We’ve Transformed Our Business

to Help Transform Yours

The Association for Supply Chain Management
(ASCM) is your unbiased partner. Ready to help build
your roadmap to supply chain excellence through:

■
SCOR-E corporate designation
■
Performance-driven talent development
■
Corporate Membership programs

Learn more at ascm.org

FIND IDEAS.
SOLUTIONS.
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ADVANTAGES.
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With over 1,000 solution providers, ProMat 2019 is
where manufacturing and supply chain innovation
comes to life – in person and in action. So come find
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 TABLE OF CONTENTS JANUARY-MARCH 2019, VOLUME 29, NUMBER 1

34

28 42
FEATURES
1 SCMNOW JANUARY— MARCH 2019

28 Supply Chain Optimization with

High-Level Value Stream Mapping
38 Cover Story

S&OP and the Digital Supply Chain

By Gregory L. Schlegel, CPIM
By Peter L. King, CSCP; Dave Rurak, CSCP; 1 SCMNOW JANUARY— MARCH 2019

Innovative tools lead to high-impact advancements.

and Stephen Liberatore
Discover how the maker of GORE-TEX achieves
POLCA: A Simple Visual-Control
continuous improvement.
42 System to Boost Profitability
34 Does Your Supply Chain Move at the
Speed of Customers?
By Rajan Suri
An aluminum extrusion manufacturer finds
shop-floor simplicity.
By Michelle Covey
Give customers what they want with these
best-practice guidelines.

2 SCMNOW JANUARY— MARCH 2019

 DEPARTMENTS
4 About ASCM

08 6 From the CEO

7 From the Editor

8 Corporate Spotlight

12 Supply Chain Matters

13 Professional Development

14 Operational Excellence
20 16 Management Perspective

17 Executive View

18 Career Launch

19 Enterprise Insights

20 Sales and
Operations Planning
23 22 Customer Experience

23 Working Green

24 Relevant Research

46 Case Study

48 Lessons Learned

24

SCM Now (ISSN 1056-0017) is published quarterly by ASCM, 8430 West Bryn Mawr Ave., Suite 1000, Chicago, IL 60631-3439.
Phone: 773-867-1777. Periodicals postage paid at Chicago, IL, and additional mailing offices. Copyright © 2019 by ASCM. All
rights reserved. Printed in the United States of America. POSTMASTER: Send address changes to: ASCM, 8430 West Bryn
Mawr Ave., Suite 1000, Chicago, IL 60631-3439.

WWW.ASCM.ORG/MAGAZINE 3
 EDITORIAL STAFF AND BOARD OF DIRECTORS

EDITORIAL ASCM BOARD OF DIRECTORS

Editor-in-Chief CHAIR OF THE BOARD
Jennifer Proctor Keith Connolly
Senior Managing Editor
CHAIR-ELECT
Elizabeth Rennie
Antonio Galvao Costa, CSCP, CLTD, CTL
Editor
Kia Wood TREASURER-SECRETARY
Michael Wasson, CSCP

DESIGN DIRECTORS
Bates Creative Scott Ehrsam, CSCP
Millissa Flanagan
Radha Krishna, PhD, CFPIM, CSCP
ADVERTISING Wendy Leakeas
Pamelyn Lindsey, CSCP
Tom Lasch
Paul Pittman, PhD, CFPIM, CSCP
tlasch@larichadv.com
Shari Ruelas, CPIM, CSCP, CLTD
440-247-1060
Lisa Veneziano
George Yarusavage, CPIM, CTL, C.P.M., DLP
EDITORIAL ADVISORY BOARD
YOUNG PROFESSIONAL BOARD GUEST
Brain Atwater, CPIM Matt Schuetz
Steve Brown
Marta Dijkman, CPIM, CSCP
Antonio Galvao Costa, CSCP, CLTD, CTL ASCM CORPORATE
Rex Magadia
Chief Executive Officer
Leila Merabet, CPIM
Abe Eshkenazi, CSCP, CPA, CAE
Gracien Mobinzo
Magazine Contact
editorial@ ascm.org
Publication in SCM Now does not constitute an endorsement ascm.org/magazine
of any product, service or material referred to, nor does publication of an
advertisement represent an endorsement by ASCM or the magazine. All articles
represent the viewpoints of the authors and are not necessarily those of the magazine ASCM
or the publisher. Letters to the editor will be published at the discretion of the editor. 8430 W. Bryn Mawr Ave.
Suite 1000
Canada Post International Publications Mail Product (Canadian Distribution) Sales Chicago, IL 60631-3439
Agreement No. 1220055 Phone: 800-444-2742 or 773-867-1777
Fax: 773-409-5576
Subscriptions: ASCM members have access to the magazine online at ascm.org/ editorial@ ascm.org
magazine. U.S. members can purchase a one-year print subscription for $20, and ascm.org
international members can purchase a one-year print subscription for $40. For all
others, the subscription rate is $93 annually. To join or subscribe, call ASCM
customer service at 800-444-2742 or +1-773-867-1777.

Single copies may be ordered for $8 each when shipped within the United States
or $12 each when shipped internationally. Please contact ASCM customer service for
more information.

Printed in the United States of America

4 SCMNOW JANUARY— MARCH 2019

How has ASCM
Advanced
Your Career?
Tell us what ASCM membership and APICS
certifications mean to you and how they have
advanced your career in supply chain and beyond.

Tell us at ascm.org/member-spotlight
 FROM THE CEO
Something Special
Is Happening in
Supply Chain
T hroughout my career, I have been privileged to have a front-row
seat to the evolution of supply chain management. In recent
years, supply chain has truly become a strategic imperative for
organizations of all types and sizes, everywhere around the globe.
And more and more professionals, just like you, are now occupying
board rooms, C-suite offices and vital leadership positions that
cross the enterprise.
For more than 60 years, APICS has helped make this evolution possible.
We did so via world-class supply chain certifications, education and
training; cutting-edge research; award-winning publications; valuable
networking opportunities; and much more. I am proud of the work that
we have done thus far, but I’m even more excited about what lies ahead.
To that end, I’m thrilled to tell you that we are launching a new
global organization: the Association for Supply Chain Management
(ASCM). As the largest nonprofit association for supply chain, ASCM
is an unbiased partner, connecting organizations around the world
to the newest insights on all aspects of supply chain. ASCM is driving
innovation in the industry with new products, services and partner-
ships that will enable companies to further optimize their supply
chains, secure their competitive advantage and positively impact
their bottom lines.
6 SCMNOW JANUARY— MARCH 2019
For you, our valued members, this
announcement means access to enhanced
benefits, new resources and more ways to
advance your career. With ASCM, we will
be able to expand our reach and broaden our
impact, becoming the leader you will turn to
for all things supply chain.
Here are some specifics on the transfor-
mation. First, on January 22, 2019, your
APICS membership will become an ASCM
membership. You will automatically receive
a membership kit and card. Rest assured, you
will still be able to access the global-standard
APICS Certified in Production and Inventory
Management; Certified Supply Chain
Professional; and Certified in Logistics,
Transportation and Distribution learning
systems and exams. Best of all, the reach of
ASCM will increase the visibility of these
designations and enhance your marketabil-
ity as an expert in supply chain.
SEE FOR YOURSELF
Please take a few minutes to learn more
about ASCM and how it will benefit and
support you and your supply chain organ-
ization. You can visit our brand new web-
site at ascm.org. While there, be sure to
read about how ASCM is making a positive
impact on supply chains worldwide by
building stronger frontier and humanitar-
ian networks, engaging K-12 students with
supply chain and STEM, and unlocking
the next supply chain innovations with
industry-leading research.
The new ASCM LinkedIn page is now live.
To see ASCM-related news and information,
you can follow the organization at linkedin.
com/company/ascmorg. Please also share
the page with your social networks and tell
them about this exciting new phase in supply
chain. ASCM needs your support, your full
engagement and your passion for supply
chain management as we embark on this
journey together.
Abe Eshkenazi, CSCP, CPA, CAE
Chief Executive Officer

Introducing
SCM Now
A recent Wall Street Journal story tells us we are in the midst
of the next industrial revolution, the fourth of its kind, also
predicted by Klaus Schwab in 2016 at the World Economic Forum.
Mobile internet, automation and artificial intelligence are fueling
the transformation.
“In the two years since Prof. Schwab’s talk, those trends have gone
into overdrive,” writes Christopher Mims. “The sudden ramp-up of
technologies ranging from phone components to wireless networks
to data centers points to a new kind of automation, more pervasive
and smarter than ever before seen.
Mims predicts the economic and political ramifications of this cur-
rent industrial revolution will be similar to the impact outsourcing
and globalization have had over the last 60 years.
All this is to say that the world of supply chain is evolving rapidly.
Technological advances, combined with a renewed focus on ethical
sourcing and efficiency, make staying ahead of the curve a signifi-
cant challenge for supply chain leaders. That’s where we come in.
As you read on the previous page, we’ve launched an entirely new
association, the Association for Supply Chain Management (ASCM).
We aim to provide something you’ve never had before — a collabo-
rator you can count on to help you keep pace with the ever-evolving
world of supply chain. Plus, we’ll still give your supply chain team
the tools they need to advance their careers and create value for
your company.
FROM THE EDITOR
A TRANSFORMED PUBLICATION
Throughout this ASCM launch, we’ve been
using language that helps explain the change
and unite us in this new phase. This phrase
really stands out to me: “We’ve transformed
our business to help transform yours.” That
business transformation is evident with a new
website, ascm.org; new products and services,
such as SCOR-Enterprise; and our new flagship
publication, SCM Now.
Whether you are holding this magazine in
your hands or reading it on your computer or
smartphone, I hope you notice the difference
right away. First off, our publication’s name
has changed to something our team feels is
timelier. On that note, we’re bringing you arti-
cles representing the information that helps
supply chain professionals now and into the
future. For example, look at the cover story by
Gregory Schlegel, CPIM, that outlines how to
bring your sales and operations planning up
to par with your digital supply chains (page
38); the e-commerce story describing how to
enhance inventory visibility and optimization
(page 34) by Michelle Covey; and more.
We made deliberate design decisions that
will enable the entire magazine to feel more
modern while remaining a trusted, profes-
sional publication. Lastly, and most impor-
tantly, we wanted SCM Now to be a clear signal
to readers that we are now officially ASCM.
I think we’ve done our jobs, but we always
appreciate hearing from you. Write to us at
feedback@ascm.org. And catch up on what’s
happening by visiting ascm.org and following
ASCM on social media.
Over the past 60 years, it’s professionals like
you who have made supply chain management
the strategic imperative it is in companies
today. I have felt privileged to be a part of
these exciting changes for the past 14 years.
This is my last issue as editor-in-chief, but the
talented publications staff remains commit-
ted to helping you on your important career
journey — through the fourth industrial
revolution and beyond.
Jennifer Proctor
Editor-in-Chief
WWW.ASCM.ORG/MAGAZINE 7
 CORPORATE SPOTLIGHT
ELIZABETH
RENNIE
Elizabeth Rennie is
senior managing
editor for SCM Now.
She may be contacted at
editorial@ascm.org.
APICS Education
Advances People and
Performance at Weir
T he Weir Group PLC is a global engineering and equipment man-
ufacturing company headquartered in Glasgow, Scotland. The
business is organized in four divisions serving the mining, oil and
gas, and power industries, with approximately 18,000 employees
in 70 different countries. Weir’s operating model is decentralized
into local or regional businesses based on either the markets they
serve or products they make. Each business is responsible for its
own profit or loss.
UNITING DIVERSE BUSINESSES
In 2014, Weir launched a value chain excellence program to
improve overall performance. As part of the initiative, an inter-
nal assessment of supply chain capabilities was performed. The
assessment identified that there were varying degrees of capabili-
ties and practices across the organization, with certain businesses
requiring the establishment of fundamental supply chain and
operations practices. In addition, Weir lacked a common language
of terms or practices.
“In most locations, people working in the supply chain functions
had little or no formal training,” explains Mark Duncan, value
8 SCMNOW JANUARY— MARCH 2019
chain excellence lead, Americas. “Their
capabilities were limited to their own expe-
riences and what had been passed down
from other employees. This translated into
inconsistent supply chain performance
across the various businesses.”
Weir turned to APICS to provide broader
views and a full body of knowledge in sup-
ply chain management. By having a common
knowledge base and improved people capa-
bility, Weir was able to significantly improve
overall company performance. In fact, the
results were so impressive that APICS Award
of Excellence judges recognized Weir with
the 2018 Education Award.
EDUCATION AND APPLICATION
With people in different countries, divisions
and businesses, it was critical for Weir to
develop a common understanding of the
APICS material and allow employees to share
their experiences, practices and learning with
colleagues. Additionally, Weir leaders wanted
to provide the training at different sites to
allow participants to see and understand each
business, operating model and how they could
apply the concepts they were learning from
the APICS material.
To accomplish these objectives, Weir
engaged the APICS Houston Chapter, which

