@ Supply Chain Management

Supply Chain Excellence – A Handbook for Dramatic Improvement Using the SCOR Model is a worthy effort by Peter Bolstorff and Robert Rosenbaum published by American Management Association (AMACOM).

At the end of this book review, I want to drive towards clear answers for the following questions and/or headings. As I review more books, hopefully, I will expand the following questions into some sort of template against which future books would be reviewed.

1. What this book is about – what are its aims?

If I were to ably classify this book, I would slot it in the category of a Map. I have classified it as a map because it is written to help you navigate the challenge of structuring supply chain management inside and outside your firm. The two authors, Mr. Bolstorff who is a SCM consultant and Mr. Rosenbaum who is a journalist, have laid out a path using the SCOR (Supply Chain Operations Reference) Model as the framework within which your supply chain can be evaluated, planned and executed. It would be a truism to say that various firms are situated somewhere along that path to excellence, the achievement and realization of the said state is unknowable, ephemeral if achieved and the mine upon which careers are built or wasted – such is the life of business.

Rather than deal with such matters of philosophy or digging deeper into what excellence really means or the like, the task at hand is to begin that project – to make a stab at Supply Chain Excellence. And the authors have a 17 week plan to get you started. While I have my sweet suspicions of the 10 step program or for that matter the 17 week project (that’s still over 4 months of work), the plan is a tight one with meetings, homework, templates, samples of charts, tables and tasks and more. In order to give users of this book/guide a context for the required changes and a backdrop for the challenge itself, an imaginary Fowler’s Inc. has been conceived and employed which is a useful device as well.

So the aims as spelt out by the authors themselves:

a. The book is meant to be a manual for anybody (specifically for someone who wants to make sure supply chain improvement is done right) who seeks a rigorous and proven methodology for systematic supply chain improvements.

b. As a working guide for using SCOR as a tool to help senior managers at every step of undertaking supply chain initiatives.

2. Who this book is for?

My take on this topic is – If you’re not in the Steering Team (which not only comprises the power players but also members of the design and project team), chances are that this book will only be good review of how the SCOR model meets the road of implementation and execution. Which is a shame, all said and done from multiple points of view. A steering team typically consists of the few – no doubts about this. Say you are a marketer – would you prefer to market a commodity such as a book to the few or the many? Sure, it is the few (in the steering team and above) who have to take decisions at the end of the day and that is what a lot of this book is about i.e. how to create that sort of a methodology based (SCOR) supply chain improvement plan and execute it. The authors have done an excellent job of writing effectively to and for this group. But what about the many – those who will actually participate and implement this new plan, who will form the links for feedback on how well the plan is working – why and why not?

3. Does the book succeed in its aims?

I believe that in one of its principal aims – that of being a working guide for using SCOR by senior managers, this book succeeds a great deal. Laying out a four month plan is a very short time to get down the path of supply chain improvement and I do wonder if this is a realistic goal as well. However, what I would think about doing is to take a look at the cycle of activities that forms the normal quarter to quarter cycle within a firm and adjust the timelines accordingly. So, while they hit one of their aims above (b) nice and square, they do miss out on a good chunk of (a) and thus also a significant market for this book. Can anyone say companion book to this one?

4. A summary of my thoughts about the book

There is a host of valuable insights about how to make this sort of change happen within an organization and the fact that one of the authors is a consultant who has considerable related experience under his belt contributes to this mine of insights. But as I have said above, this is a map and there are several maps out there not only in the area of supply chain excellence but also in the area of change management and the like. The benefit that is readily observable to me is that over the project period, a structure and ordering of activities is presented which should be mined for insights. Moreover, a set of templates associated with the structure and activities is also available for modification and adaptation.

An important aspect of any successful project is knowing where you were at the beginning (baseline), tracking your progress and demonstrating the results and tangible benefits availed at the end of the project. There are a set of categorized metrics (thank you SCOR for them) that are being used in this space that you can adapt for your particular use but within the above constraint of baselining, tracking and demonstration of tangible improvements.

