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Supply chains by design.

By training and temperament, most managers working in the supply chain space are operationally oriented. They typically have come up through the ranks of transportation, logistics, or purchasing. They're used to getting things done.

So not surprisingly, many of these managers may not be all that familiar with the notion of supply chain design. Yet they need to be because how well your supply chain processes are designed correlates directly to how effectively your supply chain actions can be executed. Poorly designed processes and procedures lead to substandard results--no matter how great your technology or how talented your people.

Several articles in this issue of Supply Chain Management Review, aim to help supply chain managers better understand the importance of design. The subject is approached from the key perspectives of practice and principles.

The principles part is skillfully articulated by Steve Rogers, who recently retired from Procter & Gamble after a 30-year supply chain career there. The veteran practitioner describes the six design elements that P&G used to create a high-performance purchasing and supply management organization. Although the design approach is explained within the context of a consumer-packaged goods company, Rogers believes that the principles can be effectively applied across a range of business sectors.

Like P&G, Gillette recognizes the importance of supply chain design as a building block of business success. Service and inventory management concerns had forced the company to re-examine its entire go-to-market approach. The redesign that followed that sometimes-painful exercise was built upon a guiding premise: The value chain begins and ends at the retailer's shelf. As Gillette's Mike Duffy relates in his piece, this core vision paid big dividends--in the form of significant improvements in service levels, inventory, expenses, and overall supply chains costs.

Design competency extends beyond the physical to the virtual world as well. No, we're not talking about the attractiveness of your Web design (though that's certainly not unimportant). But rather how well you have designed your order fulfillment and logistics processes--the blocking and tackling of any successful retail strategy. A research team from Arizona State University led by Arnold Maltz presents a convincing case for the criticality of good logistics design--followed by precise execution, of course--in e-retailing success.

You don't have to become an expert in sophisticated design modeling. But a fundamental understanding of the role and importance of design in the supply chain is an essential first step toward superior performance.

Introducing the RFID Report: The RFID Report debuts on page 17 of this issue. This new, regular section of the magazine presents insight and information on the emerging technology of radio-frequency identification.

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Title Annotation:In This Issue
Author:Quinn, Frank
Publication:Supply Chain Management Review
Geographic Code:1USA
Date:Apr 1, 2004
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