had been providing very successful on-site
APICS Certified in Production and Inventory
Management (CPIM) courses at the Weir
business in Houston, Texas. The Houston
Chapter agreed to send the same instructor to
teach all the CPIM courses to Weir employees
throughout the world.
“A key challenge here was getting people
from all over the world together for classes,”
Duncan says. “This provided some logistical
challenges in not only travel, but also lan-
guage. For many of the students, English
was a second language. … They not only had
to learn the material, but also understand a
new language. We asked the instructor to
adapt examples and speak slowly to allow
better understanding for a global audience.”
In the fall of 2015, Weir began the process
of holding CPIM courses for 120 employees
from 24 different countries in five regional
training sessions. The courses were held
every six months in Australia, Malaysia,
England, the Netherlands, Scotland, Chile,
Brazil, Peru and six locations in the United
States of America.
For each course, participants would
travel to the designated location, where they
would spend the week being instructed.
Weir supplemented the material with site
tours and workshops. The company also
paid all expenses — including exam fees —
and employees received their normal pay
during the training. To further support the
APICS education, Weir purchased a corpo-
rate membership, and all CPIM participants
were put under the umbrella. To encourage
the use of APICS resources and education,
even those supply chain directors not par-
ticipating in the training, as well as other
key people in each division, were put under
the Weir membership umbrella.
AWARD-WINNING RESULTS
At the end of the CPIM courses, all partici-
pants gave a presentation to their peers, as
well as a member of the executive manage-
ment team. Each shared what they learned,
what they applied to their business and how
it improved performance.
“Three common themes arose from the
training,” Duncan notes. “These include the
benefit of using all levels of manufacturing
planning and control; the benefit of apply-
ing the appropriate manufacturing, supply
and inventory processes to each unique
manufacturing environment; and a common
understanding of terms and best practices.”
Additional results include the following:
§ One business achieved a 45 percent reduc-
tion in lead time, and another reduced
inventory by 20 percent.
§ At the end of 2017, Weir’s Oil and Gas
division realized a 67 percent increase in
orders over the previous year.
§ The Minerals division saw an 11 percent
increase in orders.
§ As a result of enhanced sales and opera-
tions planning processes, Weir has been
able to deliver to additional demand and
gain market share.
§ The Salt Lake City business, which previ-
ously had on-time delivery in the single
digits, is now delivering on time 98 percent
of orders.
“In my opinion, the most valuable result
was developing more capable people,”
Duncan says. “The APICS participants used
their learning to not only improve the supply
chain in their location, but also educate others.
Consequently, many of the participants have
taken on additional leadership roles.”
APICS education is now broadly sup-
ported throughout Weir. In addition, the
company has scheduled the next wave of
CPIM courses and there are discussions to
support an APICS Certified Supply Chain
Professional course.
“People and their development is a strate-
gic pillar for Weir,” says John Heasley, chief
financial officer. “Through APICS education,
Weir has been able to increase the capabil-
ity of our people and organization. This
increase is allowing Weir to make changes
in how businesses operate, manage their
supply chains and manage inventory. Weir
will continue to support APICS education
because it provides our employees with
a broad body of knowledge, which can be
applied to their particular business situation.
In turn, improvements at the local business
level will improve the overall performance
of the Weir Group.”
To comment on this article, send a
message to feedback@ascm.org.
THOUGHTS FROM
THE LEARNERS
“An APICS education is important to me
because it gives me the foundation from
where to start building a successful supply
chain. … APICS resources have become
my starting point each time I begin working
on a new process improvement.”
—Trent Harris, Planner, Weir Specialty
Pumps, Salt Lake City
“The APICS learnings helped me
understand the objectives of master
scheduling, inventory management,
kanban process and production
scheduling. … And my APICS certification
will add greater value and impetus to a
career-oriented individual in the very fierce
and competitive market and enable them
to have an edge above the rest.”
—Sophy Thomas, Procurement Manager,
Weir Oil & Gas, Dubai
“I’ve implemented two learnings from
APICS directly after attending the courses:
ABC classification, which revolutionized
the way we make decisions and reporting
in our business; and better use of [material
requirements planning] (MRP) controls
and execution, where we started correctly
executing daily MRP messages to make
sure we do not procure unwanted items.”
—Riaan Lategan, Regional Demand and
Systems Manager, Weir Minerals Africa,
Johannesburg, South Africa
“APICS certification is important to
me because of the actual certification
and because it helped me expand my
knowledge on specific fields. … Most of
the actions we are putting in place now
are based on these topics. We aligned our
improvement action to the concepts and
terms we learned during the training.”
—Andre Marcal, Material Planning
Supervisor, Weir Minerals Brazil,
Jundiai, Brazil
WWW.ASCM.ORG/MAGAZINE 9
Congratulations
to our 2018 Award of Excellence winners!

ASCM is proud to honor these outstanding corporations

and supply chain management professionals.

Excellence in Education Award

Weir Group

Excellence in Transformation Award

Novartis
 Supply Chain Leader
Nick Vyas
Founding Executive Director
Center for Global Supply Chain Management
Academic Director of USC Marshall
University of Southern California 

Corporate Social Responsibility Catalyst 

Bruce Klafter
Vice President of Corporate Social
and Environmental Responsibility
Flex

Diversity and Inclusion Champion 

Imelda Castro
Director of Equipment Workforce Capability
Intel Corporation

Emerging Supply Chain Leader  

Hollie Elliott, CPIM
Materials Manager
Leggatt and Platt Automotive Group of North America
Award accepted by Neema Babu and Sanu Mohamed

See videos on all of our distinguished winners at bit.ly/APICS_awards

The Awards of Excellence are for corporations and individuals

demonstrating superior performance and dedication to advancing the field
of supply chain management. Visit apics.org/awards to learn more.
 SUPPLY CHAIN MATTERS
HOLLIE ELLIOTT, CPIM,
is materials manager
at Leggatt and Platt
Automotive Group of
North America.
Editor’s note: Hollie
Elliott, CPIM, was
the recipient of the
2018 APICS Award of
Excellence — Emerging
Supply Chain Leader,
which recognized her
significant contributions
to the supply chain
management
profession and her
strong potential to
become an outstanding
leader in the field. To
learn more about the
awards, visit apics.org/
awardsofexcellence.
KIA WOOD
is editor for
SCM Now. She may
be contacted at
editorial@ascm.org.
12 SCMNOW JANUARY— MARCH 2019
To comment on this article, send a
message to feedback@ascm.org.
Award-Winning
A DAY WITH
Leadership HOLLIE ELLIOTT
6:15 a.m. I wake up and immediately
What events in your life led you to a career in supply chain? hit snooze. When a second alarm
I worked as a manager in the restaurant business prior to changing goes off, I hit the shower, let the dog
my career in 1999. I was looking for more income, so I worked shifts as out and wake up my daughter to get
a production associate on the floor at Schukra. Once I learned more her moving.
about the company and what it had to offer, I pursued learning as
much as I could in a short period of time. Later, a customer service 7:30 a.m. I leave the house, drop
representative position opened up in the logistics department. I off my daughter at school and get my
had one week’s worth of training and was on my own. It was a sink- morning tea.
or-swim situation, so I started swimming. I have managed to learn
all aspects of the materials department and moved up to be where
8 a.m. I arrive to work and get settled
I am today, materials manager.
in for the day’s events. I check my
email, calendar and tasks for the day.
What are your primary responsibilities at your current job?
8:30 a.m. We have our internal
I manage a team of 24 employees responsible for all inbound customer
meeting to review the previous day’s
releases and supplier shipments, as well as outbound releases to
concerns and production status. I
suppliers and customer shipments. We have [key performance indi-
set tasks and goals for the day with
cators] that we are responsible for and strategic goals and objectives
follow-up times for updates.
to complete monthly and yearly.
9 a.m. I head to our operations
How do you make a difference at your company? meeting on the production floor.
I try to be a leader who listens and provides clear communication back
to the team with detailed direction. At times, I try to mentor and allow 10 a.m. The balance of the morning
my team to take the lead. I want to show I trust my team and show them is composed of other meetings,
they are capable of doing things on their own and making decisions. helping with daily concerns or other
issues, and reading and responding
What is the greatest challenge you’ve encountered on your career to emails.
path so far?
12 p.m. Lunch break! I do a quick
My greatest challenge would be the standardized work between
check online and see what is going on
our communized areas in the department. Everyone must follow
in the news.
the same procedures and processes in order to be able to cover each
other whenever needed. We do this using a training matrix and
1 p.m. Afternoons are usually a
standardized daily work sheet. When being trained on new jobs,
compilation of business process
there is a sign-off from both parties that the details of the training
transformation meetings or other
were completed and understood. Then, there is a daily standardized
meetings pertaining to customer
work sheet for each day for each position. Everyone works through
changes, supplier capacity concerns
those sheets and adds their completion notes to what is coming up
or management reviews. When I’m
for the next day or rest of the week.
not in meetings, I’m with the materials
team reviewing and problem solving
What has been your most fulfilling accomplishment or expe-
discrepancies or issues.
rience so far?
I have learned and grown so much within this company, and I have put 5:30 p.m. I leave the office and
the tools together for my team. I am leading them to be self-efficient, either pick up my daughter for family
reliable, strong and supportive in all areas. dinner and time together, go on a
run, or do a cross-training workout.

To comment on this article, send a
message to feedback@ascm.org.
Developing a
Talent Pipeline
A record-low unemployment rate coupled with talent shortages
in many areas of supply chain means that it’s more critical than
ever to create a robust talent pipeline. One great way to do this is
with a supply chain leadership development program.
In 2003, I helped create the first such program for The Home
Depot’s global logistics organization. The program took place over 12
months and featured attendees working through various rotations at
different facilities, participating in training sessions and culminating
with a special project. After completing the program, participants
were placed in various roles within the global logistics department
to continue growing their careers within The Home Depot.
There are many proven advantages to such programs:
§ They help market your supply chain organization as an industry
leader that provides its employees with the ability to accelerate
learning, skills development and leadership acumen.
§ They attract top graduates from targeted universities while enhanc-
ing employee loyalty and retention rates.
§ More promotions come from within instead of having to use
resources to look outside the organization for qualified talent.
§ As participants enhance their thought-leadership and critical-
thinking abilities, they become more multidimensional.
§ Participants hit the ground running in all different supply chain
areas after completing the program.
To build a successful program, follow these steps.
1. Define what you’re looking for. It’s important to understand
what defines a strong leader within your particular supply chain
organization. This involves identifying the top functional, technical
and leadership skills in which individuals should gain competence.
The simplest way to do this is by evaluating current leaders beyond
their functional and technical skills. This exercise also will help
PROFESSIONAL DEVELOPMENT
you determine where you have skills gaps
so you can use the program to help close RODNEY APPLE
them. In addition, consider what you want is founder and president
of SCM Talent Group, a
your program to look like. What does your supply chain recruiting and
organization value? What do you want future executive search firm. He
leaders to accomplish? has served as the ASCM
career coach since 2014
2. Benchmark leading organizations. and routinely contributes
Take a look at supply chains that have mature supply chain career
supply chain leadership development pro- development content for
members. Apple may be
grams in place. The information you gain will contacted at rapple@
enable you to build a robust framework of your scmtalent.com.
own. Check out Cardinal Health, Caterpillar,
General Electric and Lockheed Martin.
3. Develop a cross-functional program
management team. At this stage, gener-
ate ideas for the program and its required
resources. Which functional areas will host
work rotations? What kind of training should
be provided? Consider developing a training
course for the program management team so
they can learn best practices for implement-
ing and overseeing the program.
4. Get a sponsor. A top supply chain exec-
utive should serve as the program sponsor
to help signify its importance, drive engage-
ment and offer support when needed.
5. Establish a framework. It should
include the following:
§ The length of the rotations: Typical pro-
grams last one to two years, depending
on the number of rotations, the available
assignments and other factors.
§ Projects and training: Think about the
skills and qualities you need in a leader
and establish where in your organization
an individual can obtain or further them.
§ Communication templates: Create program
agendas, action plans, progress reports and
an exit plan for when a rotation wraps up.
6. Assign a supply chain mentor to each
participant. As people rotate through the
different areas of your supply chain organi-
zation, a mentor can provide steady guidance
and enhance participants’ leadership skills.
7. Routinely measure the program.
Conduct regular assessments with all par-
ticipants to watch their progress, growth and
advancement; identify areas for improve-
ment; and check in on how past graduates are
doing. This continuous improvement helps
ensure the program can support your supply
chain organization as it evolves.
WWW.ASCM.ORG/MAGAZINE 13
 OPERATIONAL EXCELLENCE

PETER J.
SHERMAN, CSCP,
is managing partner at
Riverwood Associates,
a process improvement
training and consulting
firm based in Atlanta.
He is a Certified Lean
Six Sigma Master Black
Belt and previously
served as lead instructor
of Emory University’s
Six Sigma Certificate
program. Sherman may
be contacted at peter@
riverwoodassociates.com.

Stop Pedaling and scope — not next quarter or next year, but
five or 10 years out. Generate a vision by
having all stakeholders get together in

Start Navigating a room and complete the sentence, “Our

vision for XYZ Company is ________________,”
by writing just one word on a sticky note.
Then, collect the responses and group them

W hen was the last time you sat down with your team to thor-
oughly review your supply chain organization’s progress and
future direction? These days, some professionals are so busy that
they fail to notice when they’re running to stand still. If most of the
work you do involves decisions and activities that affect the next 30
days, then being reactive is your norm. Furthermore, you probably
want to do everything yourself because trust is lacking, which may
cause high levels of employee turnover.
The first step to being proactive and learning to let go and trust your
team is plotting a longer-term course. Organizations that can balance
short- and long-term demands conduct regular strategic sessions,
into their natural categories. The power
of the group generally captures the most
relevant themes.
Once you’ve articulated your vision, try
the approaches outlined in Figure 1. The
lower levels are fundamental and easier to
conduct. The higher levels are strategic and
require more effort and discipline. You may
complete some in tandem, but regardless of
how you proceed, they are best performed
in a team setting.
PHOTO CREDIT © ISTOCKPHOTO.COM/ COURTNEYK

meet frequently with their customers, visit other industries to learn
best practices and invest in their employees. This requires thoughtful
planning, market research, competitor analysis, forecasting, process
improvement, business development, delegating and leading.
However, the most fundamental activity is articulating a vision.
Vision is what future success looks like. It should be grand in
Start-stop-continue is a simple framework
of what to start doing (because it will lead to
improvements), what to stop doing (because
it isn’t helping) and what to continue doing
(because it’s working). To identify these items,
have team members write down at least one

