1、Customer Focused Supply Chain Management: An Overview 1Welcome Welcome Please share with us: Your name Company Responsibility Responsibility Issues you would like to learn more about this k week 2Agenda for theWeek Agenda for the Week Monday Tuesday Wednesday Thursday Friday y y y y y 810am Customer
2、-Focused Supply Chain Management An Strategic Sourcing and Relationship Management Forecasting and Sales/Operations Planning Global Logistics Supply Chain Risk and Disruptions Management An Overview Planning Disruptions 10-12am The Role of IT and Difficulty of Driving Change: Supplier Selection : A
3、Case Study Forecasting & Planning: Home Depot A Retail Pain Points and Opportunities (Breakout Change: A Case Study A Case Study A Case Study Case Study (Breakout Preparation) 1 3 Aligning Manufacturing Strategic Cost Management : Material Req irements Value-Added Services, and Supply Chain Performa
4、nce Meas rement 13pm g Strategy to Customer Requirements g Negotiation Exercise Requirements Planning : Exercise , Collaboration ZARA CASE STUDY Measurement and Financial Impact Maturity Model Self- Assessment and Maturity Model Maturity Model Self- Maturity Model Self-Assessment Opportunity 35pm As
5、sessment and Report SC Strategy LOA Enablers SC Di Maturity Model Self-Assessment and Report SS, RM, Contract Mgmt Maturity Model Self- Assessment and Report Out S&OP Plng-Sch- Coord Self-Assessment and Report Collaboration Deliver Return M P f Identification Key Areas for Focus and Growth (Present
6、to Group) 3 SC Design Manage Perf to Group)FridaysBreakoutExercise Fridays Breakout Exercise F ll ddi Form small groups and discuss: 1) What are the three major opportunities that exist to improve financial performance in your supply chain? (Based on maturity assessments and material presented). 2)
7、What are the three major risks / barriers / problems that exist which prevent you from achieving financial objectives? 3) What innovative approaches do you think will enable you to exploit the opportunities, and mitigate or reduce the risks? BE PREPARED TO PRESENT YOUR CASE TO THE GROUP THIS AFTERNO
8、ON 4SessionObjectives Session Objectives Introduce Supply Chain Management (SCM) and Value System concepts y p Identify factors that are driving organizations towards value systems towards value systems Discuss SCM challenges Provide examples of integrated supply chain strategies strategies 5Supply
9、Chain Resource Consortium Partner Companies 6“Its no longer about competing products. Its b i l hi Th about competing supply chains. The company with the most streamlined, costeffective, ll b i l hi i” collaborative supply chain wins”. SAP SAP 7SUPPLY CHAIN DEFINED 8SupplyChainDEFINITIONS Supply Cha
10、in DEFINITIONS Suppliers Make/Maintain Customers Distribution Depot Supply Chain:The global network used to deliver products and services from raw materialstoendcustomersthroughanengineeredflowofinformation physical materials to end customers through an engineered flow of information, physical distr
11、ibution, and cash. APICS Supply Chain:The integrated processes of Plan, Source, Make, Deliver, and Returnspanning your suppliers supplier to your customers customer, aligned with Operational Strategy, Material, Work & Information Flows. Supply Chain Council 9A Global Supply Chain Manufacturing Manuf
12、acturing Warehouse Warehouse European Supplier European Supplier Customer Customer Customers Customers Customers Customers Latin American Latin American Sl i Sl i Warehouse Warehouse OhSl i OhSl i Warehouse Warehouse Suppliers Suppliers Other Suppliers Other Suppliers Customer C C Customer Warehouse
13、 Warehouse Outgoing material Customers Customers Customers Customers 10 Incoming from supplier ReturnsSupply Chain DEFINITIONS Supply Chain Management: The design, planning, execution, control, and monitoringof supply chain activities with the objective of creating net value, buildingacompetitiveinf
14、rastructure leveragingworldwidelogistics synchronizing building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally. APICS Supply Chain Optimization: the activities (such as planning, work flow and process ppy p ( pg , p
15、improvements, tradeoffs) that provide the goods to the consumer in an “optimal” manner the best tradeoffbetween the lowest cost, lowest inventory, and best duedate performance. 11Supply Chain DEFINITIONS ppy The Chain is a series of connected activities and physical processes Product Returns Supplie
16、rs Make/Maintain Customers Distribution Depot Product Information Information Cash 12The Integrated Supply Chain Flows of Information, Product, Services, Funds and Knowledge Relationship Management g ppy SUPPLIER NETWORK ENTERPRISE DISTRIBUTIVE NETWORK E N N D Engineering C O N Sourcing Logistics S
17、U M Operations M E R S 13 S Resource Base (Capacity, Information, Core Competencies, Financial)SUPPLYCHAINMANAGEMENT SUPPLY CHAIN MANAGEMENT DEFINED 14HistoryofSupplyChainInitiatives History of Supply Chain Initiatives MRP Reorder Points 60s 1970 1985 1990 1995 2000 1980 1981 1979 15SupplyChainManag
