Category Archives: Miscellaneous

Looking to Transform? Make Sure The Organization is Ready!

Transformation, which many companies will require to survive the next few years, doesn’t work unless it’s taken seriously, and the organization is ready for it. To judge awareness, ask these “six questions for company transformation” from a recent Industry Week article.

  1. Where is the Organization’s Culture?
    Before an organization can begin a change management initiative, it must understand the culture of the organization. What are the beliefs and expectations of the employees? If this is not understood, then it is not likely that an initiative can be designed to change their spirit. And unless the employees get behind the initiative, there is no hope for success.
  2. What starts the process?
    Most companies want to take action right away, but action is often no more effective than reorganizing lines on an organizational chart, which is rarely effective. A successful transformation begins with knowledge — a pervasive awareness of what needs to change, why, and how it will improve the company’s situation.
  3. Whose culture is it?
    The organizational culture must be owned by the employees, not by the management team or the consultants brought in to lead the change management initiative. Furthermore, the effort must allow the people to reach their potential or the change will not be as successful as the organization hopes.
  4. How Do You Know If You Are Making Progress?
    It’s not just about the metrics, which won’t convey meaningful information for months, but about the visible changes in behaviour that signify that change is taking place within the organization.
  5. When Can You Change the Culture?
    Change can only happen now, not at some future time. Each day must be an effort focussed on meeting that change.
  6. Why Do People Change?
    There are two critical steps to transformation success. The first is to understand that organizational culture will need to change. The second is to understand why it will change, which is not always obvious. For more details, see the article or The Seven Arts of Change (DavidShaner.com).

Product Recall

It’s coming. It costs US business over 700 Billion each year. And your product could be next. Are you taking steps to make sure that it’s not?

Remember, the supply chain doesn’t start when an order is made or stop when the product is delivered. It starts in the NPD design phase (and considers compliance and safety issues) and keeps going until the product reaches end of life and is recycled. And it only takes a single misstep for a Product Recall to rear its ugly head. That’s why good processes and quality control are vital.

Bugs and Cecil Predicted the Current State of Affairs 60 Years Ago

In 1941, Tex Avery directed a Merrie Melodies animated short starting Bugs Bunny and Cecil Turtle called Tortoise Beats Hare. A new twist on the classic tale of the Tortoise and the Hare, it had a pretty simple message buried within:

You snooze, you lose.

And that’s precisely what will happen if you fail to constantly improve your supply chain.

Implementing VFS: A Beginner’s Guide, Part II

In yesterday’s post, we discussed CAPS’ Value Focussed Supply (VFS) and how it represents a valid methodology for taking supply management to the next level. Given that many leading organizations are seeing decreasing returns in their supply management efforts, it is becoming clear to leading analysts, providers, and thought leaders that this decade needs to see the introduction of Next Generation Sourcing and Supply Management Techniques if Supply Management (and Procurement) are to have a hope of getting, and keeping, their seat at the C-Suite table.

In addition to discussing the four levels of VFS in their recent report on “Linking Supply to Competitive Business Strategies”, the report outlined a high level process that can be used as a starting point. As noted in our last post, this process can be broken down into a seven-step program that will get a company on its way. Specifically:

  1. Understand Customer & Supplier Markets
  2. Identify Directional Changes
  3. Link Insights into Directional Changes to the Business Strategy
  4. Evaluate the Company’s Strategic Options
  5. Set Holistic Value Focussed Goals
  6. Evaluate and Select Strategic Supply Options
  7. Identify and Implement Levers

To understand this process, we’ll start with an example that’s easily understood. To do this, we’ll have to travel in time and space and go back to Cupertino circa 2006. Apple, having just conquered the mobile music device industry with the iPod, is looking for the next market to conquer. They make computing hardware, the iPod was a natural progression, and they are looking for the next killer product. Where should they go?

  1. Their suppliers are great at supplying leading-edge computer components for compact and mobile devices and good at innovation.
    Their customers are interested in cool gadgets and entertainment and keeping in contact with their peers.
  2. These two observations quickly lead the organization to two potential markets, gaming platforms, which was a very lucrative market for Nintendo and Sony and which their competitor (Microsoft) had entered five years previous, and smartphones, which was a quickly growing market as cell phones were already in the hands of 1/3 of the global population.
  3. The business strategy was continued growth and market leadership in any computing device or mobile market that was entered. Both the gaming marketplace and smartphone marketplace had a number of big players with well established market share, including Sony, Nintendo, Microsoft, and Sega in gaming and Nokia, Motorola, RIM, Samsung, and LG in smartphones. Both could be hard to break into, but ( a) the mobile market is more fractured, ( b) there are more similarities between smartphones and iPods then between generalized computers and specialized gaming systems, and ( c) the market for smartphones is growing rapidly with projections that half of the global population will have cell phones within two years.
  4. The strategic options are to fight it out in the mature and relatively flat gaming market and go head to head with their main competitor on another platform, or fight it out in the growing smartphone market where platforms are not as mature and there are more opportunities for innovation.
  5. The obvious goal is to enter the smartphone market with an innovative new product and capture a leading market share, especially among current, discerning, Apple customers.
  6. Apple evaluated it’s supply chain and locked in a sufficient supply of strategic components to ensure it could meet projected demand.
  7. Knowing that a phone was useless without a carrier, Apple signed a strategic agreement with one of the largest carriers who would see the 3 years of exclusivity it was granted as a way to significantly grow its own market share and, in turn, aggressively promote the new product for Apple.

Now, we’ve made a few assumptions and taken a few liberties, but it’s easy to see that Apple obviously used some type of VFS strategy when they decided to introduce the iPhone and enter the mobile market, because, within 2 years, they were the top selling mobile phone on the market.

In our next post, we will begin to dive into the steps in more detail.