Supercharging Supply Chains: New Ways to Increase Value Through Global Operational Excellence

Gene Tyndall, Christopher Gopal, Wolfgang Partsch, John Kamauff

John Wiley & Sons Inc., 1998

269 pages, $34.95

To order: Call (800) 225-5945

The authors, all management consultants with Ernst & Young, begin with a premise that's hard to refute: Operational excellence is an essential—if not, the essential—component of increased shareholder value. And one of the most compelling ways of achieving operational excellence, they maintain, is through supply chain management.

The book proceeds to support the argument through a series of chapters that build upon one another. The discussion specifically:

• Establishes the relationship between supply chain management excellence and shareholder value. It then defines the attributes of supply chain management that contribute most to that value.
• Describes how operational excellence in the supply chain will help a company sell more goods. Among the techniques discussed are push-pull programs that cost effectively respond to market demand, creative customer segmentation initiatives, one-to-one account management, and consumer-direct marketing.
• Explains the role that supply chain management plays in new-product introductions. A five-step operational plan is offered to "improve the odds" that the supply chain will support the new product throughout the entire concept-to-end-of-life cycle.
• Summarizes how companies should think about the supply chain's contribution across the key dimensions of value (relationship of benefits to all costs), risks in executing supply chain initiatives, and best methods for implementing innovations.

Case study vignettes are placed throughout the work to illustrate how leading companies are leveraging supply chain management for increased shareholder value. They include well-known examples such as the Wal-Mart/Procter & Gamble collaboration as well as some lesser-known success stories from companies as diverse as Hoechst Celanese and K2 Skis. There's also an informative appendix that details the results of a study on supply chain partnerships conducted by Ernst & Young and the University of Western Ontario.

Despite the occasional "consultantese" that sneaks into the writing, Supercharging Supply Chains is an excellent resource. It clearly and forcefully establishes the relationship between supply chain management and shareholder value—a significant achievement. And in doing so, it provides powerful ammunition to any manager seeking to advance the case of supply chain management in the corner offices.

Global Cases in Benchmarking: Best Practices From Organizations Around the World

Robert C. Camp, Editor

ASQ Quality Press, 1998

640 pages, $47.00

To order: Call (800) 248-1946

With Global Cases in Benchmarking, Robert C. Camp has put together one of the most comprehensive—and certainly one of the biggest—books on benchmarking. Camp says that his goal in this work is to present a series of case studies on benchmarking initiatives that go beyond the traditional U.S. manufacturing environment to embrace different types of organizations from all parts of the globe. He has succeeded admirably in that goal.

Fully 27 case studies are included in the book. The benchmarking initiatives undertaken in these organizations represent a broad spectrum of activity—supply chain management, hardware procurement, international trade and development, customer-satisfaction measurement, and many more. Five sectors are covered: manufacturing, service, non-profit, government, and education. And virtually every trading area, from North America to Australia and New Zealand, is represented. For the North American executive, this universal perspective will likely provide a first-time exposure to certain companies, countries, and benchmarking initiatives.

The case studies themselves are written by experts from both within and outside of the profiled organizations. As with any such compilation involving multiple authors, some of the case studies are more succinctly presented than others. But overall, the story lines are clear and the particular benchmarking initiatives well stated and adequately explained.

Tackling a book of this magnitude can be a bit daunting. But the editor does a commendable job of ordering the presentation through a series of overviews of each of the five sectors. These summaries contain a valuable "master table" that lists the company, country, and industry as well as the specific benchmarking initiative addressed. This at-a-glance approach allows readers to focus on the case studies that will have the greatest significance to them.

The book is instructive not so much for the nature of the benchmarking initiatives (there is one case study, for example, on coronary bypass surgery), but rather for the processes the organizations are applying to define and implement the initiatives. Or as Editor Camp writes in the introduction, "I hope the book will provide a safe place where those interested in benchmarking can go and learn—and learn quickly."

Robert Camp is the author of two earlier books on benchmarking, also published by ASQ Quality Press. They are Benchmarking: The Search for Industry Best Practices That Lead to Superior Performance and Business Process Benchmarking: Finding and Implementing Best Practices.

Purchasing and Supply Chain Management

Robert Monczka, Robert Trent, Robert Handfield

South-Western College Publishing, 1998

776 pages, $56.25

To order: Call (800) 423-0563 or visit www.swcollege.com

This new textbook is a superb primer for college students preparing for careers in supply chain management, particularly those who intend to focus on procurement. But it is also a valuable desk reference for supply chain professionals far removed from the classroom.

The reason: The authors have written a text that responds to the business realities of the end of the century. In addition to providing readers with a clear understanding of purchasing fundamentals, it explains why and how procurement professionals must look beyond functional excellence and link purchasing to the broader concept of supply chain management. "Contemporary supply chain responsibilities require that the purchasing manager act as an initiator of strategic inter-firm relationships rather than as a buyer, per se," the authors note early in the text.

