May 22, 2009 0
Book Review – The Supply-Based Advantage
At long last, I am posting the review of this book The Supply-Based advantage by Stephen Rogers about which the author had contributed a summary some time ago. Actually, this is the second time I am writing the review because unfortunately, the first one was deleted from my hard drive (pesky, pesky little thing).
When reading this book, the first thing that jumped out at me is that the book is really divided into two parts – the first three chapters are a sort of conceptual and definitional gambit. The fourth chapter is a short introduction into what the blueprint for a supply-based advantage should look like and the rest of the chapters in the book are a study in erecting the different elements of a successful supply based strategy illuminated through the metaphor of a house i.e. foundation, walls, roof, utilities. you get the rough picture.
In the first part of the book, Steve introduces the concepts of competitive advantage, value, complexity and risk (rapid change not being a concept but a reality). It is a good idea to keep those concepts in mind (but because they’re in some way detached from the metaphor of constructing a good house, they float somewhere in the ether and you need to suffuse your reading with the implicit relation to these concepts).
There are some interesting questions asked in the first part of the book (that which I pored over in my previous review but will only touch on briefly now):
1. Why do smaller companies understand better how to structure a good relationship with suppliers and larger companies (and even smaller companies that grow large) forget this? Steve’s answer takes the form that in most small businesses, owners are usually spending their own money and therefore seek to get the most value of their spending. I think that is a good observation. I would only add that a small business entrepreneur is risking everything with the idea that there is something about a particular niche or segment that is uniquely appreciated by him and he proposes to fill that gap with the expectation of reward. Therefore, I infer, that if deriving supply advantages are part of that gap equation, then the owner will set about creating some measure of defensible value that will add to his overall advantage. Now, as the company grows, others come in that do not share the owner’s appreciation of the gap or of the value – the further the owners are pushed from this basic equation, the less of an understanding the organization now possesses of the situation. However, those who add to the firm’s headcount bring along their own ideas of what is really important to the equation or their understanding of the equation – sometimes better and sometimes not.
2. The importance of timing. This important idea is illustrated through the example of P&G before the American Civil War and how the owners of the firm seized the import of securing the supply of a key component before the outbreak of war that served them well through and after the war. In fact, the claim goes that the additional profits generated from this strategic move funded their future operations and growth. This is a lesson of life – cut your losers short before they consume you but press your winners home before they are undone by others.
As for the second part of the book, there is a litany of plans, activities and processes that can be marshaled towards building up (or conversely breaking down) supply-based advantages. These chapters deal with the nitty-gritty of structuring these activities and processes for success. Also, what I found helpful in the reading is the well distributed “Practitioner’s take” in grey boxes that provide reflections every step of the way which by itself renders these chapters within the framework of “Here’s a good way to structure things” – “Oh! by the way, here’s how I found it”. Now of course, your straddle upon this framework is going to be different but you have a reference point in these appraisals of salient supplier planning and engagement processes.
Lastly, a shortcoming of the book is the use of an overarching metaphor (of constructing a home) which on the surface seemed very useful but as one gets through the chapters, the metaphor finds little depth beyond the first paragraph of a chapter. Metaphors are tricky to begin with but a good metaphor not only permeates but also reaches deep into a subject and allows a reader to connect beyond the prose so that long after the particulars have escaped one’s grasp, the metaphor resonates and its particulars return on a superficial recounting.
Overall, I think its a worthwhile addition to your library as a reference if you work in the supply management field.
P.S: I am on vacation till mid-June and that will explain the lack of updates. Not that I have explained the lack of updates this month but I am just saying. I have reason this time. Wish you all well!!