Introductie Supply Chain Management

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Introductie Supply Chain Management
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What is a supply chain?
Customer
4PL
the supply chain
3 PL
3 PL
Value chains
Carrier
Carrier
Carrier
Carrier
Trailer service
ICT host
Hardware provider
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Opprtunities Threats
More product introductions and products for
unfaithful customers Tougher competition

• Shorter product life cycles
• Customization
• Globalization
• Outsourcing

Longer chains, more parties involved, tougher
competitors Tougher supply chain management
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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

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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

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Customer Order Decoupling Point Make to Stock
Make to Stock
Push
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Customer Order Decoupling Point Engineer to
Order
Engineer to Order
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Customer Order Decoupling Point Assemble to
Order
Make to Stock
Assemble to order
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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!

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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

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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

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From market strategy to corporate strategy
SC strategy
KPIs!
2nd tier supplier
1st tier (main) supplier
Distributor
Retailer
Corporate strategy
KPIs!
3 PL
Strategy sec. processes
Trans
KPIs!
ICT host
Hardware
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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.

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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
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Corporate performance

• Same as supply chain performance indicators,
  however
• Beware of the COPD, the upstream KPIs may differ
  from the downstream KPIs (and then the COPD is a
  tough position) !
• Beware of local optimization pie sharing versus
  pie growing!
• Unfortunatelyyou are in more than one chain, and
  different chains have different priorities!

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Fishers supply chain fit matrix
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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!!!

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Enhancing performance through state of the art
technology

• Share (market) information through the supply
  chain trade inventory for information
• Organize visibility monitor alert on KPIs.
• Plan and schedule according to supply chain
  KPIs Collaborative Planning Forecasting and
  Replenishment.
• Technology brings new SCM concepts within reach

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Benettons innovation postponement
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Benettons innovation postponement
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Benettons 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

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Dells innovation assemble to internet order
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Dells 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

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Facts Figures
PC market shares Q4 2003 Dell 16.0 HP/Compaq
15.5 Source Gartner Dataquest
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How SCM Technology becomes a competitive
advantage?

• Be in chains that are winners on the end user
  market, measure in end user market KPIs
• Target Supply chain and corporate KPIs in terms
  of market KPIs.
• Use state of the art competitive weapons (your
  competitors do!)
• SCM concepts, if they supports the SC strategy
• ICT, if it supports the SC strategy
• Think strategically, pie growing, not pie sharing