subscribe: Posts | Comments | Email

Campbell Soup Elevates Role of Supply Chain Management

0 comments

From time to time, Supply Chain Matters will highlight supply chain management leadership appointments that provide our readers insights into specific supply chain challenges.

One we did want to highlight was a recent organizational announcement by Campbell Soup. Co., which last week promoted three internal executives into wider senior responsibilities that include membership for the corporate executive leadership team, reporting to the firm’s CEO.  campbells soup can 350 175x300 Campbell Soup Elevates Role of Supply Chain Management

In the Campbell announcement, CEO Denise Morrison states in part:

As the external operating environment continues to evolve at a rapid pace, it is critical that we adapt our organization along with it to realize the potential of our Purpose, ‘Real food that matters for life’s moments.’ We are elevating these roles in recognition of the strategic importance they play for our business and our growth plans.

Bob Furbee, a 32-year employee of Campbell’s was elevated to Senior Vice President of the Campbell Soup Company and Senior Vice President of Global Supply Chain. The announcement indicates that Furbee: “will lead efforts in creating an integrated supply chain organization designed to deliver new capabilities and efficiencies to drive growth.” Most recently, Mr. Furbee was Senior Vice President of Supply Chain for Campbell Soup America’s Simple Meals and Beverages business segment, where he held leadership responsibilities for manufacturing, distribution logistics, procurement, and customer service for the Americas division.  Furbee’s background At Campbell’s includes international experience as well having led European supply chain and operational activities.

What Supply Chain Matters found significant was the emphasis on driving top-line revenue growth as well as ongoing efficiencies. That takes on special significance for an industry faced with significant forces of external change brought about by changed consumer consumption and buying preferences as well as game-changing shifts occurring at the retail grocery level. Frankly, we would expect other CPG producers to elevate the role of supply chain management beyond that of a cost line related to operations and more toward a key enabler of needed business changes and desired business outcomes.

In addition to supply chain, other executive leadership elevation included an expanded vide-presidential role for corporate strategy with the appointment of Emily Waldorf, and the leadership of a single, integrated U.S. sales organization under the direction of Jim Sterbenz.


Supply Chain Sourcing Taking on More Geo-Political Significance

0 comments

In this new era of geopolitical risks, the critical importance of supply chain management sourcing strategy was again brought to light in a published article by The Wall Street Journal. The report, When Currencies Fall, Export Growth Is Supposed to Follow- Until Now (Paid subscription required), questions common theory that a weaker currency is a boon to export growth. The reason stems from existing supply chain sourcing realities.  Container Term 300x200 Supply Chain Sourcing Taking on More Geo Political Significance

The report specifically examines a test case reflected by the ongoing effects of Brexit to the manufacturing sector of the United Kingdom. As Supply Chain Matters has profiled in a prior posting, the country’s decision to initiate efforts to exit the European Union, caused the British pound sterling to fall significantly. The effect was that products exported, such as chemicals, autos or aircraft parts became more price competitive in global markets. That obviously raised expectations for boosted economic growth, and indeed the PMI indices for the UK have been generally rising.  The evolving reality as depicted by the this latest WSJ published report, is that supply chain sourcing strategies that resulted in significant dependencies on importing value-chain components and/or raw materials served to have generally served to offset any lower price advantages of produced goods.

One specific example profiled was auto producer Aston Martin which exports a reported 80 percent of its vehicles to foreign markets. Post Brexit, with the decline in the value of the pound in low double-digits, Aston sales resulted in as much as 12 percent in additional sales margin. However, an industry reality that many automotive component suppliers are primarily based in offshore lower-cost locales presented the effect of increased costs for imported materials.  That has reportedly offset sales margin gains. Likewise, retail prices of many consumer items that are often imported into the UK have risen significantly since the Brexit referendum decision.

A contrast provided is that of the whiskey industry in Scotland, where the bulk of the product value is generated and produced locally and where producers have now been able to reap the rewards of increased export sales as well as profits. With the majority of the end-product locally sourced, a devalued currency has provided meaningful economic benefits for this industry.

