Arne Janssen, Melanie Engelhardt, Hendrik Walter | 20/01/2014!

AGENDA

2  

1. OVERVIEW

2. PRODUCT

SUPPLY CHAIN MGMT.

3. SERVICE

SUPPLY CHAIN MGMT.

5. CONCLUSIONS

4. RELEVANCE

FOR MARKETERS

3  

1. OVERVIEW

4  

THE EVOLUTION OF SCM

Source: Metcalfe (2004); Camerinelli (2009); Christopher (2011)!

“Supply chains” already existed in

prehistoric !times!

“Logistics” used for building pyramids!

“Logistics” used for trade (Silk

Road)!

Logistics used in

military (war)!

Until 1970s:!Manufacturer driven supply

chain!

In 1970s: supply chain becomes demand driven!

SC considerations in business:!

In 1990s: SCM developed!

5  

DEFINITIONS

“Supply chain management is the active management of supply chain!activities and relationships in order to maximize customer value!

and achieve a sustainable competitive advantage.”!

– Bozarth & Handfield (2013, p. 25)!

Supply  Chain  Management  

Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and

storage of goods, services, and related information [...]” !!

Logis4cs  

– Farahani, R. et al. (2009, p. 2)!

6  

WHY IS SCM IMPORTANT?

Video  

Source: MIT CTL (2011)!

7  

Competitive advantage!

Cost advantage!(economies of scale;

experience curve)!

Value advantage!(differentiation; image

& service)!

Sources: Christopher (2011); Porter (1985)!

Companies recognize vital impact of logistics and supply chain management in achieving competitive advantage!

IMPORTANCE OF SUPPLY CHAIN MANAGEMENT

SERVICE KNOWLEDGE PRODUCT SUPPLY CHAIN MANAGEMENT

8  

9  

2. PRODUCT

SUPPLY CHAIN MANAGEMENT

10  Source: cf. Supply Chain Council (2013)!

Plan | Source | Make | Deliver | Return | Enable!

M1 Make-to-Stock | M2 Make-to-Order | M3 Engineer-to-Stock!

LEVEL 1!(SCOPE)!

LEVEL 2!(CONFIGURATIONS)!

LEVEL 3!(BUSINESS ACTIVITIES)!

M2.01 Schedule Production | M2.02 Issue Product | M2.03 ...!

SCOR-MODEL

SCOR-MODEL

11  

YOUR COMPANY!

PLAN!

Source: cf. Supply Chain Council (2013)!

SOURCE! MAKE! DELIVER!

RETURN!RETURN!

CUSTOMER!

PLAN!

SOURCE!

RETURN!

SOURCE! MAKE! DELIVER!

RETURN!RETURN!

SUPPLIER!

PLAN!

DELIVER!

RETURN!

ENABLE!ENABLE!ENABLE!

ENABLE!ENABLE!

SOURCE! MAKE! DELIVER!

RETURN!RETURN!

PORTER‘S VALUE-CHAIN

12  Source: Porter (1985)!

Firm Infrastructure!

Human Ressource Management!

Technological Development!

Procurement!

Inbo

und!

Logi

stic

s!

Ope

ratio

ns!

Out

boun

d!Lo

gist

ics!

Mar

ketin

g !

& S

ales!

Serv

ice!

Primary Activities!

Supp

ort A

ctiv

ities!

PRODUCT SUPPLY CHAIN

13  Sources: cf. Waissi (2011); cf. Christopher (2011)!

OEM!

CUSTOMER!

TIER 1 TIER 2 TIER 3

Materials flow!Information & cash flow!

*Original equipment manufacturer!

*  

ERP SYSTEM!

HR! Controlling!Logistics! Production!

OEM  

Inter-divisional functions!

ENTERPRISE RESOURCE PLANNING

14  Source: Author design; cf. Hesseler & Görtz (2007)!

SUPPLIER! CUSTOMER!

*Original equipment manufacturer!

15  

APPLIED PRODUCT SUPPLY CHAIN MANAGEMENT

SUPPLY CHAIN OF COCA COLA CAN

16  

CUSTOMER!

