Supply chain orchestration

L F is constantiy searching for new companies to add to the network, as well as new product opportunities. Over 100 years of experience has provided the company with a deep knowiedge of its business and the ability to identify those organisations that have the right capabilities to enhance and sustain the growth and diversity of the network. Co-ordination costs are high, but L F has demonstrated that these are more than offset by the advantages of flexibility offered by its loosely coupled network. 

Another model for the co-ordination of complex networks that has been proposed is the idea of a 4PL or a lead logistics service provider. 

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TOC will find, we believe, widespread application in supply chain orchestration. The theory of constraints was described earlier in Chapter 25. In formulating this theory, Eli Goldratt and Robert Fox observe that a production system can produce no more than its "capacity constraint resource," or CCR. They use this principle as a foundation for what they call the "drum-buffer-rope way." While the authors focus on individual factories, the lessons apply equally to the supply chain. 

The JV will then identify those specialist providers of logistics services who between them will execute the different activities in the supply chain. Using its information systems the JV now becomes the supply chain orchestrator and delivers to the client, against agreed service and cost goals, a complete network management capability. 

Consider supply chains that face significant short-term changes events that require rapid adjustment and adaptation of flows. In a book titled Orchestrating Supply Chain Opportunities, Iyer and Zelikovsky [63] focus on the information system as one tool to manage events that include weather-related disruptions (like Hurricane Katrina), product failures that require rapid redesign (Uke the Kryptonite bicycle lock), demand surges (such as those faced by Amazon.com), among others. 

Iyer, A., and Zelikovsky, A. Orchestrating Supply Chain Opportunities. New York Business Expert Press, 2011. 

Supply chain leaders manage complex systems with complex processes with Increasing complexity. Leaders orchestrate the trade-offs vertically and horizontally to deliver the business strategy. Laggards let the supply chain whip them around. 

With greater maturity, the company aligns the supply chain market to market to become market driven. In this stage, the supply chain senses buy- and sell-side market shifts and orchestrates tradeoffs horizontally in a bidirectionally coordinated response. This represents less than 1 percent of companies interviewed. 

Value networks do not just happen. Extending the supply chain outward from the enterprise through strategic relationships is an integral piece of the supply chain strategy. It takes time. It is a staged progression. Concentrated effort and a shared vision are essential. Network orchestration is critical. 

Staff and plan for risk scenarios. As the network is outsourced, the need for network orchestration increases. Since the building of networks is often a focused effort to reduce costs, companies new at building networks usually understaff coordination. As a result, the supply chain becomes more fragile. 

Build capabilities for network orchestration. While you can outsource value chains, you cannot outsource the risk of the value chain. As the supply chain is outsourced, staff for value chain orchestration and process coordination. 

Traditional view of supply chain excellence. For demand-driven initiatives to be successful, they must extend from the customers customer to the supplier s supplier. The concepts of demand latency, demand sensing, demand shaping, demand translation, and demand orchestration are not widely understood. As a result, they require education and a business champion. Organizations not familiar with the concepts will not understand why the demand management processes need to change. 

From 1990 to 1998, in the early phase of supply chain evolution, the supply chain pioneers focus was on the development of vertical processes. It was a zealous focus on optimizing vertical silo processes of make, source, and deliver. As a result, there was little cross-functional overlap and as a consequence, there was no way to orchestrate tradeoffs in supply chain execution. In the last five years, the focus on planning processes has shifted from vertical to horizontal. In addition, from an inside-out (within the organization) to an outside-in (from the external markets in to the organization) focus. Both of these shifts are fundamental to the building of market-driven value networks. 

Supplier development programs matured the fastest in discrete industries. The Nokia/Ericsson story was a catalyst for high-tech and discrete manufacture adoption. A supplier development program is an orchestrated initiative using the supply chain strategy to define supplier relationships. It includes one or more of these key elements ... 

Supply chain center of excellence. The supply chain center of excellence orchestrates the horizontal processes and... 

Supply chain excellence has evolved. The definition has morphed from the efficient supply chain to a market-driven value network. Today, the concept of a market-driven value network is largely aspirational. It is a new goal. As supply risks and costs have grown, companies realize that a demand-driven approach is not sufficient. The focus needs to be about more than the channel, instead, the supply chain needs to be driven through strong horizontal processes bidirectionally from market to market. Accomplishing the goal requires a redefinition of both buy-side and sell-side processes, and the use of new forms of analytics to sense, shape, and orchestrate bidirectionally market to market. 

Project B, on the other hand, must be orchestrated between departments (Manufacturing and Engineering), and one department or the other might bog down in implementing the project. This increases the effort required by senior managers. Project C must be orchestrated along the supply chain, and some distributors may not participate or see value in the program. So, real implementation hassle and risk can be expected. 

Keywords outsourcing. Supply Chain Management, logistics service provider, chain orchestration, food industry... 

Because the achievement of higher levels of adaptability generally requires inputs from a variety of other entities in the wider supply/demand network, the need for co-ordination across the network arises. As supply chains become more virtual than vertical there is a growing requirement for orchestration. Whether that orchestration task is performed by fhe firm itself or by a specialist external logistics service provider or 4PL , the ability to structure appropriate networks and to synchronise activities across the nodes and links of those networks is paramount. 

The aim within a supply chain must be to keep materials flowing from source to end-customer. The time dimension in Figure 1.4 suggests that parts are moved through the supply chain as quickly as possible. And in order to prevent local build-ups of inventory, flow must be orchestrated so that parts move in a coordinated fashion. The term often used is synchronous. Caterpillar Inc. makes complex earth-moving equipment, and there are literally thousands of component parts and subassemblies that must come together in the final assembly processes. The vision is that parts and subassemblies should flow continuously through the supply chain, all orchestrated like a ballet (Knill, 1992 54) ... 

What actions are needed to address the problems of inter-firm planning and control listed in section 6.1.3 How would you go about orchestrating material movements (for example cheeses, shown on Figure 1.1) across a grocery supply chain ... 

Automotive assemblers and their inbound supply chains have developed many solutions to orchestrate the manufacturing and delivery of the thousands of parts that go to make up a vehicle. The many potential inbound logistics solutions are summarised in Figure 9.3. 

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