SCM-EricJohnson Change Management

8/12/2019 SCM-EricJohnson Change Management

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change management

ENFRENTANDO LA INCERTIDUMBRE Y EL CAMBIO

Dr. M. Eric Johnson

El Dr. M. Eric Johnson es Director del

Tucks Glassmeyer/McNamee Centerfor Digital Strategies y Profesor deOperations Management de TuckSchool of Business, DartmouthCollege.


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Supply Chains for the Information Age:Mastering Uncertainty and Change

M. Eric Johnson

Tuck School of Business

Dartmouth College


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Uncertainty - Supply Chains Are Right In Middle


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Demand Characteristics

Functional

Low demand uncertaintyStable demand

Long product life

Low product customization

Innovative

High demand uncertaintyShort selling season

High product variety

High obsolescence


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Supply Characteristics

Stable

Fewer breakdownsStable and higher yields

Fewer quality problems

More supply sourcesReliable suppliers

Dependable lead time

Evolving

Vulnerable to breakdownsVariable and lower yields

Potential quality problems

Limited supply sourcesUnreliable suppliers

Variable lead time


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Supply/Demand Uncertainty Matrix

1 2

3 4

Demand Uncertainty

SupplyUncer

tainty

Low (Function Products) High (Innovative Products)

Low

(StableProce

ss)

High

(Evolving

Pro

cess)


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The Barilla Supply Chain

Barilla

Factories

BarillaCDC

Barilla

DCc

Private DCs

Grande

Distribuzione

Independent

Supermarkets

Chain

Supermarkets

Signora Maria

Shops

BarillaCDC


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Barillas Supply Chain

Barilla

Factories

Barilla

CDC

Barilla

DCc

Private DCs

Grande

Distribuzione

IndependentSupermarkets

Chain

Supermarkets

Signora Maria

Shops

Barilla

CDC

Barilla

Factories

Barilla

CDC

Barilla

DCc

Private DCs

Grande

Distribuzione


Chain

Supermarkets

Signora Maria

Shops

Barilla

CDC

Barilla

CDC


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Barillas Supply Chain

BarillaFactories

Barilla

CDC

Barilla

DCc

Private DCs

Grande

Distribuzione


Chain

Supermarkets

Signora Maria

Shops

Barilla

CDC

BarillaFactories

Barilla

CDC

Barilla

DCc

Private DCs

Grande

Distribuzione


Chain

Supermarkets

Signora Maria

Shops

Barilla

CDC

Barilla

CDC


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Causes and Costs

Causes of the fluctuations

Costs of the fluctuations


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Campbells Soup

0

100

200

300400

500

600

700

800

1 4 710 13 16 19 22 25 28 31 34 37 40 43 46 49 52

Time in Week

Weekly

Quantity Retail Sales

Mfg Shipments


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Solutions


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1 2

3 4

Demand Uncertainty

Supply

Uncertainty


Low

(StableProcess)

High

(Evolving

Pro

cess)

Hau Lee, 2002


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Printer Supply Chain

Asia Dealers

Supplier

SupplierEuropeoards Printers Dealers

Supplier

Dealers

Supplier

ASICs

4 weeks 15 weeks 1 weekweeksday

Americas


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Product Design: A Lesson From High Tech

Product Design Proliferation

both

black & white

color

DOS

Mac

both

black & white

color

UK

GermanySpain

UK

GermanySpain

UK

GermanySpain

UK

GermanySpain

UK

Germany

Spain

UK

GermanySpain


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Postpone Localization

Supplier

Dealerssia

Dealersmericas

EuroperintersItalyFranceGermanySpainetc

Supplier

Dealerssia

Dealersmericas

EuroperintersItalyFranceGermanySpainetc

Differentiating atthe factory

Differentiating atthe warehouse


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1 2

3 4

Demand Uncertainty

Supply

Uncer

tainty


Low

(StableProce

ss)

High

(Evolving

Pro

cess)


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The Supply Chain Life Cycle

1 2

3 4

The SC Solution Reduce Uncertainty

The Business Problem - Commoditization


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The Supply Chain Life Cycle

1 2

3 4

The Business Solution Innovation

The SC Problem - Uncertainty


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Level II - Resiliency

Weeks

Producti

vity

100%

0%1 2 3

Start of recovery

Event

Rather than simply avoid uncertainty,plan for it and build resiliency.

