Advanced Supply Chain Management: How to Build a Sustained Competitive Advantage

Charles C. Poirier

Berrett-Koehler Publishers Inc., 1999

220 pages, $39.95

ISBN 1-57675-052-3

To order: Call (415) 288-0260, www.bkpub.com

Anyone looking for a straightforward description of supply chain management evolution will find Charles Poirier's book an excellent source. The title is just slightly misleading, though. It is not just for advanced management: The author examines SCM in its most basic as well as its most elevated form.

Readers who are in the early stages of reengineering may find Poirier's analysis somewhat discouraging. His long experience as a partner in the supply chain practice of Computer Sciences Corporation has led him to conclude that most businesses must painstakingly move through a series of evolutionary steps before they reach proficiency. Each step builds on the preceding one. And there are no shortcuts. Yet the benefits that flow from this effort, even in the early stages, give good reason to persevere. In fact, when it comes to developing supply chain capabilities, companies don't really have a choice. Poirier contends that the supply chain leaders are steadily widening the gap between themselves and the rest of the pack.

The first chapter is particularly useful for readers grappling with the concept of supply chain management. It presents a bit of a supply chain history lesson, outlining the forces driving its development and succinctly defining what supply chain management means. The author then walks readers through the sometimes difficult, often painful journey toward advanced supply chain management practices, whereby companies improve their total system of supply and develop efficiencies across the entire network.

Poirier warns that early efforts tend to produce mixed results and that the barriers (both internal and external) to supply chain improvements can be hard to overcome. Traditional ways of doing business that focus on transactional negotiations, limited sharing of information, and benefiting only at the expense of other supply chain participants need to give way to true collaboration. It is this inherent reluctance to give up past practices, he argues, that makes sudden transformation difficult.

Poirier identifies four stages of supply chain evolution, discussing what's involved in each. First comes functional improvement in purchasing, logistics, inventory, and order fulfillment. This is followed by development of internal excellence through process redesign. In the third stage, businesses turn their focus to building networks with supply chain partners. In the final "industry leadership" stage, management teams across the entire network of supply (the "value chain constellation") move in concert to serve customers while sharing resources and rewards. Poirier details the requirements for success at each level, paying particular attention to the central role that technology plays in facilitating supply chain management.

The text is replete with anecdotes of how various businesses implemented process changes along the way. The anecdotes tend to be short and disguise the identity of the companies. Thus, while interesting, they do not carry the same impact as "naming names." Nonetheless, they provide useful illustrations of key points.

No textbook, of course, can fully prepare any manager for the ever-evolving process of supply chain improvement. But this book provides a useful roadmap by pointing the way, establishing generic milestones, and explaining why it is important to follow that path.

Advanced Supply Chain Management is a logical sequel to Poirier's earlier book, Supply Chain Optimization, which he co-authored with Stephen E. Reiter. That book also is available through Berrett-Koehler Publishers Inc.

Competing Through Supply Chain Management

David Frederick Ross

Kluwers Academic Publishers, 1999

366 pages, $79.50

ISBN 0-412-13721-6

To order: Call (781) 871-6600

This is a versatile publication that delivers value on a number of levels.

As a tutorial, it does a good job of chronicling the emergence of supply chain management and defining the key terms associated with this business approach. As a management text, it persuasively states the competitive case for developing excellent supply chain processes—both within the organization and then extended to the trading partners. And as a practical guide, it gives a framework for developing an effective supply chain strategy and a 10-step program for implementing that strategy.

Author David Frederick Ross, manager of education for the Interactive Group in Chicago, develops several recurrent themes ... the importance of extending the supply chain to embrace the external partners, the necessity of information connectivity across the chain, the need to manage inventory aggressively at every point in process. None of these theses are new, or course, but they are effectively reinforced and illustrated throughout the book.

Competing Through Supply Chain Management is hard to categorize. It contains elements of an academic text as well as a business management book. It's a delicate balancing act, but one that for the most part succeeds. In short, this would be a useful reference addition to any supply chain library.

Mass Customization: The New Frontier in Business Competition

B. Joseph Pine II

Harvard Business School Press, 1999 (Paperback)

368 pages, $16.95

ISBN 0-87584-946-6

To order: Call (888) 500-1016

Readers who missed this business classic when it was introduced in 1993 have a second chance with the release of the paperback edition. In Mass Customization, Joe Pine pointed to a business trend that was to intensify throughout the 1990s—namely, the wholesale shift from commodity to variety in products and services.

What makes the book still relevant today is that the mass customization movement that Pine wrote about earlier in this decade will only accelerate in the years ahead. Consumers, once introduced to something that speaks to their particular likes and dislikes, will never go back to plain vanilla. To respond to that personalized demand, providers of goods and services will become even more reliant on the efficiency and creativity of their supply chains.

