Supply Chain Optimization: Building The Strongest Total Business Network

Charles C. Poirier and Stephen E. Reiter Berrett-Koehler Publishers, 1996

350 pages, $32.95

To order: Call (617) 558-4473

Poirier and Reiter, who are management consultants with CSC, have worked with hundred of business organizations on developing supply chains. In the course of their work, they have observed that companies typically focus their supply chain efforts within their own walls and not outside of them. Most have yet to band together in an extended enterprise to forge a supply chain from original supply to final consumption. Yet they need to do this, the authors argue, if they want to realize the true savings and efficiencies that supply chain management can deliver.

The authors offer ideas and recommendations on how to construct a broad alliance of partners in the supply chain. They propose a new model that would reverse the current polarity of product flow. It would move from a traditional push system to a pull system in which consumer takeaway would determine shelf stock. Point-of-sale data would drive the flow.

Their model for a supply chain in a particular industry channel begins with a cadre of key suppliers. It also encompasses the manufacturer, distributors, and finally, the retail outlets. All partners in the chain would have access to a data warehouse containing SKU-level information.

The chief obstacles to these network alliances among companies is trust. Too often, manufacturers and suppliers worry that retailers are the only beneficiaries of supply chain optimization. The authors maintain that corporate attitudes can be changed and that adversarial self-interest must be set aside to build mutually beneficial relationships. They emphasize that supply chain management succeeds best when savings are shared among the network partners.

The bottom-line message of this valuable book on supply chain optimization is clear: Network alliances spanning the breadth of the supply chain are essential to survival and prosperity in today's competitive business environment.

The Development Factory: Unlocking the Potential of Process Innovation

Gary P. Pisano

Harvard Business School Press, 1996

368 pages, $38

To order: Call (800) 545-7685

Gary Pisano, an associate professor at Harvard Business School, takes as his central tenet that companies competing on the basis of product innovation can gain an additional edge in the market if they also concentrate on processes—like accelerating product to market, for example.

The author believes that many high-tech companies today—challenged by rapidly changing technology, uncertain markets, and complex product technologies—face enormous difficulty in process development. Pisano's primary interest is in how process development affects product development. To understand that, he undertook a three-year field study of the pharmaceutical industry—an industry in which costly product development and rapid technological change drive an industry undergoing evolution at lightning speed.

What he found was that process development, in the great majority of cases, is a low priority for high-tech companies. Product innovation takes center stage. But Pisano argues that paying close attention to process innovation can provide enormous benefits. "How quickly and effectively a company can develop and implement such process technologies increasingly shapes the overall cost, timeliness, and results of new product introductions and the overall competitive success of the company," he contends. Processes ought to be developed right along with the product.

That's in sharp contrast to traditional business thinking, in which process improvement, largely aimed at cost cutting, occurs in mature industries where product innovation is minimal. Pisano says that by closely linking process development to product development, companies gain competitive advantage in several areas. One of the most crucial in today's marketplace: accelerated time to market. Engineering products and processes simultaneously instead of sequentially can reduce leadtimes substantially.

The author shows that equally talented and resource-rich organizations vary markedly in their process development performance, though. He says the difference is management and how it defines the role of process development, designs the structure for it, and manages experimentation. Those insights are useful in any business where innovation matters.

Juran: A Lifetime of Influence

John Butman

John Wiley & Sons Inc., 1997

260 pages, $29.95

To order: Call (800) 225-5945

This biography of quality advocate Joseph Juran explores both the life of this famous consultant as well as the history of the quality movement in the 20th century.

Born in a Rumanian village in 1904, Juran immigrated to the United States with his parents before World War I. In Horatio Alger fashion, the boy rose above his poverty and became the first in his family to earn a college degree when he graduated from the University of Minnesota.

Serendipitously, the young engineer lands his first job out of college at Western Electric's Hawthorne Works, the legendary plant that supplied telephone apparatus for AT&T. Here Juran would first encounter the issues that would consume his life—how to achieve quality production in a large industrial organization.

Juran further crystallized his ideas on quality when, during World War II, he was recruited to go to Washington, D.C., and help streamline the federal bureaucracy of the Lend-Lease program that armed America's wartime allies. It was during the war years that Juran penned the first two books in the canon that would make his name synonymous with quality.

Juran's writings first captured the attention of business leaders during the reconstruction of war-torn Japan. Japanese managers and engineers would embrace his teachings and put many of them into practice. Later, during the decade of the 1980s, when the quality of Japanese manufacturing challenged America's industrial pre-eminence, U.S. managers turned to Juran for insight into achieving manufacturing excellence.

