Early Supplier Integration in the Design of the Skid-Steer Essay Example

from the initial attempt. We cannot afford multiple iterations before finalizing the product.

Q:

What is the task?

The task is to answer the question of what our organization's shift from being tactically oriented to becoming more strategic entails. This includes hosting more supplier conferences to establish expectations with our supply base. In June, we organized a supplier forum attended by 67 key suppliers, centered around the theme "Performance Matters" and highlighting the significance of mission assurance. These events aim to enhance our behaviors, relationships, and communication with suppliers progressively.

Q:

What are your ideal expectations from your suppliers? Responding: When envisioning my future integrated supply chain, I refer to it as a "netted integrated supply chain". This concept entails Raytheon IDS striving to become a Joint Battleships Integrator and possessing proficiency across multiple domains. The goal for our supply chain organization is to connect and unite suppliers who excel in specific domains, allowing us to generate solutions that meet our customers' demands and uphold our business vision.

Q: Is it implied that suppliers will collaborate with other suppliers?

Answer: Yes, in certain situations they certainly will. Therefore, the next question is how can we enable and enhance their collaboration to achieve the best possible result?

Q: What methods do you use to assess your success with the new business focus?

Answering: In the past, our metrics primarily centered around the supply chain. Although we still have internal-focused metrics, we now also consider the value we bring to the organization from an overall perspective.

In the realm of effectiveness, efficiency, capability, and capacity, we have now introduced

metrics that are directly tied to our business performance and our customers' expectations. Our primary objective is to generate value for both our customers and our business.

Q: Now, what are those new metrics? Answering: One of them is cash-to-cash cycle- how quickly do we collect cash from our customers? Another one is on-time performance to contract. Do we deliver our hardware the way we said we would, when we said we would, with mission assurance and quality levels that satisfy our customers?

Thirdly, we have a strategy within Raytheon IDS that is connected to the question: How can we enhance our overall business cycle time?

Q:

Why is flexibility within the supply chain crucial for satisfying our customers' needs?

Q: How would you describe your supply chain initiative?

In regards to the response, we have recently reorganized our supply chain to align with Raytheon IDS vision and meet customer expectations. Our supply chain includes five main capabilities. The first one, known as collaborative solutions, involves a team of skilled experts who work closely with our business development team from the start. Within this capability, we have professionals who help select partnering suppliers and determine which ones are best suited for securing this proposal.

Q: Do we have a piece for subcontracting?

Answer: Yes, subcontracting is the next capability we offer. As our business transitions from a focus on products to capabilities-based solutions, Subcontract Management becomes a crucial component of our supply chain operations. Our approach involves incorporating new skills, tools, and techniques to effectively manage significant subcontracts. Presently, we are responsible for overseeing nearly $2 billion worth of subcontracts.

Q:

Ultimately, our Integrated Supply Chain organization remains dedicated to supporting the fundamental products of our business.

Material acquisition, planning, and product management, as well as integrated logistics, are crucial elements in ensuring that our manufacturing operations have the correct materials, located in the right place, delivered at the right time and cost. The primary goal in these areas is to implement transformative changes that enhance the effectiveness and efficiency of operations. This includes various aspects of e-procurement, reducing transactional processes, implementing lean supply strategies, and introducing innovative techniques for handling and managing materials flow.

Q: That's organizational. What about individuals?

In the modern age, our organization seeks individuals with a variety of skills and experiences. Although traditional supply chain professionals remain valuable, we prioritize hiring candidates who possess diverse backgrounds in program management, project management, engineering, operations, and supply chain. The integration of these vital capabilities is essential for the success of our integrated supply chain.

Q: How difficult is it to find individuals like this?

Answering: It is extremely difficult to locate individuals with such qualities. I may be interested in employing the next five program managers who cross my path, but there is fierce competition from other establishments seeking to recruit them as well. The Defense Department is also in pursuit of individuals possessing these skills. Naturally, if we come across individuals with the desired skills who are available for employment, we quickly seize the opportunity.

Q:

How can you meet your need if the desired individuals are in high demand? Here is our solution: In our new supply chain, we have established and

shared a career trajectory for future program managers within the supply chain organization.

