What constitutes a dynamic supply chain and how do you bring all the elements into alignment to maximise its potential? The man who has developed these concepts, Dr John Gattorna, will be the keynote speaker at the Extended Supply Chain conference in March. He sets the scene for Malory Davies.
It’s not often that someone tells you: “we now have all the answers”. It is, after all, quite an extravagant statement. But Dr John Gattorna is one of the few people who can make that claim without risking guffaws of derisive laughter.
The question, of course, is what do we need to understand about the way supply chains work to predict how they will respond to changing conditions? Gattorna has been looking for answers for more than 25 years and has established an international reputation in the process.
And with his latest book “Dynamic Supply Chain Alignment” he reckons that solutions are now available for the key issues.
He will be explaining the thinking when he makes the keynote speech at Extended Supply Chain 2010, which is entitled: “Dynamic alignment: a new business model for designing and operating enterprise supply chains in the New Millennium”.
The thesis is that existing business models used in enterprise supply chains have outlived their usefulness, especially with the onslaught of more demanding customers and an increasingly volatile marketplace in these uncertain times.
There is no silver bullet, but there is a model which is increasingly being applied successfully by global corporations – dynamic alignment.
“Back in 1989-90,” Gattorna says, “people talked about logistics – it was all very physical – and I was thinking that there was nothing very conceptual about it. There was no basis for predicting the future.” There is a big shift in thinking between logistics and supply chain, says Gattorna.
“Supply chain is all about relationships. What runs supply chains is people, not technology.
“This also gets you into the field of culture,” says Gattorna.
“The fact is that some 40 per cent of the activity in the supply chain is human decision making.” He points out that this was in stark contrast to other fields of management where the conceptual basis had been developed to enable analysis and prediction.
“We decided to break away and start again at base zero,” he says.
“We looked at the various elements in a business – marketing IT, consumer behaviour and so on,” he adds.
It was through this process that the concept of the “strategic alignment of the business” was developed.
The idea of strategic alignment is that if enterprises wish to produce sustained operational and financial performance, they must align their strategies, cultural capabilities, and leadership styles with customers.
Gattorna’s first book on the issue, “Strategic supply chain alignment” came out in 1998 and in it he brought together contributions from a host of leading thinkers.
It started by looking at developments in the market before analysing strategic responses. It went on to consider cultural capabilities and leadership before considering information enablers and drivers. The book quickly became established as a key text in the development of supply chain thinking.
Gattorna points out that while he has been developing the concepts, the world has not stood still – in particular, developments in technology have enabled the supply chain thinking to move ahead.
Gattorna points to the arrival of the internet in the 1990s. Before that, he says, integration was limited. Use of the internet made it possible to get around many of the blockages in systems terms.
Having developed the idea of strategic alignment, Gattorna has spent the past 20 years making the concept more granular and going deeper into the detail.
Through this process it became clear that there was a need for a fundamentally new business model to take supply chain to a new level, he says. It was at this point that the concept of dynamism was brought into play, reflecting the changing buying behaviours of customers.
“Strategic” supply chain alignment became “dynamic” supply chain alignment. “The supply chain has to deal with more than the static customer, we need to configure supply chains to deal with dynamic situations,” he says.
How do you design a supply chain that can respond dynamically to changing market conditions? It would be easy to over-complicate and there are clearly plenty of pitfalls.
At the conference Gattorna will be looking at how companies can configure their supply chains so that they can meet changing demands.
If there is a recurring theme for Gattorna it is the need for organisations to understand their customers. “Very few genuinely understand customer behaviour,” he says.
Leadership plays an important role in this – particularly getting the right leadership style in the business. “Good leaders understand what is happening in the market,” he says. “There is a huge correlation between good leadership and performance.”
Dr John Gattorna holds a number of academic appointments:
* Adjunct Professor, Macquarie Graduate School of Management (MGSM).
* Visiting Professor, Cranfield School of Management (UK).
* Chairman, Advisory Board – Institute of Logistics & Supply Chain Management (ILSCM),Victoria University.
* Adjunct Faculty member, École de Management de Normandie/Normandy Business School, Le Havre, France.
