Redefining Operations: Global Operations Conference Uncovers Strategies for Surviving in the New Economy

ANN ARBOR, Mich. -- A new day has dawned on the world’s economy, and only those companies that have weathered the storm are left standing. Maintaining competitive advantage in the face of adversity is a topic all resilient business leaders are trying to grasp.

In its third year, the student-driven Global Operations Conference (GOC) at the University of Michigan brought industry leaders, faculty, and students together to advance the worldwide practice of Operations on the way to understanding how to best survive and thrive today. The conference, held at Palmer Commons on Nov. 6, 2009, focused on strategies that work in this new economy.

Effective strategies and operational changes in response to the downturn were examined by top level automotive, energy and supply chain executives during the day-long conference. Students were given the opportunity to ask targeted questions and speak one-on-one with leaders during networking segments.

Organized by Tauber Institute for Global Operations students and supported by the Ross School of Business, College of Engineering, and the Operations Management Club, GOC 2009 focused on redefining operations and strategies for future success. Joel Tauber’s introductory remarks to the companies and students in attendance touted the benefits of having a disaster plan in place to allow for faster reaction time in the event of an economic downturn. The Tauber benefactor said that renewed emphasis must be placed on new technologies and efficiencies to help lower costs, and that innovative and creative management is key to being nimble when times get tough.

“Greed drives the free enterprise system, but excessive greed is what destroys it,” he said. “I said last year at this conference that the sun will rise tomorrow, and it will. But you have to keep your eyes open in order to see that sun.”

Top-Level Speakers

Keynote speaker Professor Hau L. Lee, Director of the Global Supply Chain Management Forum at Stanford University, presented "Winning Supply Chain Strategies in a Multi-Polar World.” Professor Lee is a co-founder of several supply chain and price optimization software companies including Evant, DemandTec, SignalDemand and TrueDemand; and he serves on the advisory boards of several logistics services and supply chain software companies. At the GOC, he listed five things he feels companies must do to be successful in a down economy:

• Architect the right supply chain
• Adapt to evolving changes
• Leverage partner capabilities for innovation and new product introduction
• Build values through deep and expanded customer service
• Invest in socially and environmentally responsible supply chain practices

“Companies who do these five things will do well in turbulent times,” said Lee. “The multi-polar world changes rapidly. It never remains the same. Companies who thrive are adaptive and use their customers as a source of innovation.”

Reuben Slone, Executive Vice President of Supply Chain at OfficeMax since 2004, comes from an automotive and consumer goods background. As such, he sees supply chains without the lens of a particular industry. The U-M ’84 Mechanical Engineering graduate said in his address, "Headwinds: Opportunity for Transformation," that now is the best time to be involved in supply chain management.

Citing enhanced levels of commitment, frequency of interaction, and trust among employees and customers, Slone maintains that these elements work toward maintaining a virtuous cycle during times of change. “Call me crazy, but the recession actually created a climate of cooperation and change,” he said. Equally interesting is the problem of keeping this attitude going when times improve. “We shouldn’t be reactive,” he noted. The key is to be proactive. But it’s harder to sell a new initiative on the basis of what will be gained (in good times) than on the basis of what will be lost (in bad times).

John Kelly has served as President of Xerox Global Services North America since 2007 and oversees document management and business process consulting services for the company in the US and Canada. His presentation, "Agility in the Enterprise - Outsourcing an Overlooked Business Structure," focused on documents as infrastructure. He said that the centrality of documents in all business transactions make their management a piece of the corporate infrastructure and has a significant impact to overall organizational effectiveness.

Kelly said his company is historically seen in terms of document management, but has embraced digitization of information and now serves as an outsourcing provider for companies with a value proposition that data management is not most companies’ core competency. He told the group that though some may be hesitant to store information on computers due to security concerns, the method is actually more secure and easier to manage than in print form.

Panels Discuss What’s on the Horizon

A power-packed energy discussion panel made up of Mark Wiseman of Ricardo, William J. Akley of National Grid, Dr. Branko Terzik of Deloitte, and Russel Pogats of DTE Energy talked about future energy challenges and the need for growth in meeting population increases worldwide. From energy creation to storage, the best and most efficient players will rise to the top, according to Dr. Terzik. Also, the panelists agreed that power utilities have not been customer-focused in the past and that these entities are in for an overhaul in terms of meeting the new challenges of tomorrow.

Energy issues also dominated the automotive panel discussion when David Cole of the Center for Automotive Research, Kim Korth of IRN, Ed Martin of Autodesk Inc. and Darryl Niven of Eaton Vehicle Group took to the dais. Gas prices and fuel emissions have created a burning platform for change in the car industry, but experts say that people continue to want it all—fuel efficiency and bigger vehicles. The panel agreed that companies must understand their markets, consider contingencies and anticipate customer needs to weather the current “new normal” economy. Martin said that in the new automotive reality, companies must innovate, drive out costs and design the sorts of vehicles people will want to buy. Cole called the automotive collapse a “depression” and said that without government intervention, the situation could have thrown the entire economy into a depression as well. Korth said that she expects car sales to rebound slightly in 2010.

Redefining supply chain operations was the focus of the third panel discussion, which featured Sharad Elhence of Infosys, D.G. Macpherson of Grainger, Darin Cooprider of Ryder Systems and Bill Read of Accenture. The panel pointed out that companies should foster the innovation process, stating that truly innovative ideas were never the result of a voting process by an executive steering committee. These ideas can be generated and expanded by all employees, and designing responsive systems where changes can be driven from the bottom-up is important in maintaining or advancing innovation.

Ricardo Case Competition

In addition to the formal conference program, Ricardo Strategic Consulting sponsored a rigorous two-round student case competition. The competition attracted 28 teams from across 10 universities from as far away as New York and California. Teams applied business strategy frameworks, operations knowledge, and analytical and problem solving skills to develop and present a recommendation to deal with emerging challenges at a fictional wind turbine component manufacturer. Winning teams included two Ross School of Business teams comprised of 1st place winners Daniel Corsetti, Faheem Gill, Kevin Hannegan and Natalie Henderson and 2nd place winners Shomit Manapure, Raghu Valipireddy, Sunil Tahilramani, and Rashinder Pal Gill.  Taking 3rd place was the team from the University of Maryland which included Siddhartha Jain, Chia-Chia Chang, Neil Vora, and Venkata Kumar.

Student organizers were pleased with both the turnout of students, faculty and business leaders, as well as with the caliber of information shared at the 2009 GOC. The lively discussions throughout the day uncovered effective operations strategies that will enable companies to both thrive in a growing economy and weather the current economic challenges.

For more information on the speakers and sponsors of GOC 2009, visit www.tauber.umich.edu/goc. 

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Written by Nancy Davis

Tauber Media Contact: bakerpa@umich.edu