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Taken together, these actions put the company back on track for profitable growth Supply chain expertise was developed and maintained to build a foundation for future growth Today, Nokia s supply chain is recognized by the rest of the industry as a true source of competitive advantage14.

7.00M

Cisco is another interesting example In May 2001, Cisco shocked the markets by announcing a $22 billion provision for inventory writeoffs15 As the star player of the fast-growing networking equipment sector, Cisco had developed a reputation as one of the most savvy supply chain managers in the world Outsourcing partners provide Cisco with manufacturing, materials management, warehousing, and transportation services, allowing the company to focus on its core strategy of rapid innovation and rapid growth without increasing fixed assets In 2001, when the whole networking equipment sector experienced an unprecedented collapse in demand, few expected that Cisco would suffer as much as other industry players But the company had built a complex global supply chain without robust supply chain planning between itself and its partners.

9.00M

This led to duplication of planning based on second guess estimates and an inability to see and respond quickly to changes in market demand, which resulted in excess inventory across the supply chain To minimize the impact of future boom-bust scenarios, Cisco turned to a private Internet-based network called eHub The result was an innovative, shared environment with top-tier suppliers, distributors, and contract manufacturers16 In so doing, Cisco hopes to build one of the most effective supply chain networks in industry Given the dynamic nature of industries, businesses, and product life cycles, creating and putting in place a supply chain strategy are not an annual or biannual exercise but an ongoing orchestration of decisions and actions New opportunities and threats emerge every day If you can t keep up with these new realities, you risk becoming a footnote in some dusty management text.

Pace only succeeds by depriving the human player of the time he needs to invest a larger portion of himself into the game Without that investment, the game can never offer a rich challenge Pace does for computer games what the one-night stand does for romance Like one-night stands, it will never go away We certainly do not need to encourage it..

x = 3.77M y = -6.59

It s also a fact of life that major supply chain innovations can be copied Even if you re first out of the gate, your edge will dissipate with time So stay vigilant, and keep looking for ways to improve and differentiate your supply chain performance As shown in Figure 1-1, a supply chain strategy involves many interlocking facets and hundreds of decisions, large and small Michael Porter, strategy guru and author of Competitive Advantage, discusses the notion of fit when a group of activities all support a chosen competitive strategy Any single activity can be copied, but taken together they form a system that is virtually impossible to duplicate17 The same concept holds true for your supply chain strategy Taken together, the choices you make create a supply chain that is uniquely yours and tough for others to replicate And that s a source of competitive advantage..

(Continued )

Today s supply chain architectures are designed predominately for excellence in cost reduction through a focus on back-end processes, such as purchasing, manufacturing, and physical distribution. This can translate into efficient supply chains that often don t truly support overall business strategy. Next-generation supply chain strategies will support continuing improvements in productivity but also will drive the achievement of business-level outcomes with a strong focus on the customer. It will be important in the future to identify these objectives, which will include new revenue-generating services and time-to-market, time-to-volume, and customer-segment-specific capabilities. In the future, supply chain strategy also naturally will consider the supply chain as part of an extended business architecture and consider key targeted outcomes with suppliers, customers, and partners as core elements. We expect to see the changes shown in Figure 1-5.

Wfm2:

Summary

Current Dominant Practice Focus is on the internal organization Focus is on functional excellence, with corresponding emphasis on functional metrics such as unit manufacturing costs and purchasing price variance Next Generation Dominant Practice Focus is extended to key customers and suppliers Functional strategies are integrated as part of the overall supply chain strategy to achieve enterprise-level performance improvements in areas such as supply chain management costs, order ful llment lead time, on-time delivery, and inventory days of supply Supply chain capabilities and performance objectives are aligned with marketing and sales, technology, service, and product development strategies

Wfm1:

-204 -208