• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Fapics mondher may 19, 2011_final_partial
 

Fapics mondher may 19, 2011_final_partial

on

  • 443 views

 

Statistics

Views

Total Views
443
Views on SlideShare
338
Embed Views
105

Actions

Likes
0
Downloads
2
Comments
0

1 Embed 105

http://www.mondher.com 105

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Fapics mondher may 19, 2011_final_partial Fapics mondher may 19, 2011_final_partial Presentation Transcript

    • Global  Supply  Chain  Management  Trends  &  Best  Prac.ces  FAPICS  Annual  Conference  Paris,  May  2011   Mondher  Ben-­‐Hamida,  CPIM,  CSCP   APICS  Board  Member   Vice  President  Strategy,  E2open   mondher@e2open.com  /  mondher@mondher.com   +1.415.425.7184   ©  2011  E2open,  Inc.  All  rights  reserved.  
    • Agenda   1   Our  Point  of  View  on  Global  Supply  Chain  IntegraAon   What  Works  &  What  Doesn’t  Work   2   Case  Studies  in  Global  Supply  Chain  IntegraAon  &  Co-­‐opeAAon     Lessons  Learned   3   An  Overview  of  Some  Macro  Economic  Trends   …  and  their  impact  on  the  micro  economic  drivers  of  SCM   4   IT  and  the  Future  of  Supply  Chain  Management   On  the  structure  and  merits  of  an  IT-­‐enabled  business  network   5   Conclusion   Final  Thoughts    E2open  ConfidenNal  /  2  
    • Supply  Chains  are  More  Complex  than  Ever   •  Supply  chains     becoming  ‘virtual  enterprises’   •  Complex,  mulN-­‐Ner  business  and     service  level  relaNonships     •  GlobalizaNon,  de-­‐centralizaNon  and   management  of  shared  processes      E2open  ConfidenNal  /  3  
    • …  and  Supply  Chain  CollaboraNon  is  Tough!    The  Uncanny  Resemblance  with  Chaos  Theory   1.  Complex  systems  consist  of  a  large  number  of  elements.   2.  The  elements  have  to  interact  and  this  interacNon  must   be  dynamic.     3.  The  InteracNon  is  fairly  rich,  i.e.  any  element  in  the  system   influences,  and  is  influenced  by,  quite  a  few  other  ones.   4.  Firstly,  the  interacNons  are  non-­‐linear.     5.  The  interacNons  usually  have  a  fairly  short  range,  i.e.   informaNon  is  received  primarily  from  immediate  neighbours.   6.  There  are  loops  in  the  interacNon.   7.  Complex  systems  are  usually  open  systems,  i.e.  they  interact   with  their  environment.   8.  Complex  system  operate  under  condiNons  far  from   equilibrium.   9.  Complex  systems  have  a  history.  Not  only  do  they  evolve   through  Nme,  but  their  past  is  co-­‐responsible  for  their   present  behaviour.   10. Each  element  in  the  system  is  ignorant  of  the  behaviour   of  the  system  as  a  whole.    E2open  ConfidenNal  /  4  
    • Business  EvoluNon  over  the  years  ……   Asset  Light  TransformaAons   Short  Product  Lifecycles   • Loss  of  control  &  increased  risk   • Need  for  dynamic  supply  chains   • Planning  focus  replaced  by  execuNon   • Lower  Inventory  levels   focus     • Lower  liability   Complex  Customer  Channels   AcAve  Demand  Management   • End  customer  value  NOT  immediate   • Real  Nme  visibility  and  dynamic   customer  focus   execuNon  to  counter  volaNlity   • Visibility  and  replenishment   • Demand  shaping,  promoNons   Value  Networks   RegulaAons  &  Compliance   • Non-­‐linear,  Global,  MulN-­‐Ner,  Regional   • Global  networks  drive  huge   • Direct  links  between  points  of  supply   compliance  requirements   and  demand     • Cross-­‐country  goods  movements   • No  touch  or  low  touch  operaNons   require  detailed  documentaNon    E2open  ConfidenNal  /  5  