Another reason to seek out the book is that the lead author, Robert Monczka, has long been one of the foremost thinkers in purchasing and supply chain strategy. As director of the Global Procurement and Supply Chain Benchmarking Initiative and professor of strategic sourcing management at Michigan State University, Monczka brings to the text not only a well-honed expertise, but also a perspective nurtured at both the academic and industry levels. Co-author Robert J. Trent is assistant professor of operations management at Lehigh University. Robert B. Handfield, also a co-author, is associate professor of purchasing and operations management at Michigan State.

One particular strength of the book is the use of actual business cases from major corporations such as Xerox and Ford. In many instances these case examples are drawn from trade publications such as Purchasing magazine and in others from the authors' own experience. One caveat: While the cases are instructive, some are a bit outdated—not entirely surprising considering the time involved in preparing a textbook. Additional value comes from the bibliography at the end of each section.

The 21 chapters are organized in five sections. The first is the most basic, outlining the core purchasing-related functions. Section 2 introduces strategic supply management, with a focus on how procurement processes can help deliver competitive advantage. Section 3 looks at tools and techniques available to supply management professionals, including such practices as value analysis, project management, cost analysis, and cost accounting. Section 4 offers a perspective on the functional areas that interact with purchasing as well as measurement and information systems that support this function. Part 5 may be of the most interest to experienced professionals. Called "Future Directions," the section provides insight on a number of business trends garnered from surveys of managers in various global organizations.

Although the writing is lucid throughout, the book is an introductory text, and as such may be too elementary for some supply management professionals. Yet it does provide solid reminders of purchasing basics and clear explanations of how the function fits into modern supply chain strategy. Keeping in mind the nature of the book, readers will find it is a worthwhile tool to have at hand, somewhat akin to a trusted dictionary or reference work.

Beyond Strategic Vision: Effective Corporate Action With Hoshin Planning

Michael Cowley and Ellen Domb

Butterworth-Heinemann, 1997

24 pages, $17.95

To order: Call (781) 904-2500

What do Hewlett-Packard, Ford, Xerox, and Procter & Gamble have in common? For one thing, they all use a management technique called Hoshin Planning as part of their competitive strategy.

Consultants Michael Cowley and Ellen Domb have helped many companies implement Hoshin Planning techniques. And in their opinion, it is the most effective way of achieving breakthrough results. As importantly, they believe, it is a technique that all levels of the organization can understand and support.

Like kanban and kaizen, Hoshin originated in Japan. And like many of these business techniques perfected in that country, it has roots in the works of W. Edwards Deming and John Juran, the progenitors of the modern business quality movement. Hoshin (literally the "compass needle" that will set the strategic direction for the organization) combines elements of Management by Objectives and participatory management with a series of specially designed tools to execute the planning process. The activities that flow from Hoshin Planning aim not for incremental advances in processes or operations, but rather for quantum leaps in performance and profitability.

Beyond Strategic Vision offers a readable guide to a proven and powerful strategic planning tool. The authors begin with a persuasive argument for strategic planning in general as a core component of business success and then go on to make just as convincing a case for the primacy of Hoshin. After explaining the evolution of the Hoshin Planning process, they get to the heart of the matter—a step-by-step guide to planning and executing the Hoshin-style plan.

Readers will learn of the seven tools that lie at the center of the Hoshin process—tools like matrix diagrams, affinity charts, and activity network diagrams. They'll be introduced to a concept known as "catchball," designed to generate commitment to the planning objectives at all levels of the organization. And they will benefit from the charts, diagrams, and other templates used in the Hoshin Planning process.

For companies and supply chain professionals that believe strategic planning can make a difference in how they compete in the marketplace, this is a must-read book. It succeeds on at least two important fronts: by explaining a sophisticated concept in clear terms and then providing a workable guide for putting that concept into action. (For a closer look at one manager's experience with Hoshin Planning, see "A Practitioner's View of Strategic Procurement" on Page 56 of this issue.)

Logistics Software

Richard C. Haverly and James E. Whalen

Council of Logistics Management, 1997

988 pages, $75 (CLM members), $100 (non-members)

To order: Call (630) 574-0985

Here is an indispensable guide for anyone replacing, adding, or evaluating supply chain software. Prepared by Andersen Consulting for the Council of Logistics Management, this massive (988-page) document provides detailed information on more than 1,200 software packages in the following areas: order processing, inventory management, distribution location modeling, warehouse operations, purchasing, and transportation rate calculation and analysis.

Each of those 1,200 entries includes a series of relevant data points. In addition to the package name and vendor contact information, each listing gives price, maintenance fee, number of installations, functions provided, hardware, language, and database.

In addition to being comprehensive, the software guide is easy to use. Readers can quickly identify those packages that have the greatest potential for their operations and systems hardware configurations. An electronic version of the book accompanies the hard copy.