The Manager's Guide to Distribution Channels

Linda Gorchels, Edward Marien, and Chuck West, McGraw-Hill, 2004 226 pages, $39.95 ISBN 0-07-142868-2

To order: visit www.books.mcgraw-hill.com or major online booksellers such as Amazon and Barnes & Noble.

Distribution channels are an important component of the overall supply chain management process. But how many companies regularly assess their channels to ensure that they remain appropriate to—and supportive of—their business goals? In all likelihood, not enough.

The Manager's Guide to Distribution Channels is a useful companion for any company seeking to evaluate how effectively its products move to market. Written by marketing and logistics experts from the University of Wisconsin School of Business, the book lays out a practical seven-step approach to evaluating and upgrading a company's distribution channels. (As the authors say in the introduction, the book is intended not just to be read but also to be used.)

The discussion is logically organized around the seven stages of the framework—those key activities needed to evaluate and reconfigure the channel strategies. The stages range from the initial tasks of defining channel and coverage requirements, to developing the channel design and selecting suitable partners, to monitoring ongoing performance.

Thankfully, the book does not put forth rigid pronouncements of what channels should or should not be used. Instead, it recognizes that distribution is a dynamic process subject to changes in markets, products, and economics. Accordingly, the discussion recognizes and explains why in some cases existing channels may just need tweaking; in other cases, they may require a wholesale redesign; and in still others a hybrid approach of both new and existing channels may be best. A big part of this discussion focuses on distributors, who are, of course, a major go-to-market channel in many business sectors. The authors do a good job of outlining what qualities to look for in these critical partners.

In addition to the seven-stage framework, the book offers a glossary of terms and a listing of the technologies relevant to the distribution process. There also are plenty of checklists and templates to help users execute the various stages.

The framework and the collateral material give the book a practical handbook-like feel. For any company that needs to reassess how it brings goods to market—and that probably includes most companies—The Manager's Guide to Distribution Channels is a reliable roadmap on how to proceed.

United Space Alliance: Attacking the Causes Not the Symptoms

United States Marine Corps Logistics Chain Business Transformation & Integration

Compaq Computer Corporation: Turning Supply-Chain Strategy into Reality

Supply-Chain Council, 2003 21-27 pages, $15

To obtain, visit www.supply-chain.org

What do a space parachute manufacturer, a computer company, and the Marine Corps have in common? Supply chain problems—according to the supply chain officers of all three. The management of the United Space Alliance (USA) had trouble locating the root causes of their supply chain inefficiencies. The supply chain professionals in the Compaq Computer Corp. couldn't even seem to speak the same language. And the Marine Corps had a hard enough time coordinating a logistics chain in peacetime conditions; how was it supposed to operate in the fog of war?

Each of these supply chains needed a roadmap—a visual structure—to bring order to its processes. Enter the SCOR (Supply-Chain Operations Resource) model. The SCOR-model, created by the Supply-Chain Council, maps supply chain processes into an interlinking chain of five events: plan, source, make, deliver, and return.

In three separate case studies published by the Supply-Chain Council, the organizations report the results of their SCOR-model implementations and give solid facts to back their high opinion of the model. The reports candidly provide real company figures to convince even the most calculating skeptics of the value of the SCOR-model. Compaq developed a common process language through SCOR-model terminology and reduced its project planning rework time from 30 percent to 0 percent. The Marine Corps learned to look at its supply chain as one end-to-end process cycle instead of as separate modules. Embracing this new holistic view enabled the Marines to centralize their inventory management, connect previously incompatible information systems with middleware, and reduce repair cycle time by 33 percent. United Space Alliance used the model to map out an "as-is" version of the entire supply chain from one end to the other, form a "to-be" version of the ideal supply chain, and then identify the disparities between the two.

If there is any fault to be found with the three reports, it's the lack of specific examples regarding the implementation process. Although the reports give ample information about the organizations' admittedly impressive results, they tended to focus more on the concepts of the SCOR-model and broad descriptions of the solutions rather than on specific implementation techniques. And for the supply chain professional who wants to understand how the nuts and bolts of an implementation would work, the vague, conceptual language could become a bit frustrating.

The vagueness of the SCOR approach, however, makes the concept easily adaptable to a whole range of specific situations. According to the reports, the beauty of the supply chain-wide vision of the SCOR-model is that it is general enough to apply to any number of completely different processes.

The Extended Enterprise: Gaining Competitive Advantage Through Collaborative Supply Chains

Edward W. Davis and Robert E. Spekman Financial Times Prentice-Hall, 2004 $29.95, 262 pages ISBN: 0-13-008274-0

To order: visit www.phptr.com or most major booksellers

The extended enterprise that Edward Davis and Robert Spekman describe in their new book does not differ greatly from other cross-organizational business models described by other thought leaders. Whether called an extended enterprise, an extended supply chain, or a value network, all involve a set of companies—stretching from raw material to end consumption — that collaborate closely to bring value to the marketplace.

Yet in spite of all that has been written and said about extended enterprises being the "new world order," few cross-organizational efforts have lived up to their potential. The reason, according to Davis and Spekman, is a lack of trust between supply chain partners. And it is here, in their close examination of the important role that trust plays, that The Extended Enterprise: Gaining Competitive Advantage Through Collaborative Supply Chains differs from other supply chain management books.

In general, it's hard to find anything substantial written about trust that does not devolve into the gooey prose of self-help psychobabble. The Extended Enterprise, however, does an admirable job of providing a clear-eyed look at both the benefits and the challenges of building trust across organizational boundaries. And the authors provide readers with practical frameworks for developing trust, assessing potential enterprise partners, and even for qualitatively measuring trust levels. The book also contains a liberal flavoring of real-world examples to bolster the authors' position.

Because the authors view the extended enterprise from a purchasing perspective, they pay especially close attention to how the traditional buyer-seller relationship inhibits trust. To overcome this chronic problem, the authors strongly press for the necessity of aligning goals, using metrics, and developing the right organizational processes and structures.

At times, however, Davis and Spekman's vision of the extended enterprise teeters on the brink of sounding Utopian. They describe the extended enterprise as a model where each supply chain member has to be valued and taken into consideration, where reward and risk are shared equitably, and where all members value learning and share their knowledge. Yet the book does continually provide reality checks. Davis and Spekman do an excellent job of acknowledging that few companies currently possess the level of trust necessary for an extended enterprise relationship. They continually point out the gap between talk and action. Companies may pay lip service to the ideal of partnership but often they still make decisions based on price.

But, even as an ideal, The Extended Enterprise provides a good prod for managers to reassess their current supply chains and address how they can work toward a truer integration.