Operations

Japan's distribution systems, long the target of criticism, are changing. Deregulation, new manufacturing imperatives, consumer behavior, and the economy have interacted to reshape Japanese distribution. The trends have important implications for global business, since the system now offers areas of opportunity for Western manufacturers and retailers.

In a time of shortening product life cycles, complex corporate joint ventures, and stiffening requirements for customer service, it is necessary to consider the complete scope of supply chain management, from supplier of raw materials, through factories and warehouses, to demand in a store for a finished product. Hewlett-Packard has developed a framework for addressing the uncertainty that plagues the performance of suppliers, the reliability of manufacturing and transportation processes, and the changing desires of customers. The author describes several cases in which entire product families have been reevaluated in a supply chain context. The methodology he presents should help others to manage their own supply chains more successfully.

Vertical integration is a risky strategy -- complex, expensive, and hard to reverse. Yet some companies jump into it without an adequate analysis of the risks. The authors have developed a framework to help managers decide when it's useful to vertically integrate and when it's not. They examine four common reasons to integrate and warn managers against a number of other, spurious reasons. Their primary advice: don't vertically integrate unless it is absolutely necessary to create or protect value.

Do you consider distribution and inventory costs when you design products? Can you keep your customers informed of when their orders will arrive? Do you know what kind of inventory-control systems your dealers use? If not, you've succumbed to the pitfalls of inventory management. You're not alone. Manufacturers have been concentrating on quality of incoming materials and outgoing products, but they haven't been paying as much attention to the costs associated with transporting and storing them. Lee and Billington describe fourteen pitfalls of supply-chain management and some corresponding opportunities. The more complex your network of suppliers, manufacturers and distributors, the more likely you can gain operational efficiencies by attending to inventory.

Organizations need focus, but they also need balance.

This paper offers ten commonsense principles that will help project managers define goals, establish checkpoints, schedules, and resource requirements, motivate and empower team members, facilitate communication, and manage conflict.

Do quality improvements lead to higher or lower profits?