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management as a core management discipline. During the 50 years of mass production as the main feature of the industrial landscape (1920 1970), the pursuit of quality and materials and labor efficiency dominated management thinking. It was at this stage of development of the global industrial landscape that PRTM came on the scene in 1976. At our beginnings, we worked primarily with the emerging high-technology sector to address its problems of high-volume production, rapid innovation, and globalization. The challenges faced by our clients forced our consultants to leverage and integrate many of the disciplines of the time in both innovative and practical ways. For example, we realized early on that MRPII, just-in-time (JIT) manufacturing, kanban, statistical process control, total quality management, and process management all could be brought together intelligently to yield a superior result. In the mid-1980s, under the topic of operations strategy in a series of executive seminars that PRTM conducted on behalf of the then-fledgling American Electronics Association, we talked about a cross-functional set of integrated processes that we called supply chain management. In 1986 we conducted a client-sponsored study of the global manufacturing strategies of almost 100 major high-tech manufacturers. (The study was refreshed in 1989 1990 and was titled, The Emergence of the Globally Integrated Corporation. ) It concluded that we were entering an age of global integration between major economic regions and identified the competitive importance of what are now thought of as core supply chain processes. In 1988 George Stalk, Jr., published a seminal article entitled, Time The Next Source of Competitive Advantage, in Harvard Business Review. Stalk s article added the dimension of time to the other processmanagement dimensions of cost and quality. And by 1989 the empirical and conceptual bases for competitive, customer-focused, cross-functional supply chain management were in place. These disparate threads of emerging practice came together in one significant client project of PRTM. In 1989 1990, Rick Hoole, a PRTM director, began work with Fred Hewitt of Xerox Corporation to examine the opportunities that might be available to Xerox through globally integrated cross-functional process management. The joint PRTM-Xerox project team concluded that there were four core supply chain processes that Xerox needed to manage plan, source, make, and deliver. Xerox then formed a project team to deliver results based on the findings of the study and realized benefits amounting to 2 percent of revenue over the course of the next few years.
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Another early adopter of supply chain management as a discipline was Digital Equipment Corporation (DEC). It contracted with PRTM in 1991 to launch the first of what became a series of integrated supply chain performance benchmarking studies sponsored by IBM, DEC, Xerox, Lotus Development Corporation, and NCR. To ensure that this study did not simply become a compendium of functional metrics, PRTM sought to create a new set of truly cross-functional supply chain metrics. It is remarkable to reflect that it was just 13 years ago that the activity-based definition of total supply chain management cost was first designed and the now-widespread metric of cash-to-cash cycle time was created. With a process definition (plan/source/make/deliver) and with performance benchmarks available, PRTM was able to introduce a new approach to managing global operations an approach that yielded tangible benefits but required much change at companies. Industry s early adopters, together with sponsors and participants in the early benchmarking studies by PRTM, came together with us and three leading academic institutions (MIT, Stanford University, and Pennsylvania State University) in June 1994 to form the Supply-Chain Consortium. Its aim was to promote the success of supply chain integration and implementation efforts across industries. The consortium had four objectives for the first phase of its work:
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To establish a common baseline definition of the supply chain To define a common set of critical supply chain performance metrics To adopt a framework for consideration, presentation, and application of supply chain metrics To promote sharing of supply chain best practices and implementation approaches
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PRTM s leadership of this body resulted in creation of the metrics that would define the new Supply-Chain Operations Reference-model (SCOR) developed two years later and now adopted widely by industry through the Supply-Chain Council. While most of this pioneering work was being done in the United States, January 1992 was the scheduled date for the dismantling of trade barriers (which included product specifications, mobility of labor, and border delays) between member states of the European Economic Community. This dateline encouraged many companies to look at the opportunities to create integrated European manufacturing and distribution operations
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