od & global supply chainnov

7/30/2019 OD & Global Supply ChainNOV

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OD & Global Supply chainAndreea Patrascu T& O.D. Manager


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agenda

What is Organizational Development ?

Organizational Design principles within Supply Chain

SCM strategies & performance management indicators

Introduction in operations management

26th Nov.

27

th

Nov.28th Nov.

29th Nov.

4th Dec.

5th Dec.

12th Dec.


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agenda

about organizational development

organizational models as roadmaps

core strategy tools & strategic prioritization

study case


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Organizational development -discipline that aims to improve the organizationsperformance trough planned change management interventions.

Scope: improving performance

When?

Q. How does the need of change appear?

Focus : systemic alignment

total organizational system alignment and interfaces between parts

movement within one part will affect all other parts

The burning platform

Change management is an important aspect of management that tries to

ensure that a business responds to the environment in which it operates.

what is organizational development


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focus on diagnostic data for interventions in order to find out root causes and put in

place a structured change management plan.

Gainingentry

Diagnosethe situation

Implementingthe plan

Influencingthe change

Strong

business case

Leadership

engagement

Discover theroot problems

Facts

Documentation

Include

plannedchanges in all

impacted

areas

See organizational

models

Communicate

Gain needed

resources

Gain support

the OD process cycle


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Organizational models as roadmaps

J Galbraith Mc Kinseys 7s

How do you go about analyzing how well your organization is positioned to achieve its goals ?

Organization is a system ! Look for congruence between all aspects of the organization.


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Structure:

How is the company/team divided?What is the hierarchy?

How do the various departments coordinate activities?

How do the team members organize and align

themselves?

Is decision making and controlling centralized or

decentralized? Is this as it should be, given what we're

doing?

Where are the lines of communication? Explicit and

implicit?

Systems:What are the main systems that run the organization?

Consider financial and HR systems as well as

communications and document storage.

Where are the controls and how are they monitored and

evaluated?What internal rules and processes does the team use to

keep on track?

Staff:What positions or specializations are represented within

the team?

What positions need to be filled?

Are there gaps in required competencies?

Shared Values:What are the core values?What is the corporate/team culture?

How strong are the values?

What are the fundamental values that the

company/team was built on?

Style:How participative is the management/leadership

style?

How effective is that leadership?

Do employees/team members tend to be competitive

or cooperative?

Are there real teams functioning within the

organization or are they just nominal groups?

Skills:

What are the strongest skills represented within thecompany/team?

Are there any skills gaps?

What is the company/team known for doing well?

Do the current employees/team members have the

ability to do the job?

How are skills monitored and assessed?

7S Checklist Questions

How to put the right questions to identify gaps!


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Organizational models is based on the theory that, for an organization to perform well, all

elements need to be aligned and mutually reinforcing

Burke -Litwin Nadler & Tushman

The congruence model

Organizational models as roadmaps


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core strategy tools

Porters Five Forces

Assessing the Balance of Power in a Business Situation

1. Supplier power - assess how easy it is for

suppliers to drive up prices

2. Buyer power- ask yourself how easy it is for

buyers to drive prices down

3. Competitiverivalry -the number and

capability of your competitors

4. Threat of substitution -if customer can

easily substitute what you supply,, then this

weakens your power.

5. Threat of new entry- is affected by the

ability of others to enter your market


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core strategy tools

PEST analysis:

PoliticalGovernment type and stability.

Freedom of press, rule of law and levels of bureaucracy and corruption. Regulation

and de-regulation trends. Social and employment legislation. Tax policy, and trade

and tariff controls. Environmental and consumer-protection legislation. L

likely changes in the political environment .

EconomicStage of business cycle..Current and projected economic growth, inflation and interest rates.

Unemployment and labor supply. Labor costs.

Levels of disposable income and income distribution. Impact of globalization.

Likely impact of technological or other change on the economy.

Likely changes in the economic environment.SociologicalPopulation growth rate and age profile. Population health, education and social mobility, and attitudes to

these.

Population employment patterns, job market freedom and attitudes to work.Press attitudes, public opinion, social attitudes and social taboos.

Lifestyle choices and attitudes to these.

Socio-cultural changes.

