Charting Your Supply Chain DNA - The Integrated Operating Model - aftermarketNews

Charting Your Supply Chain DNA — The Integrated Operating Model

In our previous article, we outlined five key challenges facing today’s supply chain architects. Starting this week, we want to present a dramatic new approach to supply chain engineering that responds to these challenges.

AMN Perspectives by Thomas Group: Experience at Work

Posted: Aug. 24, 2004, 9 a.m., EST

by John Steidl, Thomas Group consultant and David Demers, president of Avicon.

IRVING, TX — In our previous article, we outlined five key challenges facing today’s supply chain architects. Starting this week, we want to present a dramatic new approach to supply chain engineering that responds to these challenges. The challenges were:

1. The trend toward outsourcing;

2. Wall Street expectations for accelerated cash velocity;

3. New business models introduced by companies like Dell, Wal-Mart and Zara;

4. Unplanned global events; and

5. Shorter product life cycles in virtually all industries.

A handful of industry leaders are beginning to adopt a new approach through a supply chain model called the “integrated operating system.” Unlike older models, this new model is capable of helping companies outperform weaker competitors by simultaneously reducing working-capital requirements, improving revenue and margin contributions and improving order-to-delivery predictability and response time. The new model is particularly well suited to companies that are experiencing product commoditization pressures.

Each integrated operating system has its own unique footprint, which we call supply chain DNA. Unlike human DNA, supply chain DNA can be adaptively configured to deliver the desired business values. DNA are distinctive strategy and capability building blocks that drive supply chain innovation. In the integrated operating system model, the DNA are grouped into solution patterns spanning four essential business areas: process, information, cash and organization (PICO).

Leading companies have developed integrated operating systems by selecting a unique blend of DNA and configuring these into DNA solution patterns organized in the four PICO areas to best suit their strategic needs. The resulting supply chain integrated operating system drives the simultaneous achievement of improved customer response, higher revenue and margin contributions, and faster cash-to-cash velocity. This innovative supply chain lifecycle is illustrated in Exhibit 1.

The Integrated Operating System Model

Two strategic shifts are spearheading the migration to an integrated operating system. The first shift involves the broad recognition that supply chain velocity is fundamental to performance, efficiency and competitive differentiation. Technology companies like Apple, Cisco, Dell and others that have mastered the concept to gain a competitive advantage over their rivals have highlighted the advantages of high-speed supply chain strategies. These companies didn’t have an influx of cash or the prowess of vast research-and-development budgets, so they chose to compete on business innovation instead of product innovation. In a recent issue of MIT Sloan Management Review, Paul Kampas discussed the significance and implications of strategic shifts like this one. Underlying the business-innovation strategy is a relentless pursuit of an improved business operating model. Today, the application of streamlined supply chain strategies is spanning electronics, retail, automotive and other market sectors where product-innovation strategies are no longer enough to win market share.

The second strategic shift is the application of systems thinking to the transformation of supply chain models. In our view, the leaders are taking a more holistic view of the supply chain in designing their models. They are now engineering their models with four critical dimensions of PICO in mind. These dimensions form the four support components of the integrated operating system, which require concurrent engineering to attain peak performance. In upcoming installments we’ll talk more about design and implementation in the key dimensions of PICO.

_______________________________________

Click here to view the rest of today’s headlines.

You May Also Like

Continental, Synopsys Team Up on Automotive Software Development

The collaboration aims to accelerate the development and validation of software features and applications for the Software-Defined Vehicle.

Continental announced a collaboration with Synopsys to accelerate the development and validation of software features and applications for the Software-Defined Vehicle (SDV).

"This new collaboration integrates Synopsys’ industry-leading virtual prototyping solutions for virtual Electronic Control Units (vECU) within Continental’s Automotive Edge (CAEdge) cloud-based development framework. The results are digital twin capabilities for software development that help automakers accelerate software development and speed up their time to market," Continental said.

Epicor Unveils Digital Cataloging, Future Plans

The new catalogs use Epicor-validated, ACES-compliant data and an “Intelligent Search” feature to find the right part quickly.

Epicor digital catalog
Epicor Launches Automotive B2B eCommerce Platform

The Epicor Commerce for Automotive platform features multi-seller support and parts lookups for distributors and their customers.

Epicor commerce for Automotive
Marelli Launches Fuel System for Hydrogen Propulsion Systems

Marelli will present a variety of new technology at the CTI Symposium in Germany, Dec. 5-6.

The Automotive Aftermarket’s Role in a Circular Economy 

Take a deep dive into the factors driving the automotive aftermarket toward a more circular economy.

Circular economy

Other Posts

AI in the Aftermarket: Endless Applications Yet Hurdles Remain

The automotive aftermarket is delving into AI and ways it can help businesses be more productive and effective.

Intellias to Showcase HMI, ADAS and More at CES 2024

The company also will unveil the next generation of its IntelliKit, a portable fully-integrated digital cockpit.

Anyline Partners with Treads to Simplify Car Ownership

Anyline has partnered with Treads, an AI-driven car management subscription service, to enhance analytics for car owners.

Anyline Trends partnership
Unifying Your Parts Technology to Eliminate Channel Conflict

Harmonizing various channels in your eCommerce strategy through unified technology helps build an agile business model.

ecommerce channel conflict auto parts suppliers