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Transcript of International Supply Chain Environment Analysis Kimball Bullington, Ph.D Professor Middle Tennessee...
International Supply Chain
Environment Analysis
Kimball Bullington, Ph.DProfessor
Middle Tennessee State University
What is Six Sigma?
A. Customer Focus – Focus on what is critical to customers
B. Data Driven – Extensive use of statistical tools
C. Robust Methodology – Tools plus implementation methods to make success more likely
What is Six Sigma?Key Concepts
1. Critical to Quality: What attributes are most important to the customer? (CTQ, CTC, CTD)
2. Defect: Failing to deliver what the customer wants / expects (DPMO)
3. Variation: The level of unpredictability the customer experiences
What is Six Sigma? Key Concepts
5. Process Capability: What your process can deliver – consistently
6. Stable Operations: Stable ops are predictable
7. Design for Six Sigma: Designing to meet customer needs and process capability in changing environments
What Types of Companies Can Benefit from Six Sigma? Companies that benefit from structured
organizational improvement Companies that need to improve customer
satisfaction All types of companies can benefit:
Manufacturing Service Non-profit Educational
The environment of a change process affects the nature and success of a change program.
We would like to design the supply chain to be robust to changes in the environment.
Process Flow
InputsTransformProcesses Outputs
Feedback
Suppliers Operations Customers
Process Flow
InputsTransformProcesses Outputs
Feedback
Suppliers Operations Customers
Environment
Process Flow
InputsTransformProcesses Outputs
Feedback
Suppliers Operations Customers
Environment
EnvironmentEnvironment Environment
Supply Environment Analysis Tools
Cause-and-Effect SWOT Supplier Category Trend Force Field Stakeholder Commitment Communication
Cause-and-Effect Diagram
Effect
MaterialsMethods
MachinesManpower
Environment
Cause
Cause
Cause
Cause
Cause
CauseCause
Cause
CauseCause
Cause
Cause
Cause-and-Effect Diagrams Supplier Failure - Causes
People
Materials
Equipment
Processes
Environment
Measurement
FireEarthquake
Mat'l price increase
Bankruptcy
Illness
Turnover
Process upset Commodity allocation
Bad specs
Inaccurate PO
New employees
New source
IncompetenceIncapable equip
Lack of PM
FraudLawsuit
Tornado
Flood
StrikeStrikeBusiness down
Business up
Different standards
Causes Environment
Measures
Materials
Methods
Machines
Manpower
SWOT Analysis
Positive Negative
Internal Strengths Weaknesses
External Opportunities
Threats
SWOT Analyses: Exercise Strengths
What are the strengths of your supply organization?
What are the strengths of your operations as a customer of supply?
Weaknesses What are the weaknesses of your
supply organization?
SWOT Analyses: ExerciseSupply personnel
Supply ManagementProcesses
Supply ManagementTechnology
Operations Environ
SuccessfulSupply
SWOT Analyses: Exercise Strengths
What are the strengths of your supply organization?
What are the strengths of your operations as a customer of supply?
Weaknesses What are the weaknesses of your
supply organization?
SWOT Analyses: Example Strengths
Extensive experience with supply base
Supplier performance history Procurement engineering ISO-quality process documentation
SWOT Analyses: ExerciseSupply personnel
Supply ManagementProcesses
Supply ManagementTechnology
Operations Environ
Supply Failure
SWOT Analyses: Example Weaknesses
Politically weak Lack of commitment to suppliers Tactically-focused Limited time for improvement
activities Data is suspect Little visibility to sister-division data
SWOT Analyses: Exercise Strengths
What positive developments have occurred? What are the untapped strengths of your
suppliers? Weaknesses
What are the weaknesses of your supply base?
What are the weaknesses of your supporting functions?
SWOT Analyses: Example Opportunities
Untapped intra-business unit leverage Consortia opportunities Supplier capabilities not used Opportunities for expanding business
with a key good performer
SWOT Analyses: Example Threats
Financially unstable suppliers Incapable suppliers Cost increases Poor performance in a key supplier
(quality, cost, delivery, service, technology development)
Logistics issues
Define Phase - Tools Project Charter Stakeholder
Analysis Affinity Diagram SIPOC Voice of the
Customer CT Tree
Kano Model SWOT Analysis Cause-and-Effect
Diagrams Supplier
Segmentation Project
Management
Critical 2: Special Situations
Critical 1:Long-term Relationship
Non-Critical 1:Contractual
High
Low High
Ris
k
Annual Spend
Supply Base Categorization
Non-Critical 2:Transactional
Critical 2: Special Situations
Critical 1:Long-term Relationship
Non-Critical 1:Contractual
High
Low High
Ris
k
Annual Spend
Supply Base Categorization
Non-Critical 2:TransactionalService-sensitive
Critical 2: Special Situations
Critical 1:Long-term Relationship
Non-Critical 1:Contractual Price, inventory & contract sensitive
High
Low High
Ris
k
Annual Spend
Supply Base Categorization
Non-Critical 2:Transactional
Critical 2: Special SituationsQuality, Risk, Financial, InventoryIssues
Critical 1:Long-term Relationship
Non-Critical 1:Contractual
High
Low High
Ris
k
Annual Spend
Supply Base Categorization
Non-Critical 2:Transactional
Critical 2: Special Situations
Critical 1:Long-term RelationshipCommunication,Design, Quality, etc.
