Supply Chain Strategy Profile

Supply Chain
Strategy
Keys to Increased Business
Profitability

A Profile of REM Associates of Princeton, Inc.
Resources and Capabilities

20 NASSAU STREET, SUITE 244

PRINCETON, NEW JERSEY 08542

REM Associates Profile
Our business operations strategy profile includes . . . .
Business Supply Chain Strategy
Profile of REM Associates
The REM Associates Network
Functional Areas of Consulting
Client Industry Profile
Partial Listing of Clients
REM Associates Relevant Experience
Our Approach to Clients:
– Assessment
– Issues and Concerns
– Path Forward
Overview of The Business Operations Strategic Planning Process.
Copyright ® REM Associates Page 2

Today’s business management faces increasingly complex challenges
from a variety of sources, including . . . .
Business technology issues
Political, regulatory, and external controls
Sociological and cultural change
Investment community emphasis on “real” earnings and growth.
In addition, increasing business pressures require management focus,
decision making, and action plans directed at . . . .
Intensified product, service, and market competition
Innovative pricing strategies
A constantly changing government regulatory environment
Greater emphasis on operational and working capital cost reduction
Increasing the need for managing a company with in-depth
understanding, improved knowledge, and skills not previously required in
business management.

Recent assignments found that inefficiencies in business operations waste
as much as 25% of an organization’s operating costs. With profit margins
of 3 to 4%, even a 5% reduction in waste can double a company’s
profitability. Key drivers of this value creation include . . . .

Revenue - capacity utilization, product speed to market, stock-outs, and
service to customers
Expenses - inventory carrying costs, production and distribution costs,
transportation costs, logistics productivity, outsourcing, and asset utilization
Capital Utilization - working capital (inventory turns, order cycle time) and
fixed assets (plants/DC locations, fleet utilization, strategic outsourcing)

By lowering costs and increasing asset utilization, business operations can
free up cash.


Supply Chain strategy deals with planning the intermediate and longer-
term direction of the business, including . . . .
Supply Chain mission
Key strategic thrusts
Supply Chain goals and objectives
Action plans aimed at strategy implementation.
Supply Chain re-engineering is directed at assessing and improving
policies, procedures, and practices to improve costs, customer service, and
business effectiveness, including . . . .
Operations and process assessments
Data and information flows and linkages
Policies, procedures, and practices completeness, consistency, and
effectiveness
Organization structure and responsibilities – ownership.

REM Associates, started in 1984, is now in its twenty-fourth year serving
business clients . . . .

Advice and counsel in “Business and Supply Chain Operations”
Consumer and industrial companies as well as governmental organizations
Strategic, tactical, and contingency planning
Operations evaluations directed at improvements:
– Profit improvement
– Facility operations analysis and planning
– Cost reduction and productivity improvement
– ABC inventory costing and evaluation
– Functional outsourcing
– Customer service
– Organization structure and performance.



REM Associates represents a network of over sixty experienced
professionals worldwide . . . .

Senior experienced business personnel
Most with over 25 years of experience
Careers in both consulting and business operations
Variety of business disciplines
Broad range of industry backgrounds
Strong inter-personal skills
Commitment to positive results
Support from analysis through implementation.


REM Associates Network represents key business operations organizations
and companies. A partial list includes . . . .
Bernard J.
Bernard J.
La Londe & Joseph
Joseph
Brinmar
Brinmar La Londe &
Ohio State Andraski
Andraski
Associates
Associates Ohio State
University Group
Group
University

Princeton
Princeton REM Associates
REM Associates CGR
CGR
Computer
Computer Network
Network Associates
Associates
Consulting
Consulting

Miami University
Miami Gross Princeton
Princeton
University Gross Of
University & University
University
of Ohio & Pennsylvania
of Ohio Associates
Associates



REM Associates provides virtually turn-key management . . . .

Setting
Setting
Policies, Goals and
Goals and Operations
Policies, Operations
Procedures, Objectives
Objectives Assessment
Procedures, Assessment
and Practices
and Practices

Organization Activity
Activity
Organization Strategy
And Based
Based
And Planning Through
Staffing Costing
Costing
Staffing Implementation

Distribution
Distribution
Project
Project Inventory Network
Inventory Network
Management
Management Strategy Design
Strategy Design



REM Associates represents a broad range of supply chain and business
operations skills and backgrounds . . . .

