CoE for a Smarter Supply Chain - Human Capital Development

Dr. Lai Ving-Kam
Associate Professor-Logistics and Supply Chain
Malaysia
Centre of Excellence (COE) for a Smarter Supply Chain
Part 2 of 3 - Centre of Excellence and Human Capital Development

• Significant business change and fluctuating levels of complexity make it
extremely intricate for global companies with multiple, independent supply
chains to achieve internal supply chain alignment across divisions.
• On the outset, centres of excellence may sound like a universal remedy for
supply chain management challenges as it lead the company in the right
direction.
• However, although they have provided significant value for some companies
and their supply chains, they have proved less useful for others especially
with the globalized market environment.
• The decision to adopt a CoE strategy therefore comes with a few notable
caveats, and ensuring a CoE's long-term viability and sustainability requires
some candid self-analysis as well as proactive change management.
• When done right, a CoE can be a valuable asset that produces long-lasting
benefits. This review will discuss the various steps for establishing a
successful supply chain centre of excellence:
Centre of Excellence (COE) for a Smarter Supply Chain
Source : VingKam Lai Aug 2017 4th Edition Supply Chain & Logistics Congress, Kuala Lumpur , Malaysia
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/coe-for-a-smarter-supply-chain-human-capital-development-2950

Center of Excellence Challenges
• Investment
– Time, funding, resources – all needed
• Continuity and sustainability Ongoing Effort
– This is not a one-time effort
• Relevancy and currency of the core competencies
-- Volatility of the technology and business trends
-- currency of the of in house competencies
• Return on Investment
– How do you determine ROI on COE?
• Savvy corporations adopt COE approach
7

10
Logistics
Distribution
Strategies
and
Planning
Developing Centre of Excellence in adaptive responsive yet efficient supply and demand
managing sourcing, procurement raw materials components and parts, manufacturing
and assembly, warehousing and inventory tracking, order entry and order management,
distribution across all channels, and delivery to the customers efficiently.
Centre of Excellence in Adaptive Responsive Supply Value Chain
Key Sc
Architecture
component Multilateral
Cross functional
Application
synchronization
Globally

Source : Accelerating Innovations in Malaysian Industry Supply Chains
By Lai Vingkam and Leong Choon Heng (2011) Institute of Supply Chain Management
Malaysia University of Science and Technology
13
Case study
Consequences of Failure to benefits from proper Centre of Excellence Development

• the innovative nature of products,
• the length of the life cycle
• the duration of retail trends in the industries,
• the longer and more complex supply chains
• the general movement to offshore production
These are only some of the associations that move supply
chains into that direction.
Global markets and more competition is likely to move
supply chains towards a more universal participation
where final retailers and upstream suppliers will be more
willing to collaborate in an effort to cut costs
There are many driving forces for collaboration in supply chains such as:-
Innovation and Supply Chain are mutually dependence
16

19
Product
conception &
Definition in
USA
Product D&D
in China ,
Korea or
Japan
Product
Technical file
digitalization
– Pseudo 5G
transmission
3D & Robotics
Production for
location sales
3D & Robotics
Production for
location sales
3D & Robotics
Production for
location salesAdaptive Responsive Supply Chain 4.5
Today
New CCR
Process
2020
RSC

1
ProductDesignFrontEndstages
CreationStage
PSTO Product Strategy Turn Over
CRM Concept Review Meeting
2 CFR Cost Feasibility Review
3
FCR Final Concept Review
4
PDR Product Design Review5
DevelopmentStage
ELR Electronic Logic Flow Chart6
TCP Tool / Capacity Plan7
8
MTC
Manufacturing Technology
Consideration
9 SCC Supply Chain Considerations
10
MBD Made / Buy Decision
11 CQP Cost Quote Package
12 FDR Final Design
13 ESR Engineering Spec Release
14
EngineeringStage
QP Quality Plan
15
PCP Process Control Plan
16 BOM Bill of Materials
17
PDC
Packaging Design
Confirmation
18
CDF
Component Drawing
Finalization
19 TSC Tool Start Confirmation
ProductdesignandDevelopmentBackEndstages
20
Tooling
Stage
1st S First Shot
21 TMR Tooling Model Review
22
WSP
Working Sample Pilot
23
DebugStage
MaterialsManagementstage
EP 1 Engineering Pilot 1
a ERP ERP system
b SOE Sales Order Entry
c MPS Master Production Scheduling
d MRP Materials Requirement Planning
e POR Purchase Order Release
f CC Customs Contract
g GR Goods Receiving
h WPS Weekly Production Schedule
i MPL Material Pick List
24 EP 2 Engineering Pilot 2
25 CPQ Component/Part Qualification
26 FTE Field Test Evaluation
27 FEP Final Engineering Pilot
28 APP Assembly Process Plan
29 WI Work Instruction
30 JGA Jig & Fixtures Approval
31 ERV Engineering Review & Validation
32
Qualification
Stage
PPA Packaging Printing Approval
33 PQT Product Qualification Test
34 TQP Tool Qualification Protocol
35 MPQ Molding Parameter Protocol
36 FPR Final Product Review
37 ERC External Regulatory Certifications
38 RTP Release to Production
39 Operations
Stage
PP Pre-Production
40 PS Production Start-up
41 PST Product Stress Test
42 SR Shipment Release
43 FS First Ship
44 A Availability
45 Post
Launch
Stage
PLR Post launch Review
46 PLM Product Lifecycle management
47
PDS Product Disposal strategy
Product and Development
Process- front and back end stages

