The challenges of today's business environment have underscored the need for expertise in supply chain management. Whether looking for new and innovative ways to meet and exceed the needs of customers, or just trying to survive in the midst of changing business environments, companies are trying to achieve success through application of the principles of supply chain management. Dealing with flows of product, information, and capital both with and between business organizations, expertise in supply chain management is fast becoming recognized as a key to efficiency, effectiveness, and differentiation.
In response to this increasing emphasis, The Logistics Institute at Georgia Tech, positioned within the School of ISyE, has founded the Supply Chain Executive Forum (SCEF), whose membership consists of a wide range of senior supply chain executives from throughout the business world. Members of the SCEF include prominent retailers, manufacturers, software firms and technology providers, and providers of transportation and third party logistics services, as well as leading academics from Georgia Tech and other major universities. The SCEF was founded to promote and stimulate thought, dialogue, and action in the evolving field of supply chain management. Its goal is to identify new and compelling ways for supply chain executives to streamline operations to enhance profitability, integrate supply chain strategy with corporate strategy, and grow professionally within and beyond their current organizations.
Dr. John Langley, Jr., SCEF director and professor of Supply Chain Management (SCM) at Georgia Tech, leads the Forum. "Georgia Tech has made this one of its major supply chain initiatives to establish a greater presence with executive level individuals who have supply chain responsibility — these are the people who are in the best position to identify priorities for change and to implement strategies that will succeed in leveraging the power of supply chain management to achieve corporate objectives and create maximum value for customers," he says.
"If you look at the composition of the membership of our SCEF, you can see people from all types of organizations that comprise today's supply chains. You will find retailers, manufacturers, material suppliers, component manufacturers, third party logistics companies, transportation companies, software and technology providers...essentially about any kind of company you would find in a supply chain," he continues. "And the underlying premise being if these companies convene in a university setting, to collaborate on their thinking, that when they leave the university they will go back to their day-to-day business life and stand a better chance of collaborating effectively and improving their supply chains."
"Supply chain management (SCM) is becoming increasingly important every day," says Langley. "SCM represents an integration of processes both within and between organizations that can lead to significant improvements in efficiency and effectiveness. In addition, a growing number of companies today are seeing ways to use the power of supply chain management to differentiate their product and service offerings from those of the competition." Examples of this include companies such as Dell Computer, The Home Depot, Philips Consumer Electronics, and Milliken & Company. In addition to leveraging the power of supply chain management to help drive company revenues — the "top" line — the competitive advantage that can be created through differentiation is significant. "For example, if you are a retailer, and you are better at having product available when and where your consumers want to buy it, your sales will go up," he continues. "That sounds kind of simple, but effective logistics can actually increase your sales."
"Effective supply chain management can actually help differentiate retailers from their competitors", says Langley. "It is one thing to say that supply chain management helps to increase our company's sales, but it is even more powerful to say that one of the reasons our customers choose us is because of our logistics capabilities. That raises the level of the playing field, and with the information technologies companies are using today to improve their internal processes and their relationships with their supply chain partners, they stand a much better chance of achieving those objectives."
There are currently 23 member companies in the Supply Chain Executive Forum, and the original design for the SCEF is to have a total of approximately 30 leading organizations from all walks of supply chain life. An objective of the Supply Chain Executive Forum is to create an exclusive, "club" type atmosphere, one that fosters a sharing of problems and perspectives among people most capable of doing something about it. Plans are for the SCEF to meet twice yearly, and ultimately to have periodic meetings at member company headquarters sites. Currently, the SCEF meets at the new Georgia Tech Conference Center, located on the Georgia Tech campus in Technology Square. Each member company is also encouraged to bring one or two additional executives to each meeting. This assists greatly in making sure that the benefits of membership extend to a broader base of participants from the member companies: to those who are most able to benefit from the presentations, discussion, and dialogue that are part of every meeting.
Among the 21 founder members of the Georgia Tech Supply Chain Executive Forum is Atlanta-based UPS. "The Forum is a great place for people who have common challenges to talk about issues that face them internally and externally," says Joseph Pyne, senior vice president of UPS's Supply Chain Group. "This is important today because a lot of companies are seeing supply chain as a way to change the battleground. It's a way to reduce costs and streamline the process," he says. UPS's supply chain expertise spans the globe. "We're among the thought leaders in design and implementation," he says, adding that Forum members have interests in design and implementation, global transportation, packaging, and warehouse management.