* Foundation Professor to CIPS Australia.
Despite a demanding work schedule in industry and commerce John Gattorna is a prolific writer, having published ten books and numerous articles in his areas of interest.
Many of his books have been translated into Chinese, Japanese, Russian, Portuguese & Italian language editions; the Spanish language edition is due.
In 2001, Gattorna was awarded the 2001 SMART Conference Award For Excellence, “in recognition of his outstanding contribution in the field of supply chain management”.
In March 2006,he was appointed to the Accenture Supply Chain Capability Development Advisory Board.
Dynamic Supply Chain Alignment: A New Business Model for Peak Performance in Enterprise Supply Chains Across All Geographies. Gower Publishing, London, June 2009.
Living Supply Chains: How to mobilise the enterprise around delivering what your customers want. FT Prentice Hall, Financial Times, May 2006.
THE EXTENDED SUPPLY CHAIN CONFERENCE
The Extended Supply Chain conference 2010 will focus on the concept of flexibility and meeting customer needs by responding efficiently to constantly changing market conditions.
In particular, it will look at building supply chain capability to manage fluctuating costs and volatile demand patterns; achieving end-to-end visibility throughout the extended supply chain in collaboration with your partners; and translating top level supply chain strategy into operational best practice.
Extended Supply Chain is attended by Europe’s most forward thinking and innovative supply chain leaders.
Now entering its eighth year, ESC2010 will bring together supply chain & logistics directors from a range of industry sectors to discuss, network and debate supply chain best practice and operational excellence.
The conference has two distinct elements, day one focuses on strategic thought leadership content, delivered by pre-eminent supply chain minds.
Day two sees up to 40 case study- led, practical and operational workshops, delivered by industry experts on a range of topics deemed to be of significant relevance to supply chain leaders who operate an extended supply chain.
Confirmed speakers include:
* Douglas Kent, European chairman, Supply Chain Council. Kent is the chairman of the European Supply Chain Council’s Leadership team where he is also one of a select few SCOR-certified instructors. He has over 20 years of experience focused on the development; marketing and deployment of tailored supply chain solutions for companies across a wide variety of industry sectors.
* Mawgan Wilkins, sr director global service supply chain, Cisco Systems. Wilkins is responsible for the creation and implementation of long range transformational strategies for Cisco’s Global Service Supply Chain organisation.
* Kevin O’Marah, chief strategy officer AMR Research. O’Marah brings a unique blend of intellectual prowess, practical business experience, and energy to AMR Research’s clients. During his nearly seven years with the firm, O’Marah has worked with hundreds of companies on manufacturing, product lifecycle management, and supply chain strategy.
* Christian Verstraete, chief technology officer, manufacturing & distribution industries, HP. Verstraete has been a member of HP’s manufacturing team for more than 29 years and is responsible for thought leadership and innovation – scanning industry and technology trends and assessing their mid/longer-term effect on emerging MDI business opportunities. He is the linkage to the CTO community both inside HP and with customers and partners.
* David McMillan, director of sourcing, Europe IBM. A 25-year employee of IBM, McMillan has worked in a wide range of supply chain leadership positions. McMillan is currently the director of procurement for Europe, Middle East and Africa, based in the UK and responsible for a spend of $7bn.
* Peter Surtees, European supply chain director, Kimberly-Clark. Surtees joined Kimberly-Clark in 1994, following 15 years working in the 3PL industry. In his role as European supply chain director – consumer products, Surtees is responsible for physical logistics, sales and operations planning and customer services in Western & Central Europe.
* Dirk Holbach, corporate vice president global supply chain operations, Henkel.
* Prof Alan Waller, president – Benelux, Leaders in Supply Chain.
* Cloe Zeng, demand flow director, Electrolux.
* Kris Van Ransbeek, vice president product supply & ingredients business Europe, Chiquita.
* Edwin Van Der Meerendonk, VP European supply chain, Walt Disney Studios Home Entertainment.
* Simon Williams, VP supply chain, Constellation Europe.
* Duncan Lowe, supply chain director, Pepsico.
* Chris Carden, head of food supply, Asda.