Potential Advantages of Centre of Excellence
• Organization must take stock of their
position in this CoE triangulation.
One may want to start on a small
scale by leveraging existing
resources and expanding its
capabilities as the value is proven
companies frequently find the CoE
model to be self-funding.
2. Practicality: Building a CoE Triangulation is an achievable
goal.
• Guided by core strategic vision directing corporate , business
and operation strategies, company must harness and taking
specific advantage of the triangulation of Supply Chain,
Technology and Market Demand .

5. Reduced risk:
CoE models help reduce risk by providing cross
Business and project visibility to quality metrics and
services re-use, by continuously monitoring the
status of new design , testing and service
development, and by verifying that release decisions
are based on quantifiable business risk.
Potential Advantages of Centre of Excellence

Levels of Strategic Management
CoE readiness

CoEs Competitive Position: Competitive Advantage
Competitive Strategy: The analysis
of strategic position and core strategic
vision
Sustainable Competitive Advantage
Sources of Cost Advantage
Core Competencies
Economies of Scale
Economies of Scale Activity
Experience Curve Effects
Vertical Integration
Value Chain Analysis
Marketing and product management
Market Research
Market Positioning
Marketing Strategy and segmentation
Measuring the Positioning (Marketing)

Developing systematic and long term leadership capacity within business context
Performance Management Framework
Activity- Based
Costing [ABC]
Suppliers
Mission,
Strategy
Leaders
Share-
Holders
Lean , ERP
Six Sigma
Customer
Satisfaction
Assets
Leadership
Behaviours
Products
Services
Missions
Process Planning & Execution
(Back Office)
Adjusted
Strategy
Needs
CRM
Your Organization
ROI &
Capital
Order
Management
(Front Office)
KPIs
Strategy Maps
And Scorecards
Employees:
“How am I doing on
What is important?”
$

40
Do we have effective
enabling mechanisms
for the core processes ?
Do we have strategic
direction and
commitment in moving
forward?
Do we have an
innovative
organization?
Do we build rich
proactive links?
Do we learn and
develop our innovative
and creative leadership
Capability?
Is your organization well equipped with appropriate
Leadership capability in CoEs management?
Unless the leadership development is priority for CEO, HR effort is easily
sidelined. Without the involvement from CEO and top leaders , activities can
be reduced to programs or training events that failed to captured the
audiences.
If CEO and top management do not care , few other will !
CEO
of
Driving leadership model using business needs and company strategy led by CEO

43
The “Right” People or the “Right” Organization?
• What are the basic business Principles,
Philosophies and Core Values?
• What do we believe in?
• What policies and practices are consistent
with these Values and Philosophies?
•What can we do for the customer better
than our competitors?
• Given the core capabilities, how can we deliver
value (EVA) to customers in a way our
competitors cannot easily imitate?
• Senior management “manages” the values
and culture of the firm.
A Lean Values-Based View of Strategy
Fundamental Values or Beliefs
Design Management Practices
That Reflect and Embody
These Values
Use These to Build Core
Capabilities
Invent a Strategy That is Consistent
with the Values and Uses the
Talents & your Capabilities to
Compete in
New and Unusual Ways
Senior Management’s Role

Visionary
Chief
Entrepreneur &
Strategist Capabilities
Builder
Resource Acquirer &
Allocator
Culture
Builder
Chief
Administrator &
Strategy
Implementer
Process
Integrator
Coach
Crisis
Solver
Taskmaster
Spokesperson
Negotiator
Motivator
Arbitrator
Consensus
Builder
Policymaker
Policy
Enforcer
Mentor
Head
Cheerleader
Numerous Roles of Strategic Leaders

• Developing the business strategy is the responsibility and
priority of senior leaders. It is where they focus their time and
energy.
• Yet the success rate is alarmingly low.
• A business strategy is not enough.
Robert S. Kaplan and David P. Norton (Strategy Maps), developers of the Balanced
Scorecard, found in their research that the execution of business strategies is quite
poor:
1. 95% of a typical workforce does not understand its
organization’s strategy
2. 90% of organizations fail to execute their strategies
successfully
3. 86% of executive teams spend less than one hour per
month discussing strategy
4. 70% of organizations do not link middle management
incentives to strategy
5. 60% of organizations do not link strategy to budgeting
49
CoEs Leadership: Developing an Organization
to Deliver the Business Strategy

