Supply chain configuration

1
Supply chain configuration

• Mohamed Naim Paul Childerhouse
• Denis Towill Stephen Disney

2
A Sample of Quick Scanned Companies in an
automotive supply network (Childerhouse, 2001)
3
Background

• Logistics Systems Dynamics Group
• 30 year history in System Theory
• System Thinking
• System Engineering
• System Dynamics
• gestalt
• Business Systems Engineering
• Cross sector research

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A system
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Emergent Properties - Gestalt

• the properties of the system as a whole which
  cannot be replicated by the simple addition of
  its parts (IEE, 1993)
• The whole is not the sum of its parts
  (Burbidge, 1961)
• a set of sub-optimum solutions can never produce
  a true optimum solution (Burbidge, 1961)

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Spectrum of Systems

• Fact
• Quantifiable
• Hard
• Control Engineering

• Opinion
• Subjective
• Soft
• Soft Systems Methodology

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Supply chains as systems

• a system whose constituent parts include
  material suppliers, production facilities,
  distribution services and customers linked
  together by the feedforward flow of materials and
  the feedback flow of information (Stevens, 1989)
• Add flows of cash and resources

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Supply chains as systems

• Each business in the supply chain system is a
  unique sub-system consisting of internal flows
  and, furthermore, they are points in the chain
  where decisions are made including
• demand forecasts
• stock holding targets
• internal order requirements
• external orders
• capacity levels

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Supply systems - emergent properties
(Johansson et al, 1993)
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Units of analysis
Dyadic structure
Network structure
Supply chain structure
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A Sample of Quick Scanned Companies in an
automotive supply network (Childerhouse, 2001)
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Systematic methodologies
UDSO
ASIA Stages
Information Systems
Manufacturing Systems
Stages 1
12
Reengineering Stages 13
Reengineering Stages 14
1.
1. Analyse
1. Envisioning - including
1. Market Analysis
Understand
understanding the business and
capturing requirements
2. Document
2. Reverse Engineering
2. Business Process Analysis -
including the development of
including process mapping
models of the existing business
and legacy information systems
3. Simplify
2. Simplify
3. Forward Engineering
3. Steady State Design -
including the simplification of
including ensuring that the
software coding when
system is balanced and
interfacing new systems to
synchronised
legacy systems and creating
4. Optimise
3. Integrate
the information system itself
4. Dynamic Design
4. Automate
5. Information Control
Design System Integration
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Quick Scan

• A supply chain orientated business diagnostic

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Supply Chain 2001
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Comparative Scope and Depth of Understanding
Gained via QS Analysis
Comprehensive
Case Studies e.g. Burbidge and Halshall, 1994
Depth of Knowledge Acquired from Each Company
Quick Scan Diagnostics
In-depth
Questionnaire Surveys e.g. Schmenner, 1998
Overview
0
0
20
1
300
Number of Companies/ Sample Size
16
Distribution of Team Effort During a Typical QS
Audit Undertaken by Experienced Auditors
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The Major Steps in Conducting a Quick Scan
Audit (Childerhouse et al, 1999)
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Value Chain Specific and Generic Research Outputs
form the Quick Scan Diagnostics
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Sample industry deliverables
Supply chain focus Infrastructure Planning
control Material flow
Benefits 20 reduction in logistics costs 21
reduction in stock holding demand
amplification 100 productivity improvement, 10
improvement in capacity
At what cost? Outsource warehouse
transport Change in planning control
parameters Change in working practices
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Supply chain integration evaluation

• Identification of the beaten path

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The Uncertainty Circle Principle(Source
Mason-Jones and Towill 1998)
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Sample Bullwhip Curve
21 increase across a single business
Smart design reduces bullwhip to 0.21
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Coping with uncertainty
Inventory levels traditionally required
Improved inventory levels via supplier
integration and tight production processes
Further reduction via enhanced internal logistics
control
Seamless Supply Chain
Process Variance
Supply Variance
Internal Logistics Control Variance
Demand Variance
(Mason-Jones Towill, 1998)
24
A Sample of Quick Scanned Companies in an
automotive supply network (Childerhouse, 2001)
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Proximity to The Seamless Supply Chain
(Childerhouse et al, 2000)
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Scoring on the Stevens scale
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Binary Analysis of Uncertainty Circle Radar
Plots for the 32 Value Stream Sample (Towill et
al, 2000)
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Exploitation of Quick Scan

• CSC Supply Chain Competency Group
• Liverpool Uni. / Loughborough Uni.
• Cardiff LSDG
• kaizen - 15 applications to date
• cross-sector - Terrain Scanning Methodology in
  housing sector
• product introduction process
• action research methodologies

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Maximise scope
Material flows Information flows Cash
flows Resource flows
(Berry et al., 1999)
Width
Breadth
Activity Work process Business Process Dyadic
link Supply chain Network
Depth
Organisational structure Attitudes and
culture Financial Technological
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Comparative Scope and Depth of Understanding
Gained via QS Analysis
Comprehensive
Case Studies e.g. Burbidge and Halshall, 1994
Depth of Knowledge Acquired from Each Company
Quick Scan Diagnostics
In-depth
Questionnaire Surveys e.g. Schmenner, 1998
Overview
0
0
20
1
300
Number of Companies/ Sample Size
31
Details of the Quick Scan process
web site www.cf.ac.uk/carbs/lom/lsdg