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Think Supply Chain

Think Supply Chain

Leading the supply chain conversation

Join the supply chain conversation with Sharon Rice, executive director of the APICS Educational and Research (E&R) Foundation. Explore topics including the role of supply chain planning in corporate success, how sustainability and corporate social responsibility enable the bottom line, global supply chain risk management, and more. Comments are welcome. 

    Innovation: a noun or a verb?

    by Sharon Rice, APICS E&R Foundation Executive Director | Mar 11, 2013
    I am starting to cringe when I see the word innovation. I have placed this word on a list of terms that I maintain that are so overused that they begin to lose their meaning.“ I know where Bob Trent, who commented on my last post, is coming from. In the world of business education and communication, most of us are guilty of picking up on trends in nomenclature and beating them to death until pointed in a new direction by different trends. The problem with naming is that it allows us to seemingly embrace concepts without really understanding them. We can lose the complexity or richness of meaning.

    So perhaps it is best to focus on innovation as a process as opposed to an outcome. What is required for innovative thinking and action to become a part of the way firms do business? Jennifer Kevlin, Value Stream Manager, WW Client Supply Chain & Delivery Solutions at IBM, shared this weekend how IBM seeks to create a culture of “collaborative innovation” through the use of technology. IBM Jam Events allow individuals from all over the world to think together about issues in different ways, taking different perspectives. These are structured, facilitated events where the input received is carefully culled through and evaluated. The outcome of these events can be new projects that drive value to the customer, the firm, or society.

    Harnessing social media to facilitate collaborative thinking is a powerful way to embed innovation in process. Yet gathering input is not the end of the process. Companies still need to be able to not only make sense of all the input received, but transform it into something that is actionable and that ultimately drives value to the customer. 

    What ways are companies creating a culture of innovation in their organizations? Is value being created as an outcome?


    Built to Last?

    by Sharon Rice, APICS E&R Foundation Executive Director | Mar 07, 2013

    Winning, earning profits, or creating customer value: What is the best focus for developing supply chain strategy? Commenting on my last post, Joe Wikowski points out Michael Porter might disagree with A.G. Lafley and Roger Martin’s emphasis on winning as the foundation for developing strategy. Witkowski writes, “winning, or beating your rivals, in the context of Porter’s 5 forces framework, is too narrow.” He says, according to Porter, customers, suppliers, substitutes, and potential and existing rivals all impact a company’s ability to earn profit.

    Intrigued by the distinction and wanting to know more, I came across an interesting, albeit biting, Forbes article written by contributor Steve Denning. The article, "What Killed Michael Porter’s Monitor Group? The One Force That Really Matters,” appeared November 20, 2012, and is packed with provocative comments designed to incite conversation. Decide for yourself whether Denning’s commentary is fair or not. However, citing Apple, Amazon, Salesforce, Costco, Whole Foods, and Zara, Denning makes the interesting point that the purpose of the successful firm today is to deliver “more value to customers through innovation.” Focusing strategy on driving profit for profit’s sake will not lead to sustained success, Denning suggests.

    If a firm is successful at creating and delivering customer value, it is more likely to create more profit and win over time. But if the focus is on profit or winning for its own sake, customer value through innovation is not guaranteed. Denning recognizes this, and sees continual innovation as the only means to sustain success in today’s global marketplace.

    Consider the focus of your supply chain strategy. What is the balance between creating profit and delivering customer value?



    Strategy and the Risk of Opportunity Lost

    by Sharon Rice, APICS E&R Foundation Executive Director | Mar 04, 2013

    Consumer package goods (CPG) companies, such as Unilever and Procter & Gamble, have earned a special kind of admiration in the supply chain world. They are targeting emerging middle class markets and it is their supply chain strategy that makes this a profitable—and enviable—business. Supply chain leaders across a variety of industries and marketplaces want insight into CPGs supply chain strategy.

    A.G. Lafley, former CEO of Procter & Gamble (P&G), has recently co-written a book on strategy with colleague Roger L. Martin, dean of the Rotman School of Management at the University of Toronto. In Playing to Win: How Strategy Really Works, the authors define strategy as a series of choices: What is winning? Where are we going to play? How are we going to win? Do we have the core competencies and capabilities to win? How will we manage and measure strategic process? Although Lafley and Martin do not specifically call it out with these questions, risk is inherent.

