Summary

You can't compete and win alone. Today, constellations of firms ally against each other--and the firm that stands alone, may fail alone. Now there's a start-to-finish guide to the opportunities and challenges facing today's extended enterprise. InThe Extended Enterprise,authors Edward W. Davis and Robert E. Spekman show why extended enterprises demand radically new buyer-supplier relationships, why traditional business structures inhibit alliances and partnerships, and how to develop the competencies your company needs right now.Drawing on extensive research and new case studies, you get realistic strategies for planning, building, and managing the extended enterprise. You'll learn how to decide when to partner and who to partner with; align processes to improve information flow; and especially, develop people who'll work well across organizational boundaries. Above all, the authors offer deep insight into the attitudinal and behavioral changes that are needed in order to rapidly achieve results and sustain them for the long term.

Author Biography

Edward W. Davis, Oliver Wight Professor of Business Administration at University of Virginia's Darden Graduate School of Business Administration, specializes in supply chain management, manufacturing strategy, global sourcing, and developing high-performance organizations Robert E. Spekman is Tayloe Murphy Professor of Business Administration at Darden

Preface	p. xv
Acknowledgments	p. xxiii
Introduction	p. 1
The New Competition: The Extended Enterprise	p. 3
Changing the Face of Competition	p. 4
Different Views and Perspectives	p. 11
Life after Price Leverage	p. 16
Beginning the Conversation Needed for the Extended Enterprise	p. 18
Defining the Extended Enterprise	p. 20
Summary	p. 29
Traditional Views and Where We Have Been	p. 31
Tracing Shifting Priorities	p. 35
Traditional Buyer-Supplier Relationships: The Dark Ages	p. 35
Enter Material Management: The Beginning of the Age of Enlightenment	p. 37
From Materials Management to Supply Chain Management	p. 44
From Supply Chain Management to Extended Enterprise Thinking	p. 50
Summary	p. 52
Supply Chain Planning: From Past to Present	p. 53
In the Dark Ages: Economic Order Quantity and Reorder Point	p. 55
Material Requirements Planning: More "Push" for Materials Management	p. 56
Distribution Resources Planning = Material Requirements Planning for Distribution	p. 59
Just-in-Time: "Pull" Systems	p. 59
More "Pull" along the Chain	p. 61
Manufacturing Execution Systems: For the Shop Floor and More	p. 63
Enterprise Resources Planning: The Interconnected Enterprise	p. 63
Planning in Pieces	p. 64
Interfacing Alone Is Not Integration	p. 65
Advanced Planning Systems: Brains for Enterprise Resource Planning	p. 67
The Internet and E-Manufacturing	p. 70
Planning and Scheduling Integration Across Company Boundaries	p. 75
Summary	p. 78
Developing Extended Enterprise Thinking	p. 79
Toward the Implementation of the Extended Enterprise	p. 81
A View to the Future	p. 84
Strategic Intent Drives Extended Enterprise Thinking	p. 86
From Intent to Integration	p. 91
Supplier Relationship Management	p. 93
Mapping the Process from Strategic Intent to Partner Selection	p. 93
Parallel Processing: Understanding How to Manage the Gap	p. 97
Creating Value	p. 98
The Three Cs	p. 102
Summary	p. 106
Outsourcing in the Extended Enterprise	p. 109
Background and Trends	p. 109
Traditional versus New Reasons for Outsourcing	p. 112
Business Process Outsourcing	p. 112
Strategic Outsourcing: An Example of the Extended Enterprise	p. 118
Challenges to Getting There	p. 120
The Issue of Control	p. 124
The Extended Enterprise Approach to Outsourcing	p. 127
Summary	p. 128
Information Systems and Technology Issues in the Extended Enterprise	p. 131
Information Technology and Its Role in Supply Chain Integration	p. 133
Enabling Seamless Integration with IT	p. 135
Planning, Control, and Decision Integration	p. 137
Information Integration and Business Process Integration	p. 138
IT for the Extended Enterprise	p. 143
Strategic IT Opportunities For the Extended Enterprise	p. 144
IT Infrastructure	p. 145
Transactional IT	p. 146
Informational IT	p. 147
Strategic IT	p. 148
Reach and Range in the Extended Enterprise	p. 148
Capitalizing on IT Opportunities for the Extended Enterprise	p. 150
The Challenge of Building Consensus about IT Direction	p. 151
The Challenge of IT Integration	p. 152
The Challenge of Multiple IT Integrations	p. 154
Other IT Challenges	p. 155
A View Over the Horizon	p. 155
Winning Companies Will Excel at IT Integration	p. 156
Business Performance Management Systems Will Drive Continuous Improvement and Real-Time Response	p. 156
Decision Paths and Analytical Routines Will Enable Decision Integration	p. 157
Business Intelligence and Analytical Applications Will Deliver Process Intelligence and Information Integration	p. 157
IT Expertise Will Be Managed as a Core Competence and Competitive Discriminator	p. 158
Summary	p. 158
Trust, the Glue that Binds the Extended Enterprise	p. 161
Why Is Trust Important?	p. 163
Trust Is Essential	p. 167
The Role of Contracts and Trust	p. 169
Decomposing Trust into its Core Dimensions	p. 172
Building Trust	p. 174
Supplier Development	p. 174
E-Commerce, Supply Chains, and Trust	p. 176
Approaches to Building Trust	p. 178
Know the Components of Trust	p. 178
Understanding the Relationships between Trust and Control	p. 180
From Theory to Practice: Developing an Atmosphere of Trust	p. 182
Begin with a Plan	p. 182
Ensure Open Lines of Communication	p. 183
Establish an Appropriate Governance Structure	p. 184
Keep Your Eye on What Matters	p. 185
Walk in Your Partners' Shoes	p. 185
Partner Assessment and Determining Trustworthiness	p. 186
Summary	p. 188
Developing the Extended Enterprise	p. 189
Managers: People, Processes, and Structures	p. 189
General Trends of Forces Changing the World	p. 190
Surviving in the New Economy	p. 191
Boundary-Spanning Roles	p. 192
Requisite Boundary-Spanning Activities	p. 194
Gatekeeping and Interpretation	p. 194
Transaction and Integration Planning	p. 195
Engaging, Managing, and Monitoring	p. 195
Managing Across Networks	p. 196
Understanding the Competencies of an Extended Enterprise Manager	p. 198
Building Blocks for Extended Enterprise Thinking	p. 199
Processes and Structure Need to Adapt	p. 202
Developing Extended Enterprise Manager Competencies	p. 204
Teachable Competencies	p. 205
Unteachable Competencies	p. 206
Finding the Right Person	p. 207
Network Manager Competencies: What Kinds of Questions to Ask	p. 208
Extended Enterprises Evolve Over Time	p. 210
Summary	p. 212
Metrics for Extended Enterprise Performance Measurement	p. 213
Traditional Performance Measures: Focus on Functions	p. 214
Supply Chain Performance Measures: The Enterprise View	p. 216
Supply Chain Performance Measures--The Supply Chain-wide View	p. 219
SCOR Model	p. 220
PMG Supply Chain Performance Scorecard	p. 220
Balanced Scorecard for SCM	p. 223
Extended Enterprise Measures	p. 227
Summary	p. 236
Concluding Remarks	p. 237
Endnotes	p. 243
Index	p. 257
Table of Contents provided by Ingram. All Rights Reserved.

