ISCM Planning Meeting Program Review

1
ISCM Planning Meeting Program Review

• December 4, 2002
• James B. Rice, Jr.
• Director - Integrated Supply Chain Management
  Program
• Massachusetts Institute of Technology

2
Meeting Objectives

• Primary
• Review ISCM Program activities 2002
• Plan ISCM Program activities 2003
• With ISCM sponsor input and consensus
• Research Agenda 2003
• Event Plans 2003
• Secondary
• Brief review of 2002 research projects
• Revisit ISCM Structure
• Funding, Scope, Recruiting additional sponsors
• Enlist sponsor participation
• Research project(s)
• Event planning and hosting
• Harvesting Discussion

3
Agenda

• Review ISCM 2002
• Finances
• Research
• Events
• Value Exchange
• Issues
• Research Briefs
• System Dynamics Modeling of the Supply Chain
• Supply Chain Response to Terrorism
• Planning ISCM 2003
• Events
• Research

4
Review of 2002 ISCM Finances
5
ISCM Financial Structure

• Funding
• 100 from ISCM sponsors
• Pays for Director
• Fixed cost recent sharing
• Pays for research investments
• 40K annual sponsorship
• Single year commitment
• Funding structure allows freedom to work with
  other groups
• Financial contributions as well as content
  access contributions are exchange collateral

6
Review of 2002 ISCM Finances

• Funding received
• 2002 Revenues 160K received
• Forecasted 2002 Revenues at 200K
• Pre-2001 Surplus of 128K available
• 2003 Revenues 60K received (prepaid)
• Expenses incurred (actual)
• 2002 Est. Expenses xxxK
• Net Position 12-02
• Estimated carryover into 2003 xxK
• 2002 Research Project funding stretched into 2003

7
2002 Statement
Highlighted areas indicate estimates expense
items to be split among ISCM and APL
8
2003 Expense Estimate
Highlighted areas indicate estimates expense
items to be split among ISCM and APL
9
2003 Financial Forecast
Recommend that we maintain 75K in reserve to
provide cash flow flexibility
10
Estimate of 2003 ISCM Finances

• Estimated Funding Available
• 2003 Revenues anticipated from current sponsors
  200K
• Net cumulative available carry forward into 2002
  69K
• Expenses
• 2003 Est. Expenses before research investments
  143K
• Net Position 12-02
• Net available for program operation 269K
• Net available for research investments 126K
• Entails spending down all funds
• Will need to make research investments with
  funding receipts

11
Planning Implications Finances

• Consider potential research investment decisions
• Realistically funding one project at 50K,
  dependent on revenues
• Additional sponsors revenues is high impact
• Assess and develop research alternatives

12
Review of 2002 ISCM Research
13
Review of 2002 ISCM Research Agenda

• Extended projects through 2002
• Clockspeed On-Site Sessions with Prof. Charlie
  Fine
• Open invitation to sponsors to submit cases for
  Clockspeed sessions
• Fine continuing work in service supply chain
  some new areas
• New focus on Communications Value Chain
  Roadmapping
• Supply Chain Visualization Project
• Continued to involve ISCM in the development of
  this system to visualize supply chain performance
  through a tangible user interface, a system
  dynamics model knowledge repository
• Final project demonstrations in early 2003
• Initiated new projects conducted by ISCM
• SC Response to Terrorism
• Monsanto Seed Returns

14
Review of 2002 ISCM Events
15
2002 ISCM Event Schedule

• January 10 Dynamic Pricing in the Supply Chain
• MIT CTS Affiliates Program in Logistics
  Symposium
• February 5-6 ISCM Key Contact Planning Meeting
• 2001 Research Review and 2002 Research/Event
  Planning
• May 20-21 Joint ISCM Affiliates Symposium
• New Era of Customer Service Management
• May 21-22 ISCM Research Review/Best Practices
  Exchange Meeting
• October 16-17 Joint ISCM Affiliates
  Symposium Auto-ID Technology Defining
  Logistics Applications
• December 4 ISCM Key Contact Planning Meeting
• 2002 Review and 2003 Research/Event Planning

16
Planning Implications Events

• Choices for 2003
• Mix of events and timing
• Travel events to sponsor sites
• Sponsor supply chain reviews
• Clockspeed sessions
• Theme, or multiple point topics
• Co-sponsored events with other groups possible
• Sharing and collaboration potential
• How much and what amount of this is desired?