Though Mass Customization has no shortage of deep thinking, it's essentially an easy read. The first part of the book describes the what and why of this concept. As the author explains, mass customization is really the synthesis of two competing systems of management—that is, the mass production of individualized goods and services. And as with so many other advances of the past decade, the enabler has been advanced information technology.

The second part of the book examines the how of mass customization, offering a wide range of successful examples from Toyota to the Marriott Hotel chain. Of particular value is the discussion of the organizational transformation that has to take place for mass customization to succeed. Interestingly, that transformation—from a hierarchical to a networked organization—is the same one required to create a successful supply chain organization.

Though some of the book's examples may now sound a bit outdated (and obviously there's been a raft of new enabling technology that has since come on stream), Mass Customization offers important core insights on customer focus. We all need to be reminded of that on a regular basis. And the release of the paperback edition is one such timely reminder.

A Guide to Effective Motivation & Retention Programs in the Warehouse

Warehouse Research Center

WERC, 1999

40 pages, $20 (WERC members), $40 (nonmembers)

To order: Call (630) 990-0001, www.werc.org

The warehouse or distribution center often is described as one of the most critical links in the supply chain. If that link is to operate effectively, companies need reliable workers who will stay on the job and perform well consistently. Yet how do you meet that challenge of motivating and retaining workers in a warehouse—an environment that many people (Generation X-ers, in particular) perceive as dull and repetitive?

Experts at the Warehouse Research Institute at Miami University of Ohio address these issues in this new publication from the Warehousing Education and Research Council (WERC). The booklet articulates the challenges warehouse managers face and then offers guidelines on how to develop effective retention and motivation programs that meet those challenges. Much of the analysis stems from an in-depth study of motivation and retention practices among WERC members in the manufacturing, retailing, wholesaling, and third-party logistics sectors.

A key conclusion of the research team is that the programs easiest to implement—for example, company picnics or employee-of-the month programs—by themselves are usually not enough. What's needed is a "portfolio" of reward and recognition initiatives that are tied to specific operational or profitability objectives.

The authors present a useful set of guidelines for helping managers create a comprehensive motivation and retention program. A couple of specific recommendations bear mentioning here: obtain top management's commitment to any program up front, seek the input of the associates actually working in the warehouse, and don't look or settle for the "quick fixes." This is one of a series of practical publications available from WERC that can be accessed through the organization's Web site.

The Systems Purchasing Breakthrough

Ernest L. Anderson and James P. Morgan

Purchasing Magazine, 1998

206 pages, $32.50

To order: Call (617) 558-4348, www.purchasing.com

In The Systems Purchasing Break-through, authors Ernest L. Anderson and James P. Morgan challenge managers to examine whether their supplier relationships contribute to or detract from their companies' strategic goals. Then, step by step, they detail how to develop supply agreements that support the corporate strategy by taking out unnecessary steps and costs, by promoting efficiency across the supply chain, and by building long-term supplier relationships. These activities are the essence of systems purchasing.

Both authors are well qualified for the task. Anderson first developed the concept of systems contracting in the 1960s as purchasing director at Browne & Shape, and later at Carborundum Co. For the past two decades, Morgan was chief editor of Purchasing Magazine. He has written and lectured extensively on purchasing management and strategy.

The authors provide a blunt assessment of why purchasing departments must change the way in which they work. In his preface, Morgan charges that business purchasing departments traditionally have spent too much, carried too much inventory, involved too many people in too many transactions, and become bogged down in outmoded rules and procedures.

The crux of the problem, the authors suggest, could be that purchasing managers too often see their role as buyers and not as professionals charged with safeguarding corporate resources. They spend far too much time on transactions and not enough on ensuring that purchasing systems align with corporate objectives. Systems purchasing requires careful and thoughtful development of close relationships with suppliers. Purchasing managers must begin with a skeptical look at current procurement practices, the authors argue. Too many existing practices, they contend, have been imposed on purchasing departments by controllers or information technology managers who have little understanding of purchasing's role in the organization.

The text provides a how-to guide for supply managers who want to effect change within their organization. It identifies the kinds of statistics they need to compile to formulate a systems purchasing approach. From there, it lays out a detailed approach to designing and implementing a systems purchasing plan that includes performance metrics. Included here are chapters on determining what materials make good candidates for systems contracts and winning support from management and other departments.

In several respects, the book is a primer perhaps best suited for managers working to overcome inertia in the most hidebound companies. Even so, the lists of questions, decision-making tools, and other checklists can provide a useful reference for any company seeking to re-evaluate and restructure its supply management operations.