Supply Chain Movement » Books

The New Supply Chain Agenda

Martijn Lofvers — Tue, 03 May 2011 13:11:02 +0000

Most CEOs know intuitively that profit drives shareholder value. Yet many of them fail to realise that this begins with a superior supply chain, which then translates into economic value and hence shareholder value. With such statements, ‘The New Supply Chain Agenda’ leaves us in no doubt that it is intended for senior executives in the manufacturing, wholesale and retail sectors, as well as for supply chain managers who want to convince their board of directors of the strategic importance of their particular field. A Du Pont diagram and a chart showing research results from Credit Suisse help to clearly demonstrate the relationship between shareholder value and supply chain performance.

This book includes a collection of believable anecdotes, painting a picture of how life is in boardrooms around the time of the quarterly results and how senior executives turn to the supply chain to achieve the necessary financial gains. The authors have succeeded in making topics such as product range rationalisation, Sales & Operations Planning and working capital management accessible, and often use case studies to illustrate their points more clearly (including an extensive Whirlpool case).

The only criticism of this book is that it does not include any mention of the ‘Star Wars’ comments made by the authors during an interview to promote the publication. In the interview, Reuben Slone said that companies should stop squeezing their suppliers – a villainous act which would be befitting of Darth Vader from ‘Star Wars’ – and should instead adopt a long-term, collaborative approach to the supply chain, which would be worthy of Luke Skywalker.

‘The New Supply Chain Agenda. The 5 Steps That Drive Real Value’ (2010), by Reuben E. Slone, J. Paul Dittmann and John T. Mentzer. Published by Harvard Business Press, 216 pages, € 32.99

Rating: ****

Operations Rules

Martijn Lofvers — Wed, 01 Sep 2010 14:07:37 +0000

Different customer value propositions require different supply chain approaches – that is the essence of what Professor David Simchi-Levi, from the Massachusetts Institute of Technology in Boston, hopes to get across in his book ‘Operations Rules’. Simchi-Levi provides a very clear picture of the decisions involved when setting up various supply chains, and uses persuasive case studies and research findings to illustrate how companies can create different kinds of flexibility, how risk management and scenario planning can be applied, and what role IT and RFID can, or should, play in the supply chain. All in all, the book is required reading for any serious supply chain professional.

‘Operations Rules. Delivering Customer Value through Flexible Operations’ (2010), by David Simchi-Levi. Published by MIT Press, 208 pages, $19.77

Rating: ****

Simply Effective

Martijn Lofvers — Tue, 01 Jun 2010 14:05:57 +0000

With efficiency and productivity at work currently being more important than ever before, most managers feel that they are working harder yet achieving less. Ron Ashkenas has identified four major causes of complexity in an organisation: structural fragmentation (constant changes within the organisational structure), product proliferation (the extension of product lines and services), the evolution of processes, and management behaviour.

Throughout the whole book, Ashkenas illustrates these causes of complexity with the aid of an interesting case study of the company Con-Agra Foods, where, upon his arrival from PepsiCo, the new CEO Gary Rodkin discovered an organisation complicated by rapid growth. In addition to changing the organisational structure, Rodkin decided to rationalise the number of brands, which totalled over one hundred at that time. Ashkenas claims that few companies realise the extent to which an ever-growing number of stock keeping units (SKUs) leads to increased organisational complexity as well as increased costs. Hermann Miller, manufacturer of office chairs, does realise this, however, and he is currently working on reducing the number of possible configurations of a chair from a whopping 140 million to less than 200,000.

The greatest revelation in this book is the chapter on how management behaviour can lead to increased complexity. With the aid of two fictitious, but recognisable, managers, Ashkenas describes the axis of extreme management styles: from a focus on individual performance and results (financial or otherwise) to a focus on a strategic approach and teamwork. His advice is to not impose your own, personal strength too much but rather to use the axis of extreme styles to try and find the right balance.

This book clearly explains the steps a manager can take in order to simplify both his work and the company as a whole, and hence to achieve the required results.

‘Simply Effective. How to Cut Through Complexity in Your Organization and Get Things Done’ (2009), by Ron Ashkenas. Published by Harvard Business Press, 214 pages, € 27,95

Rating: ****

Crucibles of Leadership

Martijn Lofvers — Fri, 19 Mar 2010 13:56:29 +0000

All true leaders have been formed by a crucial experience in their past, and most of these crucial experiences occurred outside rather than within the safe confines of work or school, and at unexpected moments. In his intriguing book entitled ‘Crucibles of Leadership’ Robert Thomas highlights the significance of a ‘crucible’, a transformational experience, serving as an ordeal or test for future leaders. Former CEO Bob Galvin referred to the moment that he, as a seven-year-old boy and factory owner’s son, made a mistake which resulted in the assembly line being stopped, upon which the supervisors helped him to solve the problem and encouraged him to get a good education for the future.

