Designing Supply Chains for New Product Development

Antonio Arreola_Risa

• Publisher: Business Expert Press
• Year: 2013
• Print ISBN: 9781606493953
• eBook ISBN: 9781606493960
• Topic: Business
• Subtopic: Operations
• Index: Business

Research and development (R&D) supply chains are often designed without the process discipline and rigor that typically characterize the development of products emerging from R&D programs. This book should help everyday supply chain practitioners involved in research and new product development, who are migrating their products to full commercialization. The book should also aid decision makers looking to improve the overall effectiveness and efficiency of their supply chain. When new products are developed, a significant divide typically emerges in trying to commercialize the product while attempting to meet project demands for cost, schedule, and quality. Simply put, in many cases the supply chains developed to accomplish R&D functions are usually woefully inadequate to meet the demands of large-scale commercial applications. This book recounts the real-world work efforts, rigor, and discipline used to transition from a supply chain supporting R&D functions to a world-class supply chain capable of supporting a multibillion-dollar hydrocarbon recovery project.

Chapter 1

Supplier Landscape

What Are We Talking About and How Much Do We Need?

The first order of business is figuring out how much “stuff” you are going to need to meet your requirements. In this case, we mentioned earlier that the average person would view our requirements for precious metals as huge. That said, there may be some concerns in your company regarding what impact your requirements may have on world markets. A related and also very important issue is, if it can be determined whether or not any correlations exist between your material requirements and the financial markets. How would your requirements affect the volatility of the base materials? Are there any price inelasticities in your materials? What outside factors, not associated with your project, may have significant repercussions on your project? If the material contribution of your requirements is added to the material contributions of other related aspects of the project, would the total material requirements of the entire project have any sort of impact on world commodity markets? How do regulatory policies, tariffs, anti-dumping legislation, and other global supply-chain issues impact your decisions with regard to how one develops the supporting supply chain?

With these questions in mind, it is usually helpful to engage a consultant or two to assist in researching these questions. While most commodity information is public, there are a couple of issues to consider:

1. How much time do you, as the commercial development person, have to perform the research?

2. Do you have the correct skill sets on hand to perform the research?

3. Does your organization have a tendency or inclination toward a concept that might be called “proof by consultant”?

4. Will your results be accepted without independent corroboration by another organization?

The first two issues were relatively straightforward. Literally hundreds of hours were spent researching basic raw materials and determining any positive or negative correlations with the financial markets. We simply did not have the time to do it ourselves; more importantly, we did not have the skill sets on staff required to perform this sort of a study. The third issue was a bit more problematic. In this case, the company had developed a culture of “proof by consultant.” The thought here is that while one may have the requisite skills, knowledge, abilities, and talents to meet roles and responsibilities, sometimes there are aspects of your roles and responsibilities that you may simply not be an expert in, or have working knowledge of, that can be brought to bear on the question. In our case, this culture became burdensome as there were times when even some of the most fundamental issues regarding suppliers and commodities were challenged, and while the staff worked...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Abstract
• Contents
• Acknowledgement
• Foreword
• Introduction
• Chapter 1 Supplier Landscape
• Chapter 2 Make Versus Buy
• Chapter 3 Low-Cost Country Sourcing
• Chapter 4 Intellectual Property
• Chapter 5 Accommodating Design Changes
• Chapter 6 Learning Curves
• Chapter 7 Risk as a Measure of Total Cost of Ownership
• Chapter 8 Cost Modeling
• Chapter 9 Supplier Networking
• Chapter 10 Decision Framing
• Chapter 11 War Gaming and Table Topping Your Strategies
• Chapter 12 Putting It All Together
• Chapter 13 Conclusion
• Epilogue: Back in Business!
• Appendix: War-Game Chronology
• Index
• Ad Page
• Backcover