speed, cost will be good, but not the best.” What made the process powerful was that James forced
the conversation. He used the diagram in Figure 8 to illustrate the trade-offs.
The goal as to define required capabilities. There is more capacity and the focus on flexibility in a
responsive supply chain. In this segmentation model, the more responsive supply chains depended
on greater collaboration with trading partners. In contrast, in an efficient supply chain, the focus is on
the lowest cost and trading partner communication is not as essential.
Figure 9. Designing Supply Chain Segmentation
The secret for Clorox was to start with strategy. Each year, The Company held an annual strategy
planning process. At this meeting, business units and General Managers (GMs) share plans. The
focus is to develop clear objectives: how to win, how to play and how to configure. Within the supply
chain organization these strategies translate to supply chain design requirements. Where there are
gaps, the supply chain team develops plans. It happens annually. The process is led by the Supply
Chain Strategy group: a team of five people. There are no special technologies. The GM is active
throughout the process. The focus is on the next five years.
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