Innovation FULL DOC
Chapter 1: Supply Chain Strategy
Logistics entails the organization, planning, control and execution of the flow of goods from development and
purchasing, through manufacturing and distribution to the consumer, up to including the reverse flow. The aim is to
meet market demand at lowest cost and best use of capital, and build long-term relationships with customer.
1.1 The helicopter view: from mission to results
The hierarchy of planning changed from the traditional three levels of strategic, tactical and operational due to
emancipation, democratization and digitalization into:
For a delivery company the hierarchy of planning could be:
Supply chain strategies and logistics are integrated parts of the corporate planning systems. Having an helicopter
view on the supply chain and the position of the company and its partners in it is an essential prerequisite for being
successful. Time, cost and quality remain the critical success factors, but now inventory is minimized, time frames
are compressed and bottlenecks and quality problems are eliminated in a joint effort of collaboration and
cooperation throughout the supply chain.
1.2 Organization Models
,Building Blocks
The building blocks of the basic management models can be described as:
- Strategy - People
- Structure - Resources
- Culture - Results
,Knowledge Management Model
The Knowledge Management Model (Abilities Model) is a model that states that an organization should possess six
basic capabilities.
Ability to:
- Anticipate
- Respond
- Produce
- Learn
- Create
- Last
7S Model
This model exists of 7 most important internal aspects of an organisation that need to be aligned if it wants to be
successful. The alignment of the elements require both parts of the human brain, leading to a balanced analysis of
the effectiveness of companies.
Hard elements are easy to influence and be
identified by management.
Superordinate goals is placed in the middle
because they help connect all the other points.
These represent mission and vision of the company.
Soft elements are more difficult to describe, less
tangible and more influenced by culture.
1.3 Turning vision into mission
In 1994 Colin and Porras researched what makes successful companies different from others.
They came to a 4 step process articulating into mission:
1. Core Values 3. 10-to-30-year BHAG
2. Core Purpose 4. Vivid Description
Step 3 there are 4 types of BHAG’s (Big Hairy Audacious Goal):
- Target BHAG (qualitative, quantitative)
- Common enemy BHAG
- Role model BHAG
- Internal transformation BHAG
The BHAG, Big Hairy Audacious Goal philosophy encourages leaders to set goals which are very hard to achieve but
not impossible if the company is willing to take the risk.
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Step 1: Core Values
Sony Encouraging individual ability and creativity
Step 2: Core Purpose
Sony To experience joy of advancing and applying technology for the benefit of the public
Step 3: BHAG
- Target Become the dominant player in commercial aircraft
Boeing
- Common Enemy Crush adidas
Nike
- Role Model Become the Harvard of the West
Stanford
- Internal Transformation Transform the company from a defence contractor into the best diversified high-tech
Rockwell company in the world
Step 4: Envisioned future in a vivid description
Sony We will create products that become pervasive around the world, we will be the first
Japanese company to go into the US market and distribute directly, ....
1.4 Supply Chain Management
Supply Chain Management is the synchronisation of the movement of flow of goods, funds and information.
The three flows involved in the supply chain can be outlined as follows:
1. The physical flow of goods: Purchase, movement of
raw materials through manufacture and assembly to
products and end users
Traditional Supply Chain 2. Management control & flow of money
3. The flow of information: Allows partners to co-operate
efficiently and control day-to-day flow of goods
Traditionally the supply chain management of companies has been focusing only on what was happening within the
company. The entire focus was delivering the goods to end consumer.
Nowadays the supply chain management stands for the active management of supply chain activities to maximize
customer value and achieve sustainable competitive advantage.
Managing business processes across the supply chain:
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