Introductie Supply Chain Management
What is a supply chain? 4PL Customer 3 PL   3 PL   Carrier Carrier Carrier Carrier Trailer service ICT host Hardware  prov...
Opprtunities & Threats  <ul><li>Shorter product life cycles </li></ul><ul><li>Customization </li></ul><ul><li>Globalizatio...
Consequenses for ICT <ul><li>Handling information of more products </li></ul><ul><li>Handling more changes in product info...
Weaknesses & Strength <ul><li>The ability to succesfully implement contemporary supply chain management principles </li></...
Customer Order Decoupling Point:  Make to Stock Make to Stock Push 2nd tier supplier 1st tier (main) supplier Distributor ...
Customer Order Decoupling Point:  Engineer to Order Engineer to Order 2nd tier supplier 1st tier (main) supplier Distribut...
Make to Stock Customer Order Decoupling Point:  Assemble to Order Assemble to order 2nd tier supplier 1st tier (main) supp...
Assemble to Order <ul><li>High volume low cost upstream from CODP </li></ul><ul><li>Customization downstream from CODP </l...
Who is in charge in the value chain? <ul><li>The one who interacts with the CUSTOMER! </li></ul><ul><ul><li>Walmart </li><...
Competition takes places at the end customer market! <ul><li>Choose a market: Target your strategy on end user markets and...
From market strategy to corporate strategy SC strategy KPI’s! 2nd tier supplier 1st tier (main) supplier Distributor Retai...
Market performance indicators <ul><li>Cost leadership :  </li></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Total cost...
Supply chain performance <ul><li>Cost leadership:  </li></ul><ul><ul><li>cost of goods sold </li></ul></ul><ul><ul><li>ove...
Corporate performance <ul><li>Same as supply chain performance indicators, however </li></ul><ul><li>Beware of the COPD, t...
Fisher’s supply chain fit matrix FIT NO FIT Functional supply chain NO FIT FIT Responsive  Supply chain Commodity market (...
Enhancing performance through  state of the art SCM concepts <ul><li>Postponement : Move the CODP upstream (reduces invent...
Enhancing performance  through state of the art technology <ul><li>Share (market) information through the supply chain: tr...
Benetton’s innovation: postponement Making wool Wool dying Distributor Retailer knitting
Benetton’s innovation: postponement Making wool Wool dying Distributor Retailer Knitting
Benetton’s score <ul><li>Market </li></ul><ul><ul><li>Better collection in store (customization) </li></ul></ul><ul><ul><l...
Dell’s innovation: assemble to internet order Chips Componenten Computers
 
 
 
Dell’s score <ul><li>Market </li></ul><ul><ul><li>Low price </li></ul></ul><ul><ul><li>Extreem fast delivery </li></ul></u...
Facts & Figures PC market shares Q4 2003  Dell 16.0 % HP/Compaq 15.5% Source: Gartner Dataquest
How SCM & Technology becomes a competitive advantage? <ul><li>Be in chains that are winners on the end user market, measur...
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Bis2005 Sessie3b