In our supply chain organization, we have implemented a system where individuals are periodically assigned to various roles like engineering, business development, and performance excellence. This approach helps us develop well-rounded individuals with diverse skills, preparing them for the future. Furthermore, we encourage experienced professionals from different functional areas to consider pursuing a career path within our integrated supply chain.

Q: Does this change greatly impact your IT needs? Answering: The main IT objective is connectivity.

In my opinion, the primary concern is how to effectively link my programs, engineering, performance excellence, supply chain, and operations professionals. How can I efficiently disseminate information among them? Additionally, how can I extend this connectivity to my supply base? This is crucial for involving suppliers in the early stages of the process.

Q: Is it fair to say that the new standards you have from DOD will ripple back through your organization? Answering: In my mind it has to - the DOD is our customer.

We have developed strong ties with our DOD customers due to our exceptional performance and the superior solutions we offer. The introduction of new standards is an integral part of the constantly changing nature of this industry. We understand the importance of paying attention to and addressing our customers' needs promptly, as well as delivering solutions quickly.

Q:

How important is support from top management in supply chain reengineering? Answering: My boss, IDS president Dan Smith, emphasizes in every meeting that getting suppliers in line and changing internal business operations are crucial for achieving our goals.

Time

is vital and absolutely necessary. Source: Bernstein, M., "Raytheon Goes From Traditional Purchasing to an Integrated Supply Chain," World Trade, V. 18, No. 11, 2005, up. 36-38. Used with permission.

Introduction

Unfortunately, in many modern media sources, such as Journal and magazine articles, books, and television programs, the concept of supply chain process integration is often discussed exclusively in relation to information system applications. This means that successful integration of supply chain processes is believed to be achieved by simply connecting buyers and suppliers through the use of the latest software application.

To sum up, while the latest enterprise software applications can improve information access and contribute to process integration, it is crucial to acknowledge that these applications cannot substitute or outperform the vital human elements in supply chain management and process integration.

In previous chapters, the text has touched upon the use of information systems when managing recesses, particularly in Chapter 9 which focused on information flows. However, this chapter aims to provide a comprehensive understanding of the integration of supply chain processes and offers guidance on the necessary steps and tools for achieving success in this area.

In Chapter 1, the concept of business process integration was explained. This involves the sharing of ideas and information, coordinating activities, and collaborating on design and implementation between supply chain members. The goal is to ensure that products and services are provided at the desired levels of quality, speed, and cost throughout the entire supply chain, from raw material suppliers to end-product consumers.

In the past decade or so, business research has generally discovered a positive correlation between firm performance and process integration. Essentially,

the successful integration of crucial business processes among supply chain partners is fundamental to supply chain management. Despite being one of the main challenges faced by companies implementing supply chain management practices, there are significant benefits to be obtained through process integration, as stated in the introductory statements of this chapter.

The text has been organized based on the eight crucial processes in supply chain management, which include customer relationship management, customer service management, demand management, order fulfillment, manufacturing flow management, supplier relationship management, product development and centralization, and returns management. To effectively manage supply chains, companies must first achieve internal integration in these key areas and then strive to integrate these processes with their significant trading partners.

In order to achieve process integration, firms need to overcome internal barriers and build trust and working experience with their raiding partners. They should also employ suitable technologies and performance measures to enhance integration capabilities both internally and externally. Process integration is a gradual development within a firm's workforce and supply chains. Benchmarking successful process integration can be challenging for firms as it requires the development of their own distinctive integration capabilities.

Every company has its own distinct employees, cultures, processes, products, suppliers, customers, and technical capabilities. Consequently, their approaches to achieving successful integration and supply chain management may vary from those of their competitors or other companies like Texas-based computer manufacturer Dell and mega-retailer Wall-Mart who are renowned for their exceptional supply chain management abilities. In essence, there is no universal solution or specific set of practices that can ensure success in process integration or supply chain management.