The WSJ report makes note of two recent papers from both the World Bank and the Organization for Economic Cooperation and Development (OECD) that both found that movements in exchange rates had a declining impact on trade in advanced economies.

The sum of these developments is noted to be the same conclusion, that industries and companies have become more embedded in global supply chain sourcing.  Cited as evidence is an OECD statistic indicating that between 1995 and 2011, the import content of exports rose from 14.9 percent to 24.3 percent among OECD nations. Obviously, beneficial for developing, lower-cost manufacturing regions.

From our Supply Chain Matters lens, the evolving data again points to ongoing conflicts among individual companies, who’s product value-chain strategies are driven primarily by overall profitability, manifested by landed and total cost considerations, and on individual governments who must strive to grow domestic economies and employment. Specific case in point is the ongoing manifestations of the Trump Administration’s Make America Great policies that are reflected toward existing global trade policies.

Increasingly, economists and political leaders, have begun to question the overall benefits of globalization in the context of impacts to local economies, social responsibilities and to long-term economic growth. The spillover to existing global supply chain sourcing strategies seems inescapable.

Geo-political forces surrounding global trade are likely to occupy the attention of many industry supply chain teams, all of whom must be prepared to deal with near or longer-term implications. The takeaway for industry supply chain sourcing, procurement and overall supply chain leaders will continue to be the need to be well informed as to ongoing international geo-political events that will impact certain industries, and to ensure that respective C-Suite executives are well informed as-well.

In late September, this Editor is scheduled to deliver an Accenture Academy Trend-Talk online seminar: Supply Chain in an Anti-Trade and Anti-Globalization Era. We will be sharing further details in the weeks to come.

Stay tuned.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.

 


A Commentary Reflecting on a CEO Change for General Electric

0 comments

General Electric made major business headlines today in announcing that Jeff Immelt will step down as CEO on August 1 after a 16-year run as the company’s chief executive officer.  The announcement was somewhat unexpected and came because of an ongoing CEO succession planning process overseen by GE’s board. None the lees, it was somewhat of a shock to many.

Supply Chain Matters views this announcement with some disappointment.

Succeeding Immelt is John Flannery, a 30-year veteran who has served the bulk of his GE career among the conglomerate’s financial businesses. Mr. Flannery’s most recent position was head of GE’s healthcare unit.

This senior leadership move comes amid a backdrop of increasing pressure from Wall Street and GE investors on a consistently lower stock price of the company’s shares during Immelt’s tenure. A further backdrop has been the presence of private equity ownership of the company’s stock, specifically Trian Fund Management to accelerate cost reductions and boost profits among GE’s core industrial businesses. In its reporting, The Wall Street Journal was quick to cite knowledgeable sources as indicating that Trian was not actively involved in the CEO succession process. We tend to believe otherwise. If not direct, certainly a major influencer to the culmination of today’s announcement.

As a blog focused on global supply chain management, we have consistently admired GE’s efforts both in the company’s global supply chain efforts and IT practices, but also in the vision and current unfolding strategies surrounding the GE Digital Manufacturing and Industrial Internet strategies. Under Immelt’s leadership, GE became to understand that digital disruption was a major threat as well as an opportunity. GE was bold in stating that factories no longer need to be sourced where labor is cheaper, but rather to best service major geographical markets. Instead, they can compete where educated workers can make the most of advanced technology, and where opportunities can be leveraged to shorten supply chains and reduce inventories. The company further understood the various tenets of supply chain risk and of supply chain risk mitigation. GE embraced the notions of Cloud-based ERP technology and was one of the early transformation adopters under the leadership of Immelt and GE’s CIO.

During the second term of the Obama Administration, Immelt served as an influential leader on the Presidential Commission on U.S. Manufacturing Competitiveness, adding an important voice both in words and corporate actions.

