Posted by: malstott | May 29, 2013

The Collaborating Value Chain

800PX-~1I’ve always loved the Möbius strip. It is a continuous surface. It is all one side. This geometric shape has a complicated mathematical representation and several very cool technical applications. One is simply as a typewriter ribbon (remember those?) that wears evenly on both sides. Another is a conveyor belt with the same idea of even wear. Wikipedia says, “The Möbius strip is the configuration space of two unordered points on a circle. Consequently, in music theory, the space of all two note chords, known as dyads, takes the shape of a Möbius strip; this and generalizations to more points is a significant application of orbifolds to music theory

My head just exploded.

In addition to the amazing and hard to understand ways this concept represents itself in nature and applied technology, it appeals to me in a  basic way. Perhaps I will tackle musical orbifolds some other time. Think about taking something with two sides and re-forming it so that there is only one side. How often in life would this be useful? One important use of this concept is in business. The business of building and shipping product to customers is rife with edges and boundaries and gaps. A metaphorical continuous surface is attractive to those of us fighting at the edges.

Supply chains have gotten more complex for every company in every industry over the last few decades. Whether a company chooses to outsource or assemble in-house there are very few products that can be made with no outside input. In addition to what needs to be pulled in for supply, there is the challenge of distribution to customers.  The supply and delivery value chain is global for most companies and because of that, the risks are high and inefficiencies are many. But there are ways to lessen the impact of this complex chain of interaction.

  • Real Time Information Sharing – CapGemini and Global Commerce Initiative just published their research paper entitled Future Supply Chain 2016. One of the sections in the paper talks about a new model for enhanced collaboration. Cloud based applications are available now that enable real-time information sharing across the supply and demand chain. The efficiencies that result from this information sharing include improved inventory placement resulting in higher service levels, faster reaction to trouble spots in the value chain and decrease in the use of energy to deliver the same value to customers. E2Open’s new Rapid Resolutions product claims to “reduce lead times, expediting costs, and inventory across trading partners.” Kinaxis’s Rapid Response product  similarly claims to enable companies to “make decisions quickly, collaboratively, and in line with the shared business objectives of all impacted stakeholders.” Given the tools that are now available, it is time to add the capability. Real time information is money.
  • Value Chain Mapping and Optimization – The technique of fully mapping your value chain is not a new idea. Michael Hammer talked about describing the “is” state in his book Reengineering the Corporation, originally published in 1993. Once the current state is understood, a team can evaluate the future state objectively. Lean principles have supercharged this concept making it even more powerful to companies today. Including key supply chain and distribution partners in this process can take a company even further in optimizing for full value.
  • Partner – The word is thrown around without much attention to the meaning. Companies that take the concept seriously and create processes that measure the full, continuous “Möbius strip of the supply chain” will win. Thinking of suppliers in a simple transactional mode is not valid. They are an integral part of a company’s success. If they fail, the supply chain and then customers will be impacted. There is a real synergy to these partnerships where one plus one can indeed equal three. Look for win-win ideas. Collaborate on cost cutting and inventory reduction. Think about the value chain as a Möbius strip, not just a two sided strip.

Coming together is a beginning.  Keeping together is progress.  Working together is success. – Henry Ford

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