Cyber Attack

Dock Strike

Weeks

Productiv

ity

100%

0% 1 2 3


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Risk

Measure

Define risk measures

Risk Identification Define direct and indirect risks and link to measures

Risk Assessment

Assess the current risk and develop scenarios

Risk Management

Assess and implement robust mitigation strategiesIP Leakage


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Manage Demand: Rolling Mix


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1 2

3 4

Demand Uncertainty

SupplyUncer

tainty


Low

(StableProce

ss)

High

(Evolving

Pro

cess)

Hau Lee, 2002

S /


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1Problem:

- The bullwhip effect

Solutions:

- Alignment of incentives and information

among supply chain partners

- Coordinated planning, forecasting and

replenishment (CPFR)

- Vendor managed inventory (VMI)

2Problem:

- Long/uncertain development and lead times

- Highly uncertain demand patterns

- Short selling season

Solutions:

- Mass customization

- Postponement of final customization- Early orders from customers

Problem:

- Highly uncertain supply

- Disruption risk in supply

Solutions:- Pooled inventory and resources

- Exchanges to extend reach of suppliers and

inventory

- Contracts that manage risk by locking in

factors such as price and delivery

3

Problem:

- All problems associated with Boxes 1 - 3

Solutions:

- Postponement of final customization- Pooling of suppliers to hedge uncertainty

- Platforms and modular designs that allow

for postponement of final customization

4

Demand Uncertainty

Supp

lyUncertainty


L

ow(

StablePro

cess)

Hi

gh(Evolving

Process)

Jett, Pyke, and Johnson; 2006; Hau Lee 2002

L l III V l Mi ti


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Level III Value Migration

Migrate toward areas of the supply chain that offerhigh value, while exiting areas that have shrinking

value.

iTunes

Labels

Writers

Performers

iTunes

Integrate Service and Product Supply Chains

C t N S l Ch i ith I f ti


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Create New Supply Chains with Information

Treat Ops

Mfr Customer

Mfr

P d t S i ?


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Product or Service?

Manufacturing ServicesDistinctive Operational Characteristics

S


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Summary

Level I

Different supply chains exhibit different problems and solutions

Employ solutions that reduce uncertainty

Level II

Resilient supply chains that embrace low-cost sourcing

Managing risk while lowering cost

Risk of interdependency

IP risk

Level III

Differentiate by new products, processes, tailored offers

Integrating service supply chains

Create new supply chains

Leverage partnerships

Information as a Basis for Tailored Offerings

CRM and Pricing

Sales, Marketing, Service Automation,

Dynamic Pricing

Tailored Offerings

Serve loyal customers well while

minimizing supply-chain costs tomaximize profit

ERP

Financials, HR, Manufacturing

SCM

Purchasing, Logistics, Inventory,

Planning, Distribution

Internally

FocusedExternally

Focused

Revenue

Enhancing

Cost

Reducing

Read More


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Read More

Johnson, M. Eric (2006), Ready for the Digital Future? Supply Chain Management Review, July-August, 26-32.

Johnson, M. Eric (2006), On Offshore Outsourcing, POMS Chronicle, Vol. 13, No. 2, 10.

Dynes, Scott, Eva Andrijcic, M. Eric Johnson, Barry Horowitz (2006) Economic Costs of Information Infrastructure Failures: Estimates from

Field Studies in Manufacturing Supply Chains Dartmouth College Working Paper. Proceedings of the Fifth Workshop on the Economics ofInformation Security, Cambridge University, June.

Johnson, M. Eric (2006), Dual Sourcing Strategies: Operational Hedging and Outsourcing to Reducing Risk in Low-Cost Countries,

Forthcoming inSupply Chain Excellence in Emerging Economies, Springer-Verlag, Chung-Yee Lee and Hau L. Lee editors.

Johnson, M. Eric (2006) Supply Chain Management: Technology, Globalization, and Policy at a Crossroads, Interfaces, May-June, 191-193.

Jett, Quintus R., Pyke, David F., and M. Eric. Johnson (2006), Minority Business Enterprises: Mastering the Supply Chain, U.S. Dept ofCommerce, MBDA.

Johnson, M. Eric (2005), A Broader Context for Information Security, Financial Times, 16 September 2005, 4.

Kopczak, Laura R. and M. Eric Johnson (2003), The Supply-Chain Management Effect: How Supply Chain Management Is Changing

Managers Thinking, Sloan Management Review,Vol. 44, No. 3 (Spring), 27-34.

Lee, Hau L. (2002). Aligning Supply Chain Strategies with Product Uncertainties. California Management Review, Spring, Vol. 44, No. 3.

Johnson, M. Eric (2001), Learning From Toys: Lessons in Managing Supply Chain Risk from the Toy Industry, California Management

Review, Vol. 43, No. 3, 106-124. Highlighted (2003) in Risk: The Weak Link in Your Supply Chain,Harvard Business Review Management

Update, March, 3-5.

Johnson, M. Eric and Emily Anderson (2000), Postponement Strategies for Channel Derivatives,International Journal of Logistics Management,Vol. 11, No. 1, 19-35.

www.tuck.dartmouth.edu/digitalstrategies


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SCM-EricJohnson Change Management

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