In order to achieve successful supply chain management,

managers must define and uncover the appropriate strategies for their firms. They also need to align their own business strategies with those of their supply chains and design operations practices that support these strategies. Mitt's Center for Transportation and Logistics has been conducting a multi-year study since 2005 to identify the general attributes critical to successful supply chain management by studying several successful companies.

Companies have discovered the necessity of implementing a "competitively principled" strategic supply chain management framework. This means creating customized practices that align with their specific resources and required supply chain strategies. Since achieving successful integration internally and externally takes time, most firms and their supply chain partners are still actively engaged in their integration efforts.

The constant influx of new competitors, suppliers, customers, customer requirements, and information and communication technologies in the marketplace intensify this problem. As a result, numerous trends in process management and process integration are affecting supply chain management. The final section of this chapter will also address some of these trends and developments.

Achieving Internal Process Integration

Process integration refers to the coordination and sharing of information and resources to collaboratively manage a process. This integration can occur internally or externally within a firm, and it reflects the level of synergy among employees or businesses in accomplishing tasks. Establishing effective communication, information sharing, and collaboration capabilities among employees in various units of an organization can be challenging, especially when departments prioritize their own interests and compete for limited budgets and resources.

However, organizations that are truly committed to process integration must change this type of behavior, as well as other internal issues. Process integration has

become essential for survival in certain industries, such as the automobile industry. Toyota, a Japanese auto manufacturer, had mastered lean principles by the asses through creating opportunities for employees to integrate their efforts in various aspects, including the design and construction of new automobiles, and addressing manufacturing and quality problems.

Toyota has been successful in producing higher quality automobiles at a faster pace compared to other car manufacturers. This has prompted companies like Ford, MM, Demolisher's, and others to also improve their practices to remain competitive. As of mid-2006, Toyota was the second-largest automaker globally and the most profitable with an annual revenue of approximately $20 billion. By 2001, many North American automakers had implemented internal integration of key processes and were focused on developing fully-integrated supply chains.

In order to achieve internal process integration, firms must initially establish the necessary groundwork for their process integration efforts. This involves dismantling internal barriers to collaboration, linking departmental and unit information systems, and creating performance measures that foster teamwork and collaboration.

Once the employees of the firm feel at ease collaborating and exchanging ideas and information, the process of supply chain management and external integration with trading partners can commence. This integration model is illustrated in Figure 16.1, which will be further explored in the subsequent discussion.

The Supply Chain Process Integration Model

The first step in preparing the organization for external integration and supply chain management is to establish an internal environment that promotes and rewards teamwork and information sharing.

To attain this objective, it is vital to remove current hindrances to collaboration. This can be accomplished by merging the organization's information systems into a

unified central database and introducing performance measures for collaboration that are crafted, executed, and regularly assessed. To overcome internal obstacles to collaboration, these barriers can be classified as technological (e.g., software/hardware of information systems), structural (including management hierarchy, goals, and procedures), and cultural (pertaining to employee values, norms, and behavior).

The previous chapter explored various challenges in information systems, such as the acquisition of software applications at different times or the purchase of top-notch software solutions from different vendors. To connect these systems, integration middleware is required. Alternatively, web services and web portals can be utilized to enable information sharing among different applications. These technological hurdles can impede collaboration efforts.

A few years ago, the online site Nordstrom.com, owned by the fashion retailer Nordstrom based in Washington, faced an issue where it couldn't process gift cards purchased by customers at their physical stores. This was due to a lack of a connection process with the mainframe of Nordstrom banks, which was necessary to validate and complete the transaction. To resolve this problem, the company swiftly implemented XML web services. This allowed them to integrate their systems and establish a universal data format that could be understood by all the company's systems. As a result, XML web services have now become the fundamental platform for integrating applications.

Applications are constructed using multiple XML web services from various sources that collaborate regardless of their location or implementation. (1996 Ted Goff, http://www. Ted. Goff. Com) Structural obstacles to collaboration include the slow and bureaucratic decision-making hierarchy within firms, inadequate pay systems, ineffective administrative procedures and policies. A structural issue, for instance, is an incentive pay system that

promotes competition among groups of employees.

