Executive Briefings

The 21st Century Supply Chain: Complexity Happens

The best-laid strategies are still essential, but for many businesses today, success depends on the ability to find opportunity in the unexpected.

The best-performing companies are those that lay out a carefully crafted, long-range plan for growth, then stick to it. Or so some high-paid celebrity CEOs would like you to think.

In fact, the opposite is true. As we learn from the eight case studies in our third annual special feature on Supply Chain Complexity Masters, the real winners are those that can toss aside the game plan and capitalize on the unexpected.

They must be ready for the inevitable surprises. Markets shift, customers grow fickle, key suppliers fail-all, seemingly, in an instant. How companies cope with these events is what separates leaders from followers.

Take International Truck and Engine Corp. In the first of two case studies concerning this large but agile manufacturer, we find a company easing its way into the lucrative market for military sales. It begins with commercial trucks and parts. Then it starts equipping those vehicles with armor and other add-ons for military use. Finally, it turns out fully armored vehicles designed for battle. In a few short years, International has taken military sales from zero to more than $1bn.

Other businesses find themselves facing challenges that stem from a spike in sales. They need new information technology that can support the demand, without disturbing the flow of product. New Age Electronics implemented a whole new enterprise resource planning system, coupled with other supply chain applications. In the process, it convinced a major supply chain vendor to alter its software to meet the unique needs of the distribution business.

Some supply chains invite complexity. Canada's Forzani Group, the nation's largest sporting-goods retailer, chooses to operate both in the corporate and franchise mode. What's more, it maintains at least nine separate retailing identities. Yet all must be supplied by the same efficient distribution network.

Successful companies often find themselves bucking conventional wisdom. Pharmaceutical producers, beset by tight government regulations, prefer to retain direct control of their supply chain processes. Not so with Endo Pharmaceuticals, an upstart that broke off from DuPont Merck in 1997. Maker of some of the most well-known brands of prescription pain relievers, Endo is a big proponent of outsourcing. It's willing to trust partners to handle even the most sensitive aspects of manufacturing and distribution.

Boeing Commercial Airplanes, forever locked in a tight competitive struggle with European rival Airbus Industrie, views its supply chain as a competitive weapon. In launching a program to build the new 787 "Dreamliner," Boeing took the opportunity to transform the way in which it builds planes. This time around, an army of outside contractors are doing most of the work, shipping large components and systems to Everett, Wash., where Boeing does final assembly. Every supplier plays a critical role in keeping the project on schedule.

Size and complexity don't necessarily go hand in hand. Smaller companies face many of the same challenges as the giants of the Fortune 500. Benco Dental is a family-owned concern, with sales largely confined to the eastern half of the U.S. Yet its customers are no less demanding of top-quality service and short order-cycle times. MPC Products Corp. is a tier-two supplier in the aerospace industry, dwarfed by more familiar names like United Technologies and Honeywell. But it must be able to gauge the reliability of its own suppliers, to head off any potential disruptions in a tightly integrated supply chain.

All of these companies have demonstrated the flexibility and creativity required to serve global markets. They'll continue to find ways to fit together the pieces of a complex puzzle-even as the puzzle itself keeps changing.

To view the following articles online, visit The Library at www.supplychainbrain.com, category: Case Studies.

 

 

The best-performing companies are those that lay out a carefully crafted, long-range plan for growth, then stick to it. Or so some high-paid celebrity CEOs would like you to think.

In fact, the opposite is true. As we learn from the eight case studies in our third annual special feature on Supply Chain Complexity Masters, the real winners are those that can toss aside the game plan and capitalize on the unexpected.

They must be ready for the inevitable surprises. Markets shift, customers grow fickle, key suppliers fail-all, seemingly, in an instant. How companies cope with these events is what separates leaders from followers.

Take International Truck and Engine Corp. In the first of two case studies concerning this large but agile manufacturer, we find a company easing its way into the lucrative market for military sales. It begins with commercial trucks and parts. Then it starts equipping those vehicles with armor and other add-ons for military use. Finally, it turns out fully armored vehicles designed for battle. In a few short years, International has taken military sales from zero to more than $1bn.

Other businesses find themselves facing challenges that stem from a spike in sales. They need new information technology that can support the demand, without disturbing the flow of product. New Age Electronics implemented a whole new enterprise resource planning system, coupled with other supply chain applications. In the process, it convinced a major supply chain vendor to alter its software to meet the unique needs of the distribution business.

Some supply chains invite complexity. Canada's Forzani Group, the nation's largest sporting-goods retailer, chooses to operate both in the corporate and franchise mode. What's more, it maintains at least nine separate retailing identities. Yet all must be supplied by the same efficient distribution network.

Successful companies often find themselves bucking conventional wisdom. Pharmaceutical producers, beset by tight government regulations, prefer to retain direct control of their supply chain processes. Not so with Endo Pharmaceuticals, an upstart that broke off from DuPont Merck in 1997. Maker of some of the most well-known brands of prescription pain relievers, Endo is a big proponent of outsourcing. It's willing to trust partners to handle even the most sensitive aspects of manufacturing and distribution.

Boeing Commercial Airplanes, forever locked in a tight competitive struggle with European rival Airbus Industrie, views its supply chain as a competitive weapon. In launching a program to build the new 787 "Dreamliner," Boeing took the opportunity to transform the way in which it builds planes. This time around, an army of outside contractors are doing most of the work, shipping large components and systems to Everett, Wash., where Boeing does final assembly. Every supplier plays a critical role in keeping the project on schedule.

Size and complexity don't necessarily go hand in hand. Smaller companies face many of the same challenges as the giants of the Fortune 500. Benco Dental is a family-owned concern, with sales largely confined to the eastern half of the U.S. Yet its customers are no less demanding of top-quality service and short order-cycle times. MPC Products Corp. is a tier-two supplier in the aerospace industry, dwarfed by more familiar names like United Technologies and Honeywell. But it must be able to gauge the reliability of its own suppliers, to head off any potential disruptions in a tightly integrated supply chain.

All of these companies have demonstrated the flexibility and creativity required to serve global markets. They'll continue to find ways to fit together the pieces of a complex puzzle-even as the puzzle itself keeps changing.

To view the following articles online, visit The Library at www.supplychainbrain.com, category: Case Studies.