    • Brand  vs.  Delivery  …..   Tangible  Assets/Net  Value   •  Major  Brand  Owners  conNnue  to   70%   outsource  based  on  their  core   60%   competencies  and  the  capabiliNes   of  their  partners   50%   •  Strategic  move  –  own  the  Brand/ 40%   Design  and  outsource  the  actual   30%   value  creaNon   20%   •  Requires  managing  the  value   10%   network  outside  the  four  walls   0%   1975   1985   1995   2005   2015    E2open  ConfidenNal  /  6  
    • Mismatch  between  Needs  and  Current  Setups   • Our  experience  shows  that  most  global   Phase 1 Phase 2 Phase 3 companies  are  in  Phase  3  of  their  evoluNon   Reputation Matters Growth Matters Execution Matters • Global  operaNonal  models  (process,  tools   High Suitability of Supply Chain Models and Tools Low and  infrastructure)  have  not  evolved  in  sync   with  the  growing  complexity  of  global   business  models   • The  growing  compeNNon  between  new  and   Slower growth and emerging  technology  Ntans  adds  a  sense  of   fiercer competition urgency  to  the  need  for  key  players  to   Business creation upgrade  their  operaNonal  model  with   and local market greater  emphasis  on  superior  planning  and   establishment execuNon   • Transforming  the  supply  chain  to  address   Aggressive Global Growth the  requirements  of  this  new  phase  is  the   new  compeNNve  fronNer   Low Elapsed Time / Supply Chain Planning Complexity High The  Evolving  Needs  of  Global  Supply  Chains  E2open  ConfidenNal  /  7  
    • Example:  Complex  Supply  Network   Boeing  787:   External  CollaboraNon  is  absolutely  criNcal  as   more  design,  manufacturing,  and  supply  network   execuNon  is  entrusted  to  key  trading  partners      E2open  ConfidenNal  /  8  
    • Valida.ng  Our  Observa.ons  Findings  from  a  Recent  E2open  Supply  Chain  Summit   1   Number  of  Planning  Tiers   2   Lead  Time  in  an  Extended  SC   3   Performance  Mgt  in  a  MulN-­‐Tier  System   4   SCM  &  Financial  Management    E2open  ConfidenNal  /  9  
    • Supply  Chain  MulN-­‐Tier  Performance  Using  the  E2open  Maturity  Model   The  Orchestrators  Quadrant   Companies  in  this  zone  clearly  understand  the  need  to   reach  across  their  supply  chain  spectrum  to  opNmize   their  operaNons  leveraging  advanced  opNmizaNon     and  business  intelligence  for  superior  performance     The  Overachievers  Quadrant   Companies  in  this  zone  have  managed  to  leverage   their  size  or  anchor  posiNon  to  build  a  mulN-­‐Ner   planning  model  that  sNll  lack  advanced  analyNcs  to   handle  complexity  and  improve  visibility  and   responsiveness   The  Underachievers  Quadrant   Companies  in  this  zone  have  heavily  invested  in     enterprise  automaNon  and  planning  soluNons  but  are   yet  to  reap  any  significant  benefits  because  of  either   lack  of  leverage  or  reluctance  to  embrace  the  required   mind-­‐set  shim     The  Basic  Quadrant   Companies  in  this  zone  have  neither  the  supply  chain   reach  nor  the  advanced  planning  capabiliNes  to  turn   SCM  into  a  compeNNve  differenNator.  Many   companies  from  emerging  markets  fall  in  this  category    E2open  ConfidenNal  /  10  
    • The  Challenge  of  MulN-­‐Tier  Planning   Component  Suppliers   EMS  Partners   OEM  /  Brand  Owner   Channel  Partners   Customers   Variability   Time   Vola-lity   Dependency    E2open  ConfidenNal  /  11  