17
Review of 2002 ISCM Value Exchange
18
Review of ISCM Mission Value Exchange

• Two stated objectives
• Accelerate implementation of SCM at sponsor
  companies
• Advance the state-of-art of SCM
• ISCM delivers these through
• ISCM-funded Research Projects
• Quarterly Collaboration - Exchange Events
• Annual Executive Event
• Learn from other research consortia
• Smaller programs serve a focused agenda, sponsor
  input
• Larger programs serve a broad agenda, sponsor
  input
• Multi-year commitment
• Focus is on the research

19
Summary Assessment of ISCM Value Exchange

• Potential for higher impact exists
• Increased, more active participation in long term
  research agenda
• Sponsor benefits appear to be a function of
• Attendance at events (this may seem obvious)
• Consuming research shared
• Sharing around the company
• Generating discussion with researcher to
  understand, apply learnings
• Willingness to engage
• Non-event visits to MIT to explore research
  interests
• Commitment of resources to join research projects
  
• Clarity of your companys interests and needs
• Take advantage of our resources
• Theses, Researchers, Ongoing projects
• ISCM is a High-touch Program

20
Review of 2002 ISCM Issues
21
ISCM Issue Long Term Plan

• Future for ISCM
• What is our long-term vision?
• Purpose
• Research and activities
• Sponsor composition
• What do we want ISCM to evolve into?
• Shift from year-to-year planning to multi-year?
• Harvesting strategies.
• Coordination with Affiliates Program in Logistics
  (APL)
• Lower cost for Director, some coordinated events
• Future vision should drive other key choices
• Planning horizon and cycle
• Research agenda
• Event and activity plans

22
ISCM Issue Coordination with APL

• Shared Director requires coordinated events
• Tested process in 2002
• 2 day events
• 1 day shared with APL sponsors
• 1 day dedicated to ISCM sponsors
• Identifying common themes for events

23
ISCM Issue Program Structure and Size

• Program Structure and Size
• Currently holding at lower limit on number of
  sponsors
• Limited membership low cost limits research
  funds available
• Annual funding requires rework effort, limits
  ability to make research commitments for
  longer-term projects
• Although it is useful to review progress
• Considerations
• Multiple-year sponsorship agreement
• Enlist sponsors in recruiting efforts
• Discussion

24
Research Briefs
25
Research Briefs Discussions

• Paulo Goncalves
• Review of system dynamics work
• Working on multiple ISCM projects
• Supply Chain Visualization
• Monsanto Seed
• SC Response to Terrorism Team
• Informal discussion of recent issues uncovered

26
Planning Discussions 2003
27
Planning ISCM Events 2003
28
Planning Implications Events

• Choices for 2003
• Mix of events and timing
• Travel events to sponsor sites
• Sponsor supply chain reviews
• Clockspeed sessions
• Audioconferences, research site visits
• Share events with other MIT group(s) in 2002?
  (I.e. with LFM)
• Theme, or multiple point topics
• Sharing and collaboration potential
• How much and what amount of this is desired?

29
2003 Event Framework

• Jan. 5-7 Executive Education Fundamentals of SCM
  
• Consider
• PG Event Proposal for 2Q (coordinate with a site
  visit to enrich event?)
• Joint event with Intel University Day for 3Q
  (Chandler, Az)
• Potential Clockspeed session
• Additional Quarterly AudioConferences
• Dates
• 1Q
• January 5-7 Executive Education
• ISCM Exchange Meeting
• 2Q
• ISCM Exchange Meeting
• 3Q
• ISCM Exchange Meeting
• 4Q
• ISCM Exchange Key Contact Planning Meeting at
  MIT

