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Supply Chain Frontiers issue #4. Read all articles in this issue.

The future shape of supply chains and how to make them more resilient, postponement strategies in manufacturing, and procuring transportation services, are among the projects that make up CTL's highly varied research agenda. Here is a summary of the latest project developments.

The Supply Chain Response to Disruption Study

The Impact of Postponement

The Supply Chain 2020 Project

The Transportation Research Group

Smart Objects Research Project

The Supply Chain Response to Disruption Study

The project looks at the resilience of supply chains when subject to major disruptions such as the impact of a terrorist attack or the effects of a protracted labor dispute. The project, headed by CTL Director Yossi Sheffi, is exploring how companies can build stronger, more secure and more resilient supply chains. Methods for minimizing the likelihood of major disruptions are being investigated, as are more robust supply chain designs that allow companies to bounce back quickly from emergency situations.

The Supply Chain Response project has expanded into several additional focused studies, which build off the work already completed. Two specific studies are under way: SC Response Culture Study and SC Response Collateral Benefits Study.

During the analysis of field studies the role of corporate culture emerged consistently as a contributing factor enabling, and in some cases driving, the firm's ability to make its supply chain secure and/or resilient. Just as law enforcement officials develop "cop eyes", it seems that firms are developing "security eyes" and/or "flexibility eyes", suggesting an ingrained awareness and orientation toward building these features into their business operations. As a result, the research team initiated a study to identify the role that culture plays in supply chain security and resilience. In particular, the study is capturing the practices and processes that contribute to developing these cultures and noting how firms can benefit from them.

The resilience study has attracted considerable interest worldwide. Work on a book about the project's findings is scheduled for publication in the fall of 2005. "The book will make an important contribution to the supply chain security field, and offer companies practical advice on where their security strategies might fail," said Sheffi.

For further information on the Supply Chain Response to Disruption project contact James B. Rice Jr. Director - Integrated Supply Chain Management Program, CTL, at jrice@mit.edu.

The Impact of Postponement

Delaying the final configuration of a product as late as possible in the supply chain can cut inventory costs and improve customer service. The strategy is called postponement and companies in the retail and manufacturing sectors have been using it for some time. However, the increasing complexity of supply chains and changing customer demands have given postponement new relevance. "For many companies postponement has become essential to remaining competitive," said Yossi Sheffi, CTL Director and project leader.

CTL is investigating the way postponement is being applied, the implications for productivity and support services, and how the strategy will influence the delivery of numerous products from paint to software. Case studies already compiled show that companies are refining postponement and widening the range of applications. Although these examples vary tremendously in scope and product type, there are some common features such as highly flexible work forces. Following the addition recently of more researchers to the project team, more case studies are planned and the work will be broadened to look at the relationship between postponement and employment patterns in manufacturing.

For more information on the project contact Ken Cottrill, CTL Director of Global Communications, at kencott@mit.edu.

The Supply Chain 2020 Project

The multiyear project is identifying and analyzing the factors that are critical to the success of supply chains as far into the future as the year 2020. The first research objective is to understand excellent supply chains and the underlying principles and macro factors that drive them. Leveraging what is learned during Phase I of the project, the second research objective is to project evolutionary paths of supply chains over the next two decades or so. The project team will develop macro scenarios such as an escalation in fuel prices or limitations on global trade, and explore how these likely changes could alter the nature of successful supply chains. The project will recommend actions companies can take to prepare for the proposed changes and the "sensors in the ground" needed to take action as futures are being realized. 

A European Industry Advisory Board has been formed to supplement the existing Industrial Advisory Board of more than 20 companies, largely North American-based multinationals. The group in Europe comprises 13 companies including The Borealis Group, BSH Spain, DHL, Inbev, Metro Group, Novartis, Roche, TI, TPG, and Unilever. "Having advisory boards on both sides of the Atlantic gives us a rich source of international supply chain expertise," said Larry Lapide, CTL Research Director and project manager of the Supply Chain 2020 Project.

For more information go to the Supply Chain 2020 web site or contact CTL Research Director Larry Lapide at llapide@mit.edu.

The Transportation Research Group

MIT's Center for Transportation and Logistics has established the Transportation Research Group (TRG), a multi-year, guided research initiative focused on freight transportation.

The TRG's objective is to bring together interested companies to explore how shippers, carriers of all modes, and other interested parties can improve the way in which transportation is planned, procured, and managed. Dr. Chris Caplice, Executive Director of the MIT Master of Engineering in Logistics (MLOG) Program, is the Principal Investigator of the group. He has developed a research agenda based on the interest expressed at a recent MIT symposium on Innovations in Transportation. The focus of TRG research this year is to investigate methods of identifying, mitigating, and managing uncertainty within transportation planning, procurement, and operations. Caplice emphasized that the research agenda will be shaped by the insights and discoveries gained from each year's research as well as the group's input.

In addition to the research projects, there will be a quarterly TRG roundtable where members will discuss urgent issues and exchange ideas. According to Caplice, a key benefit of becoming a TRG member is the opportunity to network with transportation professionals across different industries. For example, a retailer might provide insights on a problem faced by a manufacturer company or vice versa, he said.

The TRG is being formed and companies interested in joining should contact Chris Caplice at caplice@mit.edu.

Smart Objects Research Project

Radio Frequency Identification technology (RFID) remains a "hot issue" for supply chain practitioners with compliance mandates looming large for many manufacturers. CTL is researching RFID from a number of angles. Recent projects looked at best practices emerging from RFID pilots and high-speed manufacturing applications of the technology.

A core and continuing study called "Smart Objects and Intelligent Supply Networks" is exploring how Auto-ID technologies affect the supply chain. The study is looking at how the technology can be used for structural change, and its potential for disrupting predominant supply chain designs. The work is funded by Intel and carried out in collaboration with Stanford University.

Specific areas of research include the suitability of the technology in various applications (including end-to-end applications), comparisons of different adoption methodologies (each with different performance and structure), the importance of multiple levels and dimensions of integration for actual ROI, and how the technology can be used for varying tactical and strategic purposes. The initial research work has produced some unexpected findings, for example disconnects between market expectations and technology readiness. A report on the first year work is being prepared.

The research team is currently defining the year two-research agenda and invites input from industry practitioners. The scope of the work is becoming wider, and the community of companies involved is expanding.