14 SCMNOW JANUARY— MARCH 2019


Figure 1: Business alignment framework
CURRENT STATE/
FUTURE STATE
SWOT
ANALYSIS
START-STOP-
CONTINUE
response for each category on a sticky note,
then, once again group them to detect con-
sistent patterns.
Strengths, weaknesses, opportunities,
threats (SWOT) analysis is a strategic plan-
ning technique for business competition or
project planning. To perform a SWOT anal-
ysis, break up your team into four groups.
Ask each the following questions:
§ Strengths: What do we do better than
the competition?
§ Weaknesses: What do we need to
improve upon?
§ Opportunities: What external factors can
we capitalize on or use to our advantage?
§ Threats: What external factors could
jeopardize our success?
Give each group 15 minutes to list
responses. Then, add each group’s responses
to the four quadrants on a large flip chart,
as in Figure 2.
Current state versus future state uses
several attributes to describe how an organ-
ization is currently operating versus how
it might operate in the future. This tactic
requires considerable knowledge about
the company and is best performed with a
cross-functional group consisting of market-
ing, sales, engineering, production, supply
chain, customer support, finance, human
resources and information technology. An
outside facilitator is often useful to keep
To comment on this article, send a
message to feedback@ascm.org.
participants focused and to avoid bias as within those high potential areas. The beauty
participants discuss of the business alignment framework is that
§ your products and services it pulls the right projects such that they align
§ focus, core expertise and with the goals instead of pushing projects
comparative advantage through the organization.
§ revenues, gross profits and net profits
§ customers, in terms of industry, revenue, GET STARTED
number of employees, and whether the It’s time to stop pedaling and start navigat-
business is public or private and domestic ing. Don’t delay — take the first step today
or international toward achieving that critical, yet so often
§ the geographies and markets in which your elusive, balance between short- and long-
company operates term demands. The strategies presented here
§ customer expectations are a proven place to start.
§ organizational structure
§ the extent to which processes are docu-
Figure 2: SWOT analysis quadrants
mented, followed and maintained
§ the extent to which data is captured, stored,
reported and analyzed
§ company culture.
Business alignment starts with defining
the organization’s goals. Goals are the key
STRENGTHS WEAKNESSES
phases required to reach a vision, like the
rungs on a ladder. They should be SMART
(specific, measurable, achievable, relevant
and timely). Next, design the appropriate
strategies to realize those goals. Examples
include product or service innovation,
supply chain optimization, operational
excellence, and customer retention. At this
OPPORTUNITIES THREATS
point, the team selects high potential areas
on which to apply the strategies. The process
ends with identifying the specific projects
WWW.ASCM.ORG/MAGAZINE 15
 MANAGEMENT PERSPECTIVE
MICHAEL
MORAND,
CPIM-F, CSCP-F,
CLTD-F,
is a supply chain senior
manager at Johnson &
Johnson and a doctoral
candidate at Temple
University’s Fox School
of Business. He may be
contacted at mmorand@
its.jnj.com.
The Red
Queen Hypothesis
T he Red Queen is a fictional character from Lewis Carroll’s Through
the Looking Glass. In the book, the Red Queen explains to Alice that
her world works differently: “Now, here, you see, it takes all the running
you can do, to keep in the same place. If you want to get somewhere
else, you must run at least twice as fast as that!”
The Red Queen hypothesis was coined in evolutionary biology to
explain that a species must adapt and evolve not just for reproductive
advantage, but also for survival because competing organisms also
are evolving. It’s important to note that competing organisms can
be friendly — for instance, those that rely on the same food sources.
Applied to our careers, we might think about adaptation and evo-
lution as embracing change and pursuing continuous learning and
development. In this realm, the imperative to evolve comes not from
aspirational pursuits, such as a promotion, but from the need to con-
tinue providing value in an environment where even “running our
fastest” might not be enough.
So, what’s keeping us from running faster, and, perhaps more
importantly, why are managers sometimes ineffective at encouraging
others to do so?
FAILURE TO MOVE
Adapting and evolving as a management practice can be remarkably
difficult. To overcome the inherent challenges, we must keep in mind
that change typically involves more than a documented update to an asso-
ciate’s responsibilities and an expectation to reshape interactions with
others. Rather, change can affect a person’s sense of value or belonging.
Change management often is taught through a commitment curve.
The curve explains the stages of personal transition as an individual’s
support of an organizational change increases over time and with
exposure. The curve implies that a manager should identify an indi-
vidual’s current stage and provide the requisite information to help
this person reach the next level.
16 SCMNOW JANUARY— MARCH 2019
To comment on this article, send a
message to feedback@ascm.org.
While the commitment curve might explain
the markers and milestones of change man-
agement, it doesn’t provide much insight
into the nuances of resistance, and managers
should be cautious not to oversimplify this
effort or underestimate its significance. For
a more complete understanding of the fac-
tors associated with resistance, Shaul Oreg’s
“Resistance to Change” in the 2003 Journal
of Applied Psychology explains the common
manifestations, which include
§ reluctance to lose control
§ an unwillingness to think differently
§ lack of psychological resilience when coping
with change
§ intolerance of the adjustment period
involved in change
§ a tendency to perform poorly outside the
familiar framework
§ reluctance to give up old habits.
The central challenge for managers is how
to encourage change, continuous learning and
development. Given that shifting environments
are uncertain by design — and associates are
likely trying to understand how to make sense
of these scenarios — it follows that individuals
struggle with the idea of knowing if and how
their actions will lead to successful outcomes.
Mangers can help by sending clear signals
that change is desirable, creativity is encour-
aged and failures are acceptable. It is impera-
tive to understand the norms that the team has
grown accustomed to within the organization
and if any course-correction or compensa-
tion are needed to ensure the right actions
are being shared and reinforced.
Managers also must account for the con-
text not only at the individual and team lev-
els, but also at the broader departmental or
organizational levels. There may be a gen-
eral willingness of an individual to embrace
change and express creativity. But if there is
a distinguished resistance to change in the
team or broader organization, this will limit
the amount of change that can be driven or
supported by that person.
Finally, as managers, we often see the need
to run more clearly than the people we lead.
PHOTO CREDIT © ISTOCKPHOTO.COM
Therefore, it is our responsibility to lead by
example, help our associates overcome their
personal resistance to change and to start
running twice as fast.

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message to feedback@ascm.org.
Building Resilience
W e often hear analogies related to a well-known airplane safety
instruction: “Put on your oxygen mask before helping others.”
The concept, of course, is that you can’t assist someone else if you
aren’t at least breathing. Similarly, parents are advised to take care
of ourselves so we can take care of our children. Indeed, healthy,
well-adjusted moms and dads are better equipped to handle the many
challenges of parenthood.
In the same way, one of the most important roles of a supply chain
management leader is to make sure we are equipped to nurture,
support and look after our employees. We listen to them, help them,
build them up, watch them grow and are proud when they move on.
Along the way, we are asked to do some difficult things — often at
times when we didn’t think it could get any more challenging.
THE WORKPLAN
We all know some people who, because they are in a constant panic
state, let problems and decisions continue to pile up until they seem
insurmountable. These individuals simply cannot address the issues
from a point of calm or rational thought because they don’t have the
right reserves available.
Before we can be successful supply chain leaders, we must bolster
our own resilience. This involves our ability to cope with the pressures
and demands of daily life, handling tough situations by carefully
considering our choices, and simply having our acts together. The
first step is to check on our reserves — whether they are emotional,
PHOTO CREDIT © ISTOCKPHOTO.COM/Z_WEI
environmental, financial, health and energy-based, skills-based, or
something else. Then, we must confirm that we have resources we
can tap into when we really need them.
Don’t get me wrong: We won’t have all of these things all of the
time. But building a workplan can help us keep our reserves at the
EXECUTIVE VIEW
ready throughout our entire lives. This can
be as simple as fixing the squeaky door that’s KAREN ALBER
been a constant annoyance or as complex is a partner at The
Integreship Group,
as deciding to go back to school or pursue a where she works with
certification that will enable us to take the rising leaders to master
next step in our careers. The great thing is the people parts of
their jobs. Prior to this,
that our efforts don’t just advance our work she served as chief
lives; they meaningfully improve our per- information officer at
sonal lives, as well. both MillerCoors and
Heinz. Alber may be
As an example, I’ll share one of my own contacted at karen@
personal resilience actions that has made integreship.com
the biggest difference in my life. At an early
age, I focused on financial reserves. I knew I
didn’t want to be stuck working somewhere
or doing something I didn’t like. So, I depos-
ited my whole paycheck into my investment
account starting in my thirties. Then, I had
my financial advisor deposit into my checking
account what I needed to live until my next
paycheck. Even if that left just $5 in my invest-
ments, it was automated savings, and it grew.
Spending within my means and earning more
as I moved on in my career meant that I built
financial reserves that otherwise may have
caused me stress or concern. This translated
into feeling that I had more choices about my
work and, more importantly, in my actions. I
could choose to do the right things because I
didn’t feel financially trapped.
GETTING STARTED
There are numerous ways to begin building
your resilience. Start with something small
One of the most important
roles of a supply chain
management leader is to
nurture, support and look
after our employees.
and doable — the squeaky door. Tell someone
about it to help you feel accountable. Then, do
it. When it’s complete, this will inspire you
to work toward your next resilience goal.
Pretty soon, you’ll feel confident enough to
tackle the biggies. Building resilience is vital
regardless of where you are in your career
or personal life. Strong leaders work these
components every day.
WWW.ASCM.ORG/MAGAZINE 17
 CAREER LAUNCH
LEILA
MERABET, CPIM,
is a demand and supply
analyst at Pierre Fabre
Laboratories in Canada.
She has worked in
cosmetics and luxury
companies including
L’Oréal, Clarins and
Louis Vuitton. Merabet
may be contacted at leila.
merabet@gmail.com.
EDITOR’S NOTE
The editors of SCM
Now would like to
welcome Leila Merabet,
CPIM, as the new
author of the “Career
Launch” department.
After graduating from
engineering school,
Merabet earned her
MBA in industrial
relations. She is
currently a demand and
supply analyst at Pierre
Fabre Laboratories.
18 SCMNOW JANUARY— MARCH 2019
Take Your Supply Chain
Talent to Market
M any recent graduates jump into the business world with only
a few ideas about what we really want and what “being in
the business world” actually implies. What industry are we going
to work in? How are we going to grow professionally? How will we
contribute to an organization? These questions and many more
can go unanswered until we gain experience and learn to know
ourselves. But why should we wait so long to appreciate the value
we have to offer and discover how to maximize that value to advance
our companies and careers?
I bet you have heard at least once during the interview process,
“Where do you think you will be in five or 10 years?” Did you have
a good, clear answer? Did you realize the question’s importance?
While I was working toward my MBA, a marketing teacher gave my
class an assignment that changed my perspective on my professional
future. I was tasked to create a marketing plan for a unique company:
me. This marketing plan was supposed to convince him to hire me.
What follows are a few tips to help you determine a marketing plan
for your supply chain career.
1. Find your mission statement. When researching information
about a business, people usually check the website for a mission or
vision statement. It is easy enough to read through these few lines
and determine the organization’s purpose, values and what it offers.
With that example in mind, in a few lines, try to describe your pur-
pose, values and offerings. This is the first step toward creating
your own marketing plan. Make it short and straight to the point.
2. Define your objectives. Next, summarize three short-term and
three long-term goals. Make them clear, easy to understand, meas-
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message to feedback@ascm.org.
urable and time-phased. Later, this will allow
you to determine how successful you are.
3. Analyze yourself with a SWOT
(strengths, weaknesses, opportunities and
threats) analysis. Marketers evaluate the
external, as well as internal, environments.
For this exercise, consider internal factors
your strengths and weaknesses; external
factors are opportunities and threats. The
internal factors can be divided into themes:
communication, human relations, manage-
ment, analytical skills and so on. Typical
external factors are social, economic, finan-
cial, technological and competitive. Which
of these could have an impact on your
career? List all possibilities, but be sure to go
deeper for any that present key opportunities
or that can really differentiate you from
the competition.
4. Determine your marketing strat-
egy. At this point in the process, you have
everything you need to put your marketing
plan in place. Determine what is your target
market, what type of brand you are looking
This is the moment when
you decide how you will
attack the business world.
to create, what industry you want to work
in and where you would like to live. This is
the moment when you decide how you will
conquer the business world.
IMPLEMENTATION, EVALUATION
AND IMPROVEMENT
Once your strategy is clear, translate the-
ory into actions. Detail the tasks you want to
accomplish to reach your objectives. Again,
keep them simple, with a start and an end
date, to enable you to track progress. Every
few years, look at your marketing plan, and
ask yourself, “How am I doing? Am I following
the plan? Am I in line with the objectives?
Should I modify the plan to fit better with
who I am today?”
PHOTO CREDIT © ISTOCKPHOTO.COM
Finally, like every successful company, it’s
essential to maintain awareness of your value
in the marketplace and never stop thinking
of ways to improve.

