1. SCM-655: Global Supply Operations Strategy
Supply Chain Saves the World
Supply Chain Globalization
System Check
Administrative Stuff
Key Concepts
Question & Answer 1

2. Today’s Journey Sustainable Growth vs. Lower Cost
Globalization
Sustainable Growth vs. Lower Cost
Organizing for the Global Enterprise
Taking Innovation Global
Facing the 5th Dragon – Succeeding in China
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3. Typical Supply Chain Lead Time Example
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4. Sustainable Growth is Key
Growth is the one goal that all businesses pursue. Shareholder value is created when a business can project sustainable growth into it’s profit stream
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5. Why do Companies Compete Globally?
Gain access to new customers
Achieve lower costs; increase competitiveness
Exploit core competencies
Spread business risk
Industry leadership must be global, not just domestic
Competing Internationally vs Globally: Competing internationally means entering foreign markets as opportunities arise to increase sales and revenues. Competition in one national market is separate from competition in another. A global competitor regards it’s home market as but one part of the competitive landscape covered by its strategic plan. It is one set of global competitors operating in many different countries.
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6. Key Opportunities for Global Businesses
Developing world demand for consumer products
Establishing cost effective infrastructure networks
Identifying strategies for sustainability
Responding to growing needs for health care
Preparing for unknown disasters / risks
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7. IT in Global Demand Driven Supply Networks
Information technology is critical to global demand-driven supply networks. Leaders use information technology to support decisions across all major domains: demand, supply and product management.
What technologies are used
in today’s Global Environment?
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8. High Potential Industries for Global Commerce
Biotech and Healthcare
Clean and Sustainable Consumer Durables
Information Technology Products
Pure Content Products (i.e. iPod Downloads)
What other opportunities
do you envision?
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9. Global Supply Networks Link Demand & Supply
Benchmark global companies respond to specialized demand requirements and source across a network of suppliers – not just “chasing low cost”.
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10. The Business Environment
Customer
Expectations
Competition
Government
Regulations
Access to
Resources
Economic
Systems
Economic
Conditions
Supply
& Demand
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11. Structure Must Follow Strategy – Key Factors
Business Vision
Model of Future Business Structure
Culture, Leadership and Governance
Business Process Architecture
IT Applications and Information Structure
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12. Firm / Business Unit Strategy
Independent Functional Strategies
Firm / Business Unit Strategy
R&D
Strategy
Marketing
Strategy
Support
Function
Strategies
Production
Strategy
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13. Firm / Business Unit Strategy
Integrated Functional Strategies
Firm / Business Unit Strategy
R&D
Strategy
Marketing
Strategy
Support
Function
Strategies
Production
Strategy
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14. Demand Driven Strategy Drives Global Strategy
Demand driven supply networks require performance metrics that are interlinked throughout the organization
But, there is no one-best approach for all businesses
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15. Leadership Considerations
Create Value Networks
Involve Cross-Functional Teams in Joint Ventures
Use Global S&OP
Implement Improved Demand & Supply Visibility
Align IT Infrastructure to Support Strategy
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16. Business Goals Derive Business Structure
Business leaders must look from the customer backward through the supply chain to establish the optimum organization needed
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17. Corporate Strategy Drives Relationships
Level/Type of Communication
Degree of Collaboration
Length of Relationship
Transactional with information sharing
Each partner has access to single data source.
Generally medium term
Shared processes and partnership
Partners collaborate in specific processes and share knowledge.
Longer term
Linked competitive vision and strategic alliance
Partners function as a virtual entity, even collaborating on strategy.
Long term, possibly decades
Backward integration
Mergers and acquisitions; complete integration (in theory).
Long term (if successful)
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18. Organizational Model Options
Application
Example
Decentralized
Different products in different markets
Cargill
Centralized
Strong centralized leadership process and strong global brand
Heineken
Hybrid
Mix of regional specific and global brands
P&G, Unilever
Apple
Intel
Johnson & Johnson
Dell
PepsiCo
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19. AMR - Stages of Maturity
Apple
Intel
Johnson & Johnson
Demand-driven External integration
Dell
Multi-tier federation
Multi-tier visibility
and collaboration
4. Orchestrate
PepsiCo
Connected Network – external integration, no strategic control
Single-tier partnering
Data sharing with tier 1 partners
3. Collaborate
Connected Enterprise – internal integration, clumsy external links
Every company for itself
Internal optimization
2. Anticipate
Site-to-site traditional supply chain – little integration
Every department for itself
Slow and sequential planning
1. React
Process Maturity
Information Maturity
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20. Evolving Transformation
Apple
Product
Supply
Process
Profitable
Perfect Order
Intel
Externally
Focused
Johnson & Johnson
Dell 3 4
One Business as Unit of Measure 2
Separate Business Units 1
PepsiCo
Internally
Focused
Cost
Focused
Revenue
Focused
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21. Business Process Structure
Successful companies tend to be more cross-functionally organized across processes – planning globally while executing locally
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22. Corporate Strategy Model – Key Questions
What is our Business Vision
What is happening in our Environment?
What are our Core Values?
What Business are we in (or will be in)?
What Value do we bring to the Marketplace
Who are our Customers?
Who are our Competitors?
What are our Strengths and Weaknesses?
What do we need to do to be successful?
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23. Global Innovation
Accelerated innovation is the foundation of long-term corporate growth in manufacturing. However, complexity increases dramatically when innovation is global.
What are some potential
Risks of Global Innovation?
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24. Global Collaboration Improves Profitability
Companies are finding that collaborating with business partners for new product development and introduction is directly linked to superior operating margin growth.
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25. Global Collaboration Reduces Time-to-Market
According to AMR, outsourcing (collaboration) reduces development cost, improves on-time performance and time-to-market and improves quality.
What are some potential
Risks of Global Outsourcing?
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26. Impact of Delayed Time-to-Market
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27. Navigating Barriers to Success in China
No clear separation of government & commerce: Invest in counsel on corporate governance and property protection rights.
Manufacturing excellence is not balanced with public safety and environmental and health risks: Prepare an answer / solutions to environmental and health concerns.
The culture has no concept of protection of intellectual property: Consider the country primarily for development, not R&D and carefully control every step of high value assembly
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