Resource
Resource
Utilization
Utilization Organizational
Organizational
Operations
Operations Staffing
Staffing
Management
Management

Strategic
Strategic Forecasting
Forecasting
Quality
Quality and Tactical
and Tactical And Product
And Product
Assurance
Assurance Planning
Planning Marketing
Marketing

Financial
Financial Outsourcing
Outsourcing
Analysis and
Analysis and and
and
Evaluation
Evaluation Alliances
Alliances
Information
Information
Systems
Systems



Specifically, within supply chain operations and related functions, we are
experienced in . . . .

Supply Chain Management
Sourcing and Purchasing

Forecasting and Sales Planning

Production and Inventory Management

Warehousing & Distribution Operations

Facilities and Network Design

Transportation Operations and Management

Customer Service and Order Processing and Related Systems



We have worked for a number of manufacturers, distributors and
distributor organizations. Our work has included . . . .
Assessment, evaluation, and planning of supply chain functions
Evaluation of supply/demand chain functions, linkages, and structure
Assessment of forecasting, demand planning, and inventory management
Development and positioning of organizational structures to support business
operations strategy
Diagnosis and evaluation of functions and personnel
Development and specifications of operating systems requirements
Development of effective performance measurements and benchmarking
Assistance in implementation of recommendations and changes in operations
directed at cost effective improvements.


REM Associates has worked with manufacturers, wholesalers, and
distributors representing a wide variety of industries . . . .

Consumer Products
Consumer Products Industrial Products
Industrial Products
Food Chemical Products
Retailing Clay Products
Wholesaling Mining
Pharmaceutical Precious Metals
Electronics
Paper
Newspaper
Manufacturing
Manufacturing
Tobacco
Wines, Spirits, and
Service and
Service and
Beverages Industry Associations
Industry Associations


In addition, our work and business relationships have been international
in scope, including government clients and agencies such as . . . .

Our international exposure has included countries such as . . . .
United Kingdom Indonesia Mexico
India Russia Argentina
Pakistan China Panama
South Africa Taiwan Costa Rica
Malaysia Philippines Etc.
Our state, city, public, and local government work has included . . . .
The State of North Carolina The City of New York
The State of Michigan The University of Missouri
The County of Los Angeles Princeton University.

Partial Listing of Clients
A partial listing of our clients for whom we have worked in the past
include . . . . Honeywell Corporation
American Stores Corporation John Morrell and Company
Anheuser-Busch companies, Inc. Kimberly-Clark Corporation
Avon Products Company Kraft Foods Corporation
Bankers Trust Company Land O’ Lakes Incorporated
Becton Dickinson & Company Lea & Perrins Company
Ben & Jerry’s Leiner Health Products
Borden Company Merrill Lynch & Company
Bristol-Myers Squibb Corporation Milton Hershey School
Engelhard Corporation Nabisco Brands Incorporated
G A F Corporation Pepsi-Cola Incorporated
General Electric Company Philip Morris Company
General Mills Company Princeton University
GlaxoSmithKline plc R. C. Bigelow Tea Company
Gulf & Western Corporation Sears Roebuck & Company
Hermes of Paris Southland Corporation
Hewlett-Packard Company USA Today
Hoechst Celanese Corporation University of Missouri
Home Base Companies Warner-Lambert Company
John Hancock Life Insurance Co. W R Grace & Company


The scope of our engagements range from single to multiple functions
beginning with assessment and planning through implementation . . . .

Assessment of existing functions, processes, facilities, and operations aimed at
costs and productivity improvements
Analysis and evaluation of functions, organization and structure, linkages, and
positioning of supply/demand chain activities to support business goals
Assessment and evaluation of forecasting , sales planning, and inventory
management to support distribution costs and required levels of service
Evaluation of customer service functions and activities to determine effective
levels of service based on demand, cost, and business positioning
Development of systems requirements and measures to monitor, control, and
manage supply/demand chain activities
Management of implementation programs to meet timetables and milestones
directed at on time completion.


A sampling of our client engagements includes . . . .
For a Major West Coast Pharmaceutical Manufacturer:
– Assessed business operations to:
» Improve product and customer demand forecasting, including promotional
activity
» Reduce operational costs of functional activities
» Improve service to all customers, including retail, wholesale, and military
» Reduce inventories and related business investments at all levels, including
raw materials, WIP, and finished goods.
– Results of this work included:
» Inventory reduction of over 35%
» Improved customer service to over 96%
» Increased major customer in-stock position to over 97%
» Reorganized key management functions and responsibilities which
significantly improved communications, decision making, and timeliness of
management actions.