To comment on this article, send a
message to feedback@ascm.org.
Keep Calm and Cool
Amid International
Sourcing Ordeals
M anufacturers around the globe are dealing with an unusually
volatile international trade situation as the United States,
China and other countries adjust tariffs and negotiate new trade
agreements. Unfortunately, this creates uncertainty about the
availability and cost of internationally sourced supplies.
International sourcing is inherently vulnerable to changes and
disruptions — both political and otherwise. This is not to say that
companies should only source domestically; rather, they need
to understand that sudden and unexpected changes will arise.
Following are three important tips for how to handle them.
1. Pause, don’t panic. When the cost or availability of an item
suddenly changes, buyers and planners first should pause and
evaluate the situation. What first looks like a complete disaster
might not be as bad as it appears. If a government levied a 25
percent tariff on steel, for example, this would not equate to a 25
PHOTO CREDIT © ISTOCKPHOTO.COM/NICOELNINO NICOELNINONICOELNINO
percent increase on the cost of goods. The typical product made
in a Western factory contains about 20 percent material and 80
percent labor and overhead, according to the usual accounting
methods. Therefore, a 25 percent increase in just some of the
material content will likely only affect about 4 percent or less of
the total cost of the item. Yes, this increase is a concern, but it’s not
a catastrophe. Don’t go to pieces.
2. Consider your supplier alternatives. Next, take some time
to evaluate international and domestic suppliers. In many cases, the
ENTERPRISE INSIGHTS
incumbent international supplier was chosen
because it is the most reliable, delivers the DAVE TURBIDE,
best quality and offers the lowest prices — CFPIM, CIRM,
or a combination of these and other factors. CSCP, CMFGE,
In the event of a new tariff or even a supply is a New Hampshire-
disruption, it’s unlikely that these qualifica- based independent
consultant and freelance
tions will change. Keep these things in mind, writer and president
and don’t make a hasty switch. of the ASCM Granite
Sometimes a company wants to change State Chapter. He
also is a Certified
suppliers — such as from an international in Production and
supplier to a domestic one. It takes time and Inventory Management
a sizable investment to rebuild the capa- and Certified Supply
Chain Professional
bility to begin manufacturing an item that master instructor and
is no longer in production, so think twice The Fresh Connection
before asking a supplier to go down that trainer. Turbide may be
contacted at
path. And even if there is a viable domestic dave@daveturbide.com.
alternative, don’t switch purely because
of price increases caused by tariffs. Other
issues, such as quality and reliability, are
important too. Figure the value of those
into your calculations before you choose
to change suppliers.
3. Think long-term. Remember that some
disruptions are only temporary. Don’t let
emotion and immediate concerns drive a
long-term sourcing decision. First, consider
any temporary solutions that might keep the
business functioning until market conditions
What first looks like a
complete disaster might
not be as bad as it appears.
improve. At the same time, consider all of
the sourcing advice mentioned previously
in order to effectively plan for a long-term
solution in case it is needed.
Most supply chain management profes-
sionals are aware of the importance of risk
management and factor that into all plans
and sourcing decisions. However, even the
best-laid plans cannot anticipate every pos-
sible disruption. When unexpected changes
occur, keep a level head. Go out to the park-
ing lot and scream at the sky if you must,
but then go back to your desk, calmly and
logically analyze the situation, and devise
an appropriate strategy for addressing it. A
knee-jerk reaction now could cost you more
time and money down the road.
WWW.ASCM.ORG/MAGAZINE 19
 SALES AND OPERATIONS PLANNING

PATRICK BOWER
is senior director of
global supply chain
planning and customer
service for Combe.
He is responsible
for the company’s
sales and operations
planning process, order
management, and
third-party logistics
management. Bower
may be contacted at
plbowerone@yahoo.com.

The Key Role of provide critical insights into demand at key

touchpoints throughout the S&OP process

Customer Service
— but only if they are invited to the discus-
sion. Following are some specific examples
of how customer service can contribute to

in Sales and
the S&OP process.
Order pacing. In my 25 years of S&OP
experience, I have witnessed only one

Operations Planning instance of perfectly harmonized, four-week

periods (thirteen in total in a year). Because
of this, I have become accustomed to speak-
ing in “Wal-Mart weeks,” “31-day months”

A very important, yet frequently overlooked, area of sales and

operations planning (S&OP) is the integration of customer
service into the process flow. Unfortunately, customer service is
often considered a function of supply chain execution rather than
planning, yet it provides a vital feedback loop and adds tremendous
value to the S&OP process.
When we think of customer service in the context of S&OP, we
are referring to the part of the organization that manages and
or “5-week months” to point out the natural
irregularity of demand caused by calendar
variations. This kind of detailed knowledge
of order pacing — which is inherently under-
stood by customer service professionals
— can help pace the baseline demand and
operating budget plans.
End-of-month order flow and timing.
PHOTO CREDIT © ISTOCKPHOTO.COM

processes orders and is responsible for distribution and trans- When five customers make up 70 percent or
portation of product to customers. Because of their direct line of more of your total sales volume, as is typical
sight to fill issues, order line cuts, delayed inbound shipments, with many companies, the fortunes of any
unreliable carriers and so on, customer service professionals can given month become heavily dependent on

20 SCMNOW JANUARY— MARCH 2019


the clean execution of order flow in the last
week. If, for some reason, order flow is dis-
rupted to any one of your top customers, the
volume planned for that month is likely to
shift to the following one, thereby altering
two months of demand at the same time. In
such an instance, it’s extremely helpful for a
customer service professional to inform the
S&OP process so the impacts can be discussed
in the consensus, pre-S&OP and executive
review meetings.
Loading. If your company offers end-of-
year, -quarter or -month deals to custom-
ers, you are likely to experience a surge in
demand, followed by a weakening of orders.
Ideally, these periodic loads are planned
in advance, but sometimes they can be a
surprise — for instance, if they are offered
at the last minute in an attempt to close a
financial gap. Loads of this sort tend to be
poorly communicated within the S&OP pro-
cess. Even though this “inside of supply lead
time” information has little value in terms
of supply chain planning, it can be very
helpful in estimating dollar-volume shifts
from one month to the next and gaining a
more realistic version of the financial plan
emanating from the S&OP process.
Cuts and back orders. While some might
consider this identical to order-flow timing,
keeping track of cuts and back orders is
helpful to the S&OP process flow because
these factors represent pent up demand
that will snap back. Therefore, these
are tremendously important inputs for
the demand consensus meeting, as poor
demand planning might be a root cause
of the cuts. Likewise, it is imperative that
supply planning personnel stay abreast of
all cuts and back orders to make sure they
recheck safety stock settings, lead times or
production-attainment statistics. Any of
these parameters might indicate alternate
root causes for the cuts.
Substitutions and diversions. When I
worked at Snapple, we would often substi-
tute one flavored beverage for another if
we ran out of stock. These substitutions,
especially if considerable, are an impor-
tant input to demand consensus, helping
to explain stock-keeping unit shipment-mix
shifts and enabling adjustments to the
demand plan at the mix level. Similarly, if
we had a run on a product at one distribu-
tion center (DC), it was common practice to
ship product from a suboptimal DC — at a
higher cost or using more miles — to help
assure fill levels. These diversions would
alter our shipment history (and eventu-
ally our future forecasts) by attributing
demand against the wrong DC. This may
be manageable in small doses, but making
significant substitutions warrants discus-
sion and review during the consensus and
review meetings.
Returns. The returns that are generally
of greatest interest to S&OP participants
Customer service professionals can provide
critical insights into demand at key touchpoints
throughout the S&OP process — but only if they
are invited to the discussion.
are product returns as a result of damage.
While managing such items may seem like
merely an accounting transaction, they
are in fact a treasure trove of data about
the “shopability” of products, the need for
pilferage measures, the real-world proof
of “shipability” and the like. Reducing
these sorts of returns can meaningfully
improve your overall consumer experi-
ence and enhance margins. Thus, any root
cause insights derived from their analysis
is especially useful to the product portfolio
process within S&OP.
Customer metrics and fines. Under-
standing customer expectations is the key
to business success. At Combe, nearly all of
our customers measure our success based
on on-time-in-full (OTIF) performance.
This metric represents the culmination
of our entire supply chain’s performance
and holds tremendous value as a capstone
measure of S&OP. For more than a decade,
OTIF has been our most important assess-
ment, and recent changes in customer
expectations have only heightened its
standing. In fact, many of the retailers we
serve have tightened their tolerances for
delivery. Experienced planners understand
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that the fill portion of OTIF is directly corre-
lated to the quality of all demand, inventory
and supply plans that precede delivery to
the warehouse. An honest discussion of cus-
tomer expectations versus actual results
will help improve your S&OP process.
Special packs and offerings. All consum-
ers are familiar with demand-shaping events
such as bonus packs, instantly redeemable
coupons, buy-one-get-one offers and open
stock store displays. Even nonconsumer
businesses offer similar special features,
such as discount pricing on container sizes
or special one-time requirements. Inviting
your customer service professionals to par-
ticipate in demand consensus will aid in the
understanding and impacts related to the
execution of such events.
THE TAKEAWAY
This list of potential demand-altering
events observed by customer service
leaders could go on and on: poor inbound
carriage, DC receipt backlogs, freight that
has been stolen or led astray, customer
receipt backlogs, system changes, weather
events, allocations of special-pack invento-
ries, changes in customer in-stock levels,
shifts in ordering patterns, and so on. Each
of these scenarios has the potential to alter
the shape of your demand curve, supply
requirements, financial pacing and fill
levels. And each can yield input worthy of
consideration during one or more of your
S&OP meetings.
Customer service leaders are the eyes
and ears of your supply chain, and they
see and live with all of the weaknesses
and uncertainty inherent throughout that
chain every day. They see true demand. The
takeaway here is simple: Invite them to the
S&OP discussion. Your final plan will be
better for it.
WWW.ASCM.ORG/MAGAZINE 21
 CUSTOMER EXPERIENCE
ANNETTE
FRANZ
is founder and CEO
of CX Journey. She
may be contacted at
cxjourney@gmail.com.
Deliver a Human
Experience
I magine for a moment that you’re a human. Now there’s a bizarre
statement. But more companies really do need to start thinking
this way.
We are all humans, and we are all customers. But something odd
seems to happen when we walk in the doors of our employers’ offices
each morning. Is it that we forget that we’re all in this thing together?
Do we stop thinking about the fact that we’re all customers in some
way and we want basically the same things? Certainly, some of us
get dragged down by the corporate cultures in which we work day
in and day out. They seem to suck the empathy right out of us, and
we end up treating each other poorly. There’s really no excuse for
it; we should always aspire to deliver a great customer experience
to our fellow humans.
Here are some strategies for keeping these things in mind and
remembering that golden rule of treating our customers how we
wish to be treated:
§ Listen. Don’t just ask your customers about their experiences, but
really listen. There are numerous different channels and ways
for customers to tell you about their needs, desired outcomes
and how well you are performing against their expectations.
Understanding things and identifying key drivers of a great
customer experience are critical outcomes of this exercise.
§ Characterize. Research your customers. Identify the tasks and
jobs they are trying to do. Compile key personas that represent
the various types of prospects and customers who might buy from
you or who use your products or services.
22 SCMNOW JANUARY— MARCH 2019
To comment on this article, send a
message to feedback@ascm.org.
§ Empathize. Walk in your customers’ shoes
to get a clear understanding of the steps
they take to do whatever task or job it is they
are aiming to accomplish with your organ-
ization. Map their journeys to understand
the current experience state.
Of course, it’s not just about how we treat
our customers. It’s essential for all humans
to think about their employees, too. When we
take care of our employees and ensure that
they have great experiences, good things will
happen for our customers and businesses.
Empathy for our customers absolutely begins
with empathy for our employees.
So, how can you put the human lens on
employees? Simple: Use those same three steps,
replacing the word “customer” with “employee.”
Empathy for our customers
absolutely begins with
empathy for our employees.
This is about truly caring for your employees;
offering growth and development opportuni-
ties and clear career paths; providing feedback,
training and coaching; showing them appre-
ciation and recognition for their hard work
and the impact they make on the business; and
ensuring that they feel trusted and respected.
All of that stems from a culture that values
and respects both employees and customers as
humans. Robert H. Chapman, CEO of global man-
ufacturing technology and services provider
Barry-Wehmiller, explains this twofold: First,
don’t see employees as just cogs in the wheels to
success; and second, run a business that meas-
ures itself by how it touches people’s lives.
KEEPING A HUMAN FOCUS
The next time you’re designing a process,
developing or testing a product, or even just
writing an email or answering the phone,
think. Take a moment (or two or three) to
consider the human who will work that
process, who will use that product and who
is on the other end of the line. Then, put
PHOTO CREDIT © ISTOCKPHOTO.COM
yourself in their shoes. Don’t think of them
as purchase orders or cogs; see them as your
fellow human beings who deserve the very
best you can give with every interaction.

To comment on this article, send a
message to feedback@ascm.org.
Combatting
Sustainability
Setbacks
O ver the past 10 years, the nations, businesses and citizens of
the world have demonstrated their awakening to the planet-
threatening reality of climate change. Promises have been made and
actions taken to curb mankind’s negative impact on the capacity of
the planet to sustain the lives of the billions of people who inhabit
it. Sustainability, in its myriad aspects, has had momentum.
But that momentum has clearly slowed — and at a moment when
time is running out. The signals are clear. The United States is with-
drawing its support of the Paris climate accord, making it the only
nation to reject the otherwise universally accepted position that an
increase of the earth’s ambient temperature in excess of 1.5 degrees
Celsius (2 degrees Fahrenheit) is unsustainable.
The current U.S. administration also has eviscerated the U.S.
Environmental Protection Agency, reflecting its support of fossil
fuels over renewable sources of energy. It has reversed regulations
aimed at reducing methane emissions, weakened the regulation of
carbon dioxide emissions from motor vehicles and relaxed restric-
tions on greenhouse gases from coal-fired power plants.
At the same time, Germany, the fifth-largest economy in the world
and a beacon of environmental hope for many, is adjusting downward
its stated objective to reduce its greenhouse gas emissions by 55 per-
cent compared to 1990 levels by 2030. It is now targeting a 45 percent
PHOTO CREDIT © ISTOCKPHOTO.COM/CHINAFACE
reduction, with coal representing a larger piece of the country’s
energy mix than previously forecast, as Germany phases out nuclear
power. Coal still accounts for one-third of its power production.
Meanwhile, deforestation continues at an unsustainable pace,
reducing the planet’s capacity to deal naturally and efficiently with
greenhouse gases. A new study from The Sustainability Consortium
WORKING GREEN
(TSC), a global organization administered
by three U.S. universities and the World ANTONIO
Resources Institute, notes that more than GALVAO,
25 percent of deforestation between 2001 and CSCP, CLTD,
2015 is permanent, and the pace of deforest- is chief supply chain officer
ation globally is not slowing down. at DuBois Chemicals.
He may be contacted at
“This is happening despite nearly 450 antonio.galvao@
companies signing commitments to achieve duboischemicals.com.
zero deforestation in their supply chains
by 2020,” said Christy Slay, director of MIKE DRIES
technical alignment for TSC. “Consumers is a retired business
journalist and corporate
are demanding it and companies know it communications executive
is the socially responsible thing to do. Yet now working as a freelance
companies find it difficult to determine the writer. He may be contacted
at mjdries23@gmail.com.
source of their supply beyond the location
of their direct supplier.”
It remains to be seen whether recent set-
backs in our battle against climate change
are bumps in the road or something far more
ominous. Setbacks notwithstanding, there
still are bases for optimism. For one thing,
awareness of the risks of climate change
continues to expand, changing people’s pur-
chasing habits and driving corporations to do
the right things. Investment funds also are
continuing to decarbonize their portfolios,
shifting their emphasis from fossil fuels to
renewable sources of energy, something that
would have been difficult to justify only a
decade ago.
Perhaps the greatest source of optimism
lies in actions the private sector is taking to
deal with the threat of climate change. Instead
of waiting for government to lead the charge,
some of the largest, best known companies in
the world have stepped into the void. In the
next installment of this department, we will
focus on the actions of a few of them. In the
meantime, it’s essential that we understand
that we all have a stake in, and responsibility
for, the viability of the one and only planet
we share. By reducing waste, using resources
responsibly, electing politicians who under-
stand the importance of addressing climate
change and supporting companies that con-
duct their business according to established
principles of sustainability, each of us has
the power to have a positive impact. The only
thing standing in our way is the inaction that
results from believing that someone else is
responsible for fixing a problem we’ve all
helped create.
WWW.ASCM.ORG/MAGAZINE 23
 RELEVANT RESEARCH

RICHARD E.
CRANDALL,
PH.D., CPIM-F,
CIRM, CSCP,
is a professor emeritus
at Appalachian State
University in Boone,
North Carolina. He
is the lead author of
“Principles of Supply
Chain Management.”
Crandall may be
contacted at crandllre@
appstate.edu.

