Operation Technology Management
Presentation: Article Review of Journal Article
1.0 Bibliographic Reference
The article which name is “Power, value and supply chain management” was published in an “International journal” volume 4, Number 4 pp.167-175 in 1999 years. It was written at Birmingham Business school of University of Birmingham in England by author Andrew Cox which is Professor of Business strategy and procurement.
In his educational period, he collaborated with Glyn, Watson, Chris Londsale, Joe Sanderson , Paul and so on wrote numerous books and articles in especially strategy and procurement and supply chain management and some of them we give examples in below:
“Strategic Supply Chain Management: the Power of Incentives”, in Waters, D. (ed), Global Logistics: New Directions in Supply Chain Management (London: Kogan Page, 2006), pp. 91-106 (with Glyn. Watson, Chris Lonsdale, Joe Sanderson.
Strategic Purchasing and Supply Chain Management in the Project Environment:: Theory and Practice” in Lowe, D with Lei ringer, R (eds), Commercial Management of Projects: Defining the Discipline (Blackwell, Oxford, 2006) pp.390-416 (with Paul Ireland).
“Effective Supply Chain Management in a Project Based Environment” Proceedings of the LRN Conference, Birmingham (4-6th September 2002), pp.391-398 (with Paul Ireland)
2.0 Introduction
This study was originated from Cox (1997a), Womack et al.,(1990), Womack and Joes, (1996) findings that make clear operational effectiveness and efficiency and gives current great deal of ideas in “Supply chain management thinking”. Therefore in this article, the author described delivery channels which may be created internally and externally which is called operational and strategic approach for supporting and supply existing product and service to the clients by inventing tools and techniques for raising operational effectiveness and efficiency. It is criticizing for being atheoretical and descriptive and a case study approach with “Supply chain management thinking” based on Power and value concepts.
And also, the case study is approached to operational and strategically resource management which it is organized by Toyota. This is sometimes considered as “Lean thinking” turns to transfer Toyota’s waste minimization techniques
3.0 Very Brief Summary
The business success will be derived from companies managing to enhance the total performance of the supply chain, so it can deliver improved value to customer. As mentioned in introduction part, the Supply chain Management is described from an operational and strategic perspective.
Managing operational or external resource by different of product and service supply chains.
In a strategic or internally approach, the main discussion is aimed to that internal skills and resources company need owe and control in internal contracts for their success.
The last, understanding an importance of Power and theory for managing supply chains both strategically and operationally that practitioner clearly understand the power structures which it is exist in their supply chains.
The basic discussion from this writing is to achieve for success which derived from companies managing to enhance of performance of supply chain management.
The suggestion which is in an operational approach is offered by Toyota model which is called “lean thinking” assembly-based, outsourced and JIT, demand -pull for automobile industry. This was applied in especially in western car industry as well as in retailing commerce.
In strategic approach, The Toyota model is suitable because strategic approach to competition based on passing value to customer through supply chain to supply chain competition.
Understanding of the importance of power and theory is how to manage supply chains in strategically and operationally. Because the Practitioners need understand clearly the power structures that exist in their supply chains.
The author of this article gave in some details below which are as evidence of Toyota model “lean thinking” for operational effectiveness and efficiency.
- Try to improve of delivering value to customers
- Take attention of producing according to the necessity of customers
- You need close relationship, collaborative, adversial (win-lose) with suppliers.
- Develop working with suppliers to create a lean and demand-driven logistics.
In other words, Toyota’s lean approach is both its strategy and its operational practice. Because it operates within a contested supply chain and market place, the only way in which Toyota (or any other car assembler) can achieve sustained business success is by operating on low margins and delighting the customer in order to achieve high volume market share.
This clear understanding, implying about power of supply chains lead to make conclusion that practitioners need to understand the nature of their supply chains, before they begin to implement particular strategies and operational practices within them.
4.0 Results
The study of article is not based any concepts of theories of Supply chain management thinking for different organization therefore their producing different product and services. The article’s take home messages are not new, because from article’s case study also describes which is that Toyota model is also aimed to copying from for their suitable sights.
5.0 Contributions
At this article provides a great deal of ideas how to apply of supply chain management thinking which different approach for organization’s success is is in the future. It does not provide a new way to look at problem because this way has a long history work which we refer it is an example for a practitioner which is the success of Japanese manufacture industry from 1970 till 1980 years. From this article which are together or “insightful way several concepts in insightful way not provided because supply chain management thinking is directed to being a theoretical and descriptive.
From this article only describes how install their supply chain management for their neediness.
