THIRD NATIONAL CONFERENCE THIRD NATIONAL CONFERENCE OF THE OPERATIONAL OF THE OPERATIONAL ADVANTAGE GROUP (OAG)ADVANTAGE GROUP (OAG)

POMS ConferenceBoston, April 29, 2006

Rafael Menda

Director, POMS - Operational Advantage Group

P O M S Production Operations Management Society

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AGENDAAGENDA

IntroductionPractitioner Survey ResultsPractitioner Panel Break

Academic PanelAction Plans Going Forward Lunch

COO Workshop

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Operational Advantage GroupOperational Advantage Group: An Interest Group of POMS

Our Main Goal:

To make POMS more relevant and useful to practitioners by improving the way the POM academic community engages with industry

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An Academic Society Reaching Out To Practitioners

Better understand the problems operations & supply chain management professionals are facing todayIncrease practitioners’ involvement in POMS activitiesInfluence the POM research agenda in business schools… Help create a “research stream” for emerging

scholars Make outcomes more relevant and useful

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What The Day Will Look Like

Morning Panel: What Is Keeping POM Executives Up At Night, And What Can POMS Do To Help? (R. Menda)

First survey of POM practitioners -- summary of resultsPractitioner panel -- elaborate on the key concerns and opportunitiesOpen discussionAcademic panel -- industry-academia collaboration experiencesSuccess factors and barriersOpen discussion and call for action

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What The Day Will Look Like

Afternoon Panel: The 'Disappearing' COO - Missing Link in Business Success - The 3rd Annual COO Workshop (J. Goldhar)

The disappearing COO -- first panelWhat is an effective COO? -- second panelOpen discussion with audience participationSummary and close-out (W. Skinner and M. Starr)

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OAG Survey Of Practitioners

“Issues that are most critical to you as a POM executive”“Primary areas of concern to you and your company today and in the next 1-2 years”“Identify those few that, if not resolved in the near- to mid-term, will greatly impact your function’s, and likely your company’s, competitiveness”

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OAG Survey Of Practitioners

Pre-compiled list of 33 “issues,” grouped under 7 categories: Customers/Markets, Links to Business Strategy Organizational Structure/Systems/Decision Making Planning/Supply-Demand Synchronization Supply Chain Management, Logistics, Procurement Workforce/Human Resource Management Operational Efficiency, Cost Competitiveness Performance Measurement, Metrics Other …

Respondents added 36 specific issues of their own

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Survey Stats

E-mailed to ~400 industry practitioners in U.S., Brazil, Sweden, CanadaTranslated to Portuguese by A. Graeml & J. Csillag in Brazil62 usable responses: 43 - U.S., Sweden & Canada 19 - Brazil (14 from the Portuguese version)

Conducted January through March, 2006

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Example of a Portion of Survey Response

Customers/Markets/Links to Business Strategy _x_Market segmentation; customer tiering—aligning supply chains with the needs of various

markets/customers __Product proliferation—resulting increase in manufacturing complexity __Increased pressure for speed-to-market with new products __Lack of Operations function’s involvement in business strategy formulation __Need to satisfy company’s short-term goals to the detriment of long-term capability-building efforts _x_Need to deal with operational trade-offs in satisfying business objectives Others (please enter)

……. Organizational Structure/Systems//Decision-Making _x_Decision-making hierarchy (functional silos vs. business-wide)—in operational improvement

initiatives _x_Centralization vs. decentralization of the supply chain function in alignment with business __Need for the establishment of formal quality assurance programs __Need for adoption of formal project management processes/tools Others (please enter)

o Operating a centralized operations/supply chain function in a highly centralized commercial structure o Trading off operational metrics against poorly planned growth opportunities

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Three Categories Stand Out

TOP SCORING CATEGORIES

32% 34% 36% 38% 40% 42% 44% 46%

Operational Efficiency/CostCompetitiveness

Planning/Supply-DemandSynchronization

Customers/Markets/Links toBusiness Strategy

Average Percent of Total Respondents

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Top-10 Problems That Keep POM Professionals Up At Night