The View From

determine the best place to stock the inven-
tory — whether that is at a store or pickup
locker, a regional distribution center that

Digital Supply Chain replenishes stores, or a fulfillment center

that ships items directly to a consumer.
Next, a business needs to know the pro-

Control Towers duction capability within its supply chain.

A supply chain control tower can help
determine if a needed item is already in
inventory or, if it’s not, how long it will take

A s supply chains becomes longer, more global and increasingly

For a list of annotated
complex, supply chain management professionals need a bird’s-
eye view of their networks to ensure that all of the parts are moving
together and performing as expected. Some industy experts believe
digital supply chain control towers are the best approach for end-to-
end management.
A supply chain control tower is “a shared service center that
monitors and directs activities across the end-to-end supply chain to
make it collaborative, aligned, agile and demand-driven” (Bleda et al.
2014). This tool enables organization leaders to react to and correct
issues as they arise via four main capabilities, including
§ visibility from dashboards, alarm generation and business-to-
business integration
§ analytics gathered through root-cause analyses, simulations, what-if
scenarios, risk analysis and response management
§ the dissemination of information and action plans
§ monitoring of outcomes.
OPERATING WITH 20/20 VISION
There are thousands of potential applications for digital supply
to manufacture or procure the product and
ship it to the needed location. This knowl-
edge is especially crucial for apparel and
seasonal items.
Stretching even further, supply chain
control towers offer better visibility and
command over transportation and logistics
operations. Accenture reports that three
companies already have achieved success in
these areas (Bleda et al. 2014): Unilever set
up a supply chain control tower to provide
visibility and management control for its mul-
tiple transport movements across Europe.
Pfizer’s control tower measures the flow of
products, orders and shipments. And Dell’s
control tower coordinates parts, logistics
and field technicians to respond swiftly to
customer requests.
There are other uses, as well, such as risk
management, vendor evaluation, strategic
PHOTO CREDIT © ISTOCKPHOTO.COM

references about this

subject, contact the
author at crandllre@
appstate.edu.
chain control towers. For example, as companies increasingly investment alternatives, supply chain effec-
convert to omnichannel business models, control towers could help tiveness and project management, but these
maintain accurate records of the location, amount and availability tend to require more advanced information
of product inventory. This data could help supply chain managers capture and analysis.

24 SCMNOW JANUARY— MARCH 2019


SHIFTING BUSINESS EXPECTATIONS
Companies are under increasing pressure from
end consumers, who have been conditioned
by the success of e-commerce companies to
expect a wide range of product choices along
with high service levels. As a result, supply
chains are scrambling to shorten product life
cycles, compress manufacturing and delivery
times, and better anticipate customer needs.
Shareholders and chief financial officers also
pressure companies to find ways to control
their costs (Bentz 2014).
In this climate, legacy management meth-
ods are not enough. Previously, company lead-
ers would walk through their own facilities;
visit their partners’ facilities; and correspond
with far-away partners and company-owned
facilities through telephone, email, and digi-
tal and print records to oversee operations.
These methods are more susceptible to error,
often overlook key information and do not
give a real-time picture of the supply chain’s
operations and assets.
In recent years, developing technologies have
offered supply chain managers more organized
insights. One such example is supply chain
event management (SCEM), which the APICS
Dictionary defines as “a term associated with
supply chain management software applica-
tions, where users have the ability to flag the
occurrence of certain supply chain events to
trigger some form of alert or action within
another supply chain application. SCEM can
be deployed to monitor supply chain business
practices such as planning, transportation,
logistics or procurement. [It] can also be applied
to supply chain business intelligence applica-
tions to alert users to any unplanned or unex-
pected event” (Pittman and Atwater, eds. 2016).
Multinational software corporation SAP
offers SCEM software designed to monitor and
manage events across distributed processes,
inventories and assets. The solution captures
events from both a company’s and its part-
ners’ systems, analyzes them against prede-
fined plans, and triggers alerts or automated
follow-up activities if deviations are found.
Other software companies offer similar tools
to support end-to-end supply chain visibility.
But even this visibility is not enough. SAP
extended its SCEM software offerings with its
supply chain control tower software in 2014.
Beyond the benefits of its SCEM software, this
updated system can help companies
§ identify issues before they arise
§ recapture control of outsourced supply chains
§ reduce inventory levels
§ leverage the power of big data
§ overcome the complexity of information
technology
§ empower their enterprises with real-time
decision-making
§ become more agile
§ gain end-to-end visibility of their supply
chains (SAP 2015).
BUILDING A CONTROL TOWER
Before these benefits can be realized, compa-
nies must start by building strong bases for
their supply chain control towers. The first
step is to choose one of two basic approaches:
a one-to-many network or a many-to-many
network. The former is a hub-spoke model in
which a company establishes direct contact
with each of a number of suppliers and custom-
ers. In a many-to-many or multi-party network,
the host company establishes a network plat-
form through which all parties can communi-
cate directly (Duckworth 2018). Control towers
that are built on a one-to-many network offer
limited opportunities for visibility and optimi-
zation because they tend to utilize disparate
systems, which can be difficult to connect and
maintain (Duckworth 2018). Conversely, sup-
ply chain control towers that are built on the
many-to-many network foundation can share
data in real time across a multi-party network,
which unlocks new achievements in savings,
speed, agility and resistance.
Once this choice is made, companies go
through the following implementation
stages as they grow to fully tap the capa-
bilities of this technology:
§ The supply chain control tower provides
enhanced visibility and helps the company
avoid disruption from unexpected events
(Bentz 2014). For now, company leaders only
react to the events.
§ The supply chain control tower sets stand-
ards for functional excellence, supports
cross-functional decision-making, pro-
vides basic analytics and what-if analyses,
and manages key performance indicators
(KPIs) at the function level (Bentz 2014).
To comment on this article, send a
message to feedback@ascm.org.
This enables company leaders to start
integrating processes and information
technology across silos.
§ The control tower’s function extends from
vertical silos to horizontal processes. It is
responsible for enterprise-to-enterprise
process excellence and KPIs at the process
level (Bentz 2014).
§ The supply chain control tower continu-
ously assesses the enterprise-to-enterprise
value and uses complex, sophisticated
analytics to optimize value at every step of
the supply chain, thus boosting business
value and profitability. Most companies
can only aspire to reach this stage at this
point in time.
HEIGHT LIMITS
For some companies, stage four is not the only
thing that seems out of reach. There are many
obstacles that can limit progress. The most
common challenge is cost. A supply chain
control tower requires a substantial invest-
ment, but the return is difficult to quantify
at this point. Other challenges are similar to
those faced for other types of projects, such
as executive buy-in, change management for
company processes, systems integration, and
privacy and intellectual property issues.
Even once these challenges are overcome,
companies also need to determine who or
what will be responsible for maintaining
the information in the supply chain control
tower, analyzing data, distributing and sharing
information, solving problems, and making
decisions based on insights. In some cases, this
There are thousands of
potential applications
for digital supply chain
control towers.
may be a person, a group or a piece of software.
When the supply chain control tower is fully
functional, this responsibility — or, in some
cases, the right to access the information —
may be shared across organization.
Reaching this level of functionality pre-
sents yet another challenge. After the system
has been developed for internal use within a
WWW.ASCM.ORG/MAGAZINE 25
 RELEVANT RESEARCH
To comment on this article, send a
message to feedback@ascm.org.

company, it must be extended throughout the
supply chain and partners will need to be will-
ing to collaborate and share data. This might
require some negotiating and convincing in
order to gain buy-in.
These challenges are just the tip of the ice-
berg. The decision to establish a supply chain
control tower has substantial economic and
interpersonal implications, so managers and
executives need to carefully consider the pro-
ject before jumping in. Partnering with supply
chain control companies or software providers
can help facilitate the design and implementa-
tion process and help leaders navigate through
the various challenges that might arise.
LOOKING UP
Because of all of these obstacles, experts
classify fully developed supply chain control
towers as concepts for the future. “Creating
a digital supply chain that functions as a true
control tower — where every step along the
way is both visible and managed — is the next
frontier for global companies that want to
succeed,” global trade management company
Amber Road writes in an e-book about supply
chain control towers (Amber Road 2018). For
now, supply chain control towers are in their
infancy, and leading-edge manufacturers are
only just starting to adopt this approach to
managing their supply chains (Heckler and
Gates 2017). Though these implementations are
limited in scope for now, they have the poten-
tial to bring together analytics, automation,
augmented decision support, modeling and
other capabilities as a centralized function.
This synchronicity will unlock even more
visibility into connected aspects of the sup-
ply chain. Supply chain managers will be
better informed and able to address issues
that are not under their direct control by
collaborating with supply chain partners.
Furthermore, supply chain control towers
offer a single version of the truth across
functional boundaries and across suppli-
ers, contract manufacturers, transportation
carriers, third-party logistics providers and
more. Through improved awareness, com-
munication and collaboration, companies
can achieve truly efficient supply chains.
REFERENCES
1. Amber Road. 2018. “Creating the Global Supply Chain
Control Tower — Beyond Simple Visibility.” https://info.am-
berroad.com/rl_eBook_CreatingTheGlobalSupplyChain-
ControlTower_BeyondSimpleVisibility_Landingpage.html.
2. Bentz, B. 2014. “Supply chain control towers help organiza-
tions respond to new pressures.” Supply Chain Management
Review 18, no. 4: 34-39.
3. Bleda, Jose, Roddy Martin, Tushar Narsana and Derek Jones.
2014. “Prepare for takeoff with a supply chain control
tower.” Accenture. https://www.accenture.com/_acnmedia/
Accenture/Conversion-Assets/DotCom/Documents/
Local/it-it/PDF_3/ Accenture-Prepare-for-Takeoff-Sup-
ply-Chain-Control-Tower.pdf.
4. Duckworth, Nigel. 2018. “How supply chain control towers
provide visibility and collaboration with trading partners.”
Supply Chain 247, February 28. http://www.supplychain247.
com/article/how_supply_chain_control_towers_provide/
one_network_enterprises.
5. Heckler, B., and D. Gates. 2017. “What i4.0 means for supply
chains.” Industry Week.
6. Pittman, Paul H., and J. Brian Atwater, eds. 2016. “APICS
Dictionary, Fifteenth Edition.” Chicago: ASCM.
7. SAP. 2015. “10 reasons to build a supply chain con-
trol tower (Part 1).” SAP, August 5. https://blogs.sap.
com/2015/08/05/10-reasons-to-build-a-control-tower-now/.

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26 SCMNOW JANUARY— MARCH 2019

Delivering World-Class
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28 SCMNOW JANUARY— MARCH 2019
Supply Chain
Optimization
with
High-Level
Value Stream Mapping
By Peter L. King, CSCP; Dave Rurak, CSCP; and Stephen Liberatore

T
oo often, companies view their supply chains as
a loose collection of manufacturing sites, ware-
houses and distribution centers to be managed
as separate entities. Professionals fail to realize the full
extent of the interconnectedness and interdependence,
nor the benefits of a system-wide view. While this
behavior usually is intended to enable growth in the
short term, it hinders the identification of opportuni-
ties for broad system optimization and can negatively
affect profitability in the long term.