18、ement Supply Chain Management A collaborativebased strategyto seamlessly integrate a companys operations with internal and external suppliers and customers. Alignment of corporate strategy, people, processes, and technology as well as the flawless execution of material, information, and financial fl
19、ows across the supply value chain. Enabled by information technology such as ERP systems and bestofbreed SCM products. 16Supply Chain Management Definition Supply chain management (SCM) is the integration and management of order integration and management of order fulfillment processes, organization
20、s, and activities through cooperative organizational activities through cooperative organizational relationships, effective business processes, d hi h l l f i f i h i and high levels of information sharing to create high-performing Value Systems that provide Milliken, its customers and its suppliers
21、 a sustainable competitive advantage. suppliers a sustainable competitive advantage.SUPPLYCHAINMANAGEMENT SUPPLY CHAIN MANAGEMENT Why is it important? 18SupplyChainExcellenceObjective Supply Chain Excellence Objective Ahi i d iii ii d i l Achieving and maintaining a competitive edge in supply chain
22、Reliability Responsiveness Responsiveness Flexibility Cost Asset Management Quality “Delivery of Cash is the ultimate supply chain management metric.” S.Mozaffar,Gp.VP-ICI Chemicals, 19 g ff p 2003SCMDrivers InternalDrivers SCM DriversInternal Drivers Reduce total cost Improvequality Improve quality
23、 Reduce timetomarket Increase customer service/ satisfaction Betterutilizesupplier/customer capabilities Better utilize supplier/customer capabilities and resources Minimize new capital investment 20Why is supplychain management so important? y ssuppyca aa g eet so po ta t Delivery Performance to Re
24、quest Date 120 BestinClass 97 Average 97 94.3 97 93.7 99 72.6 68.9 77 79 80 100 97.6 81.2 % OnTime 68.9 40 60 0 20 0 Computers Industrial Telecom Chemicals Source: PRTMs 1997 Integrated SupplyChain Benchmarking Study Packaged Goods 21Why is supplychain management so important? A $1B company can save
25、 $30M $60M Bestinclass companies have an advantage in total supplychain f f BestinClass 97 Total SupplyChain Management Cost management cost of 3% 6% of revenue 12.2 13.1 11.3 10.3 10.9 11.5 12 14 Average 97 % of Revenue 5.8 7.1 6.7 6.1 6.5 7.0 6 8 10 2 4 6 0 Computers Industrial Telecom Chemicals P
26、ackaged Goods Overall S PRTM 1997It tdSl Ch iBhk iSt d 22 Source: PRTMs 1997 Integrated SupplyChain Benchmarking Study Definition :T o t a l supplychain management cost is the sum of Order Management, Material Acquisition, Inventory Carrying, and SupplyChain Finance, Planning, and MIS CostsExternal
27、Factors Facing China External Factors Facing China il h Exponential growth Extreme price pressure p p Increasing customer expectations WTOregulations WTO regulations Shorter product life cycles New technologies Environmentalissues Environmental issues Logistics infrastructure bulging 23ImpactofWTO I
28、mpact of WTO US Clothing Market Share % Before and After Quota Elimination 15 21 China Other Americas Mi 16 40 50 15 Mexico Hong Kong European Union 10 9 5 4 3 6 0 15 European Union Ind i a Rest of World 24 5 3 Rest of WorldSUPPLYCHAIN SUPPLY CHAIN Key Concepts 25Key SCMConcepts Key SCM Concepts Sup
29、ply chains may be internal or external to the organization g Internal supply chain that portion of the supplychainoccurringwithinasingle supply chain occurring within a single organization External supply chain that portion of the supplychainoccurringoutsideofthegiven supply chain occurring outside
30、of the given organization (i.e., upstream suppliers and downstreamdistributors) 26 downstream distributors)InternalFunctions Internal Functions The different processes used in transforming the inputs provided by the supplier network. p p y pp For example, orderprocessing translates customerrequireme
31、nts intoactualorders customer requirements into actual orders, which are put into the system. Discussion: Who are the critical internal functionsin YOUR supplychain? functions in YOUR supply chain? 27UpstreamSupplierNetwork Upstream Supplier Network All organizations that provide inputs, either dire
32、ctly or indirectly, to the focal firm. y y Discussion: Wh h ii i YOUR l Who are the participants in YOUR supply network? Who manages the supplier network? 28DownstreamDistributiveNetwork Downstream Distributive Network All fth it i d All of the organizations, processes, and functions that the produc
33、t passes through on its way to the end customer Examples:logisticsnetworkdesign Examples: logistics network design, packaging, warehousing, transportation, d i tilhd l i d order processing, materials handling, and finished goods inventory management. Discussion: Who is in the downstream networkin YO
