Insights From Highly Outsourced Supply Chains

  • 217 views
Uploaded on

 

More in: Business , Technology
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
217
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
6
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Copyright © 2011 Kinaxis Inc. All Rights Reserved. 1
  • 2. Insights from highly outsourced supply chains Trevor Miles Director, Thought Leadership tmiles@kinaxis.comCopyright © 2011 Kinaxis Inc. All Rights Reserved.
  • 3. Comparison of Pharma Supply ChainsBioPharmaceutical High-Tech/ElectronicsReverse V-shaped BOM Regular A-shaped BOMNascent outsourcing Pervasive outsourcingHighly regulated Relatively little regulationProduct expiry Price ‘expiry’Over 75% gross margin About 15% gross marginAvg DOI of 200 past 3 years Avg DOI of 30 past 3 yearsAvg C2C of 220 past 3 years Avg C2C of 30 past 3 yearsAvg WC Ratio of 0.33 past 3 years Avg WC Ratio of 0.12 past 3 years High-tech supply chain’s recognized as best-in-class Copyright © 2011 Kinaxis Inc. All Rights Reserved. 3
  • 4. Why compare with High-Tech/Electronics? • Highly outsourced • Global supply chains • Very volatile demand • Explosion of products • Consistently outperforms other industriesCopyright © 2011 Kinaxis Inc. All Rights Reserved. 4
  • 5. Price ‘Expiry’- ASPs Decline 15% per Year Also faced with demand ‘expiry’ leading to E&OCopyright © 2011 Kinaxis Inc. All Rights Reserved. 5
  • 6. Price ‘expiry’ experienced throughout SCCopyright © 2011 Kinaxis Inc. All Rights Reserved. 6
  • 7. Highly OutsourcedCopyright © 2011 Kinaxis Inc. All Rights Reserved. 7
  • 8. Global Supply ChainsCopyright © 2011 Kinaxis Inc. All Rights Reserved. 9
  • 9. Explosion of ProductsCopyright © 2011 Kinaxis Inc. All Rights Reserved. 10
  • 10. Very Complex Foundry Manufacturing Process • Variable yields • Low yields • Speed binning Source: http://www.sematech.org• Constantly changing technology – speed/power, size• $3B-$4B investment• 2-3 years from ‘first shovel’ to ‘first wafer’• 6-18 week manufacturing lead time Copyright © 2011 Kinaxis Inc. All Rights Reserved. 11
  • 11. Growth of Fabless Semiconductors$300,000 30.00%$250,000 25.00%$200,000 20.00%$150,000 15.00% Semi ($M) Fabless ($M) Fabless/Semi$100,000 10.00% $50,000 5.00% $0 0.00% SourceSI AS Copyright © 2011 Kinaxis Inc. All Rights Reserved. 12
  • 12. Foundry Concentration = Supply Chain Risk Fabless EMEA APAC • 24% of Revenue Foundries, 50 Foundries, 100NA Foundries, • 84% of Companies 100 NA Fabless, 600 APAC Fabless, 500 EMEA Fabless, 200 SourceSI AS Copyright © 2011 Kinaxis Inc. All Rights Reserved. 13
  • 13. Foundry Concentration = Supply Chain Risk2800.0 1002400.0 902000.0 801600.0 70 Percent Capacity1200.0 60 Wafer Starts Utilization 800.0 50 400.0 40 0.0 30 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 07 08 08 08 08 09 09 09 09 10 10 10 SourceSI AS Copyright © 2011 Kinaxis Inc. All Rights Reserved. 14
  • 14. Postponement is keyFoundry Wafer Wafer Assembl • Very lean Test Customers Fab Sort y • Tightly Push Pull Pull coupled Fabless Semi • RiskSuppliers Assembly Test VMI Customers mitigation Pull • OEM/Fabless Contract Manufacturer – DesignSuppliers Assembly Test VMI Customers – Sales Pull • CM/Foundry Original Equipment Manufacturers – MfgSuppliers Kitting/ Order VMI Customers – Efficiency Assembly Mgt Pull Copyright © 2011 Kinaxis Inc. All Rights Reserved. 15
  • 15. Visibility is a core requirement Secure systems integration across a globally distributed heterogeneous manufacturing environment Automated data exchange with ERP systems Copyright © 2011 Kinaxis Inc. All Rights Reserved. 16
  • 16. What this means for biopharma Copyright © 2011 Kinaxis Inc. All Rights Reserved. 17Copyright © 2011 Kinaxis Inc. All Rights Reserved.
  • 17. Utilization of Outsourcing in BioPharmaSource: Frost & Sullivan Copyright © 2011 Kinaxis Inc. All Rights Reserved. 18
  • 18. Global Bio-Pharma CMO Market ForecastSource: Koncept Analytics Copyright © 2011 Kinaxis Inc. All Rights Reserved. 19
  • 19. Supply Chain efficiency impacts the bottom line The Pharmaceutical industry can free up over $43B in cash by operating at the first quartile of industry performance Potential Working Capital Improvement - Pharmaceutical Industry 3Q2009 ($B)50454035 $13.703025 $13.50 $1 3.5020 $43.801510 $16.60 $1 6.60 $1 6.60 5 0 Inventory Receivables Payables Total 1st Quartile = 137 Days 1st Quartile = 82 Days 1st Quartile = 48 Days Source: How to Unlock $43 Billion in Value b y Improving Working Capital Management, PharmaPro.com By Carol Cruickshank, David Hanfland, Paul Inglis and Shiv Shivaraman; A.T. Kearney, Tuesday, April 27, 2010 Copyright © 2011 Kinaxis Inc. All Rights Reserved. 20
  • 20. • Single data model • Single UI • Many specific views – Role – Companies • Single set of analytics – – Data sources S&OP – – Objectives Demand planning – – Horizons Supply planning – – Functions Inventory mgt – Lean – CTP • One – … – Place • Imbedded – Second reporting/alerting – Supply Chain • Long/medium/short term • Finance & OperationsCopyright © 2011 Kinaxis Inc. All Rights Reserved. 21
  • 21. Thank You! Questions?Copyright © 2010 Kinaxis Inc. All Rights Reserved.