malaysia institute for supply chain innovation (m.i.s.i) k · 2017-02-14 · it e k malaysia...
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MALAYSIA INSTITUTE FOR SUPPLY CHAIN INNOVATION (M.I.S.I)
Dr. Javad Feizabadi
MISI’s Assistant
Professor and MIT Research Affiliate
South East Asia Auto Summit, Jakarta 8-9 April 2015
jfeizabadi@misi.edu.my
WhatIwillcover…
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§ MITGlobalSCALENetwork§ Automo7veExcellenceCenter@MISI§ GlobalAutomo7veIndustryDrivingForces
q ShiEinggravitycenterfromtheWesttoTheEastq …
§ ScenariosforSEAautomo7vevaluechain§ Wrapup
WHOWEARE…MITGlobalSCALENetwork
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Interna7onalallianceofleadingresearchandeduca7oncentersdedicatedtosupplychainandlogis7csexcellencethroughinnova7on.
MalaysiaIns=tuteforSupplyChainInnova=on
• LaunchedinMarch2011• Jointini7a7vebetweenMITandthe
GovernmentofMalaysia• LocatedinBukitJelutong,ShahAlam,
about15milesoutsideofKualaLumpurand10minutestoindustrialparks
MISIMITMalaysiaSCM
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MISIAutomo=veCenterofExcellenceEXPERTS:
Dr.JavadFeizabadi:Over7yearsofworkingandresearchingexperienceinautomo=veindustryinEurope,MiddleEastandSEA
Dr.DavidGonsalvez:FormerdirectorofGlobalSupplyChainStrategyatGeneralMotorsandover20yearsofexperienceinThailand,GermanyandSwitzerlandDr.ShardulPhadnis:Over7yearsexperienceinManufacturingindustryandexpertinscenarioplanningandsupplychainstrategyDr.MahenderSingh:Over15yearsexperienceinthefieldofsupplychainstrategyandformerdirectorofSupplyChain2020atMIT
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Automo=veCenterofExcellenceCurrentResearchProject:
TheChangingGlobalAutomo=veValuechainandredesigningautovaluechainsinSEA
PHASE1 Iden7fyingandanalyzingthedrivingforcesinglobalautomo7veindustry
PHASE2 DevelopingscenariosforSEAautomo7vevaluechains
PHASE3 Implica7onsonSEAautomo7vevaluechains
PHASE4 Formula7ngwinningstrategiesforautomo7vefirms
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Global automotive industry driving forces and its implication on South East Asia Automotive
Value chains
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Challengesofmanagingautomotivevaluechain
Dynamicsindifferentindustriesinupstream
anddownstream
SupplyChainVs.SupplyChaincompe77onandcomplexityofcommon
elements
Newplayersinvaluechainduetonewfueltechnology
andchangingindustryclockspeed
Strikeabalancebetweeneconomyofscaleandscopeformovingbackandforthfrom
BTStoBTOandSKUprolifera7on
Changingconsumerandcustomerindownstreamwiththeemergenceofnew
businessmodels
Thecycleofconsolida7onand
fragmenta7oninautoindustryanditsimpact
onsupplychain
Liquiditypressureincapitalmarketandpushingforreducingsupplychainlead-7me
Newmaterialanditsimpactonsupplychainand
logis7cs
Pu_ngproperpolicyinplacetomanagethemega-
suppliers
MovingfromaglobalSCtoaregionalSCandfromalongSCtoa
shortSC
Managingthreedifferentfulfillment
chains:OE,Accessoryandspare
parts
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DrivingForcesinGlobalAutoIndustry
Urbaniza7on
Customiza7onSustainability
GLOBALAUTOMOTIVEINDUSTRY
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DF1:ShiYingcenterofgravity
ASEAN Countries
China
India
Legends
WORLD MAP (SUPPLY CHAIN DEVELOPMENT)
global hub for small cars
Car exporter
Global Vehicle Production increased inASEAN, China & India from 34% in 1997 to 64% in 2010
CAR Exporter
R&D for Basic Research
R&D for Car Development
Global Hub
Core Countries Sourcing, Manufacturing, Retailing
Global Vehicle Production decreased inCore Countries from 66% 1997 to 36% in 2010:
US, Japan, Korea, Germany, Italy
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DF1:ShiYingcenterofgravity
Es7matedlightvehicleproduc7oninN11countriesby2020(source:FrostandSullivan,2012)
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DF1:ShiYingcenterofgravity
lightvehicleproduc7on2007-2020(source:FrostandSullivan,2012)
M6A0-18 78
(2.0)
3.0
8.0
13.0
18.0
23.0
28.0
Units
(Milli
on)
Brazil China The Czech RepublicGermany India ThailandIran Japan South KoreaRussia South Africa USA
1.4%
0.2%
9.5%
6.9%
4.3%
3.7%
6.1%
3.2%
1.7%
10.1%
4.2%
5.7%
Brazil
China
The Czech Republic
Germany
India
Thailand
Iran
Japan
South Korea
Russia
South Africa
USA
Source: LMC Automotive Forecasting; Frost & Sullivan analysis.
