Analyzing the data and information derived from secondary literature searches as well as the input from UW program participants and practitioner instructors, the study team developed the following list of SMC enablers:

• Organizational infrastructure—how business units and functional areas are organized; how change-management programs are led and coordinated within the existing organizational structure.
• Technology—how technology (not just information technology but also the "physical" materials-management technologies for material design, operations, and materials handling) affects a company's operational and strategic supply chain processes.
• Strategic alliances—how external companies (customers, suppliers, and logistics-services providers) are selected as business allies; how intercompany relationships are built and managed.
• Human resources management—how job descriptions are designed, how positions are filled, how people are recognized and compensated, and how career paths are directed.

The research team surveyed a group of supply chain professionals to determine their ranking of the four enablers identified. The survey sample was drawn from past attendees at UW seminars as well as from other companies, including logistics-services providers, with proven experience in implementing SCM programs. Approximately 200 responses were tabulated.

The survey findings contain a few surprises. As Exhibit 1 shows, the respondents clearly felt that the organizational infrastructure and its associated attributes was the most important enabler of successful supply chain implementation. It was ranked considerably ahead of technology and the other two enablers. (In our survey, a higher ranking—with a "4" being the highest—indicates an area of greatest concern.)

Each of the enablers has its own set of attributes. These are the critical components of each enabler that need to be in place if supply chain initiatives are to succeed. The attributes identified for organizational infrastructure, technology, strategic alliances, and human resources management are discussed below.

The attributes are listed in order of frequency of mentions. Survey respondents were asked to review a list of attributes associated with each enabler, add additional attributes they felt were important, and then select their top two attributes from the list. Each of the two mentions was assumed to be equal in importance. (The percentages in the charts below indicate the frequency distribution of results for each attribute.) The study team gained additional insight and information from interviews with SCM implementation leaders, as identified in the business press and other sources.

Enabler #1: Organizational Infrastructure

Considering the heavy emphasis placed on this enabler, it is critical to understand the specific organizational characteristics considered essential to successful SCM implementation. The research identified the following list of organizational attributes, which the survey respondents ranked in the following order:

The first attribute listed—a business strategy that aligns business units toward the same goal—was named significantly more often than any of the others. The need to have a sound process-management methodology in place was ranked second in importance.

But how does a company align business units and manage its processes effectively?

The top-management process flow chart presented in Exhibit 2 helps answer this question. It represents a phased step-by-step approach to SCM implementation developed by UW in conjunction with industry practitioners, in particular representatives from 3M. We first developed an academic model and then meshed it with 3M's supply chain planning and operations procedures to create the nine-step process improvement plan shown in the exhibit. Note how the four enablers permeate the implementation process.

Because of the central importance of the organizational enabler, the study team conducted a secondary research project to identify how widespread the "supply chain" title had become in organizations today. We felt this would yield some insight into how deeply the concept of integrated SCM had permeated large organizations. The research found that among those attendees at UW seminars, only 10 percent had a person with a supply chain title in his or her organization. Despite this low number, 59 percent said that they were involved in supply chain initiatives.

The study team also randomly sampled 25 pages from the 1998 membership directory of the Council of Logistics Management (CLM), a leading professional association for logistics and supply chain professionals. Among the 837 names reviewed, only 2.5 percent had supply chain in their title. Given that companies whose employees attend UW seminars and join CLM are generally large and comparatively sophisticated in their supply chain activities, one might logically expect that the percentage of "supply chain" managers would be a lot higher. And although the numbers of such titles is rising at both our seminars and within CLM overall, the rate of increase has been nowhere near what many observers had predicted.

Our research suggests that many companies are talking supply chain management, but comparatively few have progressed beyond that. In particular, they have yet to define SCM as a specific area of "application" knowledge that calls for an executive responsible for championing SCM initiatives. The implication is that companies may have difficulty in implementing initiatives if top management does not understand the supply chain opportunity and appoint a leader to capitalize on that opportunity.

Enabler #2: Technology

When technology is mentioned in the context of implementing SCM initiatives, most people immediately think of information technology. But as our research got under way, a number of supply chain professionals reminded us that technology went beyond information. They pointed out it also related to how products were manufactured and handled throughout the supply chain. These solutions are extremely important in meeting customer needs and in increasing inventory velocity. Accordingly, the survey questionnaire was revised to address these manufacturing and materials-management issues as well.

In line with the revised research approach, the discussion on technology is presented in two parts: information technology and manufacturing and materials-management technology.

Information Technology

Before assessing IT as an enabler, we first had to define the scope of information technology within the supply chain context. The study team created the following IT classifications to provide that definition. Respondents were asked to consider these areas as they evaluated the relative importance of IT as an enabler to supply chain initiatives.

1. Data coding and structures—ANSI, EDIFACT, CPFR, data identifiers.
2. Data capture—keyboard, bar coding, RFID, OCR, imaging, voice, POS/POU capture.
3. Data collection—hard wired, RFDC (spread spectrum and narrow band), satellite, GPS.
4. Materials manufacturing, handling and routing connections.
5. Database management—portable, front-end controllers, servers, mainframe, ERP, GsIT.
6. Electronic commerce—EDI, Internet Web-based systems between business partners.
7. Decision-aiding tools—warehouse layout and dynamic re-warehousing, work force scheduling, regression analyses, routing, sales forecasting, charting, value-added operations, geo-spatial analyses.
8. Management reporting—tabular plus graphical, control, and geographical charts.