Sugar  beet  field  

Corn  field  

Bauxite  mine  

So@wood  Forest  

Beet  wareh.  

Corn  wareh.  

Paper  factory  

Sugar  factory  

Card-­‐board  factory  

Card-­‐board  wareh.  

Chemical  reacLon  mill  

Smelter  Hot  

rolling  mill  

Cold  roling  mill  

Can  maker  

Central  UK  

wareh.  

Tesco  regional  wareh.  

Tesco  store  

Caramel  producer  

Caramel  wareh.  

Concen-­‐trate  

producer  

Sugar  wareh.  

BOTTLER!

½  producLon  cost  

Source: Womack (2013)!

Water  

17  

BOTTOM LINE Total process time! 319 days!

Actual processing time! 3h!Av. Consumption time! 5min!Transported + stored! 30 times!

Scrap! 24%!

Muda (jap.) = waste, non-value-adding tasks!!Muda 1: Tasks that are essential under current conditions!Muda 2: Tasks which can be eliminated immediately!

TYPES OF WASTE - Womack (2013)!

- Ohno (1988) !

18  Source: Womack (2013)!

BEST PRACTICE

Success Factors! Benefit!

Barcode Scanners! Exact inventory & automatic reorders!

Regional Distribution Centers! Bigger order batches!Daily JIT delivery! Decreased inventory!

Small can size, short use !

Economies of scale: big batches !

Conflict!

19  

3. SERVICE

SUPPLY CHAIN MANAGEMENT

20  

PLAN! SOURCE! MAKE! DELIVER! RETURN!

ASSESSM.! ALIGNMENT! CAPTURE! DELIVERY! MAINTEN.!

SALES!INBOUND!LOGISTICS! PRODUCT.! OUTBOUND!

LOGISTICS! SERVICE!

SC

OR!

VA

LU

E!

CH

AIN

!V

AL

UE!

SY

ST

EM!

Source: cf. Banach (2013)!

Value Assess-

ment!

Value Delivery!

Value!Capture!

Value Align-ment!

Value Mainte-nance!

VALUE SYSTEM

21  Source: cf. Banach (2013)!

LEGEND!

Brand Infrastructure! Values!

Knowledge! Leadership!

Information Technology!

Marketing Strategy!

Human Resources!Controlling!

Resource Management!

Communication Infrastruct.!

VALUE CONSTELLATION

22  Source: cf. Banach (2013)!

Restaurant!

Online Order Platform!

Delivery Service Provider!Inventory Management

Provider!

   

Value  Assessment    

Value  Alignment  

Value  Capture  

Value  Delivery  

Value  Maintenance  

23  

4. RELEVANCE FOR

MARKETERS

24  

THE CONNECTION BETWEEN SCM & MARKETING

Source: cf. Christopher (2011); Esper et al. (2010); Kortus-Schulte & Ferfer (2005) !

Marketing effectiveness !

Consumer franchise!

Customer franchise!

Supply chain efficiency!x! x!=!

Supply chain

design!

Marketing data!

Sales data! Market research

data!

25  

THE RELEVANCE OF THE 4 Ps

Source: cf. Kotler & Keller (2012); Kreutzer (2010)!

Product!

Product variety!

Quality!

Design!

Features!

Brand name!

Packaging!

Sizes!

Services!

Warranties!

Returns!

Price!

List price!

Discounts!

Allowances!

Payment period!

Credit terms!

Promotion!

Sales promotion!

Advertising!

Sales force!

Public relations!

Direct marketing!

Place!

Channels!

Coverage!

Assortment!

Locations!

Inventory!

Transport!

+ People!

Supply Chain Management!

26  

THE RELEVANCE OF THE 4 Ps

Source: cf. Corsten & Gruen (2004)!

Buy item in another store

31%!

Substitute different brand

26%!

Substitute same brand 19%!

Delay purchase 15%!

Do not purchase item 9%!

What do customers do if product is out of stock?!

n = 71.000 (in 29 countries)!

