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A4 supply chain planning in asia

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  • 1. The Supply Chain Leadership Forum 2011: Walt Disney World® Resort, Lake Buena Vista, FL Supply Chain Planning in Asia Gene Tyndall, EVP, Tompkins Associates & Steve Ganster, EVP, Tompkins Associates
  • 2. Session Scope This Session Will Focus On: • Primary objective of supply chain planning in Asia • Planning top priorities • S&OP process challenges • Sourcing and distributing in Asia • Move, store and fulfillment in Asia • Planning for risk management • Other needs for supply chain planning for Asia • Discussion Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 2
  • 3. Primary ObjectivePrimary Objective of Supply Chain Planning in Asia • Synchronizing product supply with demand S Business Strategy and Goals C U Financial Management …. U P Operations and Technology Management S P Performance Management (Metrics and Reports) T L O I DELIVER M PLAN BUY MAKE MOVE STORE & T E E O SELL R R M SE S Material Flow R Information Flow S Cash Flow Work Flow Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 3
  • 4. Planning Top Priorities Top Priorities • Establish how inventories will be created • Establish the network infrastructure of facilities and flows • Plan for supply chain risks Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 4
  • 5. S&OP ProcessChallenges of Conducting an Effective S&OPProcess in Asia • Cultural differences • Communication • Greater variability in processes • Decision-making complexity Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 5
  • 6. Sourcing and Distributing in AsiaUnique challenges posed by sourcing and/ordistributing in Asia • Variability in lead times • Supply chain delays and disruptions • Cost overruns • Supplier performance • Item visibility Yet this is Critical for Optimizing Efficiency and Logistics. Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 6
  • 7. Move, Store and Fulfillment in AsiaPlanning for Move, Store and Fulfill in Asia • Supply chain complexity and length • Infrastructure issues such as ongoing work on roads and rail and airport facilities • Sheer size and magnitude of population centers • Continuous change • Capacity issues Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 7
  • 8. Move, Store and Fulfillment in AsiaPlanning for Move, Store and Fulfill in Asia • Distribution network must balance costs Sweet Spot: Optimal Margin  and Service Mix Maximum Profit Total Delivered Costs Total Logistics Cost Sweet Spot: Optimal Logistics  Cost and Service Mix Gross Margin DC Operating Cost Inventory Cost Transportation Cost Number of Facilities Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 8
  • 9. Move, Store and Fulfillment in AsiaPlanning for Move, Store and Fulfill in Asia • Integrated to the network design is what are the requirements for each facility – Availability of land – Transportation infrastructure – Incentives – Capabilities of people, processes and technology Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 9
  • 10. Move, Store and Fulfillment in Asia Production Products Capacity & Facility, Inventory Flows & Transportation Inventory Optimization Customer Policies Demand & Flows Process Technology People Facilities: Transportation DCs, Hubs, Flows & Network etc Cost Modeling & Optimization Taxes Supplier Flows Competitor Global Strategies Business Trade Laws Strategy & Rules Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 10
  • 11. Move, Store and Fulfillment in AsiaPlanning for Move, Store and Fulfill in Asia • An important factor that is often overlooked is Tax- Effective Supply Chain Management • There are multiple categories of tax obligations – Income tax – Sales tax – Real estate tax – Customs Facility Location, Selling of Products and Flow of Goods All Impact Corporate Taxes, as Well as Management of Currencies Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 11
  • 12. Risk ManagementPlanning for Risk Management • Supply chain flow disruptions • Financial or currency variations • Security, theft and counterfeiting Plans for business continuity are necessary in Asia, as they are globally. Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 12
  • 13. Supply Chain Planning for Asia Other Needs • Setting targets for operating margins, inventory turns and other KPIs • Special events • New products • Planning tools capabilities Planning is the Critical Integrator for Asian Supply Chains Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com 13
  • 14. The Supply Chain Leadership Forum 2011: Walt Disney World® Resort, Lake Buena Vista, FL Discussion