According to Steve Banker, a senior supply chain analyst at the ARC Advisory Group in Massachusetts, it is advisable for companies to implement compensation methods that incentivize teamwork. In order to ensure effective teamwork, metrics should be established to measure supply chain performance, and rewards and punishments should be linked to these metrics. Banker suggests that structural change requires a top-down management approach, as it involves the input and resources of middle and upper management to facilitate administrative improvements.

At first, there was a significant communication issue among players when a hearing-impaired player joined a baseball team. To address this problem, the coach decided to teach the entire team a form of sign language to improve communication. This creative solution eventually led to the widespread use of hand signaling among coaches and players in baseball teams. In a more recent event, the U.S. Congress mandated changes in the Internal Revenue Service (IRS) structure, resulting in the implementation of various structural modifications with the goal of enhancing customer service and protecting taxpayer rights.

The IRS Large and Mid-Size Business Division was created to manage taxes for businesses with assets over $10 million.

In order to improve the balance of employees reporting to managers, the IRS has made changes such as adjusting managerial span of control. They have also eliminated redundant management in some field offices and reduced the number of core industry groups from seven to five.

Hospital Corporation of America (HOC), a Tennessee-based prominent healthcare services provider, has implemented a unified organizational structure to improve the overall effectiveness of the organization.

The team at HOC is comprised of a variety of professionals, such as nurses and lab technicians in the equipment department, as well as engineers and construction professionals in the construction department. Despite having different roles, these diverse groups are collaborating towards shared objectives. Al At Iowa Health - Des Monies, consisting of three hospitals, has introduced a new position called "master of the environment." This position offers employees training opportunities in multiple hospitality services, enhancing patient care and facilitating their mobility across departments and hospitals when required.

The rise in patient satisfaction has also led to a boost in employee satisfaction.

The third set of barriers to internal process collaboration or integration can be significantly challenging to overcome. These barriers are related to the deep-seated cultural issues within the organization, which promote behaviors such as hoarding information, concealing operational difficulties, and avoiding teamwork to find the best solutions for the entire organization. This phenomenon is commonly known as the silo mentality, where employees prioritize their own interests and managers prioritize their respective departments.

Cultural changes are necessary to reduce the silo mentality and improve trust among employees and their perception of the organization, as lack of trust can affect this type of organization.

In these cases, the whole organization needs to undergo change. To alter the organization's mindset, it is common to train a large group of employees, with top management taking responsibility for driving the impetus for cultural change.

To effectively handle cultural change, a variety of strategies are employed. These involve consistent communication with all staff members and ensuring that management actions reflect the desired values and beliefs. Additionally, effective communication is facilitated through tools like newsletters, intranets, kiosks, and videos. Prompt resolution of cultural discrepancies is also prioritized, along with the creation of a plan for cultural integration. Weyerhaeuser, a Washington-based company specializing in forest products, employs multiple educational resources to cultivate a united corporate culture and encourage collaboration among its employees.

In order to demonstrate the advantages of aligning work styles, the company has created an interactive game. Additionally, they have produced a DVD titled "All in One" which explains collaboration strategies within the homebuilding industry. In 1999, when Astral of Sweden and Seneca of the United Kingdom merged, they encountered challenges resulting from cultural clashes. To tackle this issue, the senior executive team approved several proposals for establishing a new culture.

The text states that a significant suggestion was made to establish a worldwide cross-functional leadership development program, specifically for the top 200 individuals in the company. This program was successful and resulted in a more innovative learning environment and increased levels of trust within various departments of the firm. Over a span of three years, approximately 900 managers had participated in this program. Furthermore, in 1999, when switch maker Cisco from California officially acquired Current Corp., an optical transport producer also based

in California, a transition team was formed to supervise the complete assimilation of Cerement.

After Cisco's acquisition, all new employees were provided with a title, boss, bonus Lana, health plan, and a direct link to Coco's internal website. The team ensured that employees received essential information about Cisco's organization, vacation policy, and benefits. The goal was to minimize uncertainty so that employees could promptly concentrate on their roles. Additionally, the Service Perspective feature discusses the integration hurdles resulting from the merger between U.S. retailers Smart and Sears.

