MyCIMA

Visiting Professor - audiocast and slides

Posted: Tuesday 13 October 2009 by Louise Ross
Replies : 2
Category: Management accounting
Keywords: alliances, interorganisational management accounting, Shannon Anderson, supply chains, visiting professor
Louise Ross's picture

You know, its not often that you do something for the first time, after age 40. I blame technology (as indeed I do quite frequently). This week I did my first ever audiocast, a double-act with CIMA 2009 Visiting Professor Shannon Anderson. I say double-act but Shannon quite properly did most of the talking, my contribution was like that of the character Roz in the TV series Frasier - "Shannon, we have Geoff on the line, with a question about control systems and managerial incentives.."

That was the great thing about the audiocast, the interactivity - listeners could submit questions and get a response from Shannon during her lecture. I had to laugh - Shannon's slides included a graph about the growing popularity of strategic alliances which showed a nice steeply growing line over a twenty-some year period, except for a big blip in 1996. Lo, the first two questions emailed in during the audiocast were asking for an explanation of the dip - I said to Shannon "show a management accountant a deviation in a pattern, and they are on it like a rat up a drainpipe!" (I had asked the same question when I first saw the slide - I think it's a MA thing - all that training on variance analysis ..)

One question from Sara was about potential customer satisfaction issues, between a vertically integrated company which can offer a seamless offering ("soup to nuts" I've heard it called) or a network offering different elements, say different parties offering the product, the delivery & installation, or the after-sales support. Shannon commented that many providers do think about quality and value-added, recognising that they have to offer more than a simple (and temporary) cost-saving outsourcing solution. I spoke to Sara afterwards, she has experience of very particular supply chain issues, which prompted her question. Sara, why don't you pop onto this blog and expand on some of your points?

We have a couple of Q outstanding from the presentation, I will add them to this blog shortly with either my or Shannon's response. Do listen to the audiocast or read Shannon's presentation if you have an interest in supply chains, alliances or interorganisational management accounting. Even if you don't, Shannon is such a lively and informative speaker, and spices her talk with interesting insights and anecdotes, it'll be time well spent.

Outsourcing and Management Controls

Posted by Purusottam Sen on Wednesday 14 October 2009 19:20

A recent article on the work of the professors who won the Nobel Prize for Economics this year (“Nobel Looks Outside Markets" - Justin Lahart ,WSJ, 13th Oct, 2009) provides a very interesting commentary on outsourcing:

“Economist Steve Tadelis at the University of California, Berkeley's Haas School of Business, who has worked with Mr. Williamson, cited the 787 Dreamliner being developed by Boeing Co. as an example of how firms can be more efficient than the marketplace. Boeing, which previously designed and built planes in-house, outsourced much of the Dreamliner's manufacturing. But because it had less control over its supply line, Boeing couldn't adapt as quickly and flexibly to the changes and problems that invariably arose within a project as complex as the Dreamliner. Boeing has since taken much of the Dreamliner's production back in-house.”

The challenge here would be to configure control systems to factor in issues connected with flexibility - a very challenging task indeed

Visiting professor audiocast

Posted by Sara Shipton on Thursday 15 October 2009 21:12
Thanks Louise. My own experiences relate to the Pub industry, where due to the Beer Orders some 20 years ago, once highly vertically integrated large brewers were forced to sell a large number of their pub estate. As a consequence, there are a number of business models in place across today's 60,000 UK pubs. My question related to the issue of dimished customer service and competitive disadvantage, that can be experienced through outsourcing large parts of supply chain, where a number of your competitors still provide an 'arms around' in house service. For example regional brewers like Marstons provide their pubs with an in-house beer delivery service, whilst the large national pubcos, like Enterprise and Punch Taverns provide beer deliveries and other cellar services through third party distributors/suppliers. This makes the quality of contract KPI's, measurements and default consequences critical to maintenance of the equivalent high levels of service provided by your competitors. A point made strongly in the presentation. My question related to any experiences/observations that Shannon may have had with respect to diminished customer service disadvantaging one company against a fully integrated competitor in any other sector, and if so, any successful mitigations implemented?