Supply Chain Lessons Learned from Apple’s iPhone 5 Launch

Apple runs one of the most watched supply chains in the world. Since Tim Cook took the reigns as CEO, though, it’s not just talked about in supply chain circles — it’s big news in the technology and main stream press as well.

That’s because Cook made a name for himself first in operations, first as a senior vice president of Worldwide Operations, then as an EVP of Worldwide Sales and Operations.

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All Together Now – Harmonize KPIs as a First Step Toward Alignment

I’m fortunate that I have the opportunity to work with a number of prominent companies that are working to improve their supply chain operations and increase operational efficiency.  And it’s interesting that some of these household names are self-proclaimed “fast followers” rather that leaders in the area of  process improvement and supply chain execution.  As one employee of a well-known company said to me, “I never really knew the power of our brand until I saw how much it compensated for our supply chain shortcomings”.  So in the spirit of fast followers learning from the experience of others, this post will focus on a common challenge: how to drive commonality in a complex organization.

One of the challenges I consistently see with larger, global companies is that trying to get a complex organization to align around common processes is a daunting task.  Whether this is the result of growing by acquisition, or that my division / product group / region “just does things differently”, the notion of having a shared operating model and common business processes often feels at odds with the day-to-day operations of the business.  Trying to balance the global commonality needed to evaluate performance across business units with the regional nuances that allow the business to operate effectively in those geographies may result in a lot of energy expended, and frankly, not a lot of progress.

One discrete manufacturing company I worked with was facing this very problem – attempting to harmonize its business processes so they could get a sense of how the overall operation was performing and assess the organizational readiness for a major transformation project.  The initial effort attempted to align the data and systems that supported major business processes, and the product divisions were so different that the team felt “we can’t get there from here”.  The business side of the house believed standardization was being sought artificially, and mapping a common process just took too long without tangible results.

One of the strategies we employed was to put the process standardization effort on hold and direct attention to developing common metrics that could be shared across regions and product divisions. Since supply chain was a common thread, focusing on key performance indicators for order-to-cash was a logical starting point.  KPIs included sales channel mix, perfect order metrics, advanced ship notification and invoice creation cycle time.  Measurements included volume, velocity (cycle time), quality and value and covered both process outcomes as well as process performance.  And as is true with any complex operation, while common KPIs allowed operational comparison, not every region or product division had the identical targets.  After all, as one global executive mentioned: “It just takes longer to get out an invoice in Africa than it does in Texas”.

The advantage of this approach is that from an alignment and change management perspective, it’s easier to identify common measurement points even if the individual processes from different parts the organization are not identical. Let’s face it: it’s a shorter path to get me to agree on common metrics to evaluate my supply chain performance rather than dictate how I actually perform those activities.  This methodology proved attractive to a commercial product company I recently interacted with, where business analysts were at a stand-still trying to gain global agreement on process steps and the notion of harmonizing process metrics before harmonizing the process itself provided some light at the end of the tunnel for that initiative.

In future posts, we’ll look at suggested criteria for selecting the “right” things to measure and how introducing a level of abstraction into process improvement efforts can speed understanding and adoption.

 

And while the Beatles’ “All Together Now” is the most popular, some early morning jazz is never a bad thing, like this cut from Gota.

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Supply Chain Trend: Made in Americas, But Not the USA

Politicians are making political hay this year out of the resourcing trend — but it may be that this trend is less about the USA and more about growth in other areas of America.

It’s true that manufacturing jobs are returning to the USA, but there are serious questions about the impact and strength of this trend. In fact, Bloomberg Businessweek recently reported the resourcing trend is already losing steam because of a global economic slowdown and the resulting weakened demand for US goods.

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Dodd-Frank Will Require End-to-End Supply Chain Visibility

Manufacturers that rely on tungsten, tantalum, tin and gold (3T+G) may need to spend a “substantial amount” to determine whether so-called “conflict minerals” are part of their supply chain chain, according to a recent CFO.com article.

These minerals are subject to a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law is designed to stop money from flowing to groups committing human rights violations in the Democratic Republic of Congo (DRC) or any adjoining countries.

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