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Supply Chain Matters Book Review: Global Tilt by Ram Charan

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From time to time throughout the year, authors and their publishers send us new books dealing with timely content related to global supply chain management and related business management topics. Our reviews are predicated on quality of content and not on any promotional or compensation arrangement.

The subject of this Supply Chain Matters book review is the Global Tilt, Leading Your Business Through the Great Economic Power Shift  (Crown Business).  This book’s author is Ram Charan, a business advisor to global companies and a previous co-author with Larry Bossidy, former CEO of Honeywell, of the New York Global Tilt Book CoverTimes listed bestseller; Execution; The Discipline of Getting Things Done. The Economic Times describes Charan as building a reputation as a one-man CEO consultant that excels at reducing a complex picture down to pertinent points.  Fast Company describes his passion as solving business problems with a plainspoken, broad and Socratic approach.  After reading this book, we tend towards agreement with these descriptors.

Overall, we found this book to be extremely timely, thoroughly informative and insightful. It helped us to better understand the ongoing shift of economic forces underway in global markets. The author provides powerful arguments as to why economic power is shifting from North based companies (Canada, European, Japan, North America) towards South based firms (Brazil, China, India, Malaysia and others).  The geographic demarcation of this split is described as the 31st parallel. Charon calls for leaders to abandon old mindsets, rules of thumb, assumptions or “gut feel” concerning relationships between North and South companies. He makes powerful arguments as to why the unleashed energies of the South are causing such global shifts. We read this book with a built-in bias toward what we observe in month to month changes occurring among global supply chain and the book literally connected many dots for us. 

Part One of this book describes the changes already underway as South based companies enter and penetrate existing and new markets.  It describes a far wider lens on risk and reward, how South based companies move beyond the near-term quarterly performance goals of North based companies. Charon provides examples of global contenders such as AB InBev of Brazil, Bharti Airtel and GMR of India, Lenovo and Haier in China.  Some of our Supply Chain Matters commentaries have and will continue to feature the supply chain strategies and efforts surrounding some of these emerging leaders.

Part Two of the book describes how to succeed in the environment of the current global tilt, including the need for an outside-in and future-back leadership perspective and mastering multiple contexts. Unlearning old lessons is indeed a rather difficult task in corporate cultures that dwell on the world that was. Consider what happened with Kodak, Research-In-Motion and others as their markets were taken-away. A passage that especially resonated was the following: “With as much as 80 percent of their annual compensation at stake, business leaders vigilantly protect margins, even if it means passing up markets that would put them on a path to faster growth.” Charon further notes: “Many Southern companies, especially those backed by their governments, drive for market share and scale, for which they’ll willingly accept lower price points, lower absolute margins, and in many cases lower percentage margins.”

Think of the previous multiple years of relentless pressures by companies on reducing overall supply chain costs that ultimately affected market responsiveness, customer service or responsiveness. Meanwhile, emerging market companies have begun to penetrate supply chains and end products involving high growth potential markets such as alternative energy, high technology, medical devices and others with an overriding perspective of how the supply chain supports the desired longer-term horizon business outcome. As a community, we often describe the growing shortage of skilled supply chain management leaders.  After reading this book, you will probably have a better understanding of why this is so important from a business competitive dimension, and why firms need to insure that training includes multi-cultural and multi-geography perspectives.

This month, both the Wall Street Journal and Fortune have featured articles on the effects of a risk-averse vs. risk embrace business culture. The WSJ article ponders whether U.S. based risk-taking spirit has faded permanently with the new dominance of larger corporations in many industries. The premise is that a general cultural decline of risk-taking, in favor of short-term results, both on the part of companies and individuals, has coincided with a broader slowing of the U.S. economy, longer recessionary recovery and for growth as a whole.  Fortune describes how the aggressive and outside-in business perspectives of Lenovo, coupled with efforts to understand global market shifts,  has made a dramatic impact on the PC and soon, mobile and tablet industry. The evidence of global tilt seems to surround, and some leaders cannot or our unwilling to connect the dots.

We recommend that supply chain leaders read this book to understand what is at-stake, and what actions can be taken to help your organization gain a broader global perspective.

Bob Ferrari

 

 


Supply Chain Matters Book Review: Supply Chain Network Design

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From time to time throughout the year, authors send us various new books dealing with timely content related to global supply chain management. One this author’s 2013 New Year’s resolutions is to be more timely on providing our Supply Chain Matters readers with some select reviews and/or recommendations regarding books written on timely and important topics.