30
Event Proposal

• Topic SC Value Creation Strategy, Financial
  Analysis Tools, Measures, Incentives
• Key Questions
• Strategy
• How critical is supply chain strategy to your
  business strategy?
• What is your business planning process and its
  influence on Supply Chain strategy?
• What are the tools/processes used to develop
  Supply Chain strategy?
• What is the vision for your SC? How is your
  company creating value from the SC?
• What are the focus areas? What is this focus
  driving?
• Financial Analysis Tools
• What are the key financial analysis tools used to
  design supply chains?
• How is financial analysis work being extended
  beyond the company boundaries?
• What are the financial analysis tools systems
  required in outsourced, dynamic environment?
• Measures
• What are the key SC measures? How are they
  executed/used? New measures required?
• Who defines measures and financial analysis tools
  in your organization? How do they get deployed?
  Do you use Centers of Excellence?
• Do you have a holistic measure for overall SC
  efficiency (financial, responsiveness, quality)?
• Incentives
• What is necessary to incent collaboration among
  SC partners (both suppliers and customers)?
• How is "gainshare" managed between supply chain
  partners?

31
Planning ISCM Research 2003
32
Planning 2003 Research

• Some funding available as noted in finance review
• 50K to support one project at current level of
  sponsor support
• Need to poll current sponsors to solicit specific
  interests
• Consider developing research projects to support
  event plans
• E.g. Proposed Finance Supply Chain Event may
  help identify a specific issue to study and
  potential researchers to consider
• Propose to solicit specific sponsor interest and
  discuss in conference call(s) with key contacts

33
2003 Research Discussion

• Propose discussions to identify areas of interest
• What are the core problems for your firms supply
  chain?
• What are the future issues that your supply chain
  may face?
• Seek common or overlapping areas of interest
  among sponsors
• Subsequently search for fit between sponsor
  interests and researchers at MIT

34
Review and Planning Summary
35
Summary

• Identify follow up items, responsibilities,
  timing
• List choices for 2002
• ISCM Vision, Long-term plan
• Research agenda decision making process
• Research plans, focus
• Event plan
• Program structure, operations
• List outstanding items

36
Reference SlidesEvent PlanningResearch
37
Reference Slides Event Planning
38
Events Evolution of process purpose

• 1995-1997
• Focused on learning about the sponsor supply
  chains (supply chain reviews at sponsor sites)
• 1998
• Shifted to theme-based, topic-focused (plan,
  make, source, deliver) events targeted to
  non-supply chain groups
• Focused on sharing learnings among sponsors,
  identifying best practices on several supply
  chain topics
• 1999
• Shifted to topic-focused events on mixture of
  supply chain and business management topics,
  leverage events with other MIT consortia and
  research groups, open discussion sessions
• No central theme identified, sponsor-driven event
  topics
• 2000-2001
• Events and audioconferences to balance travel
  interactions
• Heavier emphasis on research

39
2002 ISCM Event Schedule

• January 10 Dynamic Pricing in the Supply Chain
• MIT CTS Affiliates Program in Logistics
  Symposium
• February 5-6 ISCM Key Contact Planning Meeting
• 2001 Research Review and 2002 Research/Event
  Planning
• May 20-21 Joint ISCM Affiliates Symposium
• New Era of Customer Service Management
• May 21-22 ISCM Research Review/Best Practices
  Exchange Meeting
• October 16-17 Joint ISCM Affiliates
  Symposium Auto-ID Technology Defining
  Logistics Applications
• December 4 ISCM Key Contact Planning Meeting
• 2002 Review and 2003 Research/Event Planning

40
2001 ISCM Event Schedule

• February 1 ISCM Best Practices Collaborative
  Meeting at MIT
• Innovations in Sponsor Supply Chains
• February 2 Joint ISCM - Leaders for Manufacturing
  Program at MIT LFM Intern Research Knowledge
  Review
• June 19-20 eClockspeed Research Visit to Helix
  (Prof. Charlie Fine)
• ISCM Exchange Meeting Research Review at MIT
  
• Oct. 30 Innovations in Supply Chains
• ISCM Event Hosted by PG, Cincinnati, Ohio
• (PGs Consumer Innovation Center)
• Oct. 31 sClockspeed Research Visit to PG
• Prof. Charlie Fine Customer Service Supply
  Chain

