2nd Supply Chain Leaders Forum 2013
2nd Supply Chain Leaders Forum 2013
In the afternoon of the 29th of August 2013 a great variety of people, amongst others supply chain managers and experts from various industries, consulting and academia, gathered at Copenhagen Business School to be a part of the 2nd Supply Chain Leaders Forum 2013. The more than 80 participants met fellow supply chain colleagues and visited the supply chain vendor exhibition area offering relevant services and products plus interesting presentations about newest supply chain trends and technologies.
The conference was officially opened by Kim Sundtoft Hald, Associate Professor and Program Director HD-SCM at CBS, and followed by the chairman Henrik Knak, Director at the Supply Chain Center of Excellence at TCS. He shortly introduced the theme of the event – Competitiveness though Globalization – and engaged the first speaker Professor Torben Pedersen from the Department of Strategic Management and Globalization, CBS. He introduced the competitiveness platform at CBS. The Business in Society (BiS) Platform on Competitiveness is a 5 years initiative with major investments in support of research, teaching and dissemination on competitiveness in Danish Industry. The platform research in topics related to movement of Danish production to low-wage countries, the future of innovation activities and processes in Denmark and the degree of productivity of the Danish Industry. Finding answers to questions and problems related to these topics on time is crucial in order to secure and sustain prosperity for the Danish community.
Afterwards, keynote speaker Professor Holger Schiele from University of Twente School of Management and Governance in The Netherlands provided a very energetic and eye-opening presentation on “Effects of global outsourcing and supplier driven innovation”. The first part of the lecture focused on a research study in the German Automotive Industry which examined if global sourcing really saves money for the industry. To test the success of China sourcing expected savings and realised call-offs (% of goods received vs. budget) were compared in a research project relying on secondary data from a large number of companies. An outsourcing project was considered to be successful if outsourcing savings was beyond a certain small threshold value and if more than 75% of the goods budgeted was actually delivered. The result of the case study was that 90-95% of the examined sourcing projects were failures, and that high saving expectations were associated with a higher probability of failure. In the second part of the lecture evidence was shown that low-wage country sourcing of production parts and cost cutting attitude often leads to the deterioration of the preferred customer status and results in less innovations from suppliers. Based on this insight, Professor Schiele elaborated on the option to gain preferred customer status from ones top suppliers. This is crucial as research has shown that preferred customer status is key to ensure a high degree of innovation combined with good prices from suppliers. During the presentation the audience was requested to interact directly: Each participant received a personal “Turning Point” remote to take part in a live poll. Hereby topic related multiple choice questions, for instance the motives for global sourcing, were asked by the presenter to the audience and the poll results were shown in real-time on screen and discussed.
The next academic speaker revealed a newly done survey on Backsourcing vs. Outsourcing in Denmark. It was delivered by Associate Professor Kim Sundtoft Hald from CBS. The presentation dealt with some of the major expectations and concerns in Danish firms in regards to their current and future Backsourcing/outsourcing practices. One main finding was that a high level of further outsourcing activities can be expected in the next 5-years (38% of the companies examined). On the other hand the amount of current backsourcing activities is relatively low, 7% have back-sourced, only additional 3% are likely to do so in the near future. These numbers show a trend to outsourcing rather than backsourcing regarding Danish companies in the future. Also for that topic the opinion of the audience was requested. The result showed that the two most important decision factors for the audience to consider backsourcing in the future was proximity/distance to their market, and expected higher cost growth rates in outsourced production.
After the break, where the participants networked and enjoyed snacks and drinks, the Best CBS HD-SCM Thesis 2013 nominees and Best CBS HD-SCM Business Project 2013 nominees presented their case for winning. Three thesis and three business projects, all delivered in collaboration with a number of different companies, were presented. Christian Guldager was announced as winner of the Best CBS HD-SCM Business Project 2013 by CEO Lars Kyed Jakobsen from GS1 who also sponsored the price worth 5,000 DKK. Christians business project “Planning and Control” had received the academic level 10 – maximum in 2013. Linette Munksgaard Andersen won the Best CBS HD-SCM Thesis 2013 award sponsored and announced by Director Henrik Knak from TCS and worth 10,000 DKK. Linettes thesis “Dynamics of attraction over time in strategic supplier relationships” had obtained the grade 12.
The award ceremony was followed by an inspiring presentation on “Global Supply Chains” by the second keynote speaker of the day, Jeffrey D. Tew, Ph.D. and Chief Scientist at Cincinnati Innovation Center in TCS, USA. Mr Tew introduced his presentation with a definition of coopetition originating back from 2004, and the threats of Global Supply Chains were explained. Main conclusion was that successfully working Global Supply Chains need to be designed to create supply chain flexibility in order to smooth the impact of external forces and unforeseeable circumstances, e.g. labor stoppages, quality issues, and regulatory changes. Thereafter myths of Global Supply Chains were presented to the audience, e.g. most supply chains are designed to deliver “optimal performance”, which was requested to answer with true or false. The third and last part of the presentation was about how a Global Supply Chain can be optimized in the best way. The foundation and requirements to make changes happen need to be clarified first. Irreplaceable is a clear vision, people with the right skill set, experience and motivation and a collaborative culture. Additionally to these organizational features is a strong network of partners needed, whose metrics need to be aligned with the company’s metrics. To steadily improve your Global Supply Chain constant reviews, assessment and action-taking are required – it’s a journey! Based on that Global Supply Chains can be optimized by segmenting and customizing them and their structures according to the customer’s needs and financial scope. Parallel to the supply chain customization and redesign a high level of visibility must be generated in order to increase predictability and long-term planning ability. The third lever is flexibility, leading to more options and agility when facing problems as described earlier. A highly cost-efficient supply chain with a low degree of flexibility is likely to crash when unforeseen changes occur, leading to tremendous cost explosions which can outweigh Supply Chain savings. Good examples for unforeseen changes were recent earthquakes and floodings in Japan and Thailand in 2011, resulting in a low availability and rising prices for electronics like external hard drives or mobiles. Therefore, Mr. Tew recommended a mix of segmented thinking, flexible supply chain design, and visible and predictable operations in order to act among the best in the market.
The event ended after participants were invited to join an evening reception in order to discuss presentations and impressions and provide opinions on the discussed topics.
See pictures from the event on the website of the CBS BiS Competitiveness Platform.
The 3rd Supply Chain Leaders Forum 2014 is scheduled for August 28th – book the day!
Chairman Henrik Knak (far right), TCS, and Associated Professor Kim Sundtoft Hald (far left), CBS, honoring Best CBS HD-SCM Thesis 2013 award winner, Linette Munksgaard Andersen. She is flanked by the two other nominees for the award, sponsored by TCS.