Supplemental Materials

What is included with this book?

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.

Excerpts

PrefaceThe extended enterprise has been discussed for a number of years,beginning, we believe, with Tom Stallkamp, former purchasing head atChrysler. He transformed supplier relationships at Chrysler by buildingbridges to its suppliers, and he changed the adversarial model that hadruled the U.S. auto industry for decades.The termextended enterpriseconnotes the collaborative relationships among supply chain members.Buyers and sellers work toward a shared vision--gaining a competitiveadvantage and achieving greater end use customer satisfaction, relativeto other supply chains. Chrysler and its suppliers competed againstFord, GM, and the non-U.S.-based OEMs and their supply chains. It isinteresting to note that since the Daimler merger, the collaborativemodel at Chrysler has slowly been supplanted by a different approachto procurement that, we believe, has done very little to foster thetenets of the extended enterprise as put forth under Stallkamp.Some ofthe alleged gains from a more collaborative supply chain are easy todocument, whereas others require a leap of faith. For instance, it iseasy to point to purchase price reduction, lower inventory costs, orquality improvement. We can show, albeit with slightly more work togather data, how the total cost of ownership has been reduced or howcycle times have improved. We have a more difficult time demonstratinghow customer satisfaction, market share, or customer retention can beattributed to closer ties with our supply base. Statements of how OEMshave learned from their suppliers and improved their processes, and howthese gains have led to better supply chain-wide performance are likelyto be met with some skepticism.Yet the extended enterprise is reallyabout creating a defensible long-term competitive position throughstrong supply chain integration, collaborative behaviors, and thedeployment of enabling information technology. Herein lies the challengewe face in writing this book. We advocate close ties among supply chainpartners and argue the importance of the extended enterprise as thepreferred business model for the new millennium. If we look at thecurrent state of affairs, most companies fall short of our normativeparadigm. Our observation is that most firms are not even close todeveloping the requisite mindset; they lack the skills and competenciesneeded and cannot implement the processes that lie at the heart of theextended enterprise.We are open to criticism that we have created anideal world and that we are naive. Our objective is to share our visionof how supply chains should be. We acknowledge that most firms struggleto transform their supply chain relationships. We are aware that thereare obstacles that must be overcome. At the same time, there are a smallnumber of exemplar companies that are much farther along this path.These companies do demonstrate extended enterprise behaviors and arereaping the benefits of cross-company integration or an ability toinstitute design product and process changes with suppliersinstantaneously and on a global basis. We will document thesebest-of-breed examples and use them to support our vision. Theseexamples demonstrate that the time for extended enterprise thinking isnow. To wait is to jeopardize the future competitive position of yourcompany.We advocate that extended enterprise thinking forces thecompany to consider supply chain-wide effects for actions taken andstrategies developed. Concurrently, such thinking also encourages thedevelopment of evaluative criteria that examine cost savings and revenuegrowth. Metrics for evaluating supply chain-wide performance cannotemphasize one to the exclusion of the other, although we admit that thecost-focused measures are more prevalent. Despite the acknowledgednascent state of metrics that examine extended enterprise performance,we believe that valid and reliable measures are being developed and thatany attempt to measure these benefits i