The first quarter of the year is extremely busy for me, as it is when I have the bulk of my teaching. I have the pleasure of teaching the principles of demand driven supply chains (also known as demand chain management) to Master students on the Strategic Marketing and Logistics and Supply Chain Management programmes. This year my teaching was inter-leafed with some industrial visits to Beiersdorf, Rolls Royce and Babcock and a meeting of my Supply Chain Responsiveness in Practice (SCRiP) collaborator forum. This combination of activities challenged me to look at some of my views and perspectives on supply chain responsiveness is a new light. It high lighted to me that to truly harness the power of the supply chain it needs to be elevated beyond a functional activity. That the organisations that excel in supply chain management do so because it is an integral part of their business strategy and is not an add-on. This had three immediate insights for me:
1. The power of integrated business processes to create flow both within a business, and with its upstream and downstream supply chain partners.
Srivastava (1999) identified 3 key integrated business processes:
- New Product Development (NPD)
- Customer Relationship Management (CRM)
- Supply Chain Management (SCM)
Increasingly organisations are adding a layer above their matrix structures. An integrated process level. It draws upon the resources within the business to drive improvement in the integrated business processes. An approach that Beiersdorf is successfully adopted.
2. Segmentation is a business level (not a supply chain) strategic decision
For the last 10 years I have looked at the concept of supply chain segmentation and have considered it to be a supply chain decision. It is not. As an integral part of business strategy the decision to segment needs to be endorsed and supported by the board as it will fundamentally change the way in which the organisation delivers value. This is supported by evidence from organisations such as Kimberly-Clark (KC) Europe who have successfully implemented supply chain segmentation.
3. Don’t call it supply chain management
Unfortunately supply chain now has many personal connotations. For some it is supplier management, others a name for logistics and transportation, and a small proportion the full range of activities required in managing the flow of cash, materials and information from customers through internal operations to the supply base. The problem is that perspectives are very confused. To break this confusion I have seen a real shift in practice, back to the 1980’s and Michael Porter’s concept of the value chain and value chain management. This term seems to capture the spirit of the integrated end-to-end ethos, and aligns well with the concept of integrated business processes.
These reflections inspired me to write a short executive report that summarised my work over the last 10 years in supply chain segmentation in a way that is more accessible to the board. A copy of which can be downloaded from the SCRiP website at: