Can Supply Chain Innovations Create Customer Happiness?

Join the supply chain conversation at Think Supply ChainJeremy Gutsche will be one of the general session speakers at APICS 2013. In anticipation of meeting him in Orlando, I have been spending some time “getting to know him” through his hugely popular website Trendhunter.com. As the site states: “With 40 million monthly views, TrendHunter.com is the world’s largest, most popular trend community.” At its core, Trendhunter.com is a crowdsourcing community of more than 117,000 individuals who spot and share trends. Trendhunter.com staff post microtrends every day to help site members and readers “generate ideas, stimulate creativity, and ultimately unlock cool.”

To me, Trendhunter.com embodies this year’s conference theme, “Leveraging the Power of the Customer.” Gutsche’s success is directly related to his opinion that companies seeking to innovate make a mistake when they “microcompare” themselves to their competition, resulting in a market full of similar products. “Cool” is not a synonym for popular. Cool represents a “pocket of opportunity” that companies can potentially seize to lead—not follow—in the marketplace. Companies, including Nestlé, Kellogg’s, P&G, Samsung, and Intel, contract with Trendhunter to provide special dashboard reports that help them seize their opportunities.

Supply Chain and Opportunities for Innovation

Searching “supply chain” on Trendhunter.com, I found an interesting story about Coke2Home. Coke2Home is the brainchild of Hindustan Coca-Cola Beverages. The company believes strengthening its supply chain will support its development as a world-class company; and, therefore, it puts an emphasis on supply chain innovation.

Coke2Home does what the name suggests. It delivers Coca-Cola products to the doors of customers in Ahmedabad, India. Consumers placing an order online before noon will receive delivery the same day. In a recent interview with the Times of India, T. Krishnakumar, CEO of Hindustan Coca-Cola Beverages, explained, “our entire suite of products become available to the consumer to choose from, and a significant drop size provides us with a viable model for door-to-door delivery.”

The milk truck has been around for decades, so why does this Coca-Cola service count as cool? The answer is simple: Home delivery in India ultimately is responsive to the end consumer. With retail shelf space at a premium and personal transportation difficult, home delivery of groceries ordered online is bound to be popular with India’s rising middle class, saving them time and money. Of course, from a supply chain perspective, there will be challenges to overcome. But if Hindustan Coca-Cola Beverages can develop a model that balances consumer value and company profit, this supply chain solution likely will create a competitive advantage for Coke in the Indian marketplace.

So can supply chains deliver happiness to the customer? What other trends illustrate how companies are leveraging the power of their customers to innovate and create competitive success?

Online Supply Chain Mapping: the Dawn of a Golden Age?

Join the Supply Chain Conversation at the Think Supply Chain blog - Jonathan Thatcher APICS Research DirectorSharon Rice: I’m pleased to welcome guest blogger Jonathan Thatcher, CSCP, to “Think Supply Chain.” Thatcher is the APICS director of research. He also writes the “Ask APICS” department for APICS magazine.

If you like supply chain maps, take a look at the website Sourcemap. This free social mapping site is capturing a growing number of supply chain maps that “tell the story behind a product or a service: map the locations of suppliers, add descriptions, photos and videos, calculate the carbon footprint, and embed or link to the map to share it with the world!” Or have you ever wanted to “mash-up” different kinds of data into a single chart and see what they looks like? What insights might appear?

Google describes “Fusion Tables” as a service for data management, integration, and collaboration. According to the Google site, “You can easily upload data sets from CSV, KML, and spreadsheets, and visualize the data using a variety of tools. Users can merge data from multiple tables and conduct detailed discussions about the data (on rows, columns, and even cells). You can easily visualize large data sets on Google Maps and embed visualizations on other web pages.”

Now consider Google Public Data Explorer, which easily produces charts and graphs from datasets of public records and performance metrics. Examples include economic performance, population demographics, and international rankings of regions, from the World Bank, the United Nations, and other national government data providers. With this tool, you can combine your own datasets and produce graphs.

Supply Chain Mapping Tools

These new applications help us visualize supply chain strategy. For example, by comparing different supply chain maps, we can see which are designed for speed or lower transportation costs.

Another possible application is to look at changes in a company’s supply chain map over time. This tells the company’s story. How did it grow? What long-term decisions and investments did it make? How complex did its supply chain become?  And if you look at the supply chain maps of several companies serving in the same industry, you can start to see their separate strategies by regions, distances, similarities, and differences. Students can instantly see real-world examples of theory.