    • Performance  Management  in  a  MulA-­‐Tier  Value  Chain  The  Dubious  Usefulness  of  the  Inventory  Turnover  Ra.o  (as  an  example)   Your  Key  Supplier/CM   Brand  Owner   Your  Key  Customer   QuanNty   QuanNty   QuanNty   1   2   3   4   5   6   7   8   9   10   11   12   1   2   3   4   5   6   7   8   9   10   11   12   1   2   3   4   5   6   7   8   9   10   11   12   Time   Time   Time   COGS   COGS   COGS   I   I   I   Key  Findings   •  Is  this  metric  (and  other  tradiNonal  ones)  more  suited  for  a  verNcally  integrated  company?   •  What’s  the  true  value  of  pursuing  high  inventory  turns  at  the  Brand  Owner  level  when  the  Supplier  is   (contractually  /  in  theory)  forced  to  maintain  high  inventory  levels   ― Does  this  drive  some  of  the  hedging  games  that  we  see  in  various  industries?   •  Does  a  MulN-­‐Tier  environment  warrant  re-­‐defining  this  metric  to  cover  2+  Tiers?   •  Do  we  need  new  ‘financial  products’  to  provide  joint  inventory  hedging  mechanisms?   •  Please  share  any  experiences  implemenNng  any  cross-­‐Ner  metrics?    E2open  ConfidenNal  /  12  
    • What  Is  Your  Lead  Time  in  An  Extended  Value  Chain?  The  Need  to  Constantly  Monitor  3  Cri.cal  Variables   I   Inventory   L   Lead-­‐Time   T   Throughput   John  D.C.  Li]le   InsNtute  Professor     Your Company Customers   Suppliers   OEM’s  /  Brand   T   Component   EMS  Partners   Warehouse(s)   Raw  Materials   Owners   Suppliers   Retailers   Lead  Time   Key  Findings   •  How  comfortable  is  a  company  (with  an  extended  supply  chain)  quoNng  a  delivery  leadNme?   •  Is  expediNng  /  firefighNng  a  reflecNon  of  poor  visibility  to  inventory?  How  to  fix  that?    E2open  ConfidenNal  /  13  
    • Agenda   1   Our  Point  of  View  on  Global  Supply  Chain  IntegraAon   What  Works  &  What  Doesn’t  Work   2   Case  Studies  in  Global  Supply  Chain  IntegraAon  &  Co-­‐opeAAon   Lessons  Learned   3   An  Overview  of  Some  Macro  Economic  Trends   …  and  their  impact  on  the  micro  economic  drivers  of  SCM   4   IT  and  the  Future  of  Supply  Chain  Management   On  the  structure  and  merits  of  an  IT-­‐enabled  business  network   5   Conclusion   Final  Thoughts    E2open  ConfidenNal  /  14  
    • Co-­‐opeNNon  is  Fast  Becoming  the  Norm   Customers   SaNsfacNon   Supply  Chain   Visibility   Cost     ReducNon   Inventory   ReducNon   Lead  Time   ReducNon   Supply  Chain   Velocity   Metrics   Alignment   Source  –  E2open  Research    E2open  ConfidenNal  /  15  
    • A  Mockup  of  a  Supply  Chain  Command  Center  Co-­‐ope..on  and  ‘Real  Time’  S&OP  at  Work….    E2open  ConfidenNal  /  16  
    • Agenda   1   Our  Point  of  View  on  Global  Supply  Chain  IntegraAon   What  Works  &  What  Doesn’t  Work   2   Case  Studies  in  Global  Supply  Chain  IntegraAon  &  Co-­‐opeAAon     Lessons  Learned   3   An  Overview  of  Some  Macro  Economic  Trends   …  and  their  impact  on  the  micro  economic  drivers  of  SCM   4   It  and  the  Future  of  Supply  Chain  Management   On  the  structure  and  merits  of  an  IT-­‐enabled  business  network   5   Conclusion   Final  Thoughts    E2open  ConfidenNal  /  17  
    • Observa.on  #  1  China  and  the  Lewis  Turning  Point   Lewis  argued  in  a  1954  paper  that  a  developing  country  with   “surplus”  agricultural  labor  could  grow  its  industrial  sector  for   years  without  wage  infla.on  as  it  absorbs  that  surplus.   Share  of  enNre  industry   Sir  W.  Arthur  Lewis   Nobel  Economics  1979   (1915  —1991)   TexNle   Consumer   Steel   Automobile   Electronics   Low  value-­‐added  products   High  value-­‐added  products    E2open  ConfidenNal  /  18  