Technologicalimpact of emerging technologies. Impact of technology transfer.

Impact of Internet, reduction in communications costs and increased remote working.

Research & Development activity.


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core strategy tools

What advantages does your organization have?

What do you do better than anyone else?What unique or lowest-cost resources can you draw

upon that others can't?

What do people in your market see as your strengths?

What factors mean that you "get the sale"?

What is your organization's Unique Selling

Proposition (USP)?

What could you improve?

What should you avoid?What are people in your market likely to see as

weaknesses?

What factors lose you sales?

Do other people seem to perceive weaknesses that you

don't see?

Are your competitors doing any better than you?

What good opportunities can you spot?

What interesting trends are you aware of?

Does exists some opportunities drivers?

Changes in technology and markets on both a broad

and narrow scale.

Changes in government policy related to your field.

Changes in social patterns, population profiles,

lifestyle changes, and so on.

Local events.

S WO T

What obstacles do you face?

What are your competitors doing?

Are quality standards or specifications for your job, products

or services changing?

Is changing technology threatening your position?

Do you have bad debt or cash-flow problems?

Could any of your weaknesses seriously threaten your

business?


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0%

50%

100%

Strategy

Performance

management

Customer perception

Systems

SystemsSkills

Rewards

Processes

Starting point Current period target

core strategy tools

the radar chart


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BOSTON matrix

focusing effort to give the greatest returns

Useful tool for analyzing product portfolio

decisions

Only a snapshot of the current position

Has little or no predictive value

Does not take account of environmental

factors

There are flaws which flow from the

assumptions on which the matrix is based

strategic tools

build

harvest

hold

divest


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value chain analysis Porter 1985

strategic prioritization

How you can create the greatest possible value for your customers?

How does your organization create value?

How do you change business inputs into

business outputs in such a way that they

have a greater value than the original cost of

creating those outputs?

Describes the activities that take place in a

business and relates them to an analysis of

the competitive strength of the business!

A value system includes the value chains of

firm's supplier

the firm itself

the firm distribution channels

the firm's buyersPorter : Competitive Advantage: Creating and Sustaining Superior Performance.


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Steps in Value Chain Analysis

Value chain analysis can be broken down into a three sequential steps:

1. Break down a market/organization into its key activities under each of the major

headings in the model;

2. Assess the potential for adding value via cost advantage or differentiation, or

identify current activities where a business appears to be at a competitive

disadvantage;

3. Determine strategies built around focusing on activities where competitive

advantage can be sustained

core strategy tools


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The tag of war


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company: Voici ; clothing manufacturer

market presence : global: USA, Canada ,UK, Mexico

sales channels: retail & online

Tag of war- change or die

facts

issues

challenges

The company had started loosing money ( last 2 years)

Supply problems affected sales

High lead time comparing with main competitor

Lack of operational efficiency

Low TTM ; low productivity ; high inventory levels; no accuracy in forecast

Supplier s dependency

Lack of management control & performance management monitoring

Leadership : decentalizalized, with

own management, own set ofsuppliers

one delivery:

change the current organizational design structure

improve supply chain speed & efficiency in terms of cost & quality

What kind of leadership will get Voicis units to pull together?-use the OD process steps as support & 1 organizational model as roadmap

-what are the main priorities to address?


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How can North Pole

workshops better

respond to shifts in

demand?

Tag of war- change or die

Continuous change that incrementally

adapts the current ways of operating

across all or parts of the organization

Usually does not involve change

management

People can cope well

Continuous change that radically

transforms all or parts of the organization

Helps to involve change management

People find this hard

Intermittent incremental change that

incrementally makes adaptations in all or

parts of the organization

Important to involve change

management

People find this fairly hard but not as

hard as radical change

Intermittent radical change that

transforms all or parts of the organization

Essential to involve change management

People find this very hard


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The goal of effective supply chain is to

optimize the end-to end in order fulfillmentprocess, not individual functions, while

achieving lowest cost

____________________________________Supply Chain Management Strategies

Shoshanah Cohen &Joseph Roussel

Organizational Design


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Organizational design trends in supply chain

Center-led Supply Management

-shift toward central control and coordination that due to the intense pressure to

reduce costs brought about by global competition. An inability to raise prices,

demands the coordination of supply activities and the consolidation of purchase

volumes in an effort to minimize supply chain costs.