Rick Jackson, senior vice president of Limited Brands Logistics, says his organization joined because of the Forum's emphasis on the retail channel. "The mix of retailers and third party providers provides an opportunity for a good interchange of ideas, and the format we utilize, presentation then discussion, is a good learning environment," Jackson says. Most of those attending the Forum lead logistics for their organizations, and Jackson believes that is the essential element in the group dynamics. "Senior level attendees are a key to making this work."
Bill Turner, vice president of Logistics and Customer Service for Hershey Foods Corporation, agrees with Jackson. "The Supply Chain Executive Forum is a good place to ensure we are keeping pace as an organization on leading edge practices," he says, "but it is also very important to be in touch with other senior executives from a networking perspective. The Forum provides the opportunity for establishing contacts that can be further developed outside the meetings. Having someone like John Langley leading this initiative gives it immediate credibility to attract the top corporate leadership and keep momentum."
Intel is another founding member of the Forum. "Intel is serious about improvements in our supply network, and accordingly, we strive to find the best leading edge technologies, approaches, and industry contacts," says Jim Kellso, manager of Supply Network Research for Intel Corporation. "Georgia Tech is well recognized as a premier School of Industrial and Systems Engineering, and attracts many of the 'best in class' industrial sponsors. We find association with the 'best in class' companies helps us find new approaches and techniques which assist in improvements in our systems and processes."
SCEF held its first meeting in April 2003. The two-day discussion examined such areas as the "curse of complexity," the benefits and drawbacks of technology, security, and issues surrounding communication, collaboration, standardization, outsourcing, customer service, globalization, and maturation of the technology component. The meetings build in time for networking and small group discussions made up of participants from within similar industries.
The group came together again in October 2003 to discuss corporate success through supply chain management. Rick Jackson opened the event with a presentation on "What the CEO Wants from Logistics and Supply Chain Management." It is about building brands, building capabilities, and building talent, he says, adding that the supply chain will never be seen as a glamorous department within an organization. Challenges facing supply chain executives include:
- clearly articulating the contribution of logistics management to a firm's financial results, not only reducing costs, but driving revenue
- focusing on the ultimate customer and not just the next customer in line
- developing tools and methodologies for linking logistics to corporate strategies, and
- recognizing that supply chain management can't be one of this year's top three objectives or initiatives for any corporation
"The bottom line is, a CEO is not going to adopt SCM as a strategy on their own. For us, it is a retrenching. We need to dream up a lexicon to excite the CEO," says Jackson.
Today's supply chains are more complicated than those in the past; and Professor Kevin Hendricks of the University of Western Ontario says today's managers need to be prepared for the inevitable glitches that come from the globalization of supply chains, an increased reliance on outsourcing and partnerships, single sourcing, little slack in the supply chain, and competition. Supply chain glitches affect both shareholder value and profitability because they can lead to personnel turnover, negative publicity, excess inventory, and poor asset utilization. Hendricks' analysis of average stock market returns in relation to glitches shows that the type of event is not important; whether it is a development problem, a part shortage, or changes by customers, there is a loss of shareholder value. "It doesn't matter who is responsible for the event," says Hendricks. "Your supplier or customer can do as much damage to you as you can do yourself."
"The unexpected will happen, so today's supply chain managers must be resilient," says Roger Kallock, former Deputy Under Secretary of Defense for Logistics and Materiel Readiness and now chair, Chagrin Consulting Associates. His term for it is "falling smartly." Kallock says, "You can't anticipate everything. But you can set the foundation for good communication."
The SCEF is a project of The Logistics Institute (TLI). TLI was established in 1992 in partnership with the National Science Foundation and more than 25 corporations and governmental agencies known as Leaders in Logistics. TLI conducts in-depth research pertaining to new logistics concepts and processes while offering a comprehensive logistics educational curriculum. For more information, visit tli.gatech.edu
For more information about membership in the Supply Chain Executive Forum, contact John Langley at (404) 894-6523 or [email protected]