Non-Critical 1:Contractual
High
Low High
Ris
k
Annual Spend
Supply Base Categorization
Non-Critical 2:Transactional
Critical 2: Special Situations
Critical 1:Long-term Relationship
Non-Critical 1:Contractual
High
Low High
Ris
k
Annual Spend
Supply Base Categorization
Non-Critical 2:Transactional
Consolidate
ConsolidateRisk reduce &Consolidate
Trend Analysis
Intense Competition Globalization Customer Sophistication Mass Customization Virtual Integration
Trend Analysis
Network Rationalization Outsourcing Electronic Channels Dominant Organizations Constant Change
What are the trends in your environment?
Supply chain?Commodity?
Supplier?Project?
Force Field Analysis
TransformationProcesses
Environmental Forces Balanced – improvement
stalled
Force Field Analysis
TransformationProcesses
Restraining Forces Reduced– improvement
progresses
Cause-and-Effect Diagram
Failure
MaterialsMethods
MachinesManpower
Environment
Cause
Cause
Cause
Cause
Cause
CauseCause
Cause
CauseCause
Cause
Cause
Force Field Analysis
TransformationProcesses
Driving Forces Increased – improvement progresses
Cause-and-Effect Diagram
Success
MaterialsMethods
MachinesManpower
Environment
Cause
Cause
Cause
Cause
Cause
CauseCause
Cause
CauseCause
Cause
Cause
Force Field AnalysisTarget Forces
Largest impact Easiest to change Most economical to change Politically acceptable to change Mix of driving and restraining
forces
Force Field AnalysisDriving Forces
Economic Globalization Time Compression Rising Customer Expectations Process Management Supply Chain Integration Technological Innovation
Force Field AnalysisRestraining Forces
Management Commitment Distrust Low Morale Communication Failures Inadequate Resources Stakeholder Commitment
Stakeholder AnalysisPeople or Groups
Level of Commitment Buy Mfg EngEnthusiastic Support
Help it work
Compliant
Hesitant X
Indifferent
Uncooperative X
Opposed
Hostile X
Stakeholder Commitment
Management Buyers Engineers (ours) Engineers (theirs) Manufacturing Supervision Supplier Production Planners
Process Flow
InputsTransformProcesses Outputs
Feedback
Suppliers Operations Customers
Process Flow
InputsTransformProcesses Outputs
Feedback
Suppliers Operations Customers
Process Flow
InputsTransformProcesses Outputs
Feedback
Suppliers Operations Customers
Process Flow
InputsTransformProcesses Outputs
Feedback
Suppliers Operations Customers
Environment
Process Flow
InputsTransformProcesses Outputs
Feedback
Suppliers Operations Customers
Environment
EnvironmentEnvironment Environment
Control PhaseCommunication Model
Transmit(Encode)
Receive(Decode)
Feedback
Noise
Communication ImprovementEncoding / Decoding Problems
Language skills Cultural differences Physical limitations Technical knowledge Technical language differences
Communication ImprovementEncoding / Decoding Solutions
Training Improved specs Face-to-face meetings Standardized communication Simplified communication Feedback
Communication ImprovementNoise Problems
Auditory Psychological Physical distractions Workload
Communication ImprovementNoise Problems
Increase signal! Repetition Simplified communication Standardized communication Proximity
Conclusion Supply Environment Analysis is an
important process in organizational change.
A Six Sigma company should be especially interested in Supply Environment Analysis.
Six Sigma Tools are helpful in analyzing the environment and preparing responses to environmental forces.
References
Books: Six Sigma Pocket Guide (Rath & Strong’s) The Future of Purchasing and Supply (Carter, et al ISM) Supplier Strategies (Goldfield) Implementing Six Sigma (Breyfogle) Competitive Advantage (Porter) By What Method (Sink) The Six Sigma Way Team Fieldbook (Pande, Neuman,
Cavanagh) The Supply Management Environment (Fawcett, ISM) Supplier Strategies (Goldfeld) www.isixsigma.com