bis2005 sessie3b
DESCRIPTION
TRANSCRIPT
Introductie Supply Chain Management
4PL
What is a supply chain?
2nd tier
supplier
1st tier (main)
supplierDistributor Retailer
Customer
3 PL 3 PL
Carrier Carrier Carrier Carrier
Orignal
Equipment
Manufacturer
Trailer service
ICT host
Hardware provider
Value chains
the supply chain
Opprtunities & Threats
• Shorter product life cycles
• Customization
• Globalization• Outsourcing
Longer chains, more parties involved,
tougher competitors:
Tougher supply chain management
More product introductions and
products for unfaithful customers:
Tougher competition
Consequenses for ICT
• Handling information of more products• Handling more changes in product information• Handling more customers, and changing
customers (installed base)• Longer chains, more parties: more information
exchange for managing the chain
Weaknesses & Strength
• The ability to succesfully implement contemporary supply chain management principles
• The ability to succesfully implement contemporary supply chain management technology
sustainable competitive advantage
Customer Order Decoupling Point: Make to Stock
2nd tier
supplier
1st tier (main)
supplierDistributor Retailer
Orignal
Equipment
Manufacturer
Make to Stock
Push
Customer Order Decoupling Point: Engineer to Order
2nd tier
supplier
1st tier (main)
supplierDistributor Retailer
Orignal
Equipment
Manufacturer
Engineer to Order
Make to Stock
Customer Order Decoupling Point: Assemble to Order
2nd tier
supplier
1st tier (main)
supplierDistributor Retailer
Orignal
Equipment
Manufacturer
Assemble to order
Assemble to Order
• High volume low cost upstream from CODP• Customization downstream from CODP
Mass customization: Best of both worlds……
Mass customization requires more information technology!
Who is in charge in the value chain?
• The one who interacts with the CUSTOMER!– Walmart– Proctor & Gamble– Nike
• The one who has the unique feature in the PRODUCT or SERVICE!– Intel– Fedex
Competition takes places at the end customer market!
• Choose a market: Target your strategy on end user markets and make it measurable in Key Performance Indicators regarding the customer market.
• Competitive strategies according to Porter– Cost leadership: Price based competition, low production
and logistics costs
– Differentiation: Quality based competition, productportfolio, time to market.
– Focus: Target a niche market
From market strategy to corporate strategy
Market strategy KPI’s!
SC strategy KPI’s!2nd tier
supplier
1st tier (main)
supplierDistributor RetailerOEM
Corporate strategy
KPI’s!OEM
Strategy sec. processes KPI’s!
3 PL
Trans
ICT host
Hardware
Market performance indicators
• Cost leadership: – Price– Total cost of ownership for customer
• Differentiation oriented: – Product quality, – Service level, – After sales services– Delivery time, – Product image.
Supply chain performance
• Cost leadership: – cost of goods sold– overhead costs per unit, consolidated– Obsolescence costs (apparel),– inventory cost (CODP, High Tech)– manufacturing costs (consumer electronics), – cash to cash cycle times (retail).
• Differentiation: – Time to market (Personal computers),– Supply chain leadtime (Mobile phones), – customization (Cars), – Flexibility, productportfolio
Inventory is bad!
Inventory hides problems
Corporate performance
Same as supply chain performance indicators, however
• Beware of the COPD, the upstream KPI’s may differ from the downstream KPI’s (and then the COPD is a tough position) !
• Beware of local optimization: pie sharing versus pie growing!
• Unfortunately…you are in more than one chain, and different chains have different priorities!
WeComp1Comp2Comp3
Fisher’s supply chain fit matrixQuality/Innovative market(differentiation -JvdK)
Commodity market(cost leadership -JvdK)
Responsive
Supply chain
FIT NO FIT
Functional supply chain
NO FIT FIT
Enhancing performance through state of the art SCM concepts
• Postponement : Move the CODP upstream (reduces inventory)!
• Cross Docking: reduces inventory and lead times
• Vendor Managed Inventory: reduces inventory and replenishment costs:
Strategic alliances: fair shares!!!
Enhancing performance through state of the art technology
• Share (market) information through the supply chain: trade inventory for information
• Organize visibility : monitor & alert on KPI’s.
• Plan and schedule according to supply chain KPI’s: Collaborative Planning Forecasting and Replenishment.
• Technology brings new SCM concepts within reach
Benetton’s innovation: postponement
Making wool Wool dyingDistributor Retailerknitting
Benetton’s innovation: postponement
Making wool Wool dyingDistributor RetailerKnitting
Benetton’s score
• Market– Better collection in store (customization)– Lower price– Better response
• Supply chain– Lower inventory costs– Lower obsolescence costs– Higher production costs– Integration with Logistic Service Provider
Dell’s innovation: assemble to internet order
Chips ComponentenComputers
Dell’s score• Market– Low price– Extreem fast delivery– Customization – Market share
• Supply chain– Negative cash to cash cycle time!– Less pie eaters, more pie!– Higher fulfillment cost– Zero inventory– Full supplier and LSP integration, on planning, scheduling and
execution level
Facts & Figures
PC market shares Q4 2003
Dell 16.0 %HP/Compaq 15.5%
Source: Gartner Dataquest
How SCM & Technology becomes a competitive advantage?
Be in chains that are winners on the end user market, measure in end user market KPI’s
Target Supply chain and corporate KPI’s in terms of market KPI’s.
Use state of the art competitive weapons (your competitors do!) :
SCM concepts, if they supports the SC strategyICT, if it supports the SC strategy
Think strategically, pie growing, not pie sharing