A pet peeve of mine (and this harkens back to the "deal with such matters of philosophy or digging deeper into what excellence really means" above) with the SCOR model is the notion of benchmarking to establish where the firm is in relation to other firms either within its industry or outside its industry. It is a great idea to provide a heads up vis a vis the others but that’s where its usefulness ends. If the firm’s current operating/financial metric fares poorly in comparison to its peers, then the benchmarking exercise has succeeded and that poorly scored metric should serve as the baseline against which continuous improvements can be made and not that the benchmarked metric as the target to which the organization should be driven. This is a crucial distinction, in my opinion at least, because whatever the scope of the improvement that is envisioned or whatever strategic/tactical changes are made, the purpose of the metric (or basket of metrics chosen) should be to report on the success/failure of the changes/improvements made with respect to the baseline. The question to be asked of the firm is whether the chosen improvement or strategic action is working and not whether the metrics have improved to a parity with

Here’s what one finds on Pg 70-71,

There are four attributes of supply chain performance:

1. Delivery reliability
2. Flexibility and responsiveness (combined)
3. Supply chain management cost
4. Asset management efficiency

The objectives of the competitive requirements exercise is to prioritize these attributes for each customer or market channel, determining whether the company needs to perform each attribute – compared with other providers – at a superior level (90th percentile), at a level of advantage (70th percentile), or at parity (50th percentile).

There is a catch: For each customer or market channel, the team is only allowed to set one performance attribute at the superior level and one at the level of advantage. The other two attributes must be set at parity.

One last note, the requirements are established from the company’s point of view as they relate to the competitive landscape of the future. This is not a firefighting exercise for trying to identify where to improve the most; it’s a strategic exercise, focused on how to differentiate against stiff competition in the future.

And further on Pg 71,

At the end of the exercise, the team must reach consensus on the requirements for each supply chain. Empirically, it might help to assign numeric values to each chip [chip: competitive requirements]: there for superior, two for advantage, and one for parity.

In my opinion, this is an exercise in allocation of resources and management focus – you may conduct this dialogue with yourself:

Person 1: Are you going to pull yourself up to this level of performance in these particular areas?

Person 2: Why?

Person 1: Because it is a competitive imperative.

Person 2: How does excelling in these activities (as reported by these metrics) even along the lines of continuous improvement towards supply chain excellence put you anywhere but in a "metrics race"?

Person 1: Because that’s what excellence is – being better than others in the agreed upon categories of performance. And I might add, in a structured step by step way.

And that’s what excellence really is when you agree to "better" yourself this way. But that is a position derived from a particular philosophical view of excellence and as you might very well be aware, there are many competing notions of excellence.

Sometimes, I think firms should hire a couple of historians (or at least an historian) and ask them to write up a candid history of what is happening within the firm. It would be an exercise in eliciting goals as well as motives, the key actors and their reasons for choosing particular actions – the resultant narrative, constantly updated, would clarify (and communicate) the decisions across the firm. Today that job probably falls to the PR person who has been inducted into writing and maintaining the monthly/quarterly newsletter, who is only charged with collecting stories from different people within a firm and publishing it as such. Instead of a history, we have many short stories circulating within the organization. In this era of blogging, I would not be surprised if we were to see such narratives (even competing multiple narratives) emerge from pseudonymous/identifiable persons within an organization for the sole purpose of communicating stuff within the firm.

Another important service that I thank this book for is the exposure that the SCOR model gets through this avenue. Judging from the traffic that I have analyzed at my site and perhaps my fellow bloggers might be able to provide additional info as well, I see a great deal of interest in the SCOR model. However, the information about the model is hard to come by and this book delves into design, communication and execution using the SCOR model. For that alone, I would rate it a good buy.

In conclusion, I really enjoyed going through this book and its focus on getting things done – only practice makes perfect what theory leaves untouched. I would rate it as 4/5 – definitely a buy.

Disclaimer: I received this book in the mail bag for a review and I’m obliging the publishers with a review.

Tags: Supply Chain Excellence, Supply Chain Management, SCOR, Peter Bolstorff, Robert Rosenbaum, Supply Chain Excellence – A Handbook for Dramatic Improvement Using the SCOR Model