Structure and Supply Chains

Slide 4.1

Mintzberg Definition An organization structure is the sum total of the ways in which the enterprise divides its labor into distinct tasks and achieves co-ordination among them. Control Requires: 1. A power base 2. A control mechanism that may take the form of one of the following: Centralization Formalization Output control Cultural control

Lysons & Farrington, Purchasing and Supply Chain Management, 7th edition, Pearson Education Limited 2005

Structure and Supply Chains McKinseys 7S Model

Slide 4.2

Seven interrelated factors that organizations wishing to become more customer orientated need to address
Shared Values Structure

Skills Strategy

Style Staff

Systems

Lysons & Farrington, Purchasing and Supply Chain Management, 7th edition, Pearson Education Limited 2005

Structure and Supply Chains Hasting Seven Characteristics of New Type Organisations

Slide 4.3

Radical Decentralization

Demanding Expectations Transparent Performance Standards

Distributed Leadership

Networking & Reciprocity

Intense Interdependence

Boundary Busting

Lysons & Farrington, Purchasing and Supply Chain Management, 7th edition, Pearson Education Limited 2005

Structure and Supply Chains

Slide 4.4

A network structure is a series of strategic alliances that an organization forms with suppliers, manufacturers and distributors to produce and market a product.
A network is not a world of individual and isolated transactions. Network structures allow organizations to bring resources together on a long-term basis to reduce costs. Networks relate to all aspects of the supply chain, including marketing and distribution.

Lysons & Farrington, Purchasing and Supply Chain Management, 7th edition, Pearson Education Limited 2005

Slide 4.5

Lysons & Farrington, Purchasing and Supply Chain Management, 7th edition, Pearson Education Limited 2005

Structure and Supply Chains

Slide 4.6

Lean Production Key Aspects

1

Target costing work backwards to meet target

2

Use of value engineering/value analysis

3

Use of cross functional teams

4

Just-in-time pull system

5

Zero defects
6

Assembler and first-tier supplier co-operation

Lysons & Farrington, Purchasing and Supply Chain Management, 7th edition, Pearson Education Limited 2005

Structure and Supply Chains Enablers of Agile Manufacturing

Virtual enterprise
Physically distributed teams & manufacturing Rapid partnership formation tools Concurrent engineering

Slide 4.7

Each Functional aspect may be performed by many different organisations using Internet
A temporary alliance of partner enterprises located all over the world Achievable through tools such as IT and QFD techniques Provides a quick response to the need for shorter product development cycles

Integrated product/production systems

Rapid prototyping tools Electronic commerce

The integration of diverse systems of participating organizations

This includes CAD, CAE and CE to reduce product development times Directly collects customer requirements through on-line communications systems

Lysons & Farrington, Purchasing and Supply Chain Management, 7th edition, Pearson Education Limited 2005

Structure and Supply Chains Hines and Rich Value Stream Mapping Tools
Process activity mapping
Supply chain response matrix Production variety funnel Quality filter mapping

Slide 4.8

Reduction of waste
Reduction of lead times and inventory Targeting of inventory reductions Identification for the purpose of improvement

Demand amplification
Decision point analysis Physical structure

Identification of demand changes along the supply chain

Identifies when products stop being made in accordance with actual demand Provides overviews of a particular supply chain from an industry perspective

Lysons & Farrington, Purchasing and Supply Chain Management, 7th edition, Pearson Education Limited 2005