Supply chain projects

Major supply chain projects require great effort. Heckmann, Shorten, and Engel (2003) refer to Herculean SCM efforts, which are commensurately rewarded—they report that companies making the biggest commitment to improving their SCM system outperform those where the effort is no more than incremental. Yet such projects bring considerable risk and are not easy to complete on time, on budget, and with the desired functionality. 

Supply chain project management requires scope setting. Lack of a definition hinders drawing boundaries for supply chain projects. 

Chapter 2 described examples of buzz about supply chains. Buzz is behind the scenes conversation regarding a trend. Concepts in this chapter, many of which were introduced in Supply Chain Project Management j describe six drivers, often hidden from view, fueling the need for change in the supply chain. The drivers mirror environmental trends — economic, technological, competitive, political, and social. We also describe a framework for defining supply chain requirements for flexibility. We view flexibility requirements as the cornerstone of supply chain design. 

Wal-Mart is an illustration of the innovation driver for supply chain projects. The company uses its supply chain capability to identify products that yield the highest profit. For a retailer bringing thousands of products to market, pegging profitability at the product level is a vital, if not daunting, task. Relying on data, not the intuition of buyers and merchandisers, is key. 

TABLE 3.3 Three Scenarios for Developing Supply Chain Projects... 

Ayers, James B., Supply Chain Project Management A Structured, Collaborative and Measurable Approach, Boca Raton, FL St. Lucie Press, 2004. Chapter 3. 

TABLE 5.4 Application of the Supply Chain Project Grid... 

Table 5.4 applies the model to a few examples of supply chain projects. Just because a project extends beyond the immediate company, it need not be strategic. It could be catch up to reach parity with a more aggressive competitor or of little relevance to competitive position. So, venturing outside the company to do a supply chain project alone is not a prerequisite for a strategic project. 

This book describes tools for developing or overhauling supply chains. As important as the execution step is the project selection step — that is, deciding which tool to use. The assessment tools described in this chapter will yield a more effective portfolio of supply chain projects to implement avoiding the pursuit of ineffective, dead-end efforts. 

Definition of enterprise, including the level of the supply chain project (function, business unit, or supply chain)... 

In Figure 5.4 we described the types of supply chain projects an organization might undertake. The six types included strategic and nonstrategic projects at the function (or department), the business unit, and the supply chain (multicompany) levels. 

Supply Chain Project Management A Team Framework... 

Note that the maturity matrix applies to any project work conducted in the organization, not just supply chain projects. Other project types could include new product development, information systems improvements, facility additions, and incorporating acquisitions into operations. 

Supply Chain Project Management — A Team Framework 183... 

Figure 15.1 shows three sub-projects (A, B, and C) on the path from where we are in the lower left-hand comer to our destination at the upper right. Of course, in real projects, there could be more or less than three sub-projects. Figure 15.2 is another view that shows the phasing of a supply chain project. The view includes the model elements from Figure 15.1 and shows the sequencing of the five SCM tasks. 

Figure 15.3 provides yet another view of the supply chain project called the Work Breakdown Structure, or WBS. The WBS is a deliverable, or work product, view. For the supply chain project, this overall deliverable is the Implemented SCM Strategy shown at the top of the WBS. The components of the implemented strategy range below in the WBS structure. Projects A, B, and C, which could include partnership development, process improvements, or new systems or facilities, will also have their own deliverables. Table 15.2 summarizes each of the WBS deliverables. 

SCM project office A permanent function to oversee the supply chain project and sub-projects... 

Completing supply chain projects requires participation from many — including those in different departments. These include executive, technical, and user levels. The functional areas from which participants are drawn will depend on the project. They should work through teams at the three levels shown in Figure 15.4. The Steering Committee (SC) includes the project sponsor and other managers. It is important that the SC be able to make decisions regarding the course of the project. 

In Step 2, the Design Team should consider each listed issue. Where possible, Design Team members, by consensus, should make decisions regarding issues. In many cases, an issue resolution is not known. If its priority is high, it then becomes a requirement to address quickly in an improvement effort. Out of these requirements evolves an agenda for the supply chain project. This agenda is expressed in terms of issues to address... 

There is much research available on the topic of IT project management. Since this Handbook s first edition, a follow-up work on the topic of supply chain project management explored root causes for IT project shortcomings. Chapter 9 of that work used IT project lessons learned as case studies for avoiding the pitfalls that go with any supply chain project. This section summarizes that research into root causes for IT project failures. 

Many organizations place huge bets on technology and other supply chain projects with little understanding of the payoff and the risks. The software supply is abundant and vendors constantly produce new products. The supply chain manager is on his or her own in evaluating a solution in the form of software or technique in terms of its fit with company needs. 

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