WWW.ASCM.ORG/MAGAZINE 29
Figure 1. A simplified portion of a Gore supply chain map

FINAL ASSEMBLIES
U.S. PLANT 1 NA CUSTOMERS
U.S. PLANT 1
FREQUENCY 2.8/WEEK FINAL ASSEMBLY
INITIAL ASSEMBLY SUBASSEMBLIES DEMAND 70,000
TRANSPORT 2 DAYS RATE ASSEMBLIES/YEAR
TIME DAYS 117
TAKT RATE 1400/WEEK
SKUS 28

SUBASSEMBLIES FINAL ASSEMBLIES

U.S. PLANT 2
40,000 FINAL ASSEMBLY
INVENTORY SUBASSEMBLIES FREQUENCY 6/WEEK SUBASSEMBLIES
TRANSPORT 1 WEEK DAYS 45
DAYS 71
TIME
SKUS 84
SKUS 18
EU CUSTOMERS
DEMAND 65,000
FINAL ASSEMBLIES RATE ASSEMBLIES/YEAR
EU PLANT 1
SUBASSEMBLIES FINAL ASSEMBLY TAKT RATE 1250/WEEK
FREQUENCY 1.4 LINES/
WEEK DAYS 127

TRANSPORT 1 WEEK SKUS 18

TIME

FINAL ASSEMBLIES
CHINA PLANT 1
FINAL ASSEMBLY
FREQUENCY 1.5/WEEK AP CUSTOMERS
LOT SIZE 3.540 DEMAND 65,000
OUTSIDE CUSTOMERS: RATE ASSEMBLIES/YEAR
TRANSPORT 1 WEEK SUBASSEMBLIES
TIME TAKT RATE 1250/WEEK

Consequently, it is valuable to periodically take a step back
and look at the entire supply chain to confirm that it is an
integrated system that really makes sense. Questions to be
answered include the following:
§ Are we manufacturing products in the best locations,
aligned with emerging global markets?
§ Are we taking advantage of economies of scale or econo-
mies of flexibility in manufacturing?
§ Is our network flexible enough to take advantage of fre-
quent market shifts?
§ Would a different network design cut lead times to our cus-
tomers and make us more responsive? Would those shorter
lead times reduce inventory requirements — both pipeline
inventory and inventory at the receiving end?
§ Do we have a global inventory strategy, and does it cause
required inventories to be at the most appropriate locations?
§ Does our strategy employ mathematical analysis of replen-
ishment frequencies and lead times to set cycle stock, as
well as analysis of all variabilities to set safety stock?
§ Have alternate replenishment strategies been evaluated,
such as occasional expedited shipping, to reduce risk and
the need for high safety stock levels?
§ Are we taking advantage of postponement and finish-
to-order strategies where possible?
Value stream mapping is a proven practice at the man-
ufacturing level and can render an equal or greater
value at the supply chain level by providing a practical,
graphical and data-driven picture to frame analysis of
these factors.
This approach offers three key advantages: First, it
provides a pictorial view of the end-to-end supply chain
with key flow data and control signals, offering insights
that are hidden by traditional supply chain views. Second,
multifunctional discussions that naturally occur while
building the map create a broad, detailed understanding
of supply chain performance. And third, opportunities
are framed in a system-wide context, which encourages
comprehensive optimization.

30 SCMNOW JANUARY— MARCH 2019

 To deliver the full improvement potential, the value stream
map must follow a well-developed plan, with appropriate
preparation and follow up.
THE METHODOLOGY IN ACTION
W.L. Gore & Associates is a global materials science com-
pany dedicated to transforming industries, improving
lives and solving complex technical challenges in the
most demanding environments — outer space, the world’s
highest peaks and the inner workings of the human body.
Gore’s diverse products, such as GORE-TEX fabric, use
advanced materials to generate meaningful impact for
end users and consumers. Gore employs 9,500 associates
and has manufacturing facilities in the United States,
Germany, United Kingdom, Japan and China, and sales
offices around the world.
While recent supply chain initiatives had led to some degree
of supply chain optimization improvement, Gore supply chain
leaders knew that additional benefits could be achieved with
a more structured approach. They chose to apply high-level
value stream mapping to the entire supply chain. So far, the
process has been piloted on four supply chains representing
the variety of Gore’s businesses, leading to increasing value as
the process continues to advance.
One of the supply chains involved in the pilot manufactures
and delivers assembled products. The supply chain starts
with machined components purchased from suppliers in
Europe and North America. Subassemblies are made from
these components in plants in the United States and Europe.
Various subassemblies then are shipped to and from plants in
the United States, Europe and China for final assembly. Finally,
they are distributed to the world-wide customer base. Figure
1 shows a simplified portion of the map.
One insight gained from this map was that flow could be
significantly improved. For instance, final assemblies made on
any one of the three continents could be shipped to any other
Opportunities are framed in a system-
wide context, which encourages
comprehensive optimization.
continent, creating several crisscrossing paths. This had been
known prior to the mapping, but neither the full extent nor the
volumes involved were fully appreciated. As a result, the team
decided to make final assemblies in each customer’s specific
region, which saved considerable transportation costs and short-
ened delivery lead times.
The map also revealed that machined components were
purchased from several suppliers in the United States and
several more in Europe. Some components needed in the United
States were purchased in Europe and then shipped to the U.S.
plant. The reverse situation applied as well. The team therefore
chose to purchase all components from a single supplier and
have them shipped directly to the point of use, offering both
increased volume discounts and reduced shipping costs. A
related improvement was to have component suppliers prepare
subassemblies from their components, further simplifying the
supply chain.
Continued mapping of other Gore supply chains revealed the
following initiatives:

Figure 2. Workshop agenda

DAY TOPICS HRS

Project kickoff: Introductions, purpose of workshop, ground rules 1

SCOR metrics, business imperative 1
1
Training on value stream mapping and supply chain mapping 1
Review and edit the preliminary current state supply chain map 4
2 Analyze the map and find opportunities 7
Training on appropriate lean improvement practices 1
Inventory analysis—high-level check all inventories shown on map 1
3
Flesh out opportunities and rank business benefit and feasibility 4
Prioritize opportunities based on rankings 1
Review opportunities with business leadership—get alignment on high-priority projects to move forward 1
Develop project charters for selected opportunities: Action plan, benefits, potential barriers, process owner, project leader and timing 4
4
Highlight selected opportunities on the current state map; begin the future state map 1
Schedule follow-up tasks; workshop wrap-up 1

WWW.ASCM.ORG/MAGAZINE 31
 § Develop a global inventory strategy for each supply chain
(versus locally developed independent targets) to put inven-
tories in the most appropriate locations and significantly
reduce or eliminate duplicate or redundant inventory.
§ Share quality data between a plant producing a major inter-
mediate and the plant using it to make the final product to
avoid duplicate testing and shorten lead times.
§ Consolidate production equipment from two operations in
Asia to a single plant to cut lead time by three weeks and
free up floor space for future expansions.
The combined financial benefit from the first four initiatives
will approach $5 million annually when fully realized.
At Gore, the creation and analysis of the map and devel-
opment of improvement possibilities occurs in a multifunc-
tional, team-based workshop spanning several days. The scope
indicates who should participate, but it generally includes all
functions influencing supply chain performance — business
leadership, planning and scheduling, logistics, manufactur-
ing operations, procurement, quality, and sometimes human
resources and maintenance.
The first pilots were scheduled as five-day events. With lessons
learned and more thorough preparation, this has been shortened
to four days. As Figure 2 shows, preparation is critical. There
must be a clear scope and well-understood need for improving
the particular supply chain.
A preliminary supply chain map is developed prior to the
workshop, with most of the focus on material flow, how much
detail is needed to understand performance and detractors, and
how to best arrange the important nodes on the map to clarify
flow. Although very important for the workshop, less time is
spent on information flow.
The preliminary map is created in an electronic application,
then printed as a wall-sized copy to use during the workshop.
Figure 3. Ongoing supply chain optimization cycle
CREATE ANALYZE
BUSINESS SUPPLY CHAIN
ALIGNMENT PERFORMANCE
IMPROVE
SUPPLY CHAIN
PERFORMANCE
The electronic map is updated at the end of each day, and a new
copy is printed prior to the start of the next session.
Gore team members discovered that it is imperative to identify
the data that will be needed to understand supply chain perfor-
mance. Value stream maps tend to have standard data box layouts,
but they may need to be modified to focus on data that is relevant
to the scope of the supply chain being studied. Developing a data
collection plan with a core group of supply chain associates, with
planned periodic check-ins, helps the team stay on track and
provide the best information available. Extreme data accuracy is
not required; rather, the goal is data that is directionally correct.
Gore associates also understand the importance of agreeing on
objective criteria for ranking both benefits and feasibility of the
opportunities found prior to the workshop itself. This makes it

CRITICAL SUCCESS FACTORS

The following can make or break a value stream mapping workshop:
§ Leaders must provide clear direction on business priorities. If SCOR metrics have been developed, they can provide excellent guidance.
§ Engage key participants, including business leaders. These professionals provide significant benefits to the full extent they participate; their
participation at kickoff and final priority selection should be a minimum requirement.
§ Select the workshop week far enough in advance that participants who will be travelling have time to make reasonable arrangements.
§ Create a preliminary — 70-80 percent complete — supply chain map. This enables people to get to work quickly and shortens the
setup time required.
§ Insist upon an open, respectful, engaging environment where everyone feels they are being heard.
§ Be realistic about resources. Prioritize, focus on finishing the top few, then move on to the next cycle.
§ Commit to moving forward with chartered opportunities and ensuring the necessary resources are available.
§ Instill a rigorous follow-up process.

32 SCMNOW JANUARY— MARCH 2019

much more likely that there will be a fair comparison of all oppor-
tunities and that personal bias for pet projects won’t cause poor
decisions. Depending on the kind of opportunities identified, the
team sometimes needs additional training to better understand
how to resolve difficulties and determine the best approaches.
Post-workshop activities are critical to achieving the benefits
discovered, so they are addressed during the workshop. In addi-
tion to the specific project charters, follow-up review meetings
are scheduled to ensure that all projects are on track and to
supply chain performance. This continuous cycle also vali-
dates value for the optimization process, maintains momentum
for ongoing initiatives and enhances further learning about
the behavior and nuances of each supply chain.
Peter L. King, CSCP, is president of Lean Dynamics LLC. Prior to this, he
spent 40 years with DuPont in a variety of manufacturing automation, project
management and lean continuous improvement programs. King also is
the author of several books on lean. He may be contacted at peterking@
leandynamics.us.

provide help if any are not. Ongoing reviews with business
leaders ensure that resources aren’t being diverted to other
tasks and help overcome any newfound barriers.
CONTINUING AND SUSTAINING
Gore leaders view this optimization process as a continuous
cycle (see Figure 3). They believe that periodically reviewing
progress on current initiatives, updating the map to include
successes and seeking new opportunities based on evolving
business priorities are the best ways to sustain and grow
Dave Rurak, CSCP, is the enterprise supply chain leader for W.L. Gore
and Associates. He is accountable for all aspects of the end-to-end
supply chain, including procurement, manufacturing, logistics, contract
manufacturing, planning, quality and continuous improvement. Rurak
joined Gore in 2016 after a 34-year career with DuPont. He may be
contacted at drurak@wlgore.com.
Stephen Liberatore is enterprise operational excellence champion for W.L.
Gore and Associates, helping to build and apply Gore’s lean and continuous
improvement capabilities across functions globally. He also spent nine years
in manufacturing leadership responsibilities at Gore and six years at DuPont
in technical engineering and operations leadership roles. Liberatore may be
contacted at sliberat@wlgore.com.

DO SUPPLY CHAINS NEED AN

ANNUAL CHECKUP?
Presented by: Peter L. King, CSCP
President, Lean Dynamics LLC
Stephen Liberatore
Enterprise Operational Excellence Champion, W.L. Gore and Associates

Attend this SCM Live webinar to learn more from the authors of “Supply Chain Optimization
with High-Level Value Stream Mapping.” They will explore another global supply chain
real-world case in order to delve deeper into
■ the organic growth of supply chains
■ the need for a periodic reexamination
■ analysis and optimization methods
■ standardizing processes and sustaining results.

February 28, 2019 | 1:00 p.m. Central

Register at ascm.org/scmlive.

WWW.ASCM.ORG/MAGAZINE 33
MOVE
DOES YOUR SUPPLY CHAIN

AT THE SPEED OF

CUSTOMERS?
By Michelle Covey

I
magine the heart of a city: traffic on the roads, people exiting a bus as
they head to work, a vendor on the sidewalk selling flowers. Or picture a
quiet, suburban neighborhood with someone walking a dog, kids riding
bikes and the hum of a lawnmower. No matter where you are, the scene
likely also includes passing trucks from DHL, FedEx, UPS, the postal
service and a variety of regional parcel carriers. With the ever-escalating
amount of e-commerce shopping, the number of delivery vehicles on
the roads continues to skyrocket. Unfortunately, many of them also are
facilitating costly returns because a product turned out to be nothing
like its online representation.

The e-commerce boom is in full swing, so accurate deliveries are becoming

ever more essential. There is pressure to create an exceptional customer
experience, and winning the last mile is a huge part of this challenge. To
avoid added costs, inefficiencies and errors, industry trading partners must
collaborate on scalable methods and systems for channel consistency or risk
falling short of competitors who get it right.
Recognizing that fulfillment now demands a more modern approach, smart
supply chain professionals are working to create standardization that can
drive efficiencies and expand sales opportunities across networks. They are
focusing on three key areas related to last-mile success:
§ Enhance real-time inventory visibility using item-level radio frequency
identification (RFID) tagging.
§ Optimize the business processes most closely related to fulfillment.
§ Improve the accuracy and completeness of product information with
best-practice guidelines.

