Discussion Responses

Refer to the Discussion question below when replying to ALL (3) Forum posts:

Discussion Prompt:

Consider a supply chain for an organization you are familiar with.
 

1. How could the organization create more value for its stakeholders?
 

2. Which of the four future freight flows should it prepare itself for?

3. What should the organization do to prepare for the future flow(s)?

Resource:

Principles of Supply Chain Management: A Balanced Approach

Read chapter 14. The VitalSource ebook is provided inside the classroom, under Learning Materials.

Book Title

Principles of Supply Chain   Management: A Balanced Approach

Author / Editor

Wisner/Tan/Leong

Publisher

Cengage

Volume / Edition

4th

ISBN

9781285428314

Publication Date

2016

Introduction

Supply chains and their management create value for stakeholders. The reading for this week specifically addresses performance measurement along the supply chain. This lesson will elaborate on implementing value network management, discuss value creation concepts in general, and conclude with some thoughts about the future of (global) supply chain management.

Implementing Value Network Management

Thinking conceptually and logically rather than physically, a supply chain for an organization is really a value chain, and more specifically, a value network – a set of chains. Whether we are working with supply chains or value chains, we live in a world of various networks. Common goals associated with implementing and maintaining successful networks involve the use of proper communication systems and collaborative relationships among internal supply departments, suppliers, service providers, and customers.

According to the book, Supply Management, implementing Value Network Management “requires planning to accomplish all the concepts, methods, procedures, techniques and philosophies” (Burt, Petcavage, Pinkerton, 2010, p. 541). These have been described throughout the reading and lessons.

Transformational training is a smart investment at the start of any value network, which should communicate the common goals and how the organization plans to get there. The common goals, which include both the vision and mission statements, are developed in transformational planning meetings among all parties involved in the value network. Cost, quality, technology, supplier feedback, social responsibilities, standardization, value engineering, and organization/staffing are all critical topics to cover during these transformational meetings when establishing the set goals.

Value Creation

Creating value is the mission of any organization. Value Created equals Benefits Produced minus Direct Costs minus Opportunity Costs. (Cameron, Quinn & DeGraff, 2006, p. 150). 

Value creation occurs, according to Lepak, Smith & Taylor (2007), when organizations:

• Integrate, build, and reconfigure internal and external competencies;
• Generate and apply new knowledge through social connections;
• Build employee skills and motivate them to work toward organizational value creation; and
• Utilize employee knowledge. (pp. 184-185)

Value is created, assert Cameron, Quinn & DeGraff (2006), when every stakeholder is made better off, or at least as well off, then he or she would be without the organization. Their Competing Values Framework outlines five competencies for creating sustained economic value:

• Choose a clear definition of value for the organization. Maximizing shareholder value is often preferred in publicly-owned firms.
• Make certain that everyone in the organization understands that the goal is to maximize value over the long run. People must be assigned to the task of teaching others what value means to others in the firm.
• All employees must be educated about what the key value drivers are. Identify what value drivers are under their control.
• Tie reward and recognition systems (compensation) to the value drivers employees can control. Motivate employees to coordinate on key value drivers more than on desired outcomes.
• Create a strategy that positions the organization to compete in the future, including creating new value drivers not yet recognized by the competition. (p. 155)

Demirkan, et al (2011) state that value can be created through internal improvements, or value can be created through exchange. Value creation can occur at multiple levels: (1) industry cluster / supply chain; (2) business; (3) organization / work practice; and (4) technological.

Examples of methods for internal improvement of organizations would be Lean and Six Sigma, as well as other process improvement methods discussed in prior lessons.

In order for value to be realized in exchanges, resources must exchange something through an interaction. There are three types of interactions: (1) people-people; (2) people-technology; and (3) technology-technology. An organization needs resources, integrators, and enablers for value creation to occur.

It is difficult to sustain value creation. The value that an organization produces tends to diminish over time. This is called value migration.  (Cameron, Quinn & DeGraff, 2006, p. 151).

One way that organizations are trying to create more value is by making their supply chains more agile. Agility in this sense means readiness for change. There are typically two paths for this. One is extending agile software development, agile produce development, or agile manufacturing practices into the Supply Chain and/or Supply Management functional departments. The other is by building upon their lean manufacturing, lean operations, or lean supply chain efforts. Supply Chains that are both lean and agile are called “leagile.”

Innovation in organizations often stimulates resistance to change. Targeting resistance to change requires system leadership (Oshry, 1999, p. 10), and the skillful utilization of change leadership strategies (Manns & Rising, 2015, p. 13).  

The Future of (Global) Supply Chain Management

Supply chains have come a long way since the Silk Road and the El Camino Real that we discussed in Lesson 1. Yet, much still remains the same. The most profitable firms efficiently and effectively match demand from their customers with supply. Transportation modes and routes facilitate freight and people flows. Much has changed. The Internet accelerates information, knowledge, and financial flows. In a VUCA world where volatility, uncertainty, complexity, and ambiguity (some say anxiety), developing strategies and managing risk requires a new framework for thinking, and ultimately, different value leadership. Reverse and green logistics may create additional value for stakeholders, but may not be profitable, at least in the short term. Congestion, pollution, and climate change create increased transportation and logistics challenges. More regulations. Supply chains will be disrupted. More resilience is required. Emerging technology like digital business, the Internet of Things (IoT) 3D printing, urban logistics, autonomous vehicles, and unmanned aircraft systems (UAS) offer potential benefits if adoption can be realized quickly.