The notions of GE transforming itself from that of a traditional manufacturing focused company to a software-driven company were noteworthy and gutsy. CEO Immelt was by our lens, a visionary in understanding the implications of digital manufacturing both from an internal operations and external business perspective. We believe that GE will hence forth be recognized as a pathfinder in the notions of connected machines and Internet-of-Things enabled business models.

The bold decision to move corporate headquarters from a tranquil suburban Connecticut to Boston’s seaport district was to spur a campus environment of constant innovation and paranoia on market competitiveness.

In a call with investors, incoming CEO Flannery indicated he will take a fresh look at various GE businesses, establishing stronger shareholder returns as a goal of this broad review. Business media seems to be of the initial viewpoint that Flannery was chosen because of his financial industry experiences in creating value for shareholders.

In its reporting, the WSJ indicated that succession planning included consideration of both external and subsequently four internal executives including the CFO and heads of the power as well as oil and gas business units. As with all things GE, including the succession of former CEO Jack Welch, today’s announcement may serve as the prelude for other senior leadership or other organizational changes to come in the coming weeks and months. Their impact to ongoing initiatives, particularly the Digital Business and Industrial Internet initiatives is an open question.

It is indeed unfortunate that today’s Wall Street and investor environment remains one of a short-term focus and on individual reward.  Icons such as Dupont, Procter & Gamble and others must now constantly respond to such short-term thinking. Missing is a recollection that it took multiple years of internal investment and corporate-wide initiatives by Amazon to create the ultimate retail industry disruptor that the online provider and technology services provider is today. There again, Wall Street grumbled and grew impatient with near-term stockholder returns. Not so much today.

As a manufacturing and supply chain management social platform, we expressly tank Jeff Immelt for his visions, tenacity and understanding of manufacturing and supply chain needs, and that both truly matter in business outcomes.

We trust that John Flannery will take GE to its next dimension.

 

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Praise to APICS in Efforts to Update SCOR Reference Model

0 comments

Last week, APICS made a noteworthy announcement regarding The Supply Chain Operations Reference Model-SCOR, which we wanted to highlight for our Supply Chain Matters readers.

The supply chain educational and performance improvement organization indicates that SCOR Release 12 is currently under development by a committee of global supply chain practitioner experts and is expected to be released in the Fall, most likely in conjunction with the APICS Annual Conference. We call reader attention to the release because of the new topical areas being planned for inclusion in the new iteration, along with an increased effort to make this framework even more amendable to machine-readable language that can be leveraged for supply chain focused Cloud-based advanced analytics purposes.  APICS logo Praise to APICS in Efforts to Update SCOR Reference Model

From our lens, the planned SCOR Release 12 is a definitive acknowledgement that industry supply chain business process and advanced technology needs are rapidly changing, and manufacturers and services providers who have currently adopted tenets of SCOR need to incorporate such new factors into their performance frameworks and metrics.

APICS indicates that a SCOR job task analysis survey completed by over 1600 supply chain professionals validated the increasing importance for:

  • Sourcing and procurement processes for the SCOR framework
  • Metadata, digitization, omni-channel, and supply chain maturity model
  • Data analytics, data acquisition, data science, and predictive analysis as staff skills related to organizational supply chain initiatives
  • Continuing education and improvement of supply chain manager skills and abilities

In addition to these added context areas, ongoing APICS Special Focus Forums are addressing unique performance framework needs in areas such as humanitarian supply chains and new iterations of integrated of integrated business planning. Documentation efforts from these forums call for periodic updates to the digital library that APICS members have access to.

A further area addressed by a specific forum are opportunities to make SCOR more of a fabric in IT-centric supply chain analytics, dashboarding and overall integrated decision-support capabilities. Currently available is the software- SCOR Business Process Management Accelerator powered by Software AG’s ARIS tool. The tool itself can be extended via an open API to other Cloud-based ERP or specialty supply chain management applications, allowing analytics data to reference existing SCOR metrics. APICS further indicates a willingness to work with added software providers on other analytics and decision-support needs that seek to leverage existing SCOR performance or metrics relationship data. By our way of thinking, there is added opportunity down the road for the ability to incorporate artificial intelligence or machine learning techniques with SCOR frameworks for more predictive factors of supply chain performance.