Public supply chain maps offer supply chain practitioners a number of benefits and challenges. Benefits include supporting sales and marketing when you are local to your most important customers, or when you want to emphasize investment in specific locations or nations. New audiences also can find new uses for supply chain data. For example, regional planners can see how their company-specific supply chain fits their resource and infrastructure planning. New suppliers can look for under-served locations and spot growth opportunities.

With these new innovations come new challenges.  Competitors can study your supply chain map and better estimate your strengths and weaknesses in areas such as supply chain risk, supplier preferences, and potential distribution patterns. Customers may misunderstand the true scale and volume of your supply chain. In the past, supply chain professionals could only dream of easy-to-use tools to visualize and share supply chains maps. And they could not imagine the visibility and awareness these tools would create.

Combined with social media and blogs, new audiences are continually “consuming” supply chain mapping information. These new audiences include, but are not limited to, small businesses, government planners, competitors, and supply chain partners. Online supply chain maps are part of the big data revolution. Big data tools help graph and visualize complex relationships, making them more understandable.

But all this raises several questions. Can public access to supply chain maps be too much of a good thing? Do these maps potentially reveal competitive information? Is it possible access to this information will lead the public to form faulty conclusions that are difficult to correct? Or does this level of transparency benefit the customer in the end?

Women’s Influence in Manufacturing and Supply Chain

Join the supply chain conversation at Think Supply ChainIn March, I picked up a study conducted by Deloitte and the Manufacturing Institute (MI) titled “Untapped Resource: How manufacturers can attract, retain, and advance talented women.” The first paragraph hit me hard:

“In the midst of the resurgence of manufacturing in the US, companies are facing a widely acknowledged talent shortfall. Meanwhile, there’s one obvious source of human capital that the manufacturing industry has not fully tapped: women. Across all manufacturing sectors in the US, women are underrepresented in the workforce. While women represent nearly half (46.6 percent) of the total US labor force, they only comprise a quarter (24.8 percent) of the durable goods manufacturing workforce. The proportion of women in leadership roles in manufacturing companies also lags behind other US industries.”

I took a look on LinkedIn to see how many women I could find in vice president positions related to supply chain management. I sent notes out to some asking if they would be willing to talk to APICS about their experiences as female leaders in the field. After conversations with these fascinating women, it was clear we needed to do a feature article on women in supply chain for APICS magazine. However, one question still bothered me: while clearly there are very successful women in supply chain management, why are women still underrepresented in manufacturing?

One reason may be that even with all the diversity initiatives today, we continue to be uncomfortable talking about the lack of parity that exists in the workforce. It doesn’t matter if the subject is gender diversity or cultural diversity, it makes people uneasy. We are afraid to bring it up in conversation. When others do, it’s easier  to suggest that no problem exists, as if there is no longer an issue. Clearly, there is.

There are many perspectives from which to discuss this issue. Yes, one is political, and if the issue was strictly such, it may not be an appropriate conversation for a professional association. But, as the Deloitte/MI study points out, an important workforce development conversation must be had.

Drawing women to manufacturing

Working harder to attract and retain women in manufacturing is beneficial to everyone in the manufacturing industry. An increased number of women in manufacturing, according to the Deloitte/MI study, can

  1.  Address the skills gap issue in manufacturing.
  2. Improve the competitiveness of the industry by gaining women’s insights as consumers and influencers.
  3. Improve profitability. According to Catalyst research, Fortune 500 companies with a high percentage of women officers have a 35 percent higher return on equity and a 34 percent higher total return than companies with fewer female executives.

To address this issue, employers, professional associations, and educators need to participate in meaningful initiatives. Companies that want to attract and retain women must create more flexible work environments and amp up support for continuing professional development—benefits that attract talented men as well. And the manufacturing industry as a whole must do a better job of targeting and presenting itself to women. For this to happen, we have to be able to have the conversation. What can we do together to increase the number of women in manufacturing?

Reverse Innovation and Supply Chain

Think Supply Chain - Jason WheelerSharon Rice: I’m pleased to welcome guest blogger Jason Wheeler, CPIM, CSCP, to “Think Supply Chain.” Wheeler is Process Improvement Engineer, Warehouse Operations for Roche Diagnostics Operations and the APICS chair-elect.