Conclusion

Utilizing the scenario planning method, researchers at the MIT Center for Transportation & Logistics developed a four of plausible scenarios for future freight flows They are: Global Marketplace, Millions of Markets, One World Order, and Naftástique!. The Global Marketplace is a highly competitive and volatile world with open vigorous trade and market-based approaches to current problems. In the Millions of Markets scenario, technological breakthroughs lead to greater regional self-reliance and affluence in the United States. Trade flourishes in the One World Order scenario, but at a price as world-wide scarcity of key resources creates a need for global governance with international rules and regulations. Regional trade blocs emerge and thrive in the Naftástique! scenario. The NAFTA Trade Agreement between the United States, Canada, and Mexico leads to a self-sufficient North American economic community. Which scenario is unfolding. Only time will tell. Regardless, lots of change is coming. Accelerating change. Time to start making plans for the future of (global) supply chain management.

References

Cameron, K.S., Quinn, R.E., & DeGraff, J. (2006).  Competing Values Leadership: Creating Value in Organizations.  Northampton, MA: Edward Elgar.

Demirkan, H., Spohrer, J., & Krishna, V. (2011).  The science of service systems.  New York: Springer.

Lepak, D., P., Smith, K.G., & Taylor, M.S. (2007).  Value creation and value capture: A multilevel perspective.  Academy of Management Review, Vol. 32, No. 1, 180-194.

Manns, M., & Rising, L. (2015). More fearless change: Strategies for making your ideas happen. Upper Saddle River, NJ: Addison-Wesley.

Oshry, B. (1999). Leading systems: Lessons from the Power Lab. San Francisco, CA: Berrett-Koehler.

Peer replies to further the conversation

Responses are substantive and encourage discussion by proposing a different point of view supported by an attribution to a source, personal example, or personal application. All responses include related follow up questions to promote continued discussion, include direct questions. 

Forum Post 1:

Good Day Class,

The organization I chose is the Ford Motor Company. The stake holders in the company understand what the company does well. The Ford Motor Company makes affordable and dependable vehicles. The company can create more value by continuing to keep their cars affordable and by utilizing companies to produce more of their parts and chips for cars in North America. The company should branch out to making new products they were able to convert some assembly line to create ventilators at the height of the COVID 19 pandemic. With that sort of flexibility the company can always have products to sell.

2. Which of the four future freight flows should it prepare itself for?

Ford is already an established brand, and can produce and sell its products in many different countries and municipalities. The infrastructure issues that are presenting themselves across the country will give the Ford motor company a boost due to the demand for dependable trucks.

3. What should the organization do to prepare for the future flow(s)?

Ford like many companies will need to adapt a Tesla like model when it comes to AI and self driving cars. I believe the company will also need to either acquire companies or strengthen its partnership with Microsoft to ensure it stays on the cutting edge of technology as the world moves toward electric and self driving cars. The ability to build an electric freight truck would boost ford to the top of the list along with Tesla of electric automobile makes.

Forum Post 2:

Hello Class, 

It is finally week eight! HORRAAYYY! Is it just me or are these classes and weeks flying by? Usually it is January twice before February  finally starts to rolling around but here we are! In reference to the questions for this weeks discussion, I decided to use an organization that I am the most familiar with and that is the Army or Armed Forces. 

1. How could the organization create more value for its stakeholders? 

This is frequently the simplest region to make esteem.

You start by introducing thoughts that assist them with taking care of their concerns, beat their difficulties, or gain by their chances. This implies dealing with building arrangements that assist them with creating more noteworthy outcomes.

You make esteem by presenting them thoughts particularly looking thoughts. You truly assist when you with canning tie how you treat longer-term goals like expanded incomes or benefits.

You additionally make esteem by making the moves in the first three presents by getting entrance on individuals and data that you really want and by managing and with their watchmen; when you know how to help, you are more important.

2. Which of the four future freight flows should it prepare itself for?

There are four future cargo streams that the Army is prepared for. These four are Millions of Market, Naftastique, Global Marketplace, and One World Order. A great many Market is a situation with high innovative advances that make assets all the more promptly accessible. Naftastique is a situation where there is minimal accessible assets and worldwide exchange is low too. Worldwide Marketplace is a situation where there is a great deal of accessible assets and worldwide exchange is high, making more contest. One World Order is a situation where there are loads of guidelines and laws that oversee assets and worldwide exchange, confining accessible assets.

Forum Post 3:

Hello All and professor,

This week I am going to be discussing the producer of the current laptop that I am using which is a Dell laptop that I have used for the past two years or so. When it comes to Dell Incorporated and how it as a company can provide and create more value for its stakeholders I believe that first the company can seek to provide an increased amount or number of after sales services such as providing technicians that are accessible. I believe that for the company’s sales which are generated in remote markets such as Africa it is hard to find licenced and credible Dell stores and service providers. I recently realized this after travelling to Africa on a short trip and my Dell laptop broke down and I had no access to a licenced Dell Incorporated dealership or store. I believe that in its remote markets putting in place such a strategy would not only improve and increase the company’s customer service and satisfaction but it would also increase the company’s presence in those territories and thereby increase its market share and sales revenue generated from these markets.

I believe that when it comes to the four future flows the Dell Corporation should prepare itself for the global market place because just like the founders of the concept I also believe that labor is going to become cheaper in the future and transportation of such labor is going to become cheaper and more accessible all around the world.

In order to prepare itself for the global market place or any future scenario that may take place I believe that the company needs to establish a footprint and set up a presence in emerging and developing markets and not just in Africa but in the middle east, Asia, Latin America and China most especially. The company should focus on building a strong and consistent customer base on all of these markets around the world.