41
2001 ISCM Support Activities Schedule

• February 20 ISCM AudioConference
• Review of Innovations by ISCM Sponsors (Intel)
• March 1 Clockspeed Research Visit to Siemens
• Prof. Charlie Fine
• May 14 Supply Network Coordination Symposium
• Sponsored by KLICT Research The Netherlands
• May 15 ISCM AudioConference
• Prof. Ellen Christiaanse Univ. of Amsterdam
• From Static Supply Chains to Dynamic Supply
  Webs
• Nov 2 ISCM AudioConference
• Global Terrorism and the Impact on Supply
  Chain Mgt
• Prof. Yossi Sheffi, Prof Barry Posen, and
• Dr. Jonathan Byrnes

42
2000 ISCM Event Schedule

• January 27-28 Managing Change in the Supply
  Chain and
• Leaders For Manufacturing (LFM) Knowledge
  Review
• June 12-13 Future of Supply Chain, E-Business
  and the Internet
• ISCM Event Hosted by Intel, Chandler, Az.
• (Fine - MIT, Lee - Stanford, Cohen - Wharton)
• Sept. 13-15 ISCM Research Review and Workshop
• Research Colloquium with LFM
• Nov. 28-29 ISCM 2001 - Program Planning
• Sponsor Key Contacts MIT Researchers

43
2000 ISCM Support Activities Schedule

• February 15 ISCM AudioConference
• eClockspeed Project Planning Prof. Charlie
  Fine
• April 18 ISCM AudioConference
• Smart Practice Knowledge Network Lucent
  Tech.
• Fireball Initiative PG
• June 1 Research Visit to PG Prof. Charlie
  Fine
• June 5 Research Visit to Lucent Prof. Charlie
  Fine
• October 17 ISCM AudioConference
• Dr. Fred Hewitt MIT CISR
• Why Demand Pipelines are better that Supply
  Chains

44
Consortia Events Current Best Practices

• Committed sponsor participation
• Desirable to have full involvement in planning
• Ensures events relevant to sponsor interest
• Sponsor co-planner
• Critical to have full participation
  (representation at least) at each event
• Active involvement in discussion
• Provides deeper insight, leads to involvement in
  other activities
• Event schedule, participation and size
• 1.5 to 2 day optimal duration
• 1 day max shared with other groups, 2 hours
  unscheduled for open discussion
• For symposia-type events, maximum 30-35
  participants for top benefit
• Event planning
• 3-4 core exchange events at MIT (or sponsor site)
  plus other interactions
• Advance plan best for all, with theme
• Key contact planning sessions requires key
  contacts (at a minimum)

45
Reference Slides Research
46
Consortia Research Current Best Practices

• High sponsor involvement produces exponential
  benefits
• Participation in project development and field
  research
• Benefits to both the sponsor and project results
• 2001 ex. Intel (suggested Stanford CLV
  project), PG (CLV study, hosted event,
  Clockspeed session), Helix (Clockspeed session),
  Siemens (Clockspeed session)
• Leverage research funds with ongoing research
• Pool funds with other initiatives for greater
  impact
• 2001 ex. SC Visualization, Fine Clockspeed
• New projects invest in research considering the
  author
• Akin to commissioning a book
• Track record, productivity
• Research entails a process of discovery
• Research, not consulting - creating new knowledge
• 2001 ex. Fine exposes Service Supply Chain,
  Network Master uncovered SC vs. SC limitations

47
Research Agenda Options

• Multiple options exist for research investment
• Applied research project vs. concept development
• Independent funding vs. leveraged funding
• Large single investment vs. portfolio of projects
  
• Broad business issue vs. focused problem
• Degree of sponsor participation on each project
• Single company vs. multiple

48
Planning Implications Research

• Research agenda options as choices for a
  consortia
• This year and into the future
• Portfolio of the various options
• Recognize context of our consortia
• Multiple companies, different agendas, joined
  together for a common interest in SC
• Consortia structure entails funding constraints
• Need consensus among sponsors for research agenda
  choices
• Consider soliciting additional funding for
  additional work