Global Vehicle Production 2007-2020 Iran and Thailand are the fastest-growing markets after China, India and South Africa
Automotive Industry Vision: Light Vehicle Production, Global, 2007-2020
Automotive Industry Vision: CAGR Production, Global, 2010-2020
Global
Average CAGR 4.3%
Iran
Korea
China
India
Russia
USA Japan
Germany Brazil
Thailand The Czech Republic
South Africa
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Globalvehiclesalesin2007to2020
M6A0-18 79
0.9%
8.9%
8.9%
4.0%
6.0%
5.2%
2.4%
11.4%
4.9%
5.6%
-0.4%
China
The Czech Republic
Germany
India
Indonesia
Iran
Japan
South Korea
Russia
South Africa
USA
(2.0)
3.0
8.0
13.0
18.0
23.0
28.0
Uni
ts (M
illio
n)
Brazil China The Czech RepublicGermany India IndonesiaIran Japan South KoreaRussia South Africa USA
Global Vehicle Sales 2007-2020 India, followed by South Africa and Russia, are the fastest-growing markets in terms of sales, driven by their economic growth
Automotive Industry Vision: Light Vehicle Sales, Global,
2007-2020 Automotive Industry Vision: CAGR of Sales,
Global, 2010-2020 Global
Average CAGR 4.6%
Iran South Korea
China
India Russia
USA
Japan Germany
Brazil
The Czech Republic South Africa Indonesia
Source: LMC Automotive Forecasting; Frost & Sullivan analysis.
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emergingandfutureemergingvehicleproduc7onhubs(Source:FrostandSullivan,2012)
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Future Emerging Production Hubs—Thailand, Mexico, Iran, South Korea and Turkey These countries are predicted to become vehicle-production hubs after BRIC
2010 Forecasted 2015 Forecasted 2020 CAGR (2015-2020) Brazil 3,215,025 4,379,445 4,600,000 1.0% Russia 1,295,031 2,470,319 3,199,755 5.3% India 3,170,648 4,958,285 8,300,000 10.9% China 15,481,666 24,335,943 28,000,000 2.8%
Thailand 1,533,196 2,129,598 2,314,956 1.7% Mexico 2,066,004 3,043,842 3,266,720 1.4%
Iran 1,457,708 2,242,963 2,535,992 2.5% South Korea 3,981,648 3,962,316 4,065,627 0.5%
Turkey 1,029,992 1,295,967 1,517,470 3.2%
Indonesia 648,375 894,453 1079450 South Africa 505,924 730,144 842872 2.9%
Argentina 663,246 869,247 927082.3736 1.3% Malaysia 568,290 656,729 670031.561 0.4%
Czech Republic 980,396 1,269,995 1,343,760 1.1% Philippines 84,348 82,655 88000 1.3%
5.2% in 7 years
Automotive Industry Vision: Vehicle Production in Key Emerging and Future Emerging Markets, Global, 2010, 2015 and 2020
Global Production CAGR
Em
ergi
ng
Mar
kets
(B
RIC
)
Futu
re
Em
ergi
ng
Mar
kets
Long
Ter
m K
ey
Mar
kets
7.8% in 7 years BRIC CAGR
Source: LMC Automotive Forecasting; Frost & Sullivan analysis.
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Global Automotive Production 2020—Regional Overview Asia will emerge as a production hub, with about half the vehicles globally, manufactured here. China will account for 28 per cent out of it.
