Market Intelligence for Supply Chain Management
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Market Intelligence for Supply Chain Management

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This paper explores the functions and definitions of Supply Chain Management (SCM) and explains how Market Intelligence overlaps with a firm’s SCM goals. We look at how MI offerings can better match ...

This paper explores the functions and definitions of Supply Chain Management (SCM) and explains how Market Intelligence overlaps with a firm’s SCM goals. We look at how MI offerings can better match the needs of SCM professionals. The better information that is available, the more efficiently the SCM function can be accomplished, enabling strategic decision-making for all levels of corporate supply chain management.

This presentation shows selected slides from a GIA white paper. To download the entire white paper that you are interested in, please visit http://bit.ly/GIAinsightWP

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    Market Intelligence for Supply Chain Management Market Intelligence for Supply Chain Management Presentation Transcript

    • Market Intelligence for Supply Chain Management Webinar presentation June 4, 2009
    • Webinar Content Outline •  Corporate Supply Chain Management functions identified •  The missing piece of the puzzle – The need for Market Intelligence •  Market Intelligence solutions defined •  Conclusions
    • Corporate Supply Chain Management www.globalintelligence.com
    • Corporate Supply Chain Management Connecting the worlds of internal customers, suppliers of goods and services, and the SCM world of project management, ethical decision-making, strategy, and cost savings www.globalintelligence.com – page 4
    • Purchasing The Purchasing Process (centralized procurement) 1.  Identifying a need 2.  Creating a requisition which records budget owner & expenditure 3.  Buyer may rely on Approved Vendor Listing (AVL) to know the appropriate vendor and price for the PO, or 4.  Buyer conducts a Request for Quotation (RFQ) from the most qualified suppliers in the buyer’s network 5.  Buyer transforms requisition into a Purchase Order (PO) 6.  Responsible to coordinate delivery and customs clearance 7.  Responsible for ensuring the supplier’s invoice matches the purchase order, and arranging with accounts payable for payment 8.  Long term supplier relationship management www.globalintelligence.com – page 5
    • Procurement organization Procurement Design Process: • Business Process Mapping • Benchmarking • Best practices and alternatives • Organize teams servicing lines of business or centralized resources catering to internal customers’ needs • Goals and metrics: •  Maximized savings targets •  Maximized percentage of spend using suppliers from approved vendor listings •  Maximized volume of Requisition-to-PO transactions completed in less than 1 day •  Minimized volume of PO-invoice mismatches • Maintenance of the Approved Vendor Listing • Maintaining contract management process: negotiate contracts with suppliers for best pricing and other terms www.globalintelligence.com – page 6
    • Logistics and Inventory Management Logistics is the management of inventory after purchase or production • Strategic decision-making regarding the approach to inventory deployment • Distribution center locations and operations • Inventory forecasting (purchasing needs assessment) • Spare parts management • Operations management www.globalintelligence.com – page 7
    • Strategic Sourcing Strategic Sourcing is problem solving and needs fulfillment using the best combination of methods and internal and external sources available • Needs assessment !  Business Process Mapping !  Resource analysis !  Synergy analysis !  Total Quality Management • Evaluation of supply markets • Management of the bid process (RFP, RFQ, RFI) • Achieve best costs, quality and schedule • Minimizing risk www.globalintelligence.com – page 8
    • The missing piece of the puzzle – Typical SCM experiences “I discovered the need for targeted research and analysis, but did not have the required skills or resources to execute” www.globalintelligence.com
    • Purchasing – Logistics - Sourcing Save money Reduce risks www.globalintelligence.com – page 10