The subject of this review is the book: Supply Chain Network Design, Applying Optimization and Analytics to the Global Supply Chain.  This book is authored by Michael Watson, Sara Lewis, Peter Cacioppi and Jay Jayaraman, and reflects the author’s collective practical experiences working with supply chain network design software. The authors gained their experiences while part of the former LogicTools, which was subsequently acquired by IBM. This author has followed the adoption of supply chain network design technology since its market inception in 2000, and thus was pleased to receive a copy of this book from Michael Watson, whom we have known for several years.

If any organization is still considering the deployment and use of supply chain network design technology, or wants to gain broader benefits from an existing deployment, this is a book you should definitely consider.  As the authors point out, strategic network design is about selecting an optimized number, location and size of supply chain wide facilities, as well as supporting supply chain wide decisions by quantifying supply chain wide facility investment options.  Many global supply chain teams have gained positive and quantified business benefits from leveraged use of this technology, either by continuous or periodic use. So much so that some organizations that relied on outside consultants to perform this type of analysis have since transferred this capability to in-house expertise.

The book itself is educational in approach, while providing sufficient detail on how to build multi-echelon and multi-objective supply chain models.  It addresses what can be very technical in an easy to understand tutorial on leveraged use of this technology. I managed to get through the book in just a week or two of periodic reading. Many practical examples for building supply chain models are provided along with some rather important insights.

The book begins by providing the basics of proper modeling, and builds toward building complex models with multiple objective optimization.  What I appreciated was that the book is written in clear, rather easy to understand language vs. one that is anchored in academic formulae. In Chapter 13, the authors focus on the critical importance and yet challenging aspects of network design, that being data aggregation and proper grouping of key data. That chapter, in my view, is one of the more important and valuable portions of the book. Again, the authors provide easy to understand examples of what, and what not to do in either aggregating customer, site or product data needs. Chapter 14 provides practical advice for creating a design team and running a successful network design project.

If your work or inspirations lead toward the ability to build and deploy supply chain network design decision support models, or teaching teams to successfully deploy these methods, consider reading this text.

Bob Ferrari


Supply Chain Matters Book Review: Supply Chain Transformation by Richard Sherman

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From time to time throughout the year, authors send us various new books dealing with timely content related to global supply chain management. One this author’s 2013 New Year’s resolutions is to be more timely on providing our Supply Chain Matters readers with some select reviews and/or recommendations regarding books written on timely and important topics.

With all that occurred in 2012, we were remiss in not providing such reviews on a timely basis.

We begin with a review of the book, Supply Chain Transformation, Practical Roadmap to Best Practice Results, authored by Richard J. Sherman.

We must preface our review by stating up-front that this author has known Rich for many years, both as working for the same employer many years ago and by joint speaking and other opportunities related to Rich’s professional and professional association career in supply chain management.  Rich was gracious enough to include my name in the long listing of Acknowledgements related to his book. He has also contributed a previous guest posting on this blog.

The book itself is a pleasant read that provides a narrative of learning from Rich’s 30 year career in many aspects of transforming supply chain management. It provides a particular emphasis on organizational change management tenets related to major supply chain initiatives including those related to people, organizational culture and technology factors.

Readers who know of Rich, can relate to the fact that he can be outspoken on certain topics. That is reflected in some of the chapter and sub-chapter headings in his book.  Examples:

You Can’t Break Down the Silos: Collaboration is the Key

Guess What? The Forecast is Wrong, Deal with it.

If You’re Driven by Demand, You’re Probably Being Driven Crazy

Lean Six Sigma is Not an Option- It’s a Requirement

Business as Usual Has Been Cancelled, Now What?

In the book, Rich argues that rather than constant disappointments in attempting to breakdown the various organizational silos across the broad supply chain functional landscape, thinking of supply chain management as a holistic framework that responds to the organization’s required business operating system can result in a more-timely path of transformation.  He also provides arguments that rather than being “demand-driven”, the supply chain organization can better benefit by being “demand responsive”.

I found Chapters 7 through 9 to be the most insightful parts of the book. Chapter 7 outlines recommendations for how to get senior management commitment for supply chain initiatives. It provides emphasis on the ability to communicate the language of senior management, and how to map to key executive performance indicators of revenue and profitability growth. Chapter 8 outlines how technology drives waves of change and how emerging technologies such as cloud computing, auto id item tracking and robotics will continue to impact supply chain management. Chapter 9 brings all the tenets together in a developing an operating plan and creating a culture for change.

The book itself is an easy read and can be very helpful for those readers just getting started in their careers in supply chain management, or those experienced managers that find they need a jolt of different thinking. It is written in Rich’s unique, informal, conversational style, including some doses of the sarcasm and humor.

Bob Ferrari