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Bis2005 Sessie3b

  1. 1. Introductie Supply Chain Management
  2. 2. What is a supply chain? 4PL Customer 3 PL 3 PL Carrier Carrier Carrier Carrier Trailer service ICT host Hardware provider Value chains the supply chain 2nd tier supplier 1st tier (main) supplier Distributor Retailer Orignal Equipment Manufacturer
  3. 3. Opprtunities & Threats <ul><li>Shorter product life cycles </li></ul><ul><li>Customization </li></ul><ul><li>Globalization </li></ul><ul><li>Outsourcing </li></ul>Longer chains, more parties involved, tougher competitors: Tougher supply chain management More product introductions and products for unfaithful customers: Tougher competition
  4. 4. Consequenses for ICT <ul><li>Handling information of more products </li></ul><ul><li>Handling more changes in product information </li></ul><ul><li>Handling more customers, and changing customers (installed base) </li></ul><ul><li>Longer chains, more parties: more information exchange for managing the chain </li></ul>
  5. 5. Weaknesses & Strength <ul><li>The ability to succesfully implement contemporary supply chain management principles </li></ul><ul><li>The ability to succesfully implement contemporary supply chain management technology </li></ul><ul><li>sustainable competitive advantage </li></ul>
  6. 6. Customer Order Decoupling Point: Make to Stock Make to Stock Push 2nd tier supplier 1st tier (main) supplier Distributor Retailer Orignal Equipment Manufacturer
  7. 7. Customer Order Decoupling Point: Engineer to Order Engineer to Order 2nd tier supplier 1st tier (main) supplier Distributor Retailer Orignal Equipment Manufacturer
  8. 8. Make to Stock Customer Order Decoupling Point: Assemble to Order Assemble to order 2nd tier supplier 1st tier (main) supplier Distributor Retailer Orignal Equipment Manufacturer
  9. 9. Assemble to Order <ul><li>High volume low cost upstream from CODP </li></ul><ul><li>Customization downstream from CODP </li></ul><ul><li>Mass customization: Best of both worlds…… </li></ul><ul><li>Mass customization requires more information technology! </li></ul>
  10. 10. Who is in charge in the value chain? <ul><li>The one who interacts with the CUSTOMER! </li></ul><ul><ul><li>Walmart </li></ul></ul><ul><ul><li>Proctor & Gamble </li></ul></ul><ul><ul><li>Nike </li></ul></ul><ul><li>The one who has the unique feature in the PRODUCT or SERVICE! </li></ul><ul><ul><li>Intel </li></ul></ul><ul><ul><li>Fedex </li></ul></ul>
  11. 11. Competition takes places at the end customer market! <ul><li>Choose a market: Target your strategy on end user markets and make it measurable in Key Performance Indicators regarding the customer market. </li></ul><ul><li>Competitive strategies according to Porter </li></ul><ul><ul><li>Cost leadership: Price based competition, low production and logistics costs </li></ul></ul><ul><ul><li>Differentiation: Quality based competition, productportfolio, time to market. </li></ul></ul><ul><ul><li>Focus: Target a niche market </li></ul></ul>
  12. 12. From market strategy to corporate strategy SC strategy KPI’s! 2nd tier supplier 1st tier (main) supplier Distributor Retailer Corporate strategy KPI’s! Strategy sec. processes KPI’s! 3 PL Trans ICT host Hardware Market strategy KPI’s! OEM OEM
  13. 13. Market performance indicators <ul><li>Cost leadership : </li></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Total cost of ownership for customer </li></ul></ul><ul><li>Differentiation oriented : </li></ul><ul><ul><li>Product quality, </li></ul></ul><ul><ul><li>Service level, </li></ul></ul><ul><ul><li>After sales services </li></ul></ul><ul><ul><li>Delivery time, </li></ul></ul><ul><ul><li>Product image. </li></ul></ul>
  14. 14. Supply chain performance <ul><li>Cost leadership: </li></ul><ul><ul><li>cost of goods sold </li></ul></ul><ul><ul><li>overhead costs per unit, consolidated </li></ul></ul><ul><ul><li>Obsolescence costs (apparel), </li></ul></ul><ul><ul><li>inventory cost (CODP, High Tech) </li></ul></ul><ul><ul><li>manufacturing costs (consumer electronics), </li></ul></ul><ul><ul><li>cash to cash cycle times (retail). </li></ul></ul><ul><li>Differentiation: </li></ul><ul><ul><li>Time to market (Personal computers), </li></ul></ul><ul><ul><li>Supply chain leadtime (Mobile phones), </li></ul></ul><ul><ul><li>customization (Cars), </li></ul></ul><ul><ul><li>Flexibility, productportfolio </li></ul></ul>Inventory is bad! Inventory hides problems
  15. 15. Corporate performance <ul><li>Same as supply chain performance indicators, however </li></ul><ul><li>Beware of the COPD, the upstream KPI’s may differ from the downstream KPI’s (and then the COPD is a tough position) ! </li></ul><ul><li>Beware of local optimization: pie sharing versus pie growing! </li></ul><ul><li>Unfortunately…you are in more than one chain, and different chains have different priorities! </li></ul>
  16. 16. Fisher’s supply chain fit matrix FIT NO FIT Functional supply chain NO FIT FIT Responsive Supply chain Commodity market (cost leadership -JvdK) Quality/Innovative market ( differentiation -JvdK)
  17. 17. Enhancing performance through state of the art SCM concepts <ul><li>Postponement : Move the CODP upstream (reduces inventory)! </li></ul><ul><li>Cross Docking: reduces inventory and lead times </li></ul><ul><li>Vendor Managed Inventory: reduces inventory and replenishment costs: </li></ul><ul><li>Strategic alliances: fair shares!!! </li></ul>
  18. 18. Enhancing performance through state of the art technology <ul><li>Share (market) information through the supply chain: trade inventory for information </li></ul><ul><li>Organize visibility : monitor & alert on KPI’s. </li></ul><ul><li>Plan and schedule according to supply chain KPI’s: Collaborative Planning Forecasting and Replenishment. </li></ul><ul><li>Technology brings new SCM concepts within reach </li></ul>
  19. 19. Benetton’s innovation: postponement Making wool Wool dying Distributor Retailer knitting
  20. 20. Benetton’s innovation: postponement Making wool Wool dying Distributor Retailer Knitting
  21. 21. Benetton’s score <ul><li>Market </li></ul><ul><ul><li>Better collection in store (customization) </li></ul></ul><ul><ul><li>Lower price </li></ul></ul><ul><ul><li>Better response </li></ul></ul><ul><li>Supply chain </li></ul><ul><ul><li>Lower inventory costs </li></ul></ul><ul><ul><li>Lower obsolescence costs </li></ul></ul><ul><ul><li>Higher production costs </li></ul></ul><ul><ul><li>Integration with Logistic Service Provider </li></ul></ul>
  22. 22. Dell’s innovation: assemble to internet order Chips Componenten Computers
  23. 26. Dell’s score <ul><li>Market </li></ul><ul><ul><li>Low price </li></ul></ul><ul><ul><li>Extreem fast delivery </li></ul></ul><ul><ul><li>Customization </li></ul></ul><ul><ul><li>Market share </li></ul></ul><ul><li>Supply chain </li></ul><ul><ul><li>Negative cash to cash cycle time! </li></ul></ul><ul><ul><li>Less pie eaters, more pie! </li></ul></ul><ul><ul><li>Higher fulfillment cost </li></ul></ul><ul><ul><li>Zero inventory </li></ul></ul><ul><ul><li>Full supplier and LSP integration, on planning, scheduling and execution level </li></ul></ul>
  24. 27. Facts & Figures PC market shares Q4 2003 Dell 16.0 % HP/Compaq 15.5% Source: Gartner Dataquest
  25. 28. How SCM & Technology becomes a competitive advantage? <ul><li>Be in chains that are winners on the end user market, measure in end user market KPI’s </li></ul><ul><li>Target Supply chain and corporate KPI’s in terms of market KPI’s. </li></ul><ul><li>Use state of the art competitive weapons (your competitors do!) : </li></ul><ul><li>SCM concepts, if they supports the SC strategy </li></ul><ul><li>ICT, if it supports the SC strategy </li></ul><ul><li>Think strategically, pie growing, not pie sharing </li></ul>

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