme preparation and follow-up; Teaching methods and materials; the relevance of new skills and learning; And achievement of academic and business expectations
Economist Ranking of MBA Programmes

6th in the world
Europe's largest faculty specialising in the management of logistics & supply chains
Globally recognised centre of excellence Internationally recognised MSc in logistics and supply chain management
Accreditations
One of only 20 business schools worldwide to be triple AMBA, EQUIS and AACSB accredited Cranfield has more MBA alumni at board level in top UK companies than any other business school
www.cranfield.ac.uk/som
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Please keep in touch!

If you would like further information on the techniques described in this presentation, for example, supporting journal articles, or would like to discuss the content further, please dont hesitate to contact the author at the following address:
Professor Richard Wilding Cranfield School of Management Cranfield, Bedford, England, MK43 0AL. Tel: +44 (0)1234 751122 Fax: +44 (0)1234 752158 Email: Richard.Wilding@cranfield.ac.uk Web: www.cranfield.ac.uk/som/lscm, www.richardwilding.info
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Competitive Supply Chain Resilience: Gaining Competitive Advantage Through Innovation & Collaboration Prof.Dr.

Maintaining your competitive advantage in a changing environment

Look around - outside of your own environment

Supply chain process & product design

Supply chain Infrastructure design

Supply chain Information system design

Supply chain organisation design

Linking customer value to supply chain strategy

What do our customers value?

Define the value propositio n

How do we translate these requirements into an offer?

Identify the market winners

What does it take to succeed in this market?

Develop the supply chain

How do we deliver against this proposition?

The 3Ts of highly effective supply chains

Its all about perceptions!

Defining the perfect order

Supply chain management

C3 behaviour an essential for supply chain success

C Compromise i [1+1 [1+1=1.5!] 1 5!]

Win/lose or lose/win [1+1=1!]

C3 behaviour and trust in 54 collaborative environments

Collaboration to achieve the perfect order

Agreed A dj joint i t processes

Adapted from: Barrett, 2000

The questions we all need to ask

Collaboration: success or failure? we can measure it & make it transparent!

Bandings 0 49 50 59 Poor Moderate (2b) Moderate (2a) Good

Collaboration: success and failure across the overall supply chain

Consumer Farm Distributor Manufacturer Retailer

Extended chains accumulate risk

A day without coffee?

WWF 2009 - http://www.worldwildlife.org/ted/change.html

Water is the new CO2!?

Supply chain risk register

Supply chain design principles

The resilient supply chain

2. Supply chain collaboration

Real options thinking

Efficiency vs. redundancy

4. Creating a supply chain risk management culture

Visibility Velocity & acceleration

Establish supply chain continuity teams

Board-led responsibility & leadership

Factor risk considerations into decision making

Competitive supply chain resilience

The CSCR method d is

Locate su upply chain risks

Select Solutions Options

Competitive supply chain resilience

Competitive supply chain resilience

Common industry processes

Adapted from Edwards & Peppard 1997

Emotional intelligence gains competitive advantage in the supply chain

Source: Goleman Working with Emotional Intelligence 1998

EQ relational skills of the supply chain (1) (the order winner?)

Source: Goleman, Working with Emotional Intelligence, 1998

EQ relational skills of the supply chain (2)

Source: Goleman, Working with Emotional Intelligence, 1998

EQ relational skills of the supply chain (4)

Source: Goleman, Working with Emotional Intelligence, 1998

Research by Miller Business Systems