Dr. Steven A. Melnyk Professor of Operations & Supply Chain Management The Eli Broad Graduate School...
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Transcript of Dr. Steven A. Melnyk Professor of Operations & Supply Chain Management The Eli Broad Graduate School...
Dr. Steven A. Melnyk
Professor of Operations &
Supply Chain Management
The Eli Broad Graduate School of Management
Michigan State University
East Lansing, MI 48824
[email protected]/517-432-6410
Integrated Supply Chain Management Insights for Today’s Turbulent Economy and TomorrowIntegrated Supply Chain Management Insights for Today’s Turbulent Economy and Tomorrow
WEATHERING THE STORMWEATHERING THE STORM
Steven A. Melnyk, 2009- 2 -
THE FUTURE BELONGS TO THOSE WHO PREPARE FOR IT TODAY.THE FUTURE BELONGS TO THOSE WHO PREPARE FOR IT TODAY.
Malcolm X
Steven A. Melnyk, 2009- 3 -
New RealityNew Reality
• GM and Chrysler – bankrupt• Major automotive suppliers seeing volume of
business fall– Some have filed bankruptcy
• Visteon• Dura Automotive Systems
• New reality– Automotive will recover– New automotive less than old
Steven A. Melnyk, 2009- 4 -
Today’s EnvironmentToday’s Environment
Steven A. Melnyk, 2009- 5 -
SUPPLY CHAIN OPTIONSSUPPLY CHAIN OPTIONS
Weathering the Storm
Steven A. Melnyk, 2009- 6 - Source: Supply Chain Faculty, Michigan State University
The Integrated Supply ChainThe Integrated Supply Chain
SUPPLIERSUPPLIERNETWORKNETWORK INTEGRATEDINTEGRATED
ENTERPRISEENTERPRISE DISTRIBUTIVEDISTRIBUTIVENETWORKNETWORK
Information, Product, Service, Financial and Knowledge FlowsInformation, Product, Service, Financial and Knowledge Flows
MMAATTEERRIIAALLSS
Capacity, Information, Core Competencies, Capital and Human ResourcesCapacity, Information, Core Competencies, Capital and Human Resources
Relationship ManagementRelationship Management
Sourcing
Operations
Logistics
EENNDD
CCOONNSSUUMMEERRSS
Steven A. Melnyk, 2009- 7 -
DiversifyDiversify
Source: http://www.gotbroken.com/wp-content/uploads/2009/07/2010-Rizk-Auto-RA-Front-Side-View-588x367.jpg
Steven A. Melnyk, 2009- 8 -
Types of IntegrationTypes of Integration
• New related markets– Defense– Aerospace– Medical
• New geographic related markets• Unrelated markets• Change in emphasis
– Broaden– Diminish– Abandon
Steven A. Melnyk, 2009- 9 -
DIVERSIFICATION HAS RISKSFEW SUCCEED!DIVERSIFICATION HAS RISKSFEW SUCCEED!
Reality
Steven A. Melnyk, 2009- 10 -
IntegrateIntegrate
Source: www.scienceofselling.com
Expand
Solutions as well as products
Steven A. Melnyk, 2009- 11 -
ImproveImprove
Source: “The idea Generator by Norman Bodek
Steven A. Melnyk, 2009- 12 -
EnhanceEnhanceEnhanceEnhance
Source: digitalcarversguild.com
Broaden Product OfferingsBroaden Product Offerings
Steven A. Melnyk, 2009- 13 -
Comparing Supply ChainsComparing Supply Chains
• Today’s supply chain
– Strategically-Decoupled, Price-Driven
– Focused• Driven by the supply chain disruptions/risk, leadership within
the supply chain, managing the timely delivery of goods and services.
– Measured by three critical indicators• Price
• Delivery
• Quality
– Not linked to strategic objectives
Steven A. Melnyk, 2009- 14 -
Tomorrow’ Supply ChainTomorrow’ Supply Chain
• Strategically-Coupled, Value-Driven
• Highly adaptive
• More complex performance measurement– Cost savings– Cost avoidance– Revenue growth– Asset utilization
• Strategic in nature– A corporate capability and asset– A necessity and an opportunity.
Steven A. Melnyk, 2009- 15 -
Emerging ShiftEmerging Shift
• The emerging challenge for supply chains– Creating, delivering, and maintaining value
– The “challenge” of abundance• American homes
• Growth of the Self-storage industry
– Increasing response• INNOVATION
– Product
– Process
– Supply Chain
– Service
Steven A. Melnyk, 2009- 16 -
Steven A. Melnyk, 2009- 17 -
The Goal of Strategic Supply Chain ManagementThe Goal of Strategic Supply Chain Management
Steven A. Melnyk, 2009- 18 -
What Outcomes Do You Want Your Supply Chain To Achieve?What Outcomes Do You Want Your Supply Chain To Achieve?
• Six Major Outcomes– Efficiency
– Responsiveness
– Security
– Sustainability
– Resiliency
– Innovation
• Blending outcomes requires trade-offs
• Performance measurement is more complex.
• Outcome not enough; focus on solution.
Steven A. Melnyk, 2009- 19 -
Blending Supply Chain OutcomesBlending Supply Chain Outcomes
Steven A. Melnyk, 2009- 20 -
Assessing OpportunitiesAssessing Opportunities
Aerospace Military Medical Green/Renewable
Efficiency ✔✔✔ ✔✔ ✔✔ ✔✔
Responsiveness ✔✔ ✔✔✔ ✔✔ ✔✔✔
Security ✔✔ ✔✔✔ ✔✔✔ ✔✔
Resilience ✔✔ ✔✔✔ ✔✔ ✔
Sustainability ✔✔ ✔✔ ✔✔ ✔✔✔
Innovation ✔✔✔ ✔✔ ✔✔ ✔✔✔
✔✔✔ = Critical; = Important; = Nice✔✔ ✔
Steven A. Melnyk, 2009- 21 -
Major LessonsMajor Lessons
• Diversifying is more than changing customers– It will involve changing your supply chain
– New certification standards• AS9100
• Understand the problem that your system is good at solving and the problem that your customer wants you to solve– Efficiency and effectiveness may not mix
• Understand your critical customer
Steven A. Melnyk, 2009- 22 -
Major Lessons - 2Major Lessons - 2
• Understand your value proposition
• Recognize the impact of culture– Culture – what people do when the boss is not around
– Six sigma/lean and Radical innovation
– Culture takes time to change
• Change takes time, resources, and commitment
Steven A. Melnyk, 2009- 23 -
Success in Today’s MarketSuccess in Today’s Market
• Success is more than identifying a market where your skills seem to apply.
• Success is dependent on making sure that what you offer and how you offer it fits the needs of the customer.
• Success is dependent on speed and understanding.
Steven A. Melnyk, 2009- 24 -
A RequestA Request
• Weathering the Storm Research Initiative
• A Study to understand how small to medium sized firms are responding to this period of market instability.
• Focus on options being pursued, factors influencing the choice of options, and obstacles/enhancers.
• Your involvement is needed.
• Help us help you!
Steven A. Melnyk, 2009- 25 -
QUESTIONSQUESTIONS