Thomas distinguishes between three kinds of crucibles: Insertion into Foreign Territory, Disruption or Loss, and Enforced Reflection, which occur at the beginning, halfway through and towards the end of someone’s career, respectively. Bob Donahue, head of the Fire & Rescue Department at the Massachusetts Port Authority called 11 September 2001 as his crucible. The profound insight that he gained from this crucible was the realisation that he was more prepared to ask others for help than he had thought.

In Thomas’s opinion, great leaders are often great storytellers, although the effect of the story is more important than the story itself. The stories enable the audience to identify with each other, to define boundaries which dictate who belongs and who does not, and to call members to action. With the aid of a series of exercises, Thomas helps the reader to develop a personal strategy for learning from past experiences.

‘Crucibles of Leadership’ (2009), by Robert J. Thomas. Published by Harvard Business Press, 265 pages,$ 21.76.

Rating: ****

Think Again

Necessary but not sufficient

Martijn Lofvers — Thu, 29 Oct 2009 10:47:04 +0000

A great deal has been published about Baan Company, in many different media. The best-known book is the one by Mark Houben and Jeroen Wester of the Dutch newspaper Het Financieele Dagblad, which gives an illuminating overview of the issues with Baan. ‘Baan – Opkomst en Ondergang van een Software Bedrijf’ (Baan– Rise and Fall of a Software Company) describes in chronological order and in very understandable terms the incomprehensible practices of this company. The authors mention the failed attempt at a coup by Jan Baan, which he had planned in October 1998 together with logistics guru Eliyahu Goldratt, to try and save the company. This explains that Goldratt’s novel ‘Necessary but not sufficient’ is actually about the way Baan Company might have developed, had the coup been successful.

Goldratt’s novel Necessary but not sufficient

The protagonist of this book is Scott Duncan, CEO of the ERP supplier BGSoft. Every quarter, his listed company has to give forecasts of percentile growth in the double digits. In November 1998, Scott notices that one of their competitors is hit by negative financial growth and is forced to fire six hundred people. Is the entire ERP industry grinding to a commercial halt? The way out for BGSoft is selling value: BGSoft customers are not required to pay until the pre-calculated savings targets are met.

Two years ago the Dutch film ‘De Uitverkorene’ (the chosen one) came out, a fiction film that was clearly inspired on the lives of the brothers Jan and Paul Baan. This powerful film shows how all kinds of conflicts of interest can suddenly arise when people’s work, faith and private lives become too closely intertwined. The company in the film will surely go down, just as Baan Company did in 1998. Dutch actor Pierre Bokma won an International Emmy Award for his performance as one of the two brothers.

Account management in the Supply Chain

Martijn Lofvers — Thu, 29 Oct 2009 09:38:45 +0000

A book about customer-oriented collaboration in the Supply Chain sounds very promising, like an inspiring subject. For a long time, major multinationals in particular focused on chain control of internal collaborations with sister and parent organisations.

Now, finally, we are at the dawn of an age that focuses on the relationship between actual suppliers and customers, with the exchange of actual money, not purely bookkeeping transactions. A book like ‘The Relationship-Driven Supply Chain: Creating a Culture of Collaboration throughout the Chain’ should respond to this evolving focus. Instead, the two British authors apparently feel the need to spend a third of the book looking back on the development of Supply Chains, through endless lists (with annoying bullet points) and tiresome qualitative tables.

The Relationship-Driven Supply Chain: Creating a Culture of Collaboration throughout the Chain

It seems that the authors tried to collect as many PowerPoint presentations about Supply Chain Management as they could and stuff them in a book. And then, when there is a risk that the book may actually become interesting, the persevering reader is given a number of uninspiring, often anonymous cases to read, and a plainly unrealistic, insipid dialogue between a ‘smart’ Supply Chain Manager and a traditional, ‘dumb’ buyer. Finally, the proposed model for collaboration between purchaser and supplier looks like it was drawn by a six-year-old. This topical and intriguing subject of collaboration deserves so much more than what it gets in this book.