    • Observa.on  #  2  FluctuaAng  Oil  Prices  Make  LogisAcs  Planning  Challenging     +$100/bbl  (from  $17  to  $117)  causes  an  increment  of  transportaNon   cost  of  0.22€/km  (from  1.28€  to  1.50€)  at  full  capacity  uNlizaNon   LogisNcs  Costs   Cost  of  Warehouses,     Stock  and  Loading     Devices,  etc.   TransportaNon     Costs   #  of  Warehouses    E2open  ConfidenNal  /  19  
    • Observa.on/Ques.on  #  3  Is  Labor  Cost  SAll  Relevant?  And  How  Should  It  Be  Analyzed?   •  Vietnam  Worker  –  400-­‐500  RMBs/Month   –  Lower  than  Bangladesh   •  China  Worker  –  800  RMBs/Month   –  Higher  than  India  and  Malaysia   –  Industrial  Transfer  is  inevitable   •  Survey  by  the  FederaNon  of  HK  Industries   –  37%  of  80,000  HK  companies  planning  to  transfer  part  or  all   of  their  producNon  capaciNes  out  of  the  region   –  63%  planning  to  move  out  of  the  Guangdong  region        E2open  ConfidenNal  /  20  
    • Observa.on/Ques.on  #  4   What  is  the  True  Supply  Chain  Cost  Breakdown  (1  of  2)   ‘It  is  the  maxim  of  every  prudent  master  of  a  family,  never  to  axempt  to  make  at  home  what  it  will  cost   him  more  to  make  than  to  buy.  If  a  foreign  country  can  supply  us  with  a  commodity  cheaper  than  we   ourselves  can  make  it,  bexer  buy  it  of  them  with  some  part  of  the  produce  of  our  own  industry,  employed   in  a  way  in  which  we  have  some  advantage.’   “An  Inquiry  into  the  Nature  and  Causes  of  the  Wealth  of  Na.ons”     Adam  Smith  –  1776     StaAc  Costs   Dynamic  Costs   Hidden  Costs   •  Purchase  price  ex-­‐factory  gate   •  Increased  pipeline  and  safety  stock  due,   •  Labor  cost  inflaNon  due  to  rising   •  TransportaNon  cost  per  unit,  assuming   which  is  amplified  by  demand  volaNlity   standards  of  living  and  compeNNon  of   no  unexpected  delays  or  quality   and  product  variety   the  labor  market   problems   •  Inventory  obsolescence  due  to  long   •  Currency  fluctuaNons,  in  parNcular  for   •  Customs  and  duty  to  clear  a  shipment   logisNcs  lead-­‐Nmes,  e.g.  in  case  of   cases  of  arNficially  pegged  currencies   for  export   quality  problems   •  Rise  in  transportaNon  cost,  e.g.  due  to   •  Insurance  and  transacNon  cost   •  Cost  of  lost  sales  and  stock-­‐outs,  as  the   higher  oil  price  and  carbon  offset  costs   •  Cost  of  quality  control  and  compliance   supply  chain  is  unresponsive  to  shims  in   •  Overhead  for  managing  the   with  safety  and  environmental   demand   internaNonal  supply  base,  including   standards   •  Expedited  shipments,  e.g.  air-­‐freight,  to   travel  cost  or  cost  for  local  personnel  in   •  Search  cost  and  agency  fees  to  idenNfy   ensure  uninterrupted  supply   the  supplying  markets   and  interact  with  local  suppliers   •  The  loss  of  intellectual  property  to   contract  manufacturers   •  The  risk  of  poliNcal  and  economic   instability  or  change  21    E2open  ConfidenNal  /  21  
    • Observa.on/Ques.on  #  4   What  is  the  True  Supply  Chain  Cost  Breakdown  (2  of  2)   To  Outsource  or  Not  To  Outsource?   An  EvaluaNon  Framework   Source  –  “On  the  risk  and  cost  of  global  sourcing”  –  Holweg  et  al   InternaNonal  Journal  of  ProducNon  Economics  –  2011    22    E2open  ConfidenNal  /  22