Title: Creating Supply Chain Flexibility
1Driving Supply Chain Flexibility
Creating Supply Chain Flexibility Chris
Armbruster mail_at_chrisarmbruster.com
_at_CAArmbruster 224.430.2046
2SUPPLY CHAIN
TRENDS REQUIRE
FLEXIBILITY
- Modern supply chain trends can introduce
inefficiencies - Additional trading partners increase latency
- Global supply chains increase complexity
- Redundant judgments exacerbate demand uncertainty
3WASTE
Is NeverTolerated
4THE CHOICE IS OURS
or
5- The quest for certainty blocks the search for
meaning. Uncertainty is the very condition to
impel man to unfold his powers. - --Erich Fromm
UNCERTAINTY
Its the Driving Force Behind Flexibility
6It is commonly known that signals degrade as
demand propagates up the supply chain.
Ultimate Customer
Foundry
Chip Maker
EMS
- It Can Be Measured and Mitigated
7Ultimate Customer
Chip Maker
Foundry
EMS
Net Effect
Amplification
Interference
Latency
Uncertain Demand
Changes in demand can become exaggerated.
Noise can superimpose onto the demand signal.
Demand can become out of phase or shift in time.
8Visibility and CollaborationImprove the Demand
Signal
FLEXIBILITY
Must Do the Rest
9SPEED
Make FlexibleSupply Chains
10BUSINESS INTELLIGENCE
Potential Waiting To Be Tapped
- Notwithstanding its fickle nature, uncertainty
can be understood, characterized, bounded and
modeled.
- The data exists, but must be mined for meaningful
information.
- Business intelligence is a key input to
developing a relevant fulfillment strategy.
11SPEED
It Is All About Aligning Windows
12Strategy
STRATEGY
Start with the customer, of course.
13CASE STUDY
Semiconductor Manufacturer
14SUPPLY CHAIN
Package Assembly Test
Wafer Fabrication
Circuit Assembly
Weeks
Hours
Days
15Helps Manage Uncertainty
BUSINESS INTELLIGENCE
Error
Error
16Works Hand-in-Hand with Visibility Collaboration
-Error
Error
Visibility Collaboration
Flexibility
FLEXIBILITY
Error
17DEMAND PROFILING
In this case, customers are somewhat certain
about their demand over a quarter, but beyond the
current week they are not sure when in the
quarter it will materialize.
Demand Certainty
Probability
18Certainty Window
Time(Weeks)
Y4
Y3
Y2
Y1
Y0
Speed Aligns Windows
19FAST PLANNING LOGISTICSCOMPLIMENT LEAN
FACTORIES
24 Hour Planning Cycle
JIT Fulfillment Delivery
20SUPPLY CHAIN
FLEXIBILITY STRATEGY
Customer RequirementsFlexibility,
Responsiveness, Security
Business IntelligenceDemand Profiling Leading
Indicators
SpeedLean Manufacturing Logistics
Supply Chain Architecture Insource Assembly
Test Outsource Wafer Fabrication
21Integrated Strategy Delivers
Build to Forecast
Automation and eBusiness
Super Fast Cycle Times
48 Hour 3PL Partnership
Multiple MfgLocations
JIT
Receipt of Customer Order
Order ProcessandPlanning
Wafer Fab
Buffers for Flexibility, Response andSecurity
Package Assembly and Test
Pick and Pack
Ship
Product on Customer Dock
Buffers for Flexibility, Response andSecurity
Buffers for Flexibility, Response and Security
LeanMfg
Demand Collaboration
Supply Collaboration
DailyPlanning
MAXIMUM PERFORMANCE
22BENEFITS REALIZED
100
10
Shipping Performance to Customer Request Date
Inventory Velocity (Turns)
90
9.5
80
9
70
8.5
60
8
Shipping Performance
Inventory Turns
50
7.5
40
7
30
6.5
20
6
10
5.5
0
5
Year 1
Year 4
Year 2
Year 3
23Organizations fall short of their potential by
accident, but they become world-class on
purpose.
Chris Armbruster mail_at_chrisarmbruster.com
_at_CAArmbruster www.chrisarmbruster.com
224.430.2046