RFID
Real-time stock keeping unit (SKU)-level inventory visibility and accuracy
makes supply chains nimbler. This can be seen at retailers such as Macy’s,
which, according to Forbes, has been leveraging RFID for several years as a

34 SCMNOW JANUARY— MARCH 2019

WWW.ASCM.ORG/MAGAZINE 35

BEST PRACTICES FOR
BETTER SUPPLY CHAINS
A retail industry workgroup focused on product information
and images recently expanded a widely used guideline that
is designed to ensure consistency from digital experience to
physical product delivery. The Release 3.1 GS1 U.S. Apparel
and General Merchandise Best Practice Guideline for
Exchanging Product Images and Attributes provides detailed
guidance on how to create, manage and supply product
images and data attributes for use in commerce applications
across retail operations.
It also includes
§ an attribute for California’s Proposition 65 law, which
regulates substances that may cause cancer or
reproductive toxicity
§ electronic data interchange information for images
§ guidelines for montage and 360-degree images, as well
as 127 new attributes, bringing the total available attributes
to 193
§ a matrix showing product types applicable to attributes and
examples of attributes
§ in-document searches and navigation by enabling a
hyperlink from the attribute in the matrix to its applicable
definition or code list.
The 193 product attributes include product characteristics
such as handmade, reversible and dishwasher safe, as well
as best practices for presenting montage and 360-degree
images online. This additional information extends beyond
the traditional supply chain data already exchanged between
retail buyers and sellers and supports a consistent online
consumer experience.
Learn more at gs1us.org.
36 SCMNOW JANUARY— MARCH 2019
foundational component of its omnichannel operations. In her
Forbes article, “Is The ‘RFID Retail Revolution’ Finally Here? A
Macy’s Case Study,” Barbara Thau writes that the retailer plans
to expand its use of RFID to track every item across its fleet of
stores and fulfillment centers. Since the start of this initiative,
Bill Connell, Macy’s senior vice president of transportation,
told Thau that his company has noticed “a big impact” on sales
and profitability across several product categories from RFID.
The story notes that the RFID Lab at Auburn University has
found that the technology raises inventory accuracy from an
average of 63 percent to 95 percent and reduces retail out-of-
stocks by as much as 50 percent. RFID also can help ensure that
a company does indeed have an item in stock before fulfilling an
online order. Plus, complete and accurate product information
gives consumers a fuller picture of what they are buying, which
reduces the incidence of costly returns.
Like Macy’s, numerous retailers are publicizing their efforts
to optimize their supply chains for speed, agility and improved
customer experiences. Many achieve these objectives through
the implementation of item-level RFID for an enhanced view of
inventory quantities and their locations — from the factory floor
to the fulfillment center, store shelves or a truck heading to the
consumer. In addition, many retailers are starting to request that
items be RFID tagged at the point of manufacture. With this kind
of visibility, retailers can find a manufacturer’s products more
quickly, enabling them to fulfill orders faster.
Some manufacturers are responding by implementing
source-tagging, which enables trading partners to gain inven-
tory visibility via the sharing of data through their disparate
systems. This is critical to making products available for the con-
sumer regardless of the path to purchase. Impressively, Auburn
University’s RFID Lab reports that the use of item-level RFID
tagging in manufacturer systems alone delivers an 80 percent
improvement in shipping and picking accuracy and improves
receiving time by 90 percent.
OPTIMIZED PROCESSES
The recent Localz and eyefortransport supply chain business
intelligence whitepaper, “Last Mile Logistics,” includes feedback
from supply chain, logistics, retail and manufacturing executives.
The report reveals that the top challenges associated with the
last mile include delivery efficiency, managing customer expec-
tations and last-mile visibility. When asked what customers
are demanding most, fast delivery (same or next day) and full
visibility were the major concerns.
This study is just one indicator of a larger issue associated
with the last mile: the discrepancy between what the consumer
wants and what supply chains can actually deliver. For instance,
while customers believe that two-day shipping should be free,
fulfillment costs per order have risen 31 percent in the past
year due to investments in omnichannel capabilities, according
to the National Retail Federation’s “State of Retailing Online”
report. For industry to move at the speed of the consumer, there
is no room for waste — and optimizing the business processes
that feed fulfillment will be key to closing the gap.
Another key consideration is the significant increase in
the volume of returns. As a result of this trend, e-commerce
logistics costs, as a proportion of sales, are predicted to con-
tinue to rise in the next few years, according to the “Global
e-commerce Logistics 2017” survey released by Transport
Intelligence. Again, it’s clear that holistically driving waste out
of the supply chain is essential to ensuring fewer unnecessary
costs are added to a system already forced to absorb more.
With particular relevance for last mile, more automa-
tion based on standards at the fulfillment center contrib-
There is so much pressure
to create an exceptional
customer experience, and
winning the last mile is a
huge part of this challenge.
utes to on-time, accurate deliveries. Inefficiencies such as
mispicking can cause fulfillment centers to lose as much as
$400,000 every year, according to research by Honeywell.
Standards enable the alignment of trading partner data to
power RFID, bar code scanning and robotic systems used
during fulfillment. These tools help supply chains ensure
that the product picked from inventory is the correct one
leaving the fulfillment center or warehouse.
BEST-PRACTICE GUIDELINES IN ACTION
To keep customers happy and decrease the likelihood of costly
returns, leaders at footwear brand J. Renee knew it would be
critical to provide their shoppers with accurate website images,
product descriptions and deliveries. After all, superior online
and delivery experiences are even more essential in a space
where people cannot feel or try on the product in person. These
inefficiencies were further exacerbated by the sheer number
of website images J. Renee must aggregate from each brand the
company works with. The existing manual processes were far
too time-consuming.
In an effort to improve its capabilities, the business chose
to focus on effective collaboration with trading partners,
particularly with regards to the quality of product informa-
tion made available to consumers. This began with J. Renee
professionals working to reduce the complexities of image
sharing through the development and implementation of
the Release 3.1 GS1 U.S. Apparel and General Merchandise
Best Practice Guideline for Exchanging Product Images and
Attributes. (See sidebar.)
“For each shoe we make, we may have as many as 70 images
attached to it to meet the needs of our various retail partners,”
explains Coby Sparks, chief information officer and chief oper-
ating officer for J. Renee. “With as many as 60 styles produced in
any given season, you can see how the need for guidelines was
at the top of our wish list.”
The delays and duplication of effort were greatly reduced
with the industry’s conformity on a standardized way to pres-
ent images and data attributes. Though it seems simple, the
agreement to state “.jpeg” as the preferred electronic format,
for example, has been invaluable. Clear instructions for color
designation, sizing in dimensions and pixels, clipping path,
backgrounds, orientation, white space and other technical
specifications also significantly streamlined J. Renee’s processes.
Today, with greater efficiency and accuracy in its supply chain,
all of the company’s partners are benefiting.
WIN THE DIGITAL MARKETPLACE
With the need for ever more consumable and extended data,
supply chains must transition from inefficient, time-consuming
and often manual data-management processes and automate
operations in order to better anticipate what consumers want.
As fulfillment continues to grow in complexity, the need for the
standardization of processes will be an essential part of ensuring
efficiency and staying competitive. Walmart and Amazon are
raising the stakes daily and creating an unprecedented digital
marketplace. The most agile, forward-thinking supply chains
will win the race.
Michelle Covey is vice president of retail apparel and general merchandise
at the neutral, nonprofit GS1 US. She leads the GS1 US Apparel and General
Merchandise Initiative, which aims to help users deliver the right product to the
right place at the right time. Covey may be contacted at mcovey@gs1us.org.
WWW.ASCM.ORG/MAGAZINE 37
 S&OP AND THE
DIGITAL
Supply Chain
By Gregory L. Schlegel, CPIM
It’s amazing to think that, for
almost 50 years now, the supply
chain management profession has
embraced sales and operations
planning (S&OP) as a method for
balancing supply and demand
in complex networks. Along the
way, there have been signifi-
cant challenges associated with
both developing and sustaining
the process. But with so many
exciting and innovative new tools
emerging in our increasingly
global and digital landscape, the
future looks bright for the next
generation of S&OP.
Unfortunately, according to Gartner’s four-stage,
higher-maturity, S&OP model, nearly 70 percent of
companies are stuck operating in the reacting and
anticipating phases. These areas are most often cen-
tered around making a plan and maintaining a regular
S&OP meeting in order to balance supply with demand
for the good of the enterprise. Consequently, they are
totally focused on inward processes and tend to require
at least four years to solidify.
To address the uncertainty, complexity and risk that
come with global, digital supply chains, it’s time to make
the jump to the more mature S&OP stages: collaborate
and orchestrate. Collaboration involves expanding the
S&OP process to a company’s suppliers and customers;
orchestration describes a process that is driven by
demand sensing and shaping, as well as enterprise
trade-offs such as risk-reward analyses. In other words,
the focus shifts to profitability.
DIGITAL LANDSCAPE
The present global, digital landscape is ominous.
According to the “10 Key Marketing Trends For 2017”
report from IBM Marketing Cloud, 90 percent of the
data in the world today was created in the last two years
alone, at 2.5 quintillion bytes of data a day! One quintil-
lion bytes of data is equal to one billion gigabytes. That’s
WWW.ASCM.ORG/MAGAZINE 39
 overwhelming enough. And yet, it will continue to grow into
something even more astounding, called a yottabyte, in the
next five years. A yottabyte is equal to one septillion, or a
million raised to the seventh power, bytes. This is theoreti-
cally massive enough to fill one million datacenters and will
cost $100 trillion — more than the combined gross domestic
products of the entire world.
The best way to look at and better understand big data
is to dissect it into four V’s: volume, variety, velocity and
veracity. This breakdown helps clarify what big data is
really all about:
§ Volume: Big data is increasing exponentially, both for
people on a personal level and within our enterprises
and supply chains.
§ Variety: Many new forms of data now exist. The informa-
tion comes from computers, phones, photographs, texts,
THE S&OP INNOVATIONS TO WATCH
PREDICTIVE ANALYTICS involves mining information from data
sets in order to identify useful patterns and forecast the likelihood of
future events. As increased supply chain complexity puts pressure
on even the most well-run S&OP processes, accurate demand
planning via predictive analytics is a valuable advantage. Supply chain
management professionals can benefit by using predictive analytics to
analyze and consolidate data from all areas of the enterprise in order
to make informed, effective, real-time decisions.
PROBABILISTIC MODELING involves statistical analysis of
historical data in order to estimate the chance of an event occurring
again. In S&OP, it makes it possible for supply chain management
professionals to identify unknown risks and develop contingency plans.
40 SCMNOW JANUARY— MARCH 2019
the internet, streaming video, sensors in everything and
much more. Eight years ago, about 80 percent of all data
was structured, similar to rows and columns in relational
databases. That is the case no longer. Today, 80 percent
of all data is unstructured, free-form chaos.
§ Velocity: The speed with which data is now passing
through all of our devices is increasing exponentially.
Most existing systems simply cannot handle the pace.
§ Veracity: In the new global, digital landscape, data is
imprecise, amorphous and therefore must be vetted for
reliability before it’s possible to use it to make informed
and efficient decisions.
MAP TO MINIMIZE RISK
Because today’s networks have an escalating number of
nodes, there’s a much higher probability of a risk event
PYTHON AND R are open-source programming languages. R is
most often used to solve statistical problems, machine learning and
data science. It also offers packages that enable users to perform time
series analysis, panel data and data mining. Python offers a more wide-
ranging, data science methodology. Both can meaningfully enhance
the S&OP process.
APACHE HADOOP AND SPARK can process large data sets
with simple programming models. These solutions can create more
accurate analytic decisions in response to the internet of things,
artificial intelligence, the cloud and mobile. Hadoop also helps users
optimize enterprise data warehouses, drive better decision-making
and cut costs by moving “cold” or siloed data to a data lake.
THESE EXCITING TOOLS
CAN SUCCESSFULLY
SUPPORT THE JUMP
TO THE MORE MATURE,
OUTSIDE-IN S&OP STAGES.
occurring. Supply chain visibility thus has become a critical
part of top-notch execution and solid risk management.
Visibility is key, and this is best achieved by digitally map-
ping supply chains.
To produce an effective map, start small with a product
line maintaining a couple of stock keeping units. Graph
suppliers, then plot manufacturing plants or contrac-
tors. Next, add distribution centers, followed by any
warehouses — both the company’s and its customers’.
Finally, map the customers themselves.
When the map is complete, connect the dots to display
the flow of material. Next, use this information to identify
risks that have occurred or might occur. Put the risks on
the actual supply chain map, and assess them in order to
determine the most impactful risk-mitigation strategy. At
this point, it’s also possible to run what-if scenarios that
can help evaluate how a supply chain will react to certain
stimuli. This is known as stress testing.
MAKE THE JUMP
Big data, mapping and stress testing are a great place to
start. However, to cope with mounting uncertainty, com-
plexity and risk, additional resources are needed. Predictive
analytics, probabilistic modeling, programming languages
such as Python and R, the open-source software utility
Apache Hadoop, and the open-source computing frame-
work Apache Spark are some of the available tools supply
chain management professionals should familiarize them-
selves with. (See sidebar.) These solutions enable users to
§ digitize their supply chains
§
§
better handle uncertainty
more effectively read and make sense of unstructured data
§
§
quantify how their supply chains will react to challenges
develop statistically strong patterns associated with
supplier and customer buying habits and sentiments.
Perhaps most importantly, these exciting tools can suc-
cessfully support the jump to the more mature, outside-in
S&OP stages. Indeed, as they enable users across all kinds
of networks to accelerate learnings and enhance the pre-
cision of next-generation decision-making, the face of
S&OP will change dramatically — and a lot sooner than
many professionals may think. And with more and more
supply chain management professionals leveraging these
tools and embracing next-generation S&OP, companies will
benefit from progressing through the predictive analytics
maturity model:
§ Phase 1: Descriptive (What happened?)
§ Phase 2: Predictive (What might happen next?)
§ Phase 3: Prescriptive (What should I do about it?)
§ Phase 4: Cognitive (The system learns.)
Along the way, the objective must be for supply chain
management professionals and the networks they guide to
become better positioned to master complex decision-
making processes. As S&OP continues its dramatic shift —
from a structured, linear tool to a more ad-hoc, event-driven
process — it will be the ideal support mechanism for these
strategic imperatives. Supply chain management profes-
sionals would be wise to maximize innovations that help
them achieve high-frequency, high-impact decision-making
and accelerated learnings across the enterprise.
Gregory L. Schlegel, CPIM, is founder of the Supply Chain Risk
Management Consortium, executive-in-residence at Lehigh University,
and an adjunct professor of enterprise risk management at Villanova
University. He is also the former S&OP process owner at three Fortune
100 manufacturers. Schlegel may be contacted at gregschlegel@
thescrmconsortium.com.
WWW.ASCM.ORG/MAGAZINE 41
42 SCMNOW JANUARY— MARCH 2019
By Rajan Suri

I
ncreasingly, today’s manufacturers are reorganizing their
shop f loors into cells. The APICS Dictionary explains that a
cell is “a manufacturing or service unit consisting of a number
of workstations and the materials transport mechanisms and
storage buffers that interconnect them.” Meanwhile, order quan-
tities are getting smaller, as businesses are seeing more orders
for customized products. To serve this high-mix, low-volume
environment, companies need to route jobs through varying
combinations of cells.
Unfortunately, there have been no significant changes in the use
of materials requirements planning (MRP) and control systems.
Traditional systems do not take advantage of the cell structure.
Plus, MRP has difficulty addressing the variability in a high-mix,
low-volume business because MRP logic can lengthen lead times,
causing late deliveries and an increasing cycle of rush jobs. Add-on
solutions such as finite capacity scheduling and manufacturing
execution systems can be expensive and take a lot of time to imple-
ment. Finally, kanban — while simple and straightforward — is
inappropriate for low-volume or custom production.
There is an effective and proven solution: POLCA. POLCA stands
for paired-cell overlapping loops of cards with authorization, with
each of these terms signifying a feature of the system. This a card-
based, visual tool that manages job flow by controlling which jobs
should come next in order to meet delivery targets. In even the most
dynamic environments, POLCA ensures that upstream operations
use their capacity effectively by working on jobs that are needed
downstream while preventing work-in-process buildups when
bottlenecks appear unexpectedly.