Service Perspective

Sears and Smart, who have nearly 40 supply chain systems combined, are faced with a massive integration challenge. The challenge is to determine which supply chain system will best support the 3,500 stores of the newly formed Sears Holding Corp. Industry experts believe that this task will be difficult because neither company has been particularly agile in their supply chain. According to Noah OTTOMH, a principal supply chain analyst with Forrester Research Inc., "This is a huge endeavor they have to go through, and neither one is known for excellence in IT or supply chain [management]."

Sears Holding executives have promised to achieve $500 million in operational efficiencies in Cambridge, Massachusetts. Analysts believe that in order to fulfill this promise, the retailer needs to have coherent IT and supply chain operations. However, the recent merger of Sears and Smart has resulted in a complicated supply chain management task. According to Kim Piccolo, a retail analyst with Mornings Inc., streamlining the numerous applications will be a time-consuming and challenging process, taking several years for Sears Holding to complete.

Sears Holding has decided not to comment on

the reports about reducing expenses, changing brand names, and closing stores. Since March 25, 2004, when Smarty became shareholders at Sears, corporate officials have provided limited information beyond their initial statements about improved efficiencies and cost savings. Chris Brattiest, a spokesperson for Sears Holding in Hoffman Estates, Illinois, states that the organization is still shaping itself and does not have a definite supply chain strategy at this point. Dean Lane, CEO of Barstools Inc., a software vendor based in Sunnyvale, California finds this lack of clarity unsurprising.

According to Lane, a veteran of mergers and acquisitions, insufficient attention is often given to IT after a merger announcement. The company's plan involves generating $200 million in revenues by capitalizing on cross-selling opportunities and rebranding Smart stores as Sears. They also aim to achieve $300 million in savings through optimizing purchasing power, improving supply chain and administrative efficiencies, and selling real estate assets. However, the specific supply chain strategy for achieving these ambitious goals remains unclear. Brattiest states that it is too early to provide details. According to Lee Holman, the product development VP at ILL Consulting Group in Franklin, Tennessee, Sears Holding will inherit 37 supply chain solutions from various vendors such as Numismatics Inc., 12 Technologies Inc., and Manhattan Associates Inc. Holman further reveals that Smart currently operates three inventory management systems, three merchandise planning systems, and four logistics management systems.

Sears operates multiple solutions for inventory management, logistics management, and merchandise planning. However, these solutions are utilized differently by the various companies. Holman states that customers can find merchandise on Sears' shelves unlike Smart. Observers are curious to know which existing solutions the new

retailer will adopt or discard, and if it will invest in new ones. According to OTTOMH, Sears Holding has stopped evaluating new applications such as in-store replenishment and merchandise optimization packages as it analyzes the operations of each company.

In order to address the concerns about the pace of review, it is necessary for Sears Holding to clean house and move quickly to demonstrate how they will improve flexibility and efficiency in the supply chain, according to OTTOMH. To do this, Sears Holding must first determine its priorities, including its purpose, customer base, frequency of customer visits and purchases, and what products it will sell. Paula Rosenberg, retail research director at Aberdeen Group Inc., a market research company in Boston, provides this advice.

Before investing in an inventory management application, worth $1 million, the company must evaluate its business processes, which involves examining the interaction between stores, suppliers, and distribution centers. According to OTTOMH, it is essential to address these areas first to avoid a situation where the application, lacking accurate data, offers no benefits. Additionally, Sears Holding needs to determine how to merge two different businesses and decide if there is a need for consolidation within the supply chain operations. Steve Banker from ARC Advisory Group Inc. believes that Smart and Sears might not be able to align their strategies successfully.

In Deemed, Massachusetts, there is a research concern regarding two retail stores - one being a department store and the other a discount mass merchandiser. A banker suggests that integrating resources would be beneficial for maximizing results. One potential area for integration is in the sale of apparel. By doing so, Sears Holding

could reduce the number of warehouses and implement a shared supply chain system. The banker recommends adopting either Smarty's Manhattan application or utilizing third-party logistics providers hired by Sears. However, it may be necessary for Sears Holding to develop separate strategies to cater to different priorities.

Sears, for in