    • Market Intelligence – the missing piece of the puzzle Purchasing Research Skills required Access to information •  Finding potential suppliers •  Google •  Complicated relationships •  Suppliers who tell you who their between suppliers and the competition is competition •  Buyers who have been in the •  Understanding market pricing business for many years •  Collecting many competitive quotes “If I had access to Market •  Gossip Intelligence services I would have been even better at saving money.” www.globalintelligence.com – page 11
    • Case Example: Market Intelligence in Purchasing •  Global pharmaceutical contract research organization (CRO) •  Buyer was required to issue a request for quotation (RFQ) for dry ice !  Dry ice is used to keep bio samples cold during transit to labs •  The search for potential suppliers started with Google, “A partner screening and evaluation and moved onto asking the project would have offered the CRO incumbent supplier who their a complete list of the dry ice competitors are suppliers meeting the company’s •  The firm did not include all requirements, and a ranking of the pharma-grade dry ice suppliers firms most aligned with the in the RFQ company’s needs.” www.globalintelligence.com – page 12
    • Market Intelligence – the missing piece of the puzzle Procurement Organization Research Skills required Access to information •  Benchmarking •  Google •  Best-in-class comparisons •  Personal networks •  Tools available for ERP & •  Business school text books purchasing management •  Suppliers “Market Intelligence can tell you whether it is better to focus on maximizing savings or maximizing internal customer service – more importantly, Market Intelligence can tell you how.” www.globalintelligence.com
    • Market Intelligence – the missing piece of the puzzle Research requirements Access to information •  Finding DC locations •  Google •  What are the hidden costs of •  Cost – benefit analysis opening a DC in Europe? In Asia? •  Word of mouth In the Americas? •  Industry publications and •  What are the economic factors newspapers impacting inventory forecasts? •  Logistics & Inventory “If I had a qualitative country profile I would have known not to open a distribution center in a country with so much red tape .” www.globalintelligence.com – page 14
    • Case Example: Market Intelligence in Logistics •  Global aerospace manufacturer •  Spare parts distribution center location decision was made based on cost – benefit analysis !  South Asian location was an inexpensive choice, close to customers in Eastern Europe, the Middle East and all of Asia •  After it started up the firm realized that local government red tape was preventing the movement, sale, and removal of spare parts from the depot •  The firm was stuck paying for the parts, the warehouse, and the labor “A qualitative country profile combined with the cost – benefit analysis would have raised a red flag regarding the political powers of the host government over international business.” www.globalintelligence.com – page 15
    • Market Intelligence – the missing piece of the puzzle Strategic Sourcing Research requirements Access to information •  Understanding the alternative •  Suppliers who tell you who their supply network competition is •  What turn-key solutions are •  Buyers who have been in the available for a firm changing its business for many years overall strategic direction? •  Collecting many competitive •  What is the forecast for the quotes industry? “If I had known that a single supplier could handle all of the firm’s production inputs, I would have saved the company a lot of time and effort.” www.globalintelligence.com – page 16
    • Market Intelligence – the missing piece of the puzzle •  Working for corporate supply chain management, internal customers often want everything yesterday (get the project done really fast!) •  SCM managers are also involved in: !  Managing vendor relationships !  Negotiating contract terms and conditions !  Cutting Purchase Orders (POs) !  Balancing payables !  Forecasting inventories !  Performing needs assessments •  …and often do not have time for this research and analysis www.globalintelligence.com – page 17
    • Market Intelligence – the missing piece of the puzzle •  The Market Intelligence service offerings can enable SCM professionals to have better information, and therefore offer quicker and more effective strategic decision-making •  Market Intelligence professionals are trained to conduct research, perform primary research interviews, offer objective analyses, and manage projects with strict restrictions www.globalintelligence.com – page 18