I recently heard the term “reverse innovation” used during a discussion at work. Not being familiar with the concept, I quickly did a little research to find out more about it. The broad definition means goods are developed as inexpensive models to meet the needs of developing nations and, then, repackaged as low-cost innovative goods for Western buyers.

Wanting to learn more, I began looking for articles or a book that could provide more insight on the topic. A quick search brought up “Reverse Innovation: Create Far From Home, Win Everywhere,” written by two Dartmouth professors, Vijay Govindarajan and Chris Trimble. The book provides a better understanding of the concept while also discussing why large corporations have struggled with this idea.

Using the reverse innovation mindset, GE designed a portable, low-cost ultrasound machine that could be used in rural China. That same product now is used in many ambulances right here in the United States. GE went on to use the same process to design a low-cost portable electrocardiogram (ECG) unit for rural India. After the initial unit was completed, GE designed additional products with some minor enhancements. Similar to the portable ultrasounds, visiting nurses and primary care doctors are able to use the ECG units at rural clinics that could not afford the high-end units.

Where are some other areas where reverse innovation might be put to use? How might it be applied to improve supply chain and operations management?

The Total Scope of Supply Chain Management

Join the supply chain conversation at Think Supply ChainDefining the total scope of supply chain management—as an association professional, advocating for supply chain professionals—is one of my biggest challenges.

@ Supply Chain Management is an excellent blog run by Chris Jacob, a senior consultant for IBM. I am a little behind on my reading, so only today did I come across his post from February 11 in which he reproduced a graphical history of logistics and supply chain management originally published by SCM-Operations.com. It is a really interesting and valuable chart; however, it fails to present supply chain management as a holistic discipline that is more than the sum of its parts.

We do not share a common definition of supply chain management across the industry. Just take a look at the various professional associations to which you belong. Procurement organizations and logistics associations alike claim supply chain management as their expertise. And to be fair, APICS, which defines supply chain management from end to end, has its roots in planning and production. Even so, the APICS Certified Supply Chain Professional designation uses the SCOR model to validate candidates’ knowledge and skills from planning through returning.

Defining supply chain management

The APICS Dictionary, 13th edition, defines supply chain management as “the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.” This definition of supply chain management first appeared in the 9th edition of the APICS Dictionary in 1998. As we are in the midst of producing the 14th edition of this reference, it is a good time to ask: Is this an accurate definition of supply chain management? Does it adequately capture the scope of supply chain management today?

Supply Chain Workforce Development in India

Join the supply chain conversation at Think Supply ChainI have returned from a truly extraordinary trip to Mumbai for the APICS Asia Supply Chain & Operations Management 2013 conference. We are really pleased with the outcomes. It was a 360-degree educational experience and the participants, speakers, and APICS staff all learned so much.

What continues to resonate with me is the participants’ desire to acquire more practical knowledge. During the opening panel on workforce development, we learned that internships are not nearly as available in India as they are in other parts of the world. As a result, students do not have the same opportunity to apply theoretical knowledge to real-world situations. Bhaskar Majee, director of sales planning and operations for Philips, shared that his internship experience in India was absolutely critical to his early success. But when Abe Eshkenazi asked the audience who had participated in an internship program, only two hands raised.

Practical Supply Chain Knowledge Is Key

Internships improve the employability of students post-graduation. But equally important to professional development is the opportunity to learn about different areas of the business once individuals are on the job. Antonio Galvao, vice president of supply chain for Diversey, now part of Sealed Air, talked about how valuable his 18-month rotation in sales and marketing was for him. Although he learned he was better suited to supply chain management, he gained a deeper understanding and appreciation for the work of his marketing colleagues. These types of rotation opportunities strengthen individual performance and the contributions people make to the business.

Dan Castle, vice president, Tata Sons, Tata Quality Management Services, talked about how opportunity is a door that can be opened from either side. Managers need to actively seek opportunities for their staff, but staff need to take more initiative in asking to be given opportunities as well. Professional development of the Indian workforce must start as a partnership between companies and their employees, both taking responsibility for continual learning.

As we continue to discern how best APICS can contribute to the advancement of the workforce in India, I am convinced we will also gain the insight we need to continue to advance the supply chain and operations management workforce across the globe, including in the United States. That is the wonderful thing about education: it is never a zero-sum game.