Organizing around Critical Processes

Plan

Source

Make

Deliver

Return

Spanning across Boundaries

requires participation and coordination of activities between different organizational

functions - marketing, operations, sourcing, and logistics.

All functions must share information and conduct coordinated activities.

Design criteria:

* supply chains minimize the cost of operations at all

levels

*have redundancy built into its processes, allowing it

to quickly respond to expected changes, maximize the

service levels for fulfilling demand, manufacturing

personalized products.


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Evolution of supply chain organizational design

Functional

GM

Purchasing Operations

Planning

Buying

Logistic

Manufacturing

OrderManageme

nt

Marketing

& SalesR&D Finance

TransitionalGM

Operations

Orderfulfillment

Manufacturing

Supply

mngm.

Orderfulfillment

Logistics

Marketing

& Sales

Order

mngm.

R&D Finance

what kind of structure can best

support the business strategy?


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Evolution of supply chain organizational design

Integrated model GM

Operations

Supply

management

Purchasing

Ordermanagement

Orderfulfillment

Manufacturing

Marketing

& Sales R&D Finance

Supply chain management group is responsible for cross functional operational objectives such as inventory days of

supply, orders lead-time, customer on-time delivery.

Fullcontrol over the resources

End to end supply chain performance


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Organizational design is arranging how to do the work necessary to

achieve a business purpose and strategy.

Organizational design - the process

how do you determine the best structure for your company at any given time?

assess designplan to

transition transition

Actions

Clarify purpose & vision

Conduct an internal & external scan

Assess & align leadershipStart stakeholder engagement & leadership

Deliverables: business case , high level project plan

Tools: SWOT/PEST, organization assessment


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.


what are you customer expecting from you ?

assess design transition

Actions

Establish design criteria

Develop design options

Define key metrics and critical

success factors

Deliverables: governance model

Detailed design of future state

Measurement dashboard

Tools: process mapping ( core/essential ,non-core)

Enable low cost operating structure (minimize

overheads, layers)

Ensure able to scale up at later date with minimal

disruption to the organization

Work grouping alternatives :

Function or process Product or service Customer Multifocused

(activity+ output + user)

Keep in mid that every participant in the process is

both customer & supplier and every Supply chain

event/task has an input & an output.


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.


assess design transition

Actions

Develop a transition plan and manage the implementation

Anticipate risk & develop a mitigation plan.

Deliverables: project progress reports , course corrections

Tools: organization assessment against starting point , lessons learned

The design that an organization creates should not be the result of random

occurrences.

It should be the result of careful consideration given to what leaders are trying to

achieve.


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SCM strategies


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Traditional Advanced

Source: Boston strategies international

MARGIN

IMPROVEMENT

ASSET

UTILISATION

COST

REDUCTIONREVENUE

ENHACEMENT

Rationalization(cost containment)

Customization(customer interface

enhancement; customerintimacy)

Synchronization(demand-supply balancing

reliability)

Innovation(customer interface

enhancement)

Supply chain strategies


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Rationalization

Focus on total supply chain cost :

planning/order sourcing/inventory

management cost;

Competing on low cost by focusing on better

cost management and eliminate:-Excess purchases and inventory due to

bullwhip effect

-Excess capacity investment or lost orders due

to production capacity;

SCM techniques

Strategic outsourcingLean management- eliminate wastes

Standardization

Transportation

Design for manufacturability

Paperless work flow

MUDA: Waste. Any activity that doesn't add value. Value is usually

defined as anything the customer will pay for

MURA: variability, inconsistency, irregularity.

Mura exists when workflow is out of balance and

workload is inconsistent and not incompliance with the

standard.

MURI: Overburdening employees or processes


Success factors


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CustomizationThe experience must be unique to each customer

Flexibility : the personalized nature of the experience must

adapt to the changing needs of customer & environment

including product configuration and flexible delivering capability

Intimacy creating the sense of getting something unique,

specialConvenience

Speed delivery

SCM Techniques:

Control of customer relationships

Customer knowledge management

Value analysis linking customer data to all interactions

Mass customization

Design for configurability

Lifetime services

Customer profitability management

On demand profitability


Success factors


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Synchronization

Competing on reliability

Driving customer loyalty trough high service

levels and quality.

