K.S.Srinivasa Murty Director - IM 5M India Limited Leveraging Knowledge For Supply Chain Excellence

K.S.Srinivasa MurtyDirector - IM 5M India Limited

Leveraging Knowledge For

Supply Chain Excellence


Structure of the Presentation

• What is Supply Chain Management?

• What is Knowledge Management?

• An over view of Knowledge Processes.

• What does practising Knowledge

Management Involve?

• “Knowledge Management” & its impact

on Supply Chain Management.


• Success in business today is all about ‘Delighting’ the customer and growing profitably.

• So, The Thrust Is On…•Enhancing Customer Satisfaction.•Improving competitiveness, being ahead of competition

• To be ahead of competition, it is necessary to be --

*Responsive *Economical *Dependable

•Therefore the need to focus on effective Supply Chain Management.


What is Supply Chain?

• A supply chain is a network of facilities

and distribution options that perform the

functions of procurement of materials,

transformation of these into intermediate

and finished products and the distribution

of finished products to the customers.


The Traditional Vision of Supply Chain -Inward Looking

Purchase

Production

Inventory /Warehousing

Transportation

SOURCSOURCEE

MAKMAKEE

MOVMOVEE

STORESTORE SELLSELL


An Evolved Definition of the Supply Chain Web Emerged in the Last Decade

Collaboration and Quick Response ( QR)

• Rapid Response

• Information visibility

• Collaboration with partners

• Time to market (SPEED)

• Product variety proliferation

• Shortened product life cycles

New ResponsesKey Challenges


Some Best Practices in Supply Chain Management

•Companies that excel in supply chain

management partner and work together with

their suppliers / partners to realize mutual gains

and achieve strategic goals.

•They assess and measure suppliers / partners

through certification, audits and other quality

reviews to develop these effective partnerships.



•They Integrate suppliers / partners into process

improvement and product development early.

•They foster communication with and between

partners.

•They rationalize and consolidate strategic

suppliers / partners to reduce costs and share

costs savings with preferred suppliers / partners.



• They identify and set targets for cost savings

to be achieved by key suppliers through cross

corporate teams / through knowledge sharing.

•Their purchase, planning, stores, transport

and quality functions act as one team with

shared purpose and objectives.



•They practice effective coordination with

suppliers / partners - Synchronize the full range of

supply chain activities of the supplier and the

customer. Integrate their operations where ever

feasible, while eliminating duplication and waste in

areas such as order processing, materials planning,

inventory management, distribution and

transportation.



•They Leverage technology ( connectivity

with suppliers and key customers) to manage

supplier and customer partnerships.


In this knowledge era, Sustainable Competitive Advantage a firm has comes from what it “collectively knows”, how efficiently it uses what it knows and how readily it “acquires and uses new knowledge”.

Knowledge management (KM) provides an enabling framework to derive this advantage.

What Is Knowledge Management ?


What Is Knowledge Management ?

• KM involves developing and putting in place

an “enabling framework” for improving -

– Capture and location of current knowledge

– Sharing the current knowledge

– Creation of new knowledge, and

– Leveraging the knowledge

To strengthen business performance.


What Is Knowledge?

Knowledge is the human interpretation of data / information for potential action

Tacit Knowledge the sense making capability

Explicit Knowledge Embedded Knowledge

(Experience,past memories,hard to catalogue, document)

(Formal, codified,data bases, policy manuals, white papers etc.)

Essentially knowledge

is people based


Knowledge Management Is ...

increasing the capacity for effective action by

connecting people to people and

people to information

Capability building of an organization & its strategic partners’ - “Raising the floor / raising the ceiling”


What Does Leveraging “Collective Knowledge” Involve?

• Working in collaborative teams to deliver business excellence

• Developing and sharing “best practices”

• Faster replication of innovations through faster movement of knowledge through the organization / partners in extended supply chain

• Acquisition and sharing of “new knowledge”

• Managing organizational learning.


Key Knowledge Management Processes

– Linking people to people e.g. “communities of practice to share knowledge”

– Linking people to information / knowledge repositories / best practices e.g. Knowledge centres / Knowledge Portals

Building Blocks for KM


What Is A Knowledge Center?

-Repository of supply chain knowledge-Dissemination of best practices in supply chain-Upgradation of functional skills in supply chain

-A Place to search-A Place to post a query re Supply Chain

Need Teams to develop content

Key projects need documentation

Online courses development Storehouse of

functional knowledge

Distilled learnings in supply chain areas

Focussed functional training in supply chain

Knowledge Center

CO-Supply-chain. com

Knowledge Center

CO-Supply-chain. com

List of Experts - in company & external


Knowledge Sharing culture

• The most important enabler for leveraging collective knowledge is the Organizational Culture

A Culture of Absolute Trust is the Essential Prerequisitefor Proactive Knowledge Sharing


How does one create The culture ?