    Risk management is a core supply chain competency that goes hand-in-hand with supply chain strategy. Greg Schlegel, CPIM, CSCP, and  risk and resiliency subject matter expert, recently shared with me an article published in Risk Managementmagazine. In the article, Lafley states that “fundamentally, your risk management choices, capabilities, programs, and processes come directly out of your strategy.” He goes on to say “you make your risk management bed when you make your strategy choices.”

    But what about the risk of opportunity lost? Companies who boldly go where other companies do not are making a strategic choice to engage risk at a higher level than others. Taking hold of an opportunity that is high risk has the potential for high reward. Lafley makes the point that pushing into China to serve the emerging consumer class drove P&G’s supply chain decisions, such as manufacturing locally to keep distribution costs low. Although this introduced a good deal of risk at the time, it was an opportunity P&G leaders did not want to pass up.

    What levels of risk do you address when creating supply chain strategy? Does your company evaluate loss of opportunity as a risk at the same level as other more tangible risks? What process do you employ to evaluate whether decisions made related to risk contribute to the success or failure of your strategy? 


    Brand, Values, and Supply Chain Strategy

    by Sharon Rice, APICS E&R Foundation Executive Director | Feb 28, 2013

    Dan Castle is a true APICS success story. A longtime member, instructor, and leader, he made a very bold professional transition in 2009 and became the chief quality officer for Tata Communications in India. Dan recently transferred to Tata Quality Management Services, a division of Tata Sons, and he is charged with helping to set standards of excellence to achieve improvement goals across Tata enterprises. Because of his new role, Dan was excited to learn that APICS was holding the 2013 Asia Supply Chain & Operations conference April 4–5 in Mumbai. In preparation for the conference, I recently visited Mumbai, and Dan invited me to spend some time with Tata leaders and staff.

    It was an incredibly valuable trip. Most impressive to me was how Tata employees I met were ambassadors for Tata Group corporate values. We heard stories about how Tata values, developed over the past 145 years, are sometimes at odds with the business culture in India and the global business culture. The effort Tata leaders have taken to empower every employee to act upon the corporate values of integrity, understanding, unity, excellence, and responsibility has made Tata a recognized economic, social contributor on a global level. That Tata customers appreciate the connection is evident in the fact that the Tata brand is among the top 50 global brands based on net present value.

    Brand impact is based on many intangibles, but there is no question it is significant to increasing shareholder value. Therefore, it is an important consideration in supply chain strategy development. Regardless of size, enterprises with values that are closely connected to their brands must take up the challenge of creating supply chain strategy and tactical plans that are consistent with those values. Sourcing, production, and distribution strategy should all be expressions of corporate values, and the decisions that supply chain professionals make day-in and day-out need also to align to these values.

    The Tata Group is not the only Indian-based multinational enterprise making this connection. Infosys is leading a newly formed United National Global Compact (UNGC) sustainable supply chain taskforce on traceability. According to the UNGC, the purpose of this taskforce is to develop, “practical guidance for companies on how they seek improved transparency and traceability in their supply chains.” Transparency ultimately reveals whether corporate strategy is true to corporate values.

    So what is the best way to ensure that corporate values influence supply chain strategy and execution across an enterprise? Are there compelling success stories? Which companies are best at walking their talk?


    Mind the Strategy Gap

    by Sharon Rice, APICS E&R Foundation Executive Director | Feb 25, 2013

    Your comments after my last post, which I greatly appreciate, reminded me of an interesting meeting I had a few years ago. The group was discussing strategy and linkages between corporate strategy and supply chain and operations strategy. After the meeting was over, I asked Robert Vokurka, PhD, CFPIM, CIRM, CSCP, 2008 chair of the APICS board and a professor of operations management at Texas A&M University, to help me understand the disconnect. As he explained it, we ended up drawing a continuum on the white board that looked something like this:

    Think Supply Chain

    In organizations where a gap exists, it is likely that a combination of the following is happening: corporate strategy is not being effectively communicated across all levels in the organization and staff on the execution side of the business is not proactively seeking to understand corporate strategy and how it impacts what they do.

    Imagine the many decisions made every day by supply chain and operations management professionals primarily responsible for execution. To whatever extent a gap exists between current corporate strategy and execution, it creates risk and loss of opportunity. Yet, the negative impact of the gap is a shared responsibity of corporate leaders, managers, and individual employees. How do you mind the strategy gaps?

    • How do we ensure that employees at all levels of our organizations are making the best decisions based on corporate strategy?
    • How does one proactively gather the information needed to be certain that his or her work aligns with corporate strategy?
    • What does it take to have confidence that all policies, processes, systems, and staff are aligned to achieve corporate strategy?


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