TOP SCORING ISSUES

0% 10% 20% 30% 40% 50% 60% 70%

Support of cost reduction vs. growth/innovation/differentiation goals

Collaborative forecasting/planning/scheduling (in-house & with suppliers)

How to measure flexibility or responsiveness in operations

Optimization of Sales & Operations Planning (S&OP) process

Decision-making hierarchy (functional silos vs. business-wide)

Non-operations executives’ lack of understanding of operations/supplychain issues

Market segmentation; customer tiering—aligning supply chains with theneeds of various markets/customers

Capacity planning—proactive investment/providing buffer capacity vs.targeting high asset utilization

Increased pressure for speed-to-market with new products

Single vs. multi sourcing of raw materials(optimization of cost vs.ensuring supply continuity)

Percent of Total Respondents

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Some Issues Differ In Importance Between U.S. & Brazil

U.S. - BRAZIL DIFFERENCES

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Need for the establishment offormal quality assurance programs

Distributedmanufacturing—managing a

network of owned and contractfacilities

Support of cost reduction vs.growth/innovation/differentiation

goals

Decision-making hierarchy(functional silos vs. business-wide)

Percent of Total Respondents In Each Group

U.S. (n=43)

Brazil (n=19)

*25 pts. difference or higher

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Whom They Will Use To Work On These Issues

RESOURCES TO BE USED

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

In-company resources/projectteams

Outside consultants

In-house/corporateconsultants

Academic resources(professors/researchers;doctoral/MBA students;

interns)

Percent of Total Respondents

U.S.Br.

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Respondents’ Previous Experience With Industry-Academia Collaboration

HAVE YOU COLLABORATED BEFORE?(Past 2 Years)

Yes47%

No51%

No response2%

H O W M A N Y T I M E S ?

Once48%

Twice14%

Three times or more38%

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Future Intent

WOULD YOU SUPPORT AN INDUSTRY-ACADEMIA COLLABORATION PROJECT?

Yes (financially and otherwise)

13%

Yes, but not financially

25%

No14%

Maybe—I’d like to know more

48%

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Most Stated Contributors To Success in Previous Collaboration Work

Having a well-structured project plan, goals, deliverables, timing and teamworkExpertise and reputation of the resource; close working relationshipAcademic’s pattern recognition ability; knowledge of other industries with the same problemFocused analytics; ability to test the solutions before implementationAcademia and company support; “newness” of the topicInteraction with staff and floor personnel to make it happen

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Most Stated Barriers

Academia being labeled as “theoretical;” skeptical about ability to solve “real” problemsLack of company resources; conflicting priorities by others [in the company]Company’s focus on return-on-investment and their unwillingness to paySignificant effort to bring academic up-to-speed with business model and operating environment of companyAcademic’s lack of business/practical experienceFear of complexity; naïve view of value of academicsReluctance of company to share information

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Questions to Explore

What can OAG do to make POM research more attractive (and readable) to practitioners?How can we create “a product” in POMS that the practitioners would want to “buy”?Is it practical to create a repository of potential “hot” research topics in POMS to serve as a guide for young academics looking for meaningful research streams?What else can OAG/POMS do to increase practitioners’ degree of involvement in society’s activities?

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Panel Participants

Peiling Wu -- Senior Research Scientist, Manufacturing Systems Research Laboratory of General Motors R&D Center Tony Lynch -- Senior Consultant, A.T. Kearney, Inc.Anand Raman -- Senior Editor, Harvard Business ReviewSteve Brown -- Professor, School of Business and Economics, Exeter University (U.K.)K.K. Sinha -- Curtis L. Carlson Family Foundation Professor of Management Science and the Academic Director of the Medical Industry Leadership Institute at the Carlson School of Management, University of Minnesota Harm-Jan Steenhuis -- Assistant Professor of Operations Management at Eastern Washington University.