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to replace the country-based strategies that had been the standard operating model since Ford Motor Company established operations in Europe in the 1920s. Working with the emerging supply chain management frameworks and metrics, PRTM helped many clients to use the cross-functional plan, source, make, and deliver framework to create a vision of integrated European operations. One early adopter of the integrated supply chain methodology was Pitney Bowes. At that time, it had a complex manufacturing and customization operation that not only was costly but also resulted in long order fulfillment lead times. Integrated ERP systems functionality was not available in 1992; in fact, most companies had inherited country-based models that led to islands of information about customer orders and in-country inventory levels. To deliver cross-functional (and cross-entity) integration with a focus on time-based competition, Pitney Bowes developed a technology solution for a pilot program for postal franking machines destined for the German market. The solution was to install a fax machine on the manufacturing floor in England. This enabled countryspecific machine variants to be configured to order, which reduced customer order lead times by weeks and eliminated finished goods inventory and configuration activity in country warehouses. In 1994, PRTM also worked with ICL Computers and Siemens Nixdorf, Ltd., in the United Kingdom to define future integrated supply chain architectures using the plan, source, make, and deliver process framework. In both these projects we used a top-down process design approach, applying the four-level process logical data modeling at the core of the Structured Systems Analysis Design Method (SSADM), an early CASE methodology that we applied to integrated process design. This modeling approach became part of PRTM s supply chain project toolkit. By 1995 it was clear that no standards existed by which our clients could objectively assess the value of the functionality of the new ERP systems that were emerging. In collaboration with AMR and a representative group of companies drawn from our respective client lists, we began to develop a supply chain process reference model. Many of our clients participated in giving design input to and reviewing the output of the working parties engaged in development of the model. In Boston, in November 1996, the SCOR model was presented to an audience of almost 100 major companies. This meeting resulted in formation of the Supply-Chain Council (SCC), formally launched in the spring of 1997 as an independent, not-for-profit organization. The SCOR model was transferred subsequently to the SCC, which is charged with supporting its development
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through research, use, and education. The SCC now numbers over 800 corporations worldwide. Since 1997, supply chain management has become one of the major topics and challenges facing all companies, and the past seven years have been years of growth, convergence, and adoption of supply chain best practices. Now that many companies have addressed major supply chain challenges through selection and implementation of ERP and APS tools, they are finding that after implementation they are once again challenged with discovering and managing the core disciplines of supply chain management. Unlike the situation in the early 1990s, today s supply chain managers have many tools to support supply chain management in the form of integrated information systems, in-depth supply chain benchmarks, a mature SCOR process model, and an extensive community of practitioners. The challenge of the next decade is to leverage the founding principles of supply chain management and move this management discipline forward. This book is about the future, not the past. It structures current emerging best practices into five core disciplines: 1. 2. 3. 4. 5. View your supply chain as a strategic asset. Develop an end-to-end process architecture. Design your organization for performance. Build the right collaborative model. Use metrics to drive business success.
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In doing so, it points to some of the emerging practices likely to determine future competitiveness. We ll outline briefly some of these practices, handled in more depth at the conclusion of each chapter. In 1 the supply chain is viewed as a strategic asset, something that leading companies have already begun to do but which will represent a challenge for many. Most companies do not have a documented and communicated supply chain strategy, and when asked to create one, many practitioners confess that they would not know how to write one or get top-level sanction for it. At the core of the difficulty is choosing your basis of competition: Is it cost, innovation, quality, or service Where are the mathematical optimization models, the knowledge base, the decision trees, and the decision-making bodies Without these, what allows a supply chain practitioner to set down clearly the corporation s basis of competition and develop a strategy that supports it When we have challenged management teams to make a decision on the tradeoff between inventory levels and service levels, they have had a hard time
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