“Supply Chains and golf have many similarities". As Tiger Wood said, in golf for best results everything must be in dynamic alignment. Business leaders around the world, like IKEA, Nokia, Zara, Li & Fung, Dell, Caterpillar, can deliver products and services to their customers with a breakneck speed and in a way that makes it look easy, but not many of us can understand why.
Why is it that Nokia successfully transformed itself from a timber company in the early 1980s to become a world-leading electronics high technology company? How we can explain the fact that a national icon such as Marks & Spencer can lose its way – and its customers – while others, such as Nestle, go on to solidity and strength their position? We see it is possible for a company such as Dell to change a whole industry through its supply chain innovation, while competitors are still worrying about removing costs. How it is possible Daewoo’s Korean shipyards can produce a supertanker every 36 hours.
In enterprises for best results everything must be dynamic aligned. But what is an enterprise? “Every type of enterprise, whatever a commercial one or a not – for – profit; is a “pathway” through which products and services, even though ideas, are moving as they gather value and cost en route to the end user / customer”. Every type of enterprise is a supply chain”.
With a series of meaningful short stories, apt remarks and rhetorical questions the Supply Chain Thought Leader Dr. John Gattorna, began his analysis, in the top executive 2-Day Master Class “Living Supply Chains” that was organized by Supply Chain Management Forum (SCMF) on the 29th and 30th of May 2009 at Athens Royal Olympic Hotel.
“People, and people alone, are the centre, of every enterprise that exists in the world today. The main players in the business game of success or failure are people. On the outside we call these people “customers” or “clients” and on the inside we have “boards”, “managers” and “employees”, “blue collar workers” which running the business”. In this effort, the people of the inside the enterprise, in their way of doing business, develop strategies, processes, activities, relations, technology and infrastructure, to supply efficiently and effectively the customer, in other words to respond and meet the needs and the expectations of the people outside the enterprise. The truth is that most organizations have not reached yet, an acceptable level of understanding their customers’ dominant buying behaviours, and only very few genuinely understand and have an in depth knowledge of their customers. The name of the problem is “misalignment”.
“After more than 20 years’ experience in acting as a consultant to companies worldwide on improving their supply chains”, Dr. John Gattorna said, “it is at least clear to me that most of the companies over – serving some of their customers, and under- serving others. The problem is that we generally don’t know which is which. To meet these demands we need to adopt a fundamentally new business model for our enterprise supply chains, which is tried and tested around the world over the last decade with extraordinary results.
“This new business model, called Dynamic Alignment, is presented in details in my book “Living Supply Chains” and I will introduce you, during this 2-day Master Class. The DA model will help you to understand how to mobilize your enterprises around delivering what your customers want. David Smith, Head of Knowledge Management at Unilever, commenting in Financial Times in Financial Times in 1998, mused that ‘...... organizational alignment is 50% of the game. Processes alignment is 30%. IT alignment is no more 20%. The dynamic alignment concept requires that four levels of human endeavour be aligned: Marketplace – Response (s) to customer demands (Strategy) - Internal culture capability - Leadership style.
The introduction of DAM started with the Environment Analysis and Evaluation (Customers / Suppliers). Dr. John Gattorna introduced to his audience, which composed of executives coming from Greek and International firms, leaders in their business field, the new way of interpreting customers’ needs, and offered to them a new way of segmenting customers along their behavioral lines. (Dynamic Alignment 1st Diagnostic: Segmenting Target Market Along Behavioural Lines).
“Once we fully understand the behavioural structure of our marketplace, emphasized by Dr. John Gattorna, it is possible to “reverse engineer” the configuration of our supply chain back through the organization to actual operations on the ground. And because there is always more than one type of dominant buying behavior evident in any product / service – market situation, it follows that there is likely to be more than one type of supply chain. In all organizations worldwide, experience taught that, any organization, three (3) to four (4) generic supply chains, and the variations of these, exist in different mixes, depending of the product, service or country.