The Next 100 years: A Forecast for the 21st Century

Martijn Lofvers — Sat, 17 Oct 2009 12:52:03 +0000

The American political scientist and forecaster George Friedman, author of ‘The Next 100 Years’, predicts that China will not overtake the US in terms of dominating international affairs. Although currently perceived as the nation most likely to challenge America’s leading position, China will be held back by its relative isolation in geographical terms and the political instability in the country. In this fascinating book, Friedman sets out the economic and geopolitical developments for the coming century. Friedman foresees the decline or even the implosion of China and Russia around the year 2020, and the emergence of three new world powers: Poland, Turkey and Japan. The expansion of the latter two powers and their informal military alliance will lead, in 2050, to the Third World War against the US, which will be allied with Poland. These may sound like fantastical predictions out of a work of science fiction, but, backing up his forecasts with economic and demographic statistics against the background of geopolitics, Friedman manages to make his envisaged scenarios seem relatively plausible.

‘The Next 100 Years: A Forecast for the 21st Century’ (2009), by George Friedman. Published by Doubleday (hardcover), Anchor (paperback).

Rating: *****

Silicon Dragon

Strategies and tactics in supply chain event management

Martijn Lofvers — Fri, 11 Sep 2009 12:00:44 +0000

The authors of ‘Strategies and tactics in supply chain event management’ have bundled a number of articles about theories, methods and tools for dealing with various disruptions in the supply chain. The book is mainly intended for supply chain professionals and researchers and provides many practical insights, models, tools and examples of schedules and budgets. It discusses cases of best practices from various industries, including retail, pharmacy and aviation. Thus, the book focuses not only on disruptions, but also on distinguishing different scenarios.

Strategies and tactics by Raschid Ijioui, Heike Emmerich and Michael Ceyp

The book concludes with a number of interviews about the use of SCEM. These make it clear that while the term SCEM is not often used as such, many elements of it are embedded in underlying processes. At Ford, for instance, SCEM is embedded through the use of EDI with both internal and external partners. The important thing is to create transparency and to monitor business processes – and this book provides plenty of pointers for that.

Measuring the Value of the Supply Chain

Martijn Lofvers — Fri, 11 Sep 2009 11:56:23 +0000

Enrico Camerinelli, senior analyst at the Celent Banking Group, has recorded his experiences with the financial supply chain in a book. He describes the bridge between the supply chain manager and the CFO as being threefold: 1) it is hard to translate qualitative standards for such things as reliability, responsiveness and flexibility into financial indicators; 2) there is no unique set of numbers or unique measurement instrument to monitor the performance and efficiency of the supply chain; 3) there is a lack of similarly-named definitions for the measurement system and for the co-ordination between the supply chain and the financial side.

Measuring the Value of Supply Chain by Enrico Camerinelli

Camerinelli arrives at these three issues after having explained the basis of supply chain management and having linked it to the influence of supply chain operations on the financial aspects, like shareholders’ value, financial indicators, profit and loss account and the balance sheet.

In the second part of the book, he discusses various measurement methods; the second chapter is dedicated to the SCOR model. This is how Camerinelli succeeds at providing the CFO and the supply chain manager with a toolset for finding a joint principle for measuring the value of the supply chain. This book, too, concludes by expressing the necessity for a new type of collaboration that focuses on trust, speaking the same language and sharing value.

Dynamic supply chain alignment

Martijn Lofvers — Sat, 15 Aug 2009 11:43:35 +0000

Ten years after ‘Strategic supply chain alignment’, John Gattorna provides a new business model for the supply chains of 21st century companies. In ‘Dynamic supply chain alignment’, he explains how multiple supply chains can be established and retained, with the flexibility of responding to opportunities and threats and the capability of properly gearing towards suppliers, chain partners and customer.

Dynamic Supply Chain Alignment by John Gattorna

The four previously defined types of supply chains, continuous replenishment, lean, agile and fully flexible, are the basis of this book. These types are extensively discussed in the 28 chapters, in which existing theories about the supply chain are supplemented with new views and understanding. Gattorna, for instance, refines Hau Lee’s ‘Triple-A supply chain’ about the important role of the internal company culture. Three chapters deal with humanitarian supply chains as an example of flexible supply chains. Topical subjects like S&OP, tax-aligned supply chains and supply chains of the future are likewise discussed.

The message of the book is crystal clear: ‘We cannot keep up the conventional working methods, we need a new business model for business operations in their entirety, and for the supply chains of which companies are a part. Mindsets and corresponding practices will have to change dramatically in order to survive, in order to exist at all,’ according to Gattorna. Highly recommended for supply chain managers.