SCM TechniquesPull based demand trigger

Constrains management & trough output analysis

Just in time ; Perfect order

Make to order

Sales & Operations planning

Collaborative inventory management

Risk mitigation

Innovation(customer interface enhancement)

Newer product and services

Concurrent product development

Continuous market feedback

Rapid & early prototyping

Early supplier involvement

Designing for supply chain (design independent of logistics )

SCM techniques

Market responsiveness

Product development

Product life-cycle management\Early supplier & customer

involvement ;Design for supply chain


Success factors


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Four major causes of the bullwhip effect:

1. Demand forecast updating

2. Order batching

3. Price fluctuation

4. Rationing and shortage gaming

Bullwhip effect

Key concepts


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Push production is based not based on actual demand

Pull production is based on actual or consumed demand.

PUSH vs PULL

Key concepts


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Supply chain contribution to the business strategy

Strategy Source of

advantage

Basis of

competition

Key supply chain

contributor

Innovation Brand & uniquetechnology

Innovative &

desirable products

Time to market &

time to volume

Cost Cost-efficientoperations

Lowest prices Efficient & low cost

infrastructure

Service Excellent service Tailored to meetthe needs of

customers

Designed from the

customer in

Quality Safest, reliableproducts

Products you can

count on

SC excellence &

quality control


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Criteria for a good operational strategy

Consistent with business strategy

Aligned with your customer needs

Aligned with your power position

Flexible in case that environment change

1. Operations strategy

2. Outsourcing strategy

3. Channel strategy

4. Customer service strategy

5. Asset network

5 Key configuration components


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1. Operations strategy types

Strategy When is needed +

Make to stock High volume

High standardization levels

Low manufacturing cost

Speed of delivery

Configure to order Product that requiring many

variations

Reduced inventory

Good service levels

Customization

Make to order Customized products Low inventory levels

Wide rage of product options

Simplified planning

Engineer to order Complex products that meet

unique customer needs

Enable response to the specific

customer requirements

Differentiation

Key driver : product cycle and no. of product variants

f


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Outsourcing strategy

allows companies to focus on their core competencies and enhance competitivepositioning

3 potential advantages:SCALE scale up production quickly without investing in manufacturing capacity

SCOPE- for companies that want to expend into new markets outsourcing partners

provides access to operations in new regions

TECHNOLOGY EXPERTISE when they have already developed a product /process

technology that would be require a sizable investment to produce it internally.

f d


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Criteria for a good strategy

Channel strategy

how will you get your product or services to your customer?

- direct sales force? online? retailers?...

Customer service strategy

In order to prioritize and focus your capabilities is necessary to know:

- what your customer really wants

- what are the overall volume and profitability

of your customer accounts

Asset network

-the product life cycle drive asset decisions

Global Regional

Country

risk mitigation option : market postponement

C i i f d i l


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Outsourcing strategy

allows companies to focus on their core competencies and enhance competitivepositioning

3 potential advantages:SCALE scale up production quickly without investing in manufacturing capacity

SCOPE- for companies that want to expend into new markets outsourcing partners

provides access to operations in new regions

TECHNOLOGY EXPERTISE when they have already developed a product /process

technology that would be require a sizable investment to produce it internally.

P f


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Performance management

Performanceattribute

Attribute definition SCOR LEVEL 1

Reliability correct product

correct place& customer

JIT and perfect condition in correct quantity with

correct documentation

Delivery performance

Fill rate

Perfect order fulfillment

Responsiveness pull balance between supply & demand Order fulfillment lead time

Flexibility Quickly responses to marketplace; agility in

maintaining competitive edge;

Response tim e

Production flexibility

Cost The cost associated with operating the supply

chain

COGS

Total supply management cost

Value added productivityWarranty returns

Inventory cost

Asset management Effective management of asset to satisfy demand

. Include fixed assets & working capital

Cash-to cash cycle time

Inventory days of supply

Inventor turnover

SCOR cardmodelSupply Chain Operations Reference model


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Supply Chain KPI


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THANK YOU

od & global supply chainnov

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