In recent years, management gurus have urged businesses to adopt such strategies as just-in-time, lean manufacturing, offshoring, and frequent deliveries to retail outlets. But today, these much-touted strategies may be risky. Global financial turmoil, rising labor costs in developing countries, and huge volatility in the price of oil and other commodities can disrupt a company’s entire supply chain and threaten its ability to compete. In Operations Rules, David Simchi-Levi identifies the crucial element in a company’s success: the link between the value it provides its customers and its operations strategies. And he offers a set of scientifically and empirically based rules that management can follow to achieve a quantum leap in operations performance.
Flexibility, says Simchi-Levi, is the single most important capability that allows firms to innovate in their operations and supply chain strategies. A small investment in flexibility can achieve almost all the benefits of full flexibility. And successful companies do not all pursue the same strategies. Amazon and Wal-Mart, for example, are direct competitors but each focuses on a different market channel and provides a unique customer value proposition—Amazon, large selection and reliable fulfillment; Wal-Mart, low prices—that directly aligns with its operations strategy. Simchi-Levi’s rules--regarding such issues as channels, price, product characteristics, value-added service, procurement strategy, and information technolog—-transform operations and supply chain management from an undertaking based on gut feeling and anecdotes to a science.
About the Author
David Simchi-Levi is Professor of Engineering Systems at MIT and is considered one of the premier thought leaders in supply chain management. He coauthored the award-winning Designing and Managing the Supply Chain. He is the founder of LogicTools (now part of IBM), which provides software solutions and professional services for supply chain planning.
—Jim Champy, Coauthor of Reengineering the Corporation
—Hasso Plattner, cofounder of SAP and chairman of the SAP Supervisory Board
—John J. Grimaldi, former executive vice president, Michelin North America