    • Market Intelligence Solutions www.globalintelligence.com
    • Solutions for the purchasing process • Company profiling • Supplier screening & evaluation !  As the simplest form of supplier !  When looking for new or alternative intelligence, a company profile suppliers, a thorough methodology can provides basic information about lead to significant savings and value in suppliers the partner relationship • Supplier deep dive • Rapid response background checks !  In order to properly evaluate the !  As a different type of research process, reliability, strengths and a pre-defined type of background check weaknesses, and capacity of a can be performed on new potential supplier, a deep dive study, suppliers on short notice if access to a utilizing various types of global network of information sources is information sources and more available rigorous analysis methods, can reveal valuable insight www.globalintelligence.com – page 20
    • Supplier screening & evaluation •  A specialist in market intelligence is in a good position to RELIABILITY Long-term strategy CULTURE Responsiveness Company values !  Find information about potential suppliers Management Volatility experience !  Evaluate relative strengths, weaknesses of suppliers Inventory Technical staff !  Evaluate the best fit using both hard and soft criteria Logistics Backup facilities •  The evaluation process includes Error handling On-line capacity !  Defining an ideal profile for a supplier Down-time !  Comparing potential partners against QUALITY CAPACITY the ideal profile !  Comparing potential partners against Ideal partner each other Target company www.globalintelligence.com – page 21
    • Rapid response background checks •  In cases where suppliers change frequently and new unknown potential suppliers emerge, a company may need to make a quick decision on choosing a supplier •  Such a decision can lead to the discovery of a good new supplier, or alternatively to a disastrous choice •  The need may thus be for a rapid background check on unknown suppliers •  The research process in a nutshell: !  Define a template for the information needed about a new supplier – this information is usually very specific to the supply-chain or the process at hand (track record or references, capacity, bottlenecks, weak spots) !  Make a framework agreement with a market intelligence company that has global access to this information !  Whenever the need arises to do a background check on a new company, the market intelligence company already knows exactly what to look for, why the information is needed, and can find the information for any company in any part of the world – the findings can be delivered very quickly www.globalintelligence.com – page 22
    • Solutions for strategic sourcing • Market sizing & forecasting !  Market sizing & forecasting can help strategic sourcing in two ways: •  By forecasting the demand for end-products, and therefore the need for inputs •  By forecasting the market development of inputs !  Estimating and forecasting the market size for end-products is usually part of a strategy or business planning process, or the process related to launching a new product !  Efficient planning of supply-chain needs benefits from the foresight of the development of the market for the end-product !  Forecasting market developments –and price developments in particular – for inputs enables better purchasing decisions sourcing • Market monitoring !  An important part of strategic sourcing is being aware of changes in the market environment !  A market monitoring solution can provide supply-chain managers with timely insight about the markets for inputs, developments in technologies, macroeconomic developments, suppliers, competitors, etc. – page 23
    • Market sizing & forecasting •  In order to arrive at a good estimate, triangulation and validation of results is required •  A proper market sizing study therefore uses a wide variety of data sources and estimation methods Top-down model Bottom-up model Total market size Indicator 1 Indicator 2 Indicator 3 Indicator 4 Segment total Segment total Segment total Segment total Supplier 1 Supplier 2 Supplier 3 Supplier 4 Total market size www.globalintelligence.com – page 24
    • Area
of
Expertise
 Rapid
Response
Research
 Strategic
Analysis
 Continuous
Monitoring
 Company
Profiling
 Partner
Screening
&
Evaluation
 Supplier
Monitoring
 Purchasing
 Supplier
Deep
Dive
 Value
Chain
Analysis
 Competitor
Benchmarking
 Procurement
 Market
Profiling