34、UR supplychain? 29 network in YOUR supply chain?The Purpose of Sl Ch i M Supply Chain Management SUPPLY DEMAND BALANCE Synchronizing Supply with Demand Balance the flow within the pipeline Position inventory and capital in the most logical places KEY TO SUCCESS: UNDERSTAND AND IMPROVE THE INTERACTIO
35、NS BETWEEN THE LINKS IN THE 30 SUPPLY CHAINDemandPUSHorPULL? Demand PUSH or PULL? Push: Make to stock Pull: Make to order ReallyPull:Engineertoorder Really Pull: Engineer to order 31Push: Make to Stock Make to stock products are intended to be shipped from finished goods or “off theshelf,”arecomplet
36、ed prior to receiptofacustomerorder,andaregenerally the shelf, are completed prior to receipt of a customer order, and are generally produced in accordance with a sales forecast. When is Make to Stock appropriate? Stable, predictable demand. Low risk of inventory obsolescence Competition on cost Hig
37、hly efficient production process (long runs/few C/Os) Capacity set at expected sales level, reduced flexibility FG inventory used as demand dampener for production Deliveryspeedandreliabilitycritical(shortcycletime/99%fill) Delivery speed and reliability critical (short cycle time/ 99% fill) Order I
38、nsertion Point Deliver Make/ Mi i Source Customer Supplier 32 MaintainPull: Make to Order A make to order environment is one in which products are completed after receipt of a customer order and are built or configured only in response to a customer f fg y p order. When is Make to Order appropriate?
39、 Demand difficult to forecast (custom orders) High risk of inventory obsolescence Competition on speed of response and lead times Highly responsive production process (short runs / frequent C/Os) Capacity set at maximum sales level.high flexibility) Order backlog used as demand dampener for producti
40、on Production/deliveryspeedandreliabilitycritical Production / delivery speed and reliability critical Supplies and components stocked to allow for quick response Often modular product design leading to assembly / not production Order Insertion Point 33 Deliver Make/ Maintain Source Customer Supplie
41、rEngineer to Order Order Insertion Point Design Deliver Make/ Source Customer Supplier Maintain Customer Supplier 34Land Mines and Factors to Consider for PUSHvsPULL Consider for PUSH vs PULL Strategic Variables MTO MTS Product Type Product Range Product Volume/Period Special Wide Low Standard Pre-d
42、etermined High Product Volume/Period Low High Delivery Speed Difficult Easy Delivery Reliability Meeting Delivery Speed Requirements Difficult Through rescheduling requirement Easy Eliminate process lead time Process choice Managing changes in sales Jobbing/Low Volume Batch High Volume Batch/Line Th
43、rough Finished Goods & mix Through Order Backlog Inventory Other Variables Inventory Cost Supplies, capacity /t Finished Goods 35 Order Promising /components Promise capacity Promise Fin. Goods Source: Adapted from Hill 1994, Manufacturing Strategy, pg 213SUPPLY CHAIN KeyConcepts Key Concepts Foreca
44、sting, Demand Management and Collaboration 36Sharing Information Reduces Uncertainty! Exposes underlying structural problems in the supply chain E i ti f th kl d b Everyone is operating from the same knowledge base Allows clear interpretation of signals Pl d ikl iii il People can respond more quickl
45、y to minimize potential problems Allowsproblemstobeviewedfromdifferentperspectives Allows problems to be viewed from different perspectives Brings to bear innovation solutions from unexpected sources sources 37VariabilityofDemand Variability of Demand SUPPLIER SUPPLIER 38BenefitsofCollaborativeVisib
46、ility Benefits of Collaborative Visibility SUPPLIER SUPPLIER 39TraditionalInter EnterpriseFlows Traditional InterEnterprise Flows Manufacturer Manufacturer Customer Customer Supplier Supplier Distributor Distributor 24 hrs 24 hrs 24 hrs 24 hrs 40 Information Flow Material FlowNew InterEnterprise Inf
47、ormation Flows ExtendedCollaborativeBusinessProcesses Information Flow Material Flow Extended Collaborative Business Processes Manufacturer Manufacturer Customer Customer Supplier Supplier Distributor Distributor Real time data Tighter integration of disparate systems Manage business processes by ex
48、ception 41 Alert management processThe Supply Chain Operations Reference(SCOR )Model Reference (SCOR ) Model 42Purpose and Goals of the SCC SCORSupply Chain Operations Reference SCO SuppyCa Ope ato s eeece An evolving supply chain standardizationmodel supported by the Supply ChainCouncil(SCC) anonpr
49、ofitorganizationwith800members Chain Council (SCC), a nonprofit organization with 800 members worldwide. SSC was formed in 1996. SCCsponsorssixSpecialInterestGroups:SixSigma Aerospaceand SCC sponsors six Special Interest Groups: Six Sigma, Aerospace and Defense, Automotive, Electronics, Retail and Consumer Packaged Goods, and Pharmaceuti