In addition, a sampling of our client engagements includes . . . .
A Large Consumer Product Company:
– Assessed and evaluated supply chain functions, linkages, tasks, and activities
– Developed an integrated supply chain strategy directed at reduced costs and increased
customer service levels
– Positioned sourcing, sales, manufacturing, and distribution to effectively support market and
customer focus
– Evaluated deployment of inventories based on forecasted demand pull to the marketplace in
order to strengthen support services to customers
– Recommended and planned implementation for an integrated supply chain strategy.

A Fortune 100 Pharmaceutical Company:
– Set up multi-country (14) teams for implementing production and resource planning
– Worked with in-country company teams to implement planned changes
– Evaluated and recommended operations improvements within countries
– Monitored and directed progress toward program goals and objectives
– Conducted and managed program reviews to make sure timelines were met
– Completed almost two year program ahead of schedule.

Our Approach to Clients – 1. Assessment

Our initial approach to clients begins with an assessment. In order to
form a solid base of understanding, we determine critical characteristics of
our client’s business in terms of . . . .

Client operations size and basic structure

Classes of products, facilities, and customers served

Key business strategic issues and concerns

Operations network including sales, distribution, customer service, and related

functions

Customer service goals and objectives

Operations goals and objectives.

Our Approach to Clients – 2. Issues and Concerns

In order to focus our response and meet client specific needs, we need to
understand company issues and concerns. For example . . . .

Present and planned business initiatives
Specific operations issues:
– Forecasting and sales demand planning
– Inventory management
– Warehousing and Transportation
– Other operations related issues
Current key projects within operating functions
Priority, sequence, and timing of implementation of near and longer-
term initiatives.

Our Approach to Clients – 3. Path Forward

As a result of initial meetings, we form an understanding and plan a path
forward in response to your needs, concerns, and plans . . . .

Goals and objectives of REM Associates assistance

Structure and content of a proposal to respond to your needs

Requirement for site and/or functional visits

Data needed in order to understand and scope the detail of work

Point person for questions and clarification

Timetable for decision making and program completion.


Overview of The Supply Chain
Strategic Planning Process

The logic of supply chain strategy relates directly to the flow of products,
information, and costs through the business and to the customer . . . .
Sourcing Manufacturing Sales & Distribution Customer

Flows:

Products

Information

Costs
Revenue


There are several levels of business logistics between the product source
and the customer . . . .
Plant Customer
Direct Distribution Large
Chains

Small
Independents

Sourcing Primary Secondary Tertiary
Distribution Distribution Distribution


Strategic planning issues are generally of a broader scope than those of
day-to-day operations issues . . . .

Strategy
Business
Mix

Market
Definition

Operations
Customer Product
& Service
Mix Mix
Mix
Forecast Demand

Service by Class

Facility Service
Characteristics
of Customer

Facility Size

Operations
by Product

Variation

Location
Forecast

Product

Facility
S K Us

Area
Type Uniqueness


The hierarchy of supply chain strategic planning begins with customers
and service . . . .
Customer
Customer
Service
Service
Goals and
Goals and
Objectives
Objectives

Inventory Order MIS
Inventory Goals Processing Equipment
Investment Deployment Strategies and
Investment
Strategies and Programs
Programs

Facilities
Facilities Warehousing Transportation Transportation
Strategies and Strategies and
Investment Equipment
Investment Programs Programs
Investment

MIS Systems and Human
Organization
Equipment Procedures
Strategies and Resource
Strategies and
Investment Programs Investment
Programs


A number of factors must be evaluated to determine the best cost and
service mix in a strategic supply chain structure . . . .

COST: SERVICE:
Number of warehouses Order processing times
Location of warehouses Customer service
Shipment modes Operations
Size of shipments Transportation
Frequency of shipments Inventory service
Stock vs. non-stock
Shipment consolidation
In-stock position
Operating methods
Delivery reliability
Storage requirements Freight consolidation
Regulatory requirements holding times
Information systems
INVENTORY:
Stock vs. non-stock Frequency of replenishment
In-stock position Transit times
Variability of demand Inventory carrying costs


An effective supply chain strategy requires the balancing of conflicting
management objectives . . . .
Impact of Objectives on:
Customer
Logistics Objectives:
Inventory: Service: Costs:

High customer service

Low warehousing costs

Low