 Regulatory
Monitoring

 Country
Risk
Analysis
 Competitor
Benchmarking
 Logistics
 Scenario
Analysis
 Macroeconomic
Analysis
 PESTEL

Analysis
 Market
Sizing
&
Forecasting
 Price
Monitoring
 Strategic
Sourcing
 Trend
Analysis
 Supplier
Monitoring
 Supplier
Deep
Dive
 Market
Monitoring
 Building
A
World‐Class
Market
Intelligence
Department
 Intelligence
Workshops
 Strategic
quantitative
and
qualitative
research
and
analysis
techniques
 www.globalintelligence.com
    • Conclusions www.globalintelligence.com
    • Conclusions Requirements: Results: •  Capacity •  Purchasing is more efficient •  Time for research and effective •  Skills •  Procurement organization is •  Research and analysis best-in-class •  Objective perspective •  Inventory management risks are minimized •  Market Research Partner •  Strategic sourcing is aware of all possible suppliers, sources, solutions www.globalintelligence.com
    • Conclusions •  Better information enables strategic decision-making •  SCM professionals do not always have the research and analysis training or the time to conduct thorough investigations •  Bringing together the market intelligence needs of SCM professionals with the solutions available in this market can enable strategic decision-making for all levels of corporate supply chain management www.globalintelligence.com
    • Thank You for Your Attention Download the free GIA White Contact Us Paper: Market Intelligence for Supply Chain Management For additional information about Global Intelligence Alliance and our services, please send email to The report has been published under the info@globalintelligence.com or log on GIA White Paper series and is available at www.globalintelligence.com. to the GIA website for the contact information of the GIA company nearest to you. www.globalintelligence.com
    • About GIA www.globalintelligence.com
    • GIA is a strategic market Intelligence and advisory group Global Intelligence Alliance (GIA) was formed in 1995 when a team of market intelligence specialists, management consultants, industry analysts and technology experts came together to build a powerful suite of customized solutions ranging from outsourced market monitoring services and software, to strategic analysis and advisory. Today, we are the preferred partner for organizations seeking to understand, compete and grow in international markets. Our industry expertise and coverage of over 100 countries enables our customers to make better informed decisions worldwide. www.globalintelligence.com GIA Industry White Paper 2 / 2010: Native or Web Application? How best to deliver content and services to your audiences over the mobile phone
    • Access local knowledge in over 100 countries GIA Group has 12 offices on 4 continents. Together with affiliated GIA Member companies, certified GIA Research Partners and consultants, GIA provides access to local knowledge in over 100 countries. All GIA Network companies adhere to GIA’s Research and Analysis Quality System as well as the SCIP Code of Ethics. www.globalintelligence.com - page 32
    • We understand your business With a track record of supporting thousands of clients Industry Practices around the world, we bring you practical expertise in Automotive Chemicals your markets, as well as knowledge from our practices Construction & Property Development covering 11 industries and all the key business functions. Consumer & Retail Energy, Resources & Environment Financial Services Private Equity Logistics & Transportation Manufacturing & Industrial Pharmaceuticals & Healthcare Telecommunication, Technology & Media Functional Practices World Class Market Intelligence MI for Strategic Planning MI for Marketing & Sales MI for Product & Innovation Management MI for Supply Chain Management M&A and Partnering www.globalintelligence.com
    • International Global Intelligence Alliance Group info@globalintelligence.com Baltic Region Gateway Baltic baltics@globalintelligence.com Belgium Global Intelligence Alliance Belgium belgium@globalintelligence.com Brazil Global Intelligence Alliance Latin America brazil@globalintelligence.com Canada Global Intelligence Alliance Canada canada@globalintelligence.com Central & Eastern Europe EasyLink Business Services cee@globalintelligence.com China Global Intelligence Alliance China china@globalintelligence.com Finland Global Intelligence Alliance Finland finland@globalintelligence.com France RV Conseil france@globalintelligence.com Germany Global Intelligence Alliance Germany germany@globalintelligence.com Hong Kong Global Intelligence Alliance Hong Kong hongkong@globalintelligence.com India Global Intelligence Alliance India india@globalintelligence.com Japan McRBC japan@globalintelligence.com Netherlands Global Intelligence Alliance Netherlands netherlands@globalintelligence.com Russia ALT R&C. russia@globalintelligence.com Singapore Global Intelligence Alliance Singapore singapore@globalintelligence.com South Africa Butterfly Effect Intelligence southafrica@globalintelligence.com Tunisia Tunisie RV Conseil tunisia@globalintelligence.com UK Global Intelligence Alliance UK uk@globalintelligence.com United Arab Emirates GCC Consulting uae@globalintelligence.com USA East Coast Global Intelligence Alliance USA East Coast usaeast@globalintelligence.com USA West Coast I.S.I.S. – Integrated Strategic Information Services, Inc. usawest@globalintelligence.com www.globalintelligence.com