As a human being, we all consume products and/or services all the time. This morning you got up and ate your breakfast, e.g., eggs, milk, bread, fresh fruits, and the like. After the breakfast, you drove your car to work or school. At your office, you used your computer, perhaps equipped with 27” LCD monitor. During your break, you drank a cup of coffee and played with your iPhone. So on and so forth. You probably take it for granted that you can enjoy all of these products. But if you take a closer look at how each of these products can be made and eventually delivered to you, you will realize that each one of these is no short of miracle. For example, which fruit do you like? Consider fresh strawberries. In order for the strawberries to be on your breakfast table, there must be numerous functions, activities, transactions, and people involved in planting, cultivating, delivering, and consuming strawberries. Moreover, all of these functions, activities, transactions, and people are connected as an integral chain, through which physical products like strawberries themselves and virtual elements such as information and communication flow back and forth constantly. By grouping related functions or activities, we have a supply chain, comprised of four primary functions such as supplier, manufacturer, distributor, and finally consumer. A supply chain is essentially a value chain. For the society or economy as a whole, the goal is to maximize value, i.e., to create satisfactory value without spending too much. In order to create the maximum value for the strawberry supply chain, every participant in the chain must carry out its function efficiently. In addition, all of the members must coordinate with each other effectively in order to ensure value maximization. We have to face the same issues for almost all the products and services we take for granted in our everyday life, e.g., cars, hamburgers, haircuts, surgeries, movies, banks, restaurants, and you name it! In this course, we want to understand fundamental principles of value creation for the consumers or the market. We try to answer questions like how the product or service is made, how the value-creating activities or functions are coordinated, who should play what leadership roles in realizing all these, and so on. As our course title hints, we approach all of these issues from a learning perspective, which is dynamic in nature and emphasizes long-term capability building rather than short-term symptomatic problem solving.
Dynamic Changes of Capability
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來自 Korea Advanced Institute of Science and Technology 的課程
供应链管理：动态学习方法
310 個評分
從本節課中
Management Capability
Effective SCM requires the firm to have strong operations capabilities. One can group various operations capabilities into three representative capabilities: Controllability, flexibility, and integrating capability. In order to be competitive in the market, the firm must retain high levels of these capabilities. In this chapter, we will discuss what the management capabilities are and the relationship among these capabilities.
與講師見面
Bowon KimProfessor
KAIST Business School
Now, I want to talk about long-term dynamics of, capability curve.
[BLANK_AUDIO]
We actually, you know, said that the
short-term relationship between controllability
and flexibility is inverse.
But I know that some people, or some of you probably have some concerns.
Because, some of you might say that, well, in the real world,
sometimes I observe a company, that seems improving.
It's controllability and flexibility at the same time, continuously.
We can think about really great companies, good companies,
and such company, seems to easily improving.
Its capabilities, always.
And that observation, gives us some impression that, the relationship
between controllability and flexibility, might be positive, not inverse.
Not negative.
So I want to.
Focus on that observation.
Which I think is not impossible.
Where actually, we can observe that kind of thing, from many companies.
If that is true, in other words if a company.
Can improve its capabilities, continuously, without
showing any signs of [INAUDIBLE] relationship.
If that is true, then, the framer we
talked about, you know, so far, must be force.
Is that right?
Or, is it possible for us to, again,
compromise or encompass, the framer we talked about.
And to, deal with the observation with my tab.
So let me try to explain that [INAUDIBLE] observation that
possible [INAUDIBLE] observation, with the framework we all ready have.
Okay, so this is the graph, and as usual.
We have controllability, we have controllability
here and we have flexibility here.
And then I show you, the dynamics of this capability curves, of one company.
Let's say we, we call that as firm A.
And now we have five different capability curves for, firm A.
And we see that the years are all different.
In other words, let's say this.
Is firm As capability curve in 1970s, 1970s.
And then probably the firm was able to enhance its [INAUDIBLE] capability.
And therefore it has, a new capability curve.
In 1980s, because of it's improved [INAUDIBLE]
capability, it's capability curve shifts upward.
And let's say that the, the company
is really good at improving its integrating capability.
Or probably the company nurtures its learning capability over time, and
therefore, as time passes, the company has been able to improve its capability curve.
In other words the company was able to shift or move its capability curve upward.
All the time, and now, we probably
mentioned, we, we, we slightly, you know,
implied that the capability curve is
The depiction of all the possible choices, were set over
possible choices, the firm can make, in the short run.
For instance, if this is the capability curve the company has.
Right now, or at a particular point of time, that means that
the company can chose this, can chose this point, say,
this as is the choice or if the company believes that this.
Is better choice, then the company might choose this one.
In other words along this capability curve, the company
can choose, any point, and that's the whole point, right?
In other words, in the short-term you, you can.
You know, move back and forth, and you can
choose any point, along this capability curve, because the capability
curve actually defines the possible choices, defines the set
or path of a possible choices the company can make.
And having said that, if the company
chooses a particular point, as its you know,
business goal or as it's strategy, and we call that as the firm's strategy choice.
[BLANK_AUDIO]
The firm decide to make the choice.
The firm decided to choose that particular point.