27  

5. CONCLUSIONS

28  

CONCLUSIONS Define the value

proposition!

Detect and get rid of non-value-

adding processes!

Identify demand and design

supply chain accordingly!

Improve value generation in

each step of the value chain or value system!

Promote constant

knowledge exchange within

supply chain!

Arne Janssen, Melanie Engelhardt, Hendrik Walter | 20/01/2014!

30  

SOURCES Banach, C.N. (2013) Value constellation: Making models work for you! in: Kreutzer, R.T. & Land, K-H. (2013): Digitaler

!Darwinismus – Der stille Angriff auf Ihr Geschäftsmodell und Ihre Marke. Wiesbaden: Springer Gabler!Bozarth, C.C. & Handfield, R.B. (2013): Introduction to Operations and Supply Chain Mangement, 3rd edition, Harlow:

!Pearson Education!Camerinelli, E. (2009): Measuring the Value of the Supply Chain – Linking Financial Performance and Supply Chain

!Decisions. Farnham: Gower.!Christopher, M. (2011): Logistics & Supply Chain Management, 4th edition, Harlow: Pearson Education!Corsten, D., & Gruen, T. (2004): Stock-outs cause walkouts. Harvard Business Review, 82(5), 26-28.!Esper, T. L., Ellinger, A. E., Stank, T. P., Flint, D. J., & Moon, M. (2010): Demand and supply integration: a conceptual

!framework of value creation through knowledge management. Journal of the Academy of Marketing Science, 38(1), !5-18.!

Farahani, R. Z., Asgari, N., & Davarzani, H. (2009): Supply Chain and Logistics in National, International and !Governmental Environment. Contributions to Management Science!

Ford, H. (1923): My life and work. New York: Doubleday, Page & Company!Hesseler, M., Görtz, M. (2007): Basiswissen ERP-Systeme: Auswahl, Einführung & Einsatz betriebswirtschaftlicher

!Standardsoftware; W3l GmbH!Kortus-Schulte, D., & Ferfer, U. (2005): Logistik und Marketing in der Supply Chain. Wiesbaden: Gabler!Kotler, P., Keller, K.L. (2012): Strategic Marketing Management, 14th edition. Upper Saddle River: Pearson Education!Kreutzer, R. (2010): Praxisorientiertes Marketing, 3rd edition. Wiesbaden: Gabler!Mentzer, J. T., & Gundlach, G. (2010): Exploring the relationship between marketing and supply chain management:

!introduction to the special issue. Journal of the Academy of Marketing Science, 38(1), 1-4.!!!

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SOURCES Metcalfe, L. (2004): Supply chains - an introduction. Chartered Accountants Journal, 83 (4), 55-57!MIT CTL (2011): MIT Supply Chain Management Program – Lemonade Video. Retrieved from: ! ! ! !

!http://www.youtube.com/watch?v=gBRrG0-SA1I [Accessed 17.01.2014]!Ohno, T. (1988): The Toyota Production System: Beyond Large-Scale Production, Portland, Oregon: Productivity Press.!Porter, M. E. (1985): Competitive Advantage: Creating and Sustaining Superior Performance, New York; London: Free

!Press; Collier Macmillan!Supply Chain Council (2013): SCOR-Overview, Retrieved from: https://supply-chain.org/f/SCOR-Overview-Web.pdf

![Accessed: 17.01.2014]!Waissi, G. (2014): Arizona A&D Supply Chain, Retrieved from: http://129.219.40.44/adsr/Supplychain/SCDefault.aspx

![Accessed: 17.01.2014]!Weigelt, T. (2014): Mehr Platz für Coca Cola, FR-Online, Retrieved from: ! ! ! ! ! ! ! !

!http://www.fr-online.de/main-taunus/liederbach-mehr-platz-fuer-coca-cola,1472862,25813234.html [Accessed: !17.01.2014]!

Womack, J. P. & Jones, D. T. (2013): Lean Thinking, 3rd edition, Frankfurt am Main: Campus.!!!