The
MBA program in Supply Chain Management
at NC State University is unique among business schools.
With the support of the Supply Chain Resource Consortium,
an industry/university partnership, the program brings
the industry into the classroom, involving students,
faculty and supply chain professionals in finding
solutions to the real industry problems. This project-based
approach to education reflects the new model for business
schools described by Peter Drucker.
For
more information...
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Peter
Drucker...
"Management is a practice, like medicine;
and the model should have been the medical school,
where the bulk of the teaching, especially the most
important teaching of the M.D. in his or her residency,
is performed by practitioners. Unlike medicine, where
you can bring sick patients into the classroom, business
education does not allow you to bring an organization
into the classroom. You can, however, bring experience
in through your faculty and students. Business educators
should be out as practitioners where the problems
and results are." |
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12/31/03
Supply Chain Improvements,
Defined By Progress
Written
by:
Erik Kruse, SCRC
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Supply
Management at Progress Energy realizes that, as
the energy industry becomes more competitive,
the effective management of the entire supply
chain becomes an increasingly important contributor
to the top management team’s efforts to maximize
shareholder value. In fact, Progress Energy Supply
Management, whose mission is to “achieve
world-class performance” and “contribute
positively to increasing shareholder value,”
refers to managing the enterprise supply chain.
The enterprise supply chain includes “the
management of all external goods and services
from initial need identification to final supplier
payment.”
In an effort to increase the flexibility and efficiency
of the company’s supply chain, supply managers
are focused on a Supply Chain Improvement Program
(SCIP). Progress Energy’s resolution is a
good example of what Bruce Richardson, senior
vice president of research at AMR, Inc., also
recognizes as enterprise supply chain management.
In a Modern Materials Handling article, Richardson
described it as a “strategic wave” that
“will impact supply chain management going
forward (1).”
The Progress Energy SCIP is scheduled to run from
2003 through 2005. The company has identified
and set concrete goals for the program in the
following areas:
| • |
Reduction
of procurement overhead |
| • |
Reduction
of inventory |
| • |
Savings
in cost of goods and services |
| • |
Improvement
in customer satisfaction |
At the core of SCIP is the idea that, as supply
management accomplishes its SCIP goals, the Progress
Energy enterprise will enjoy a significant, positive
impact on both capital and operating expenditures
through supply chain optimization. It is likely
that an ambitious undertaking of this sort would
be unsuccessful without the full support of top
management.
Thus, SCIP is organized as follows:
| • |
A
program steering committee is composed of
key stakeholders of the program and is at
the top level of the program organization
structure. |
| • |
A
program sponsor reports to the “program
steering committee.” |
| • |
A
program director reports to the “program
sponsor.” |
| • |
A
program management office works with the “program
director” and others. It is responsible
for performance management, issues tracking,
communication support, change management and
other duties. |
| • |
Project
leaders report to the “program director.” |
| • |
Technology
enablement also plays a supporting role. |
| • |
Initiative
teams comprised of cross-organizational employees
execute the plan for each given task. |
Project
leaders are responsible for the identification and
completion of SCIP initiatives in the following
primary areas: strategic sourcing, procurement,
inventory and materials management, and accounts
payable. SCIP initiatives are characterized by:
| • |
Multiple
improvement projects |
| • |
Multiple
business unit stakeholders and participants |
| • |
Unified
leadership and direction |
| • |
Consolidated
goals and performance reporting |
| • |
Integrated
planning and scheduling |
| • |
Integrated
program management and reporting |
| • |
Focused
accountability for results |
“Supply chain professionals will never be
less visible inside their companies than they
are now," said AMR’s Richardson. Since
supply chain management has caught the attention
of managers at the corporate level, he expects
to see “a new emphasis on benchmarking, continuous
improvement, and the optimization of business
processes.”
The Progress Energy SCIP offers evidence that
Richardson has hit the nail right on the head
with his statement that enterprise supply management
is a “strategic wave” that “will
impact supply management going forward.”
References:
(1) Anonymous. (June, 2003). Next wave of supply
chain strategies. Modern Materials Handling.
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