6.0 Foundation
This article is built upon discovering tools and techniques of supply chain management that provide for increasing operational efficiency and effectiveness by delivering system which is innovated internally and externally to support and supply chain existing product and service offerings to the clients in organization by around the concepts of power and value appropriation. Which is a structure of Power within supply chain consist of in the following way
First, Practitioner need understand the peculiarity of supply chains which before to start implementing operational practices and individual strategies.
The second automotive supply chain which Toyota model is described “Lean approach” has a specific peculiarity. This peculiarity can be transfer to different types of supply chain, after that it is possible to adopt the same approach to integrated supply chain management, based on the creation of hierarchies of structural dominance.
The third, Supply chains of structural properties of power does not exist in service industry. That copying the practices of car assemblers is likely either waste of time or a recipe for disaster.
7.0 Synthesis with Class Materials
It has informed External causes of Supply chain which is implied belove with some factors of Article as synthesis with class Materials. Syhthesis analyzing with class materials from viewpoint of External causes and Internal causes of Supply chain Disruption as well as Value analysis.
- Volume change is meaning described as Products are being changed of ordered amount and delivery date.
- Changing Service and Product mix: It means that Ordered of Products may be changed by customer.
- Late Delivery: When delivery systems can force to production schedules
- Undefiled shipments: Some parts shipments accused of production schedule or quantity produced
Internal Causes of supply chain management elements consist of as below.
- It is attempted to design aggressively of services and products by Engineering technology
- It is created services and products of introduction require new supply chain.
- To promote Services and products aimed to demand spike.
- Information errors can be described forecasting before demand, suitableness communication with suppliers and deficiency of inventory counts.
Value analysis described to decrease cost of products and services which is suitable for performing service and producing sphere.
Early supplier involvement is a program, it consist of suppliers designate the form of a service and or product.
Presourcing: A level of Supplier involvement in which supplies are selected early in a product’s concept development stage and given significant, If not total, responsibility for the design of certain components or systems of product.
8.0Analysis
The article describe theories, concepts and models which is not suitable for all different types supply chain and this configuration appear in different reasons. So that there can not be one single approach to supply chain management and that is available for all circumstances. Certain approaches will be more or less reliable for supply and value chain power structures. But it is still appropriate way from completing the great analytical structure of supply and value chain power, and unite of these types with most pleasing to management strategies for appropriating value.
Additional Analysis
General Crituque
No, this supply chain management is aimed to collecting and selecting of basic views of Toyota model which is managed itself with customer and suppliers.
The author tried to describe external approach which external resource management and internal approach which is making decision, retaining resource internally that company needs.
The main objective of this article is that business success consist of companies managing to enhance all performance of the supply chain, so that it can deliver approved value to the clients.
In article’s result of confident has been drawn and is not yet completed fully.It seems to make clear that the theoretical propositions outlined in the article are considerably sub stained by empirical cases.
The article simply repackage old ideas, that follow this provide a direction of how this model of supply chain provides enligments about the structures of power in different types of supply and chain values.
Outlining of article’s characteristics has a many supply chain thinking. This thinking is aimed to both copying from and adapting basic insights that has been gleaned from the way of Toyota model.That has historically managed itself and it’s relationship with customers and suppliers.
. There are some faults and limitations of the topic area which are below described about them.
Supply chain Process Measure is based on some factors which are Customer relationship, Order fulfillment and Supplier relationship.
Offshoring – is a view of supply chain, it can be moved to other country. It can be affected to the offshoring decision include:
- Comporative labor costs
- Logistics costs
- Labor Laws and Unions
- Tariffs and Taxes
- Internet
Virtual Supply chain- It means outsourcing some pieces of the entire order fulfillment process with the help of sophisticated, web based information technology support packages.
The article have made some considerable contribution, The possession of power attributes will be made clear by the relative capacity of the owners of particular resources to available value for their neediness which is quantity and sustainability from participation in Supply chain management
This article was compared with three articles and one case studies which was described in the below by author.
The first article by Chris Londsale demonstrates that, drawing on a case study of Hewlet-Packard, it is possible to outsource safely and become an assembler in a supply chain.
The second article by Paul Ireland implies that in different of supplies chains it is approved for power to other firmly with suppliers operating in highly contested markets.
The final article by Joe Sanderson approves which is in a supply chain with dominant player, who owns the critical assets in the chain, the power to appropriate value that this ownership and control potentially provides can be significantly dissipated by government control
The case study presented by Glyn Watson that made clearer in supply and value chains there two effective choices for key participants. They can cause both strategic innovation it can achieve very temporary advantages so that it is not close markets to competitors and it should recognize competition and pursue a low margin strategy based on treadmill to oblivion.