• When you reward and recognize the value of sharing knowledge

• When Senior Management ‘Walk the Talk’. When Managers also become good ‘ Mentors ’

• When failures are treated as essential to

learning


How Does KM Support The Practice of Core Supply Chain Concepts and

Principles

Multi-party collaboration - Information

visibility and knowledge sharing

Best Practice adoption - Vendor

Transformation, Synchronized Planning,

Work Flow coordination, Postponement for

mass customization etc.


How Does KM Support The Practice of Core Supply Chain Concepts and

Principles

Capability building - managing

organizational learning - both the staff in

company’s own supply chain processes and

the staff of strategic partners’ (vendors, 3P

service providers and distributors.)


• Effective Knowledge Sharing is critical

for success in ---

– Vendor Transformation

– Outsourcing

– Supply Chain Benchmarking & Best

Practice identification


Vendor Transformation

• Vendor selection / development and the unique

way the relations are managed on an ongoing

basis

– pre-selection audits to establish capabilities and

potential synergies,

– post selection operational reviews, certification (

at different levels , reflecting the strength, depth

and maturity of relationships)


Vendor Transformation

• Knowledge sharing with strategic vendors’,

participation in new component and product

development etc.

• Identifying and setting cost savings targets for

key suppliers through cross corporate teams

(supplier & buyer organizations) / through

knowledge sharing.


Multi party collaboration & Information Visibility

The Internet is a compelling enabler for supply

chain integration. Businesses can use Internet to -

Gain global visibility

Inter-connect with their extended network of

trading partners for transparent communication.

(e.g, “Supplier net”)

Respond quickly to changing business conditions


Supply Chain Integration Dimensions

Source: Lee and Wang, Stanford University


Information Integration : Networked Sourcing

Extranet

Purchase

Suppliers

Bank

Factories

Daily Prod. plan forwardDaily stocksDaily consumption

Shares ofbusiness,Prices

StocksProduction PlansDispatches

Payments


ExtranetRetailers

Sales Team

C&FAs

Stockists Banks

Information Integration : Networked Distribution





Synchronized Planning Defines what is to be done with the shared

information

Joint design and execution of plans for product

introduction, forecasting and replenishment

E.g. CPFR initiative

Both the buyer and seller make use of the Internet

Share forecasts and detect major variances

Collaborate to reconcile differences

Eventually both have a common forecast and

replenishment plan





Workflow Coordination

Streamlined and automated workflow

activities between supply chain partner

Not just what is done with shared

information, but how

E.g. Procurement activities from a

manufacturer to supplier can be tightly

coupled to achieve efficiencies





New Business Models

The Internet makes possible whole new

approaches to conducting business

Even new business opportunities not

previously possible are made possible

E.g. Amazon running online operations for

major brick and mortar retailers such as

Target and Toys ‘R’ Us


Vendor Management Systems For Leveraging Expert Buyers’ Knowledge Non production goods & services (office equipment and supplies, spares, travel, Advertising, property management services, security services etc.) as well as production services (inbound and outbound logistics, design services, contract labor etc.) are often handled outside the procurement function. These expenditures typically receive little scrutiny and management control and could well be a gold mine of cost savings if there were ways to streamline the processes between a company and its vendors of these goods and services.


Vendor Management Systems For Leveraging Expert Buyers’ Knowledge Vendor management systems (VMS) are e-

commerce applications that streamline enterprise

buying processes by automating the procurement of

production and non-production goods and services. A VMS extends the expertise of a company’s best

buyers to the desk tops of business users through out

the many divisions and operating units of an

enterprise..By consolidating enterprise wide purchasing and

integrating processes with a few key suppliers , scale

and processing economies accrue to both buyer and

supplier.


Vendor Management Systems For Leveraging Expert Buyers’ Knowledge

• E- Auctions.

• Exchanges

• Specialized package solutions like Ariba


KM is - Connecting people to people in

collaborative teams. That is what is necessary

for the success of “vendor Transformation”,

effective “out-sourcing”.

KM is Best Practice identification and

sharing. That is what is key to performance

improvement in supply chain, establishing

appropriate matrices and monitoring the

performance is all about.

To Sum Up...


KM is collaborative team working to

leverage collective knowledge. That is what

we aim to achieve in the e-enabled Supply

chain systems, synchronized planning and

work flow co-ordination is all about.

If KM is all about capability building and

becoming a learning organization, that is

what is critical to effective supply chain

management.

To Sum Up...


While knowledge processes and IT are

important enablers to practice KM, they

don’t suffice for success. The key element is

to build appropriate culture of sharing and

learning. You can see why mere formal

adoption of supply chain practices like VMI,

JIT or adoption of integrated IT systems

won’t suffice for success in SCM. The most

important pre-requisite for success is

developing the collaborative culture.

To Sum Up...

Documents

K.S.Srinivasa Murty Director - IM 5M India Limited Leveraging Knowledge For Supply Chain Excellence