Note: Africa - South Africa Asia - Australia, China, India, Indonesia, Japan, Korea, Malaysia, The Philippines, Taiwan, Thailand, New Zealand Eastern Europe – Bulgaria, Bosnia, Croatia, The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey, Ukraine The Middle East – Egypt, Iran North America - Canada, Mexico, USA South America - Argentina, Brazil, Chile, Colombia, Ecuador, Uruguay, Venezuela Western Europe - Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK
Note: All figures are rounded. The base year is 2010. Source: LMC Automotive Forecasting; Frost & Sullivan analysis.
71.7 million Vehicles
107.9 million Vehicles Automotive Industry Vision: Light-vehicle Production, Global, 2010 and 2020
China 26
Others 3.2
Africa 1.0%
2020
Russia 2.8
Italy 2.8
France 2.6
Others 1.9 0
10
20
30
40
50
60
Africa Asia Eastern Europe Middle East North America South America Western Europe
China 28.0
Other 2.5
Japan 10.6
India 8.3
Korea 4.0 Thailand 2.3
1.0 Million Iran 2.5
9.3 million
Russia 3.2
Others 3.8
Turkey 1.5 Poland 0.8 Mexico 3.2 Canada 2.3
16.8 million
Brazil 4.6
Argentina 0.9
6.0 million
Others 1.6
France 2.7
Germany 6.4
Italy 1.5
Spain 2.8 UK 1.6
16.6 million
55.7 million
USA 11.3
Mill
ion U
nits
Africa 1.0%
North America 16.0%
Western Europe 18.0%
Eastern Europe 8.0%
South America 6.0%
Asia 49.0%
The Middle East 2.0%
Western Europe 15.0%
South America 6.0%
North America 15.0%
Eastern Europe 9.0%
Asia 51.0%
The Middle East 2.0%
CAGR: 4.3%
Others 1%
2020 2010
Note: Vehicle Sales in Million Units Includes all Light Vehicle: Passenger Vehicles and Light Commercial Vehicles (less than 3.5 ton)
2.5 million Others 0.5
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Global Automotive Sales 2020—Regional Overview Dominance of Asian countries in automotive industry will continue beyond 2020 with a growth CAGR of 5.58 per cent
Automotive Industry Vision: Light Vehicle Sales, Global, 2010 and 2020
Note: Africa - South Africa Asia - Australia, China, India, Indonesia, Japan, Korea, Malaysia, The Philippines, Taiwan, Thailand, New Zealand Eastern Europe – Bulgaria, Bosnia, Croatia, The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey, Ukraine The Middle East – Egypt, Iran North America - Canada, Mexico, USA South America - Argentina, Brazil, Chile, Colombia, Ecuador, Uruguay, Venezuela Western Europe - Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK
Note: All figures are rounded. The base year is 2010. Source: LMC Automotive Forecasting; Frost & Sullivan analysis. Note: Vehicle Sales in Million Units, Includes all Light Vehicle: Passenger Vehicles and Light Commercial Vehicles (less than 3.5 ton)
70.7 million Vehicles
~ 107.0 million Vehicles
0
10
20
30
40
50
60
Afric a Asia Ea ste rn Europe Middle Ea st North Ame ric a South Ame ric a We ste rn Europe
1 Million 7.2 million
18 million
China 29
USA 17.2
Canada 1.9
Brazil 5.3 Africa1.0%
Mill
ion
Uni
ts
2020
Japan 4.9
Iran 2.4
Turkey 1.3
Russia 4.2
Poland 0.8
Mexico 1.6 Argentina 0.7
Germany 3.9
UK 2.8
France 2.8
Spain 1.7
Others 3.9
Others 1.2
UK 2.9
Italy 2.8
2.8 million
20.7 million
48.4 million
8.3 million
India 7.8
Other 4.1 Korea
1.5
Indonesia 1.1
Other 2
North America 20.0%
Western Europe 20.0%
Eastern Europe 5.0%
South America 7.0%
Asia 41.0%
Others 4.0%
The Middle East 2.0%
North America 19.0%
Western Europe 16.0%
Eastern Europe 8.0%
South America 7.0%
Asia 44.0%
Others 3.0%
The Middle East 3.0%
CAGR: 4.6%
Africa 1.0%
2010
Egypt 0.4
PHASETWO:SCENARIOSFORAUTOMOTIVEVALUECHAINDESIGNINSEA
SECTIONII:
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Howisscenarioplanningdifferent?
