By Reuben E. Sloane, J. Paul Dittmann and John T. Menzer. Harvard Business Press, 2010, 217 pages, $35
Subtitled "The Five Steps that Drive Real Value," this book appears to be aimed at companies that are still on the fence about the value of supply chain management. The five steps are very basic (which doesn't necessarily mean they're easy to achieve; even the best supply chain organizations are challenged by these goals):
1. Pick the right leaders and develop supply chain talent.
2. Keep up with supply chain technologies and trends.
3. Eliminate crippling cross-functional disconnects.
4. Collaborate with suppliers and customers.
5. Implement a disciplined process of project and change management.
For instance, the book relates how supply chain partners OfficeMax and label maker Avery Dennison moved beyond a typically adversarial relationship to one based on collaboration. An important first step, and a step that many companies tend to ignore (ultimately dooming their supply chain projects), was establishing a joint steering committee that allowed members from both companies to get to know each other, and then to set mutual goals.
Through these meetings, the companies discovered they shared the same vision of leveraging continuous-improvement techniques to improve warehouse operations. One process in particular, known as objectives-goals-strategies-measures (OGSM), aligned the supply chain teams from both companies, while a joint value-stream mapping project identified opportunities for improvement. As a result, in-stock fill rates rose from below 95% to nearly 99%, forecast accuracy improved by more than 30% and inventory turnover increased by 9%. None of those improvements could have happened, though, state the authors, without first establishing a relationship based on trust.