Keeping these eight categories in mind, respondents ranked the following key attributes on their importance in enabling SCM initiatives.

More than half of the respondents said that the ready availability of coordinated internal data on operations, marketing, and logistics (attributes 1 and 2) was the key IT attribute in implementing supply chain initiatives. The ability to link those systems to the business partners was considered the next most important attribute.

From these responses and follow-on research, it became clear that companies needed to define their SCM data and system performance requirements before selecting their software solution. Another key finding was that they needed to first integrate their systems internally before attempting systems integration with their partners.

Manufacturing and Materials-Management Technology

The other side of technology relates to how products are manufactured and handled as they move through the supply chain—that is, the "physical" technological influences. The study team categorized these as follows:

1. Basic research & development—How to design products and services for flow-through supply chain efficiency.
2. Process research & development—How to make the right volume to meet customer needs. How postponement and modular manufacturing can be used to speed up the processes to meet customer requirements while keeping inventories low.
3. Logistics process flows—How to move products between links in supply chains.
4. Aftermarket flows—How to manage the flow of parts and returned goods, including possible use of returnable containers.

With an understanding of these categories, respondents were asked to rate the importance of the following materials-management attributes to SCM implementation. Their rankings are shown below:

Overall, respondents showed considerably less awareness and recognition of these technologies than they did of the information technologies. Yet among those attributes considered, the design of products and physical processes for supply chain efficiencies topped the list. Perhaps these results would have been different if respondents were primarily located in manufacturing, or if we had drawn our survey sample from the APICS membership. Had the survey sample been different, we possibly could have measured concepts such as lean manufacturing and ergonomic and environmental design in support of SCM. Similarly, had we had more multinational companies, transnational manufacturing issues might have been addressed as well.

Enabler #3: Strategic Alliances With Supply Chain Members

Alliances are critical to supply chain efficiency. Many companies already have made considerable progress toward dismantling the functional silos within their organization—in effect, forging internal alliances. Now, it's time to achieve that same kind of integration with the other members of the supply chain.

If organizations are to achieve the full benefits of SCM, they must integrate and streamline the flows of products between supply chain partners. This entails the development of flow-through transportation systems and intermediate assembly and distribution facilities to increase inventory velocity and meet differentiated customer needs. One proven approach is to start with the key accounts, which typically require the greatest attention, and then move on to the other customer segments.

Here's how the respondents ranked the attributes that enable strategic alliances across the supply chain.

The enabler receiving the most mentions by far centered on understanding the expectations of the alliance partners. The second most important factor cited was the ability to partner and collaborate with trading partners on supply chain design and product/service strategies. The message here is that shippers and receivers alone cannot get the job done. Strategic alliances that embrace outside suppliers, customers, third-party logistics providers, and other facilitating intermediaries must be part of the supply chain planning and execution processes. A collaborative approach to these activities is crucial to the success of the individual enterprise—and the collection of enterprises that make up the alliance.

All too often in the past, the dominant players in the supply chain dictated solutions and used their leverage to get low prices for "their" solution. In the new era of supply chain management, however, performance requirements and solutions need to be jointly developed among the alliance partners—users, suppliers, customers, and third parties. To maximize the success of the alliance, the goals, metrics, and solutions must be continually monitored. Any corrective actions needed must be taken immediately.

Enabler #4: Human-Resources Management

As a factor in enabling successful supply chain performance, respondents rated human-resources management as slightly less important than technology and strategic alliances, and significantly less important than organizational infrastructure. Perhaps this ranking is due to their limited involvement in this area. Many of their companies may not have confronted these human-resources management issues in redesigning and implementing their supply chain processes.

Not surprisingly, the most important—and the most challenging—enabling attributes are finding practitioners knowledgeable in supply chain management and finding facilitators to lead the implementation change process. Apparently, many companies are struggling with the difficult task of finding people who are knowledgeable in supply chain theory and practice. Another important human-resources attribute, ranked third in importance overall, was having compensation and incentive programs for SCM performance. This can be particularly difficult considering that supply chain management is inherently cross-functional by nature—both within and between companies.

The research conducted for this study, coupled with the input of industry practitioners who generously offered their comments in this article (see accompanying sidebars), underscores the central importance of organizational infrastructure and the compelling need for cross-functional processes as enablers to effective supply chain management. It's more than just information technology. Top management must be sold on the importance of supply chain management as a promising means of competitive advantage. For this advantage to be realized, companies must be properly organized and include SCM as part of the total business planning process.

Once the company is organized and is being managed for supply chain improvement, it can then address the other enabling forces. Existing processes need to be documented as a baseline. They then can be redesigned, and the appropriate enabling IT and communications technology evaluated and selected. Along the way, strategic alliances need to be formed—not only to execute the supply chain operations but also to plan collaboratively for greater efficiencies. Finally, companies must remember the human-resource management component. When asked to participate in the cross-functional activities of integrated supply chain management, people sometimes respond that "It's not my job." Job descriptions and performance measurement and reward systems need to be changed to overcome this resistance.

Companies that recognize the scope of the supply chain management enablers—and the resulting barriers that can form in their absence—position themselves for business success. The leaders in a wide range of industries have proven that convincingly.

Author's note: Many survey respondents expressed an interest in participating in a facilitated two-day program to discuss the research results and to network with other supply chain practitioners. Readers interested in participating in such a seminar—or who want to learn more about the study details—are invited to contact the author at emarien@bus.wisc.edu.