Action
Learning
Strategic
Leadership
programs
Action
Coaching
Approaching the Leadership
Pipeline Strategically
Few Many
Equip
for Today
Prepare
the Future
Build and Maintain
Leadership Pipeline
Develop the
Targeted Few
Transform the
Business
Educate and Train
the Many
Critical skills
Pool assessment
Accelerated development
On-boarding
Special assignments
Executive coaching
Change-agent development
Leaders teaching leaders
Business-issue focus
Build the culture
Execute strategy
Advance key initiatives
52
Tailoring efforts using company’s unique needs to yield greatest payoffs

Engaging Employees in Centre of Excellence
“ If you are going to treat customers first,
you must treat employees more first”
Employees More First ?
• 83% of employees plan to look for a new job when economy heats up
• 35% of “top performing” employees are at “high risk” of leaving their jobs.
• 60% of employees feel pressure to work too much.
• 83% of employees want more time with their families
• 56% of employees : either somewhat or completely dissatisfied with their job.
Source : 12/2003 “CNN/ Money

58
Generally, there are two types of competency models
Organizational Competency Models
Domain:
Function, Role or
Job-based Competencies
Essential to realizing organizational
business goals
Generally relevant to all employees in
the organization
Communication and Teamwork are
common examples
For some companies, these
competencies may be reflected in their
Core Values
Necessary for success in a particular function,
role, or job
Applicable to most, but not all, employees
of a particular domain (e.g., sales, finance,
human resources)
Typically not applicable to all employees of
the company
Usually involve knowledge in a technical,
professional or process area
An example of an HR function competency is
Staffing and Facilitating Change
Organizational Competencies are the same across a
company but
Domain Competencies are different for various groups in the
company

High Performance businesses are characterized by
leading edge human capital capabilities.
Human Capital
Efficiency
Workforce
Adaptability
Workforce
Performance
Talent
Management
Agility :flexibility to
Change
Employee
Engagement
Leadership Capability
High Performance Framework
High
Performance
Anatomy
Market
Focus
Distinctive
Capabilities
Human Capital Capabilities*
Management vision
and Commitment
Life Cycle
Management
Internal buy in /
Employee
Satisfaction
Dimension of Learning
Organization
Employee
Empowerment
61
Developing systematic and long term leadership capacity within business context

64
Conditions for Employee Empowerment
Empowering and inspiring top performers to stay and help grow busiess

67
Empowerment

70
Empowerment : Flattening the Power Structure
Benefits of Empowerment
All Employees view themselves as ‘Owners’ of the business
Improve productivity
Creative and Innovative
Customer-focus
Faster Decision making
Organizational Learning
Making full use of human resources-” engaging the mind of
every context and job content
Give as much responsibility and authority to employees as
is reasonable given the context
Empowerment is not TQM or Re-engineering
True empowerment means letting ‘ees’ make decisions about
their work : tasks, behaviours, goal setting and setting
work priorities
Empowering and inspiring top performers to stay and help grow business

73
Empowerment Outcomes-Psychological
• Intrapersonal Change
– Political efficacy
– Collective efficacy
– Belief in group action
– Motivation to act
– Perceived control
• Sense of community
– Community identity
– Bonding Social Capital
– Trust
– Reciprocity
• Participation
• Interpersonal: Critical Consciousness
Empowering and inspiring top performers to stay and help grow business

76
How to Achieve Empowerment & Proactivity
1. Job design
2. Manage expectations and encourage idea
generation
3. Team responsibilities and reward systems
4. Creativity training and tools
5. Staff development reviews & performance
monitoring focussed on the right things
6. Create a positive non-blame climate
7. Survey feedback method updated so it is
focussed on behaviours and orientations and not
satisfaction

Career Paths in L & SCM:
The following are some areas of employment for supply chain management
majors (actual job titles can vary, e.g., Agent, Analyst, Assistant, Specialist, or
Manager):
• Supplier Relations Management
• Contracts Management and Pricing
• Procurement and Supply Management
• Buyer / Purchaser,
• Materials Planning
• Inventory Management
• Logistics Management
• Transportation Carrier Management
• Demand Forecasting
• Consulting in SCM
• Export/Import Operations and Management
• Consumer Services Management
• Warehouse Operations and Management
• Distribution Management
•Strategic Planner,
•SCM executive
Manager
•VP, SVP, EVP- LSCM
•GM-SCM
• Lecturing
•And many more
79

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