“The next step is the process of Assessing Internal Cultural Capability to implement a specific strategy. We do this by mapping the subcultures in the company using our proprietary mapping technique. (Dynamic Alignment 3rd Diagnostic: ‘Quick’ Internal Cultural Capability Map)
“Finally, we assess the Individual and Combined Leadership Style(s) of the top management team using the proprietary MBTI technique and converting the results into our own metrics to facilitate comparison with the other levels of the alignment diagnostic” ((Dynamic Alignment 4th Diagnostic: Mapping the Top Management Team (TMT) leadership Style)
“The last phase of the DA process is the Dynamic Alignment Diagnostic. At this point we are in a position to complete our comparative vertical analysis through the 4-level alignment model, identify exactly where mis-alignments occur, and recommend to management what actions should be taken for both short-term and longer-term results”.
At the end of the workshop Dr. John Gattorna focused on the challenges that companies faced today in order to develop more responsive supply chains to customer’s demand. Responsive supply chains are by definition, highly integrated. Li & Fung supply chains are indicative. Managing through cross functional teams (clusters), Li & Fung achieved internal integration, that penetrates the operations, and external integration with upstream suppliers and downstream customers. “As a bottom line I have to say that Dynamic Alignment is an integrated process which helps each company to:
Dr. John Gattorna, is generally regarded as a Global "Thought Leader" in the Supply Chain Management Space and is a highly sought after speaker internationally.
John Gattorna established and led Accenture’s supply chain practice in ANZ/Southern Asia for several years, and was one of the Firm’s most respected ‘thought leaders’. Before joining Andersen Consulting/Accenture in 1995 he operated his own consulting company, specializing in marketing, logistics, and channels strategy, servicing an international clientele.
John has authored/co-authored several books and numerous articles on marketing, marketing planning, pricing, customer service, channels strategy, logistics, and supply chain management. His latest book, Living Supply Chains: how to mobilize the enterprise around delivering what your customers want, was published by FT Prentice Hall in June 2006, and is written specifically for C-level executives in major global enterprises. A Chinese language edition was published in November 2007, and an Indian edition has also been released. An earlier work, the Gower Handbook of Supply Chain Management (5th edn), published in 2003, is regarded as the definitive text on supply chain management theory and practice; rights to Chinese and Russian language editions have been granted, and the former was published in March 2004. An earlier book co-authored with Andrew Berger, Supply Chain Cybermastery, was published at the height of the e-commerce boom in 2001, and has since been translated into Chinese. Strategic Supply Chain Alignment, was published in 1998, and was the first publication to bring a behavioural dimension to the task of building high-performance supply chains. This book has since been translated into both Japanese and Chinese. A new edition is due in late 2008.
Although John originally came from industry he has a strong academic pedigree having taught undergraduate, post-graduate, and executive programs at the University of New South Wales and Macquarie University in Sydney; Oxford and Cranfield universities in the UK; and Normandy Business School, Le Havre, France. He currently holds Adjunct Professorships at Cranfield School of Management and Macquarie Graduate School of Management and is Chairman of the Advisory Board, at the Institute of Logistics & Supply Chain Management, Victoria University, Melbourne.
In the early 1990s, John was one of the original co-developers of the “Alignment” concept, and since then has continued to research, develop, and apply this powerful framework to the design and management of enterprise supply chains. His work has evolved into the current ‘Dynamic Alignment’ concept that he is applying to enterprise supply chains, globally.
Going forward, John intends to continue his research, teaching and writing in the supply chain space, and provide independent advice and mentoring to C-level executives and Boards around the world.
Dr. John Gattorna's Books
Gattorna, John (ed) (2003), Gower Handbook of Supply Chain Management, Aldershot: Gower Publishing
Berger, A.J. and Gattorna, J.L. (2001), Supply Chain Cybermastery, Aldershot: Gower Publishing. Chinese language edition published in 2002 by Century-Wave Co./ PHEI, Beijing
Gattorna, J.L. (ed) (1998), Strategic Supply Chain Alignment, Aldershot: Gower Publishing
Gattorna, J.L. and Walters, D.W. (1996), Managing the Supply Chain: a Strategic Perspective, London: MacMillan Press