I think the author of article described adequate information about background information about Power, value and supply chain management which was firstly undertaken in the 1970 and 1980 years of Japanese model besides the work was holded by Bhote (1989), Carlie and Parker (1989), Christopher (1992;1997),Gattorna and Walters (1996) and so on. Therefore, it was an adequate discussion hold especially in Toyota model for Supply chain management thinking as external and internal approach. But, The author informed very shortly for achieving main aim in conclusion of the article.
10. Issue:
Supply chain success just doesn’t happen. It takes focus and effort across the entire company organization and with outside suppliers and service providers. Logistics touches every part of a company. So supply chain management must be multidimensional in its approach and scope. And this takes process, people and technology. This is true whether you are a wholesaler, retailer or manufacturer. And it is true if you are lean and need to be agile, flexible and collaborative.
Supply chains can be long and complex, stretching between different countries. A firm may have many customers, each with different order and shipment requirements and destinations. There can be many suppliers, sourced from different cities and many countries. Each supplier may require instructions and planning as to lead times. All this work is done have product available when customers order.
PROCESS: Process means a practice, a series of actions, done for a specific purpose, such as satisfying customers. Customers demand and expect more from their suppliers; that is a fact regardless your size or industry. And supply chain management is critical to that customer satisfaction.
Supply chain process is a flow of activities with the goal of meeting the requirements of a customer. It includes all internal functions, logistics, distribution, sourcing, customer service, sales, manufacturing and accounting. It includes external companies. The series flows backward–from delivering each customer order each order as demanded back through the performance of suppliers to provide needed finished products, components, parts and assemblies.
Process has structure. This compares what some companies call “process” which may be a series of repetitive, standalone transactions. Process has standardization with its understanding of what must be done. With that in place, it also has flexibility to handle exceptions and changes that are a reality of doing business.
PEOPLE: People make organizations and are important to supply chain success. They need to have functional expertise and skills. They need to know how to manage and operate warehouses, inventory, transportation, purchasing. They need both a tactical view for everyday business and a strategic vision of where and how their function fits in the supply chain and how to make it better.
People success is a function also of the corporate culture, how the company sees itself, defines itself and operates, both internally and externally. The culture can be a facilitator of processes or an inhibitor. If the company has myopia, then it negatively impacts its ability to respond in all areas required.
Similarly, organizations, with their hierarchical design, create barriers to supply chain process, which is horizontal. Organization silos can short circuit the supply chain process. Each silo can have its internal goals that can work cross-functionally to the process. Even though the focus of the supply chain process is the customer, merchandising, logistics, finance and others may work to optimize their role, but which may sub optimize the process.
TECHNOLOGY: Supply chain management is sometimes define, or incorrectly defined, in terms of technology. Process can be defined as technology, with an overemphasis on hardware and software, and not on the purpose of the process.
Software may be “sold” as the answer, the means, to supply chain nirvana. That can lead to an overexpectation by the user, which in turn can lead to disillusion with what is required to set up and operate the system and with the results actually achieved.
11. Annotated Bibliography
1. Chen, I. J. and Paulraj, A. (2004). ‘Towards a theory of supply chain management: The constructs and measurements‘, Journal of Operations Management, 22: 119-150.
Maybe the most comprehensive analysis of wide-ranging, multi-disciplinary supply chain management research, this article identifies and consolidates supply chain initiatives and factors to develop key supply chain management constructs. The term supply chain management is used to refer to planning and control of materials and information flows as well as the logistics of internal and external activities. Constructs are identified for supply uncertainty, demand uncertainty, customer focus, competitive priorities, supply network structure, long-term relationships, communication, cross-functional teams, supplier involvement and logistics integration
2. B. Prida and G. Gutierrez. Supply Management: From purchasing to external factory management. Production and Inventory Management Journal, 37:38-43, 1996.
3.M.A. Cohen and H. L. Lee. Strategic Analysis of Integrated Production-Distribution Systems Models and Methods. Operations Research 36:216-228, 1988.
Measuring cost/service/flexibility tradeoffs in production/distribution systems. Methodology considers relationships between production and distribution control policies that affect inventory control, plant product mix, and production sched. Other manufacturing strategy decisions (e.g. facility location, capacity planning) are assumed fixed.
4. Thomas Craig, President of LTD Supply Chain Management Consulting, July/August 2001, “Issues supply chain management success – process, people and technology”.
Supply chain success involves process, people and technology. It gives definition to the company purpose. It enables all participants to know what is required. This in turn provides agility to handle exceptions and to adapt to changes. Having those three elements is important to having metrics, ones that are useful across the organization. All three working together in a company provides coordinated, unified effort to use supply chain management as a driving force in customer satisfaction and in having competitive advantage, with service and productivity.
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