??? Kevin Chang

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• ??? Kevin Chang
• GCSM, i2 Taiwan

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Terminologies
Logistics Management Supply Chain Management
(SCM) Enterprise Resource Planning (ERP) Advanced
Planning and Scheduling (APS) eBusiness,
eCommerce, eProcurement ???? ????? ???? ?????? ???
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Why Supply Chain Management
Its not just about profit.
Its all about competition and survival.
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Supply Chain Management Basic Concept and
Contents
MIS?
Design Source Negotiate Buy Make Move Store
Service Fulfill Sell Market
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SCM Components
SRM
SCM
CRM
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Deployment of SCM
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Strategize SCM

• Design your supply chain
• Evaluate alternative partners
• Set transportation contracts
• Jointly develop business plans
• Optimize service/parts levels to budget

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Strategic Decisions

• Where do you locate facilities?
• What should your product mix be?
• Make versus buy decision and sources?
• Which transportation modes
  and partners should you use?
• What will your distribution network look
  like in the light of a merger or
  divestiture?
• How do you determine service stocking
  levels to stay within your budgets and space?

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Plan SCM Demand

• Predict demand
• Collaborate on demand
• Collaborate on supply
• Optimize product mix for total profitability
• Profitably match supply to demand
• Detect solve problems
• Allocate supply

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Thomson Consumer ElectronicsEnhancing Customer
Satisfaction Revenues
After 1 week 2 days 95 95 8-12
BEFORE 4 5 weeks 10 days 35 -70 73 5.5
Planning Cycle Time
Forecasting Cycle Time
Forecasting Accuracy
Order Fill Rates
Inventory Turns
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WhirlpoolSlashing inventory with better demand
management
BEFORE Less than 60 Reasonable Huge
AFTER gt 70 Improved by 10 Slashed by 50
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Plan SCM Supply

• Predict demand
• Collaborate on demand
• Collaborate on supply
• Optimize product mix for total profitability
• Profitably match supply to demand
• Detect solve problems
• Allocate supply

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Challenges in Matching Supply With Demand...What
Do You Do

• When inventory and capacity shortages
  occur outside your four walls?
• To balance material and capacity
  needs against your demand?
• To decide on the right product mix
  to profitably meet
  demand?
• To communicate real-time with your suppliers?
• To quickly respond to changes in demand?
• To allocate supply plans to your demand plans?
  (i.e., do you have
  preferred customers?)

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Herman MillerTurning the Tables on the Furniture
Industry
AFTER 2- 4 weeks (vs. industry average of 12-18
weeks) gt98 Slashed 3 weeks of FGI - 75
million Slashed by 50
BEFORE Six weeks 70 Huge Huge
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VF Corporation Slashing Inventory through Supply
Planning
AFTER Enhanced 10-15 Reduced by over 75
Slashed over tens of millions
BEFORE Competitive Months Huge
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Johnson Johnson MedicalStreamlining the Supply
Chain
BEFORE Over 1 month 4 months 70 million gt
1800
AFTER 5 days 30 days Reduced to 30
million 100
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Timken Industrial BearingsEnhancing delivery
performance
BEFORE Over 30 days 10 weeks Huge 70
AFTER Bi-weekly 6 weeks Reduced 50 and
30 gt 90
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Groupo GamesaImproved customer service with
rapid time-to-value
BEFORE 4 days High Reasonable Anticipated
over 4 months for each plant
AFTER 24 hours Reduced 50 Improved gt
100 56 days across all 6 plants
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Execute SCM?

• Collaborate on orders for replenishment
• Make accurate promises
• Manage orders across multiple enterprises
• Pick, pack, ship and deliver
• Detect exceptions and manage them
• Coordinate and replenish service parts

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Execution ProblemsAre You Challenged By

• Making bad promises
  that result in irate
  customers?
• Your inability to respond
  fast enough to
  exceptions?
• High transportation costs
  due to expediting?
• Consolidating multiple line items
  into a single
  delivery?
• Completing service
  or repair on the
  first call?
• Delivering on VMI
  and CPFR
  commitments?

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Barnes NobleProfitably executing on supply to
meet demand
BEFORE Huge inventory at DCs Largely
inaccurate resulting in stock-outs Excessive
AFTER 30 - 40 reduction Significantly
improved forecast accuracy and supply chain
velocity Over 3 million in savings
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Best BuyImproving customer service at a lower
cost
BEFORE Reasonable High during peaks High from
LTL shipments and expedites
AFTER gt 95 Significantly lower Savings gt
60- 80K per month
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The Home Depot
Keeping Its Promise to
Customers Delivering On
Time
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Pilgrims PrideDriving profitability in hard
times
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Dell Computers High Velocity for Competitive
Advantage
Cash-to-Cash (Days of Receivables Days in
Inventory) - Days of Payables
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Iomega Build-to-Order for Competitive Advantage
BEFORE Reasonable Over 3 months Huge Build-to-S
tock
AFTER 92-95 11 days Shaved 200 million in
8 months Build-to-Order
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Why Invest in SCM?Business Financial Benefits

• Reduce operating expenses
• Reduce logistics spend
• Slash COGS (cost-of-goods-sold)

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Why Invest in SCM?Business Financial Benefits

• Reduce inventory (raw, WIP, FG)
• Reduce planning cycle times
• Reduce production lead times
• Increase fixed asset utilization

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Principles of SCM Success

• Design and validate your supply chain strategy
  before you deploy define scope and scale
• Collaborate on demand and gain consensus
  for the most accurate forecast execution
• Collaborate, optimize, monitor and control,
  production, inventory, distribution and
  transportation simultaneously across multiple
  enterprises global optimization
• Execute, monitor, and review your SCM performance
  carefully with predefined KPI and objectives
  operations evaluation

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Thank You