Time
l Pl
anni
ng H
oriz
on
ShiYfocusfrompredic=ontoprepara=on
Material developed by: Dr. Mahender Singh (MIT, CTL)
©2014ShardulPhadnis
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SCENARIODEVELOPMENTCantheorganiza=onCONTROLtheelement?
Yes No
Cantheorganiza=onINFLUENCEtheelement?
NoYes
DrivingForceLocalFactor
Isvalueoverplanninghorizonpredictable
NoYes
UncertaintyTrend
Elementoffocaldecision
Phadnisetal.,2014
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FocalDecision:Automo=vevaluechain(anestedstructure)
AGLOBALindustry:automakersandglobalsuppliersformbuyer-supplierrela7onshipsonaglobalscale.Inter-regionalvehicleandpartstradeissubstan7albutcappedbypoli7calandopera7onalconsidera7ons.
REGIONALproduc7onsystems:intra-regionalfinishedvehiclesandpartsflowsarethedominantopera7onalpagerninthisindustry
NATIONALproduc7onsystems:domes7cproduc7oniss7llverystronginthisindustry,ands7lldominatesinmanyna7onalmarkets
LOCALclusters:ac7vi7estendtobeconcentratedwithinclustersofspecializedac7vity,suchasdesign,Assembly
Griffinetal,2007
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FocalDecision:Automo=veValueChainRedesign
Value Chain Redesign
Car Design
Production process design
Delivery process design
Supply chain design
EnabledbyPhadnis2014
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Localfactors(transactionalenvironment)
New material (Nano)
Over-capacity in
industry
Intensity of competition
ASEAN Economic Community
Alternative fuels
Cost of capital and
liquidity pressure
Energy price volatility
Mega suppliers and their power
Variety of regulations to comply with
Moving from BTS to BTO
Value Chain Redesign
Product Design
Production process design
Delivery process design
Supply chain design
EnabledbyPhadnis2014
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DrivingForces(contextualenvironment)
Personalization
Value Bifurcation
Use not own
Machine Intelligence
Sustainability
Consolidation and
Fragmentation cycle
Go East
Urbanization
New material (Nano)
Over-capacity in industry
Intensity of competition
ASEAN Economic Community
Alternative fuels
Cost of capital and liquidity pressure
Energy price volatility
Mega suppliers and their power
Variety of regulations to comply with
Moving from BTS to BTO
Value Chain Redesign
Product Design
Production process design
Delivery process design
Supply chain design
EnabledbyPhadnis2014
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Scenario:ImpactandUncertainty
Go East
Value Bifurcation
Sustainability
Machine Intelligence
Use not own
Fragmentation and
consolidation cycle
Personalization
Urbanization
New material (Nano)
Over-capacity in industry
Intensity of competition
ASEAN Economic Community
Alternative fuels
Cost of capital and liquidity pressure
Energy price volatility
Mega suppliers and their power
Variety of regulations to comply with
Moving from BTS to BTO
Value Chain Redesign
Product Design
Production process design
Delivery process design
Supply chain design
EnabledbyPhadnis2014
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ScenariosforSEAautomotivevaluechaindesign
EnabledbyPhadnis2014
Pers
onal
izat
ion
Value bifurcation
Moving entirely from a MTS to MTO
Moving back to MTS due to shared economy
Two segments of the market: premium and value products
Fragmented market segments and having various segments in the market
Mass Volume
Mass customization
Fragmented Custom
Fragmented Mass
Other driving forces MC MV FM FC
Shared economy
Machine intelligence
Go East
Urbanization
Consolidation and fragmentation cycle
Sustainability
25
WrapUp
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§ Valuechaindesigncapabilityistheonlyenduringcorecompetencyforautomakers
§ Concurrent-designandengineeringofPRUDUCT,PROCSEEandSUPPLYCHAINwithtackingintoaccountthedrivingforcesintheindustry
§ Consideringallthetrendsanduncertain7esforSEAautovaluechain,itrequiresprepara7onfordifferentscenariosmaterializa7on,NOTPREDICTION
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