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THE WEEKLY Link
BARRY ELLIOTT
Continuing our preparation for a discussion panel at the Supply Chain Asia Forum in Singapore, which will focus on the topic: "Supply Chain Excellence: The most misquoted concept in SCM?", we wish to be clear about our views on this topic.
As we explained last week, our reference on this is the Oliver Wight Class A Checklist for Business Excellence, Sixth Edition. The premise is that excellent businesses manage formally via excellent business processes across their full scope and, as we made the point, whatever the scope of "supply chain" in one's mind or the business environment, everything ties together and drives the definition of "excellent".
The nine elements of the Integrated Business Model, articulated in the Checklist, are the following:
1. Managing the strategic planning process: An organisation can have a very good strategic vision and plan that is the result of some creative, unstructured activity in the mind of a brilliant individual or small group. However, we believe an excellent organisation will have an inclusive, formal process for setting vision, strategy, and direction in order to be an upper-quartile company.
2. Managing and leading people: It is more than a cliche' that this element is the primary key, to develop people and the organisational culture and structure to deliver upper-quartile business plan performance through line management and team ownership. Again, what defines excellence depends on the culture and maturity of an organisation. In some cases, strong autocratic management is appropriate and others will call for only consensus-based management approaches.
3. Driving business improvement: Establish the comprehensive improvement architecture, which links to the company's business performance improvement programme. It is used to drive business results to upper-quartile performance and beyond. Again, it is more than a cliche' that, in fact, it is Continuous Improvement that will define excellence in the long run.
4. Integrated business management (sales & operations planning): To establish an integrated business management process that realigns company plans in response to change, including the integration of financial plans. It drives gap-closing actions to address competitive priorities, upper-quartile performance and to deliver management commitments. It deploys the business strategy. It is this top level management process that pulls functional excellence together to achieve the integration needed to achieve excellence across the supply chain.
5. Managing products and services: To ensure that the business plan requirement for product and services sales is achieved by the management of product portfolios and life-cycles. To create competitive advantage through upper-quartile performance.
6. Managing demand: To ensure that revenue streams are achieved by managing marketing and sales activities through an integrated demand management process. This means the needs of consumers and customers are visible and understood throughout the organisation.
7. Managing the supply chain: To build an increasingly responsive supply chain that plans, integrates, links and shapes supply planning and execution to deliver competitive advantage through upper-quartile performance.
8. Managing internal supply: To manage capabilities and resources to deliver the internal supply plan and to execute the business supply strategies through integrated supply planning and control to upper-quartile performance.
9. Managing external supply: To source and manage the incoming supply of goods and services to competitive advantage, ensuring upper-quartile supply chain performance. To understand and manage the balance between risk and total cost of ownership.
We explained last week that one aspect of being excellent depends on your value proposition. In addition, above we have outlined the process model required to cover the full scope and to achieve integration and, thus, excellence across the supply chain and the business overall.
However, even excellent processes in themselves are not enough. They must deliver an excellent performance that differentiates. The Checklist calls for an ongoing process of discovery of what is possible, what customers and consumers really want, and what the competition are doing. One must benchmark against upper-quartile organisations to keep an eye on customers and on the competition and what it will take to win.
Put simply, to win consistently, you must be demonstrably better than the competition in those things that are important to the customer.
Weekly Link is co-ordinated by Barry Elliott and Chris Catto-Smith CMC of the Institute of Management Consultants Thailand. It is intended to be an interactive forum for industry professionals; we welcome all input, questions, feedback and news at:
BElliott@OliverWight-AP.com
cattoc@cmcthailand.org
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