WWW.ASCM.ORG/MAGAZINE 43
 REAL-WORLD SUCCESS
Alexandria Industries specializes in small batch and custom
aluminum extrusions. For several years, the Minnesota-based
company had struggled with long lead times and late deliveries.
Alexandria Industries professionals tried numerous production
control strategies — including enhancing MRP and implement-
ing kanban — but none of these approaches had alleviated the
problems. Newly implemented shop floor production cells
reduced lead times from 12 weeks to about 8 weeks, but the
overall material flow problem remained, and late deliveries
still required herculean expediting efforts.
After much deliberation, Alexandria Industries’ manage-
ment decided to implement POLCA. Within months, the busi-
ness had cut both lead times and work in process (WIP) by
more than 50 percent and was achieving near-perfect on-time
delivery. This led to a dramatic increases in sales. Moreover,
less expediting and rush shipping expenses also boosted
profitability. Time that managers had previously spent on
hot jobs was greatly reduced, allowing these people to focus
on strategic business efforts. Perhaps most importantly, the
benefits of POLCA are not confined to the shop floor; they
extend to the entire organization.
AUTHORIZATIONS
Even though the A comes last, the starting point for POLCA is
the concept of authorization. Authorization dates for each cell
in a job’s routing are calculated by backward scheduling from
the due date using the planned cell lead times. Sorting through
the data for all jobs leads to the creation of an authorization
list. It contains only jobs that have not yet been launched into
the cell, sorted by authorization date.
A/B LOOP B/G LOOP
CELL B
CELL A CELL G
CELL D CELL K
Figure 1: Overlapping loops
44 SCMNOW JANUARY— MARCH 2019
A central part of POLCA is that jobs with a date of today or
earlier are authorized, while those with a date of tomorrow or
later are not. Only authorized jobs can be launched, and these
are highlighted in the list for visibility.
PAIRED-CELL LOOPS OF CARDS
If jobs flow between any two cells, they are connected by a
POLCA loop. The loop contains circulating POLCA cards, which
are labeled based on the origin and destination cell. To further
enhance the visual nature of the system, cells are assigned
colors and cards are color-coded.
POLCA cards signal the availability of capacity at destina-
tion cells. For example, when Cell A is authorized to start a
job destined for Cell B, the Cell A team must have an A/B card
to launch the job. Additionally, each cell has a POLCA board
The benefits of POLCA are not
confined to the shop floor; they
extend to the entire organization.
where available cards are organized. If an A/B card is available
on Cell A’s board, the job can be launched. Then, the A/B card is
kept with the job. When Cell A completes the job, it sends the
job, along with the A/B card, to Cell B. The card conveys the
message, “We finished one of the jobs you sent; you can send
us another.” Thus, a returning POLCA card signals available
capacity in a downstream cell.
POLCA cards ensure that upstream cells work on jobs that
continue to flow downstream, instead of those that will end up
sitting at a bottleneck. These capacity signals are a key reason
why POLCA works so well in low-volume and custom production.
To clarify: Suppose there are five cards in the A/B loop. If no
A/B card is available to Cell A, this means there are five jobs
already at, or on their way to, Cell B. Working on yet another
job would result in more piling up at Cell B. Instead, POLCA
rules redirect Cell A to work on a job destined for another cell
that could benefit by receiving it.
OVERLAPPING
The remaining portion of the POLCA acronym is “overlap-
ping.” (See Figure 1.) To understand this element, consider a
situation in which Cell A has completed a job going to Cell B. It
travels — along with the A/B POLCA card — to Cell B. Suppose,
after Cell B, this job will go to Cell G. This means there is a B/G
POLCA loop as well. Therefore, when the job arrives at Cell B,
this does not mean the team begins working on it. Rather, the
cell must make a decision.
 The POLCA board at Alexandria Industries
enables team members to organize cards.
To do this, the team needs to answer three simple questions:
What’s the next job on the authorization list? Has the material
for this job arrived from the upstream cell? And do we have the
right POLCA card for this job? If there is an authorized job on the
list, and the answers to questions 2 and 3 are “yes,” then the B/G
card is allotted to this job and it is launched into Cell B. If not, the
team should engage in secondary activities, such as continuous
improvement, or assist other cells that are bottlenecked.
STARTING SMALL
The team at Alexandria Industries decided to first try POLCA in
a small, self-contained area. They chose products that traveled
from one of the extrusion presses to the centerless grinding
cell. This was a good test case because products on this routing
suffered from inconsistent deliveries.
Alexandria Industries professionals came up with three
problems to be solved:
1. Reduce queue times by eliminating the padding that had been
put in place as a safety margin for unexpected problems,
errors and schedule changes.
2. Eliminate the stocking of semi-finished products. In the past,
commonly used, semi-finished products were made to stock
and stored to optimize batch sizes and reduce setups.
3. Implement a make-to-order process on the extrusion press
to reduce the extrusion batch size.
Once leaders approved these objectives, team members
proceeded by training the affected shop floor and office per-
sonnel. Next, they designed the POLCA cards (see Figure 2)
and chose POLCA board placement. They decided how POLCA
cards would be incorporated into the shop packet and how
the packet would move along with the product. Then, it was
decided that the team in the second cell would be responsible
for the return of the POLCA cards. Lastly, a detailed procedure
was established for the scheduler to assign the inventory of
semi-finished products until they could move to a make-to-
order approach.
The transition to POLCA at Alexandria Industries was smooth
and swift. It was clear early on that POLCA was working. Floor
space started to visibly clear up as WIP decreased and deliv-
ery performance improved. Furthermore, in less than two
months, expediting efforts were almost eliminated. These
results convinced decision-makers to extend POLCA to the
whole factory.
SIMPLE AND EFFECTIVE
POLCA has been applied in large multinational organizations
and job shops with only 10 machines, in a wide variety of indus-
tries and international locations. These implementations have
demonstrated that, through POLCA, companies can reduce lead
times, eliminate expediting and achieve the highest levels of
Alexandria Industries POLCA Card
LY CG
Origination: Loewy Press (01003)
Destination: Centerless Grinder (04019)
Serial Number: LY/CG 009
Figure 2: A POLCA card for the first loop at Alexandria Industries
on-time delivery. Factors contributing to the success of this
uncomplicated and practical system include the following:
§ POLCA is designed for high-mix, low-volume production,
which is crucial for companies wanting to succeed in
demanding production environments.
§ Shop floor personnel find POLCA easy to understand.
They support its operation and stimulate organiza-
tion-wide buy-in.
§ Because it is a visual system, POLCA cards and boards pro-
vide instantaneous feedback to workers and management
on the status of any area.
§ POLCA does not require complex software, so factories
can implement it quickly and without great expense.
§ The tool builds on the increasingly popular cell structure
and supports better coordination among cell teams.
“We had struggled to implement a pull system for our
high-mix, low-volume products,” explains Tom Schabel, CEO
of Alexandria Industries. “Through implementing POLCA,
we dramatically reduced our work-in-process, freeing up cash
and creating additional space for manufacturing. In addition,
our internal chaos decreased, and customer satisfaction and
profitability heightened.”
Rajan Suri is emeritus professor and founding director of the Center for
Quick Response Manufacturing at the University of Wisconsin-Madison.
He is author of several books on quick-response manufacturing and recently
published The Practitioner’s Guide to POLCA: The Production Control
System for High-Mix, Low-Volume and Custom Products. Suri may be
contacted at rajan.suri@wisc.edu.
WWW.ASCM.ORG/MAGAZINE 45
 CASE STUDY

HackerOne
Early on, GM merged all cybersecurity
employees try to
activity — both product and corporate — into
hack a client.
one central organization. But the cybersecu-
rity team members realized they needed more
help in identifying and resolving vulnerabil-
ities within the supply chain than what the
team could provide.

THE SOLUTION
HackerOne is a hacker-powered security
platform that works with companies and
organizations across all industries to set
up vulnerability disclosure policies (VDPs)
and bug bounty programs. When an organi-
zation implements a public VDP, this means
they’re open to any security researchers
hacking their system and alerting them of
any flaws uncovered. HackerOne uses eth-
ical hackers and security researchers from
all around the world to find security flaws
within security systems.
GM implemented a public VDP through
HackerOne. The goal was to allow hackers
to safely and legally report security threats
and vulnerabilities within GM’s supply chain.

Hackers Help External hackers can submit threats in GM’s

systems through its VDP. Once they do so, the

Eliminate Supply
internal GM security team responds imme-
diately to fix the problem.
The global community of friendly hackers

Chain Vulnerabilities
brings diverse perspectives and techniques
that can identity vulnerabilities quickly. GM is
an example of an innovative company embrac-

at GM ing the hacker community to surface bugs

and supplement the great work their internal
security team is already doing.

THE CHALLENGE THE RESULTS

General Motors (GM) designs, manufactures and distributes vehi-
CHALLENGE cles and vehicle parts. One of its specializations is technologically
Identify and eliminate advanced cars, such as those with built-in 4G LTE connectivity,
cyber security threats
semi-autonomous vehicle and electric vehicles.
SOLUTION Nearly two years ago, GM leaders realized that the data limits of
HackerOne Response
its OnStar Wi-Fi hotspot system could be hacked. The security flaw
COMPANY allowed anyone to exploit the system and take advantage of unlimited
General Motors Wi-Fi. With more than 4 million cars equipped with this system, the
HEADQUARTERS consequences could have been massive.
Detroit, Michigan “We’ve always approached security with a diverse set of tools
Since the program launched in 2016, GM
has resolved more than 700 vulnerabili-
ties across its entire supply chain, thanks
to the help of more than 500 hackers. The
security improvements extend to key sup-
pliers and other external partners, making
it one of the most comprehensive VDPs in
any industry.
“Leveraging HackerOne’s relationship
with the research community and seeing
PHOTO CREDIT © ISTOCKPHOTO.COM

OPERATION in our toolbox,” says Jeff Massimilla, vice president of global firsthand the results they provide has been
Automotive cybersecurity at GM. “In today’s connected world, it’s critically extremely encouraging,” Massimilla says.
manufacturing important that product and corporate cybersecurity functions “Hackers have become an essential part of
are aligned across all areas of the business.” our security ecosystem.”

46 SCMNOW JANUARY— MARCH 2019

SAVE THE DATE
FOR ASCM 2019
IN LAS VEGAS!
Keep pace with the accelerated rate of change.
Expand your knowledge at ASCM 2019 - the inaugural
conference from the new Association for Supply Chain
Management (ASCM). Education sessions are segmented
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Learn more at ascmconference.org
 LESSONS LEARNED
KRITCHAI
ANAKAMANEE
is a lean and productivity
consultant. He may
be contacted at
kritchai.a@gmail.com.
Have you learned a
lesson at work that you
would like to share with
SCM Now readers?
Submit an article of
approximately 750
words that teaches,
enlightens or amuses to
editorial@ascm.org.
48 SCMNOW JANUARY— MARCH 2019
Delivery
Improvement
Requires Careful
Planning
W hen it comes to business competitiveness, or productivity
improvement in general, the first two factors that any supply
chain organization must thoroughly review are quality and price.
However, there is another consideration that is no less important,
yet often overlooked and underrated: delivery.
I once consulted with a canned-food manufacturer located in Samut
Sakhon Province (about 50 kilometers from Bangkok), which is a
subsidiary of a large Thai food giant. At this company, packaging is
the primary output, and 80 percent of its products are sold to other
subsidiaries of the same food chain.
Business leaders wanted to significantly improve delivery perfor-
mance, which was at an average delay of 4.9 days. The improvement
initiative began by my team establishing a project room, in which
we held team meetings and posted relevant data on the wall. This
visual management technique was designed to enable everyone to
clearly see current status, key data, objectives, challenges and more.
In the next phase, we debated how to assess the project and decided
on key performance indicators. We evaluated the situation and
defined what success would look like at the
end of the project. Along the way, we found
that the company had kept track of raw data,
but never actually analyzed it. Hence, we
passed on our findings to appropriate pro-
fessionals, who addressed the issue.
While the company had been computing
delayed deliveries, there was no measurement
of actual perfect orders. Certainly, delivery
performance is about more than orders just
arriving on time; it also requires them to be
delivered in full. To address this, we added a
calculation for short deliveries to the assess-
ment key. In doing so, it was discovered that
a whopping 23.6 percent of deliveries were
short. Findings also revealed that, in the
month the organization performed best, the
delayed ratio was 0.5 percent, while the worst
month was 2.5 percent. The average point of
delayed delivery was 1.7 percent.
It had been assumed that delayed deliv-
eries were due to the large amount of cus-
tomer order entries. However, when we ana-
lyzed the information from other months,
we found that, in the month we received
the second-highest number of entries, the
delayed delivery ratio was only 1.4 percent
(below average). After further investiga-
tion, it was discovered that the most impor-
tant factor affecting delivery was internal
company management.
The following step in this improvement ini-
tiative was to add information on the project
room wall so employees could process it daily
and post their analyses on the wall. Whenever
a complication or issue was raised, they would
write about it in order to allow other members
to understand and find a solution.
CLARIFICATION IS KEY
You may have noticed that actual improve-
ment hasn’t taken place yet. All of the activ-
ities I described were part of clarifying and
understanding the problem rationally. Indeed,
this must be the first step of any successful
improvement project.
In the end, though, very positive results
were achieved. Delayed deliveries dropped to
PHOTO CREDIT © ISTOCKPHOTO.COM
1.2 percent, short deliveries fell to 5.2 percent,
and average delay is now at 1.8 days. I have no
doubt that it was the careful planning that
made these advancements possible.
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