Clearly, Juran ranks in the quality pantheon beside W. Edwards Demming and Walter Skewhart. For time-pressed executives interested in Juran's body of work, but who are reluctant to wade through complex tomes, this book provides an accessible path as it intertwines a rich personal story with an explanation of his crucial ideas.

Purchasing and Supply Management: Creating The Vision

Victor H. Pooler and David J. Pooler

Chapman & Hall Publishers, 1997

382 pages, $59.95

To order: Call (800) 842-3636

The authors contend that companies must adopt a global vision of both purchasing and supply chain management. In describing the nature and scope of that vision, they address a number of topics such as legal issues in buying, cost-reduction techniques, effective negotiating practices, and strategic approaches to inventory management.

The book also delves into the complexities involved in offshore sourcing, offering recommendations on ways to streamline that often-difficult process. Discussed in depth are such subjects as countertrade, duty drawback, and tariff codes. In addition to covering these technical subject areas, the authors point out the political pitfalls that must be avoided in global sourcing and purchasing.

Pricing also gets considerable treatment. The book takes an in-depth look at price, cost, and value relationships in the supply chain. One particularly useful section then offers advice on how to hedge against inflation costs for components.

The book makes the important point that purchasing executives can have a bottom-line impact on their company's performance. In addition to effectively managing the supply base, it emphasizes, a world-class purchasing organization can contribute to corporate profit by controlling the flow of money. There's sound advice on how to achieve this goal on a global scale.

Victor H. Pooler is president of Pooler and Associates, an international consulting firm specializing in purchasing and materials management. David J. Pooler, a former top procurement executive with General Dynamics Corp., now is vice president of global business development for Tactech Inc.

Supply Chain Management: The Basics and Beyond

William C. Copacino

The St. Lucie Press/APICS Series on Resource Management, 1996

204 pages, $45

To order: Call (561) 994-0555

This book is drawn from columns that the author has written over the past 10 years for Logistics Management Magazine. Copacino is a managing partner in Andersen Consulting's Strategic Services Practice in the North-eastern United States. A leading supply chain consultant, he holds an MBA from the Harvard Business School. He has co-edited the Logistics Handbook and served as co-author of Modern Logistics Management.

The book's chapters are organized around key aspects and issues of supply chain management. They include an overview of supply chain strategy; the supply chain's place within a competitive business context; customer service; the essence of functional excellence; and techniques for achieving such excellence. The book concludes with an insightful discussion of future trends.

Readers will find many thought-provoking subjects. For example, the author explains the notion of differential distribution, whereby logistics systems are tailored to meet the needs of specific customer groups. Another discussion focuses on the role of value-added logistics as a means of gaining competitive advantage. One interesting section provides a self-assessment test to determine whether a supply chain organization is customer- or asset-driven.

The book is perhaps at its best when it forays into the future. Here discussion turns to topics like the world of virtual retailing, the changing role of the distributor, and the emergence of distribution utility—that is, alliances between manufacturers of non-competing products serving the same end customers.

In short, this collection of columns is ideally suited for busy executives looking to gather new ideas on improving supply chain strategy. It's organized for easy access, allowing readers to investigate as much or as little as they want on a given topic based on their time constraints.

Supply Chain Strategies

Purchasing Magazine, 1996

78 pages, $22

To order: Send check or money order to Purchasing Magazine, P.O. Box 497, New Town Branch, Boston, MA 02258. To order by credit card, call (617) 558-4348

By almost any definition, supply chain management must include suppliers. And that logically means that professionals operating in purchasing or other supply functions have a role to play in designing and implementing a supply chain strategy. But Purchasing Magazine Editorial Director James Morgan acknowledges in his introduction that it is not clear how vital a role that will be. "Indeed, whether purchasing professionals play a significant role in supply chain strategies depends to a large extent on how well those in the function understand its implications and articulate them at the highest corporate level," he writes.

The intent of this book is to provide those professionals with just that understanding. The text is the result of a six-year collaboration between Morgan and Dr. Robert M. Monczka, the National Association of Purchasing Management professor in the Eli Broad Graduate School of Management at Michigan State University. Adapted from articles that have appeared in Purchasing Magazine, the 14 chapters examine a number of critical issues with a distinctly purchasing-oriented perspective.

Many of the themes are familiar to students of supply chain integration. The authors conclude that purchasing professionals, like their colleagues throughout the enterprise, must become more strategic in their thinking, take part in cross-functional teams, and shift from buyers of parts to managers of information.

The readings examine what it takes to make supply chain management work and what changes are needed in the sourcing process and in supplier relationships. They also look at ways to implement a new supply strategy and how to measure performance. The final chapter reports on the success of a global benchmarking research effort conducted at Michigan State University.