Now, come back to this dynamics of capability curves for firm A.
From A in 1970s, decided that okay.
This is our strategy choice.
This is our strategy choice.
In other words, I want to compete, by
positioning myself at this particular point of time.
At this level of controllability, and at this level of flexibility.
And for each capability curve, the firm probably makes a strategy choice.
This is the choice, this is the position the company
wants to have, you know, to compete in the market.
In 1980s.
And then the company, chose this one, as it's
position, strategic position, in 1990s.
And in 2000, the company chose this one, and 2010 the company chose this one.
Okay, so, now we can see the strategy choices or, I would just say
that [INAUDIBLE] of the companies over the firm As capabilities.
In other words, in 1970s, the company.
Showed the market that it has.
It will perform, this much controllability and this much flexibility.
So, strategic choice is [UNKNOWN] by the external,
external entities, in other words, outsiders can
observe, the strategy choices, made by the company.
On the other hand, the objective shape, the objective
shape of capability curve is not observable, externally.
In other words, internally the company may define its own capability
curve, but the outsiders, or external entities, external,
you know, firms, or external, you know, people, probably can
not observe, the details of capability curve, of a company.
The only thing the outsiders, the only thing
the external entities can observe, regarding this capability curve
is, the actual choice, a certain choice made by
the company, so, basically what, you know, the external.
External entities observe, external entities observe, these points.
And this actual capability curves, may not be observed by the outsiders.
So let's say, you know, I'm, I'm a manager at other company.
And I'm just outsider.
Outside of firm A.
And now, I know that firm A, has chosen.
These
capabilities over time.
So, what actually I can see is this strategy choices.
Actually made by firm A, right?
So this is the only thing I can observe.
And therefore, what do you think I can conclude by observing this?
My conclusion by observing this, is that
okay, this seems like there is positive relationship.
Right?
I have to say that the
relationship between controllability and flexibility is positive.
That's my conclusion, by observing this phenomena.
But, as I you know, discussed this so far.
I reached that conclusion, by using the same framework I used, when I talked
about the inverse relationship between controllability and flexibility.
So my point is that, sometimes it's possible, that we can observe.
A company that improves both controllability, vo, both efficiency
and responsiveness at the same time, but that doesn't,
but, that doesn't mean that the relationship at least the short-term
relationship between those capabilities is fundamentally positive.
The short-term relationship is obviously negative.
It's not easy to accomplish those two, those two
capabilities at the same time in order to continue spaces.
But if we look at this whole thing from
a long-term perspective, if we focus on the long-term dynamics.
We might say that there is positive relationship.
But that doesn't mean that you can
actually easily obje, easily achieve these capabilities.
I had a chance to interview a CEO of a, a global.
Car maker.
The company is a really great company.
And then after interviewing the CEO,
I asked the last question.
The last question was.
What is the most [INAUDIBLE] problem faced by you?
What is the most difficult issue you want to [INAUDIBLE] and then the, the CEO
paused for a while and then replied, well, I think we should improve our efficiency.
And at the time, we want to have more responsive, but I find it
very difficult to achieve those two things at the same time.
So, basically, he was referring to.
The straight up relationship between controllability and flexibility.
I also had the chance to meet another, another CEO
at you know, another, you know, car maker.
And unfortunately, this second car makes is kind of a low quality and
low end player, in one of these you know, less developed countries.
So basically the.
You know, brand value and confidence and, you know, using any criteria.
There is a huge gap between these two
companies, the company I just mentioned, you're the
great, you know, and car maker that is
you know, less fortunate and less competent Car maker.
And now I ask this same question, to the CEO of that you know, low end company.
Low end car maker.
And I asked them that, what is the
most assiduous and challenging thing faced by you.
What is the most critical problem you want to, you
want to solve, you want to observe, you want to absorb.
After short, very brief polls, the CEO of that
low end or less competent car maker [INAUDIBLE] were.
We want to, we want to save more costs.
We want to save costs more.
And at the same time we want to have a more flexibility.
Because, everything is uncertain.
So I, I get, you know, personally I think that you
gotta have a better ability to deal with the, this design objective.
Can you see the point?
This [INAUDIBLE] are struggling with the same problem.
Are struggling with the same issue.
But, one company is far better than the other, from
other standard, from any criteria, there is huge gap.
But, each company is concerned about the same problem.
So I would juust say that the
tradeoff relationship between efficiency and responsiveness, is unavoidable.
You cannot escape that tradeoff relationship.
Every company is a struggling within that issue, but the point
is that each company is struggling with that issue at different position.
Depending on the company's integrating
capability, depending upon the company's learning
capability, so it's very important to
understand all this relationship in dynamics.
If we truly develop our capability, we gotta first
understand the nature of the relationship, the tradeoff relationship.
And also, we have to understand how to improve all this relationship,
in other words, how we shift, how we move this capability curve upward.
And, what other necessary forces what are the fundamental forces
that enable the, enable company to achieve that kind of shift?
That's integrating capability, that's learning capability.
And I have to say that learning capability, is at the center of.
All this improvement, and basically learning capability,
must be regarded as the, you know, major force, in
determining the forms supply chain performance.