Supply Chain Matters applauds the recognition of all the above as emerging drivers of supply chain success and of areas that can truly continue to benefit from a common supply chain reference model.

A final note relates to the need for augmented SCOR training, considering the addition of the above timely topics.  A recent conversation with Peter Bolstorff, APICS Executive Vice President, Corporate Development acknowledged the need for stepped-up training, given the added content areas with SCOR-12. The organization is currently working on stepped-up plans for SCOR training, in addition to current company hosted and public training activities. We anticipate further announcements in this area in the weeks to come.

Industry supply chain process and decision-support needs are indeed changing and its go to observe supply chain professional organizations adapting tools, frameworks, and training to help organizations manage such changes.

 

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Gartner Announces 2017 Top 25 Supply Chain Rankings

0 comments

Research advisory Gartner, Inc. released the findings from its annual Supply Chain Top 25 rankings this week, identifying its rankings of supply chain leaders and highlighting their best practices. As has been the practice, the rankings were unveiled at the Gartner Supply Chain Executive Conference, also held this week.

According to Gartner, three key capabilities stood out for the 2017 rankings:

Digitization of the Supply Chain– defined by creating digital connections within and across supply chain operations.

Adaptive Organizations and Capabilities– Defined as the ability of companies to be more adaptive to changes in their value-chains.

Developing and Fostering Healthy Ecosystems- defined as fostering the health and well-being of critical ecosystems including suppliers, partners, and employees.

Perennial supply chain leader Amazon joined Apple and Procter & Gamble in qualifying for Gartner’s “Masters’” category, which was introduced in 2015 to recognize sustained leadership over the last 10 years.

Unilever topped the 2017 ranking for the second consecutive year, followed by McDonald’s, Inditex, Cisco and H&M. Two new companies added this year were Nokia rejoining after a seven-year hiatus and Diageo making the list for the first time.

The surprises category would likely include Johnson & Johnson that climbed to #13 from being ranked #21 in 2016 likely based on a high three-year weighted return-on-assets and a high CSR Component Score. Other likely surprises would be Samsung Electronics that slid to the ranking of #25 from being ranked #8 in 2016. While the Peer Ranking deserved a higher ranking, the Gartner Opinion ranking appeared to be the lowest. We suspect that the three-year weighted revenue growth of negative 3.6 percent, and the Galaxy Note 7 product recall probably added to the low Gartner analyst ranking. Another surprise from our lens was Wal-Mart slipping again this year. Here again, the peer ranking came in high but not so for the other weighted rankings.

For the benefit of Supply Chain Matters readers, we have annually compiled the history of this ranking dating back to 2010, which is shown below.

 

GartnerTop25 sized 500 Gartner Announces 2017 Top 25 Supply Chain Rankings

 

Without risking the wrath of the Gartner content police, we would add some summarized observations, again from our admittedly more critical outside lens.

The same collection of names often come up each year. Of course, that may be a reflection that the best keep getting better, and we obviously applaud that fact. On the other hand, it may be a reflection other factors, including weighting criteria that may not depict whaTip Hat 263x300 Gartner Announces 2017 Top 25 Supply Chain Rankingst has the most meaning for industries, and more importantly, specific customers within such industries.  As an example, large consumer product goods producers and traditional brick and mortar retailers have been under enormous pressures to reduce cost structures and improve profitability, yet consumers are clearly making other choices in their buying activities. Pharmaceutical companies remain under an enormous looking glass in inflating prices of drugs and pharmaceuticals while shortages of critical life-saving drugs remain. Likewise, a more globally extended supply chain adds further supply chain risks.

Observations aside, we again extend our Supply Chain Matters tip-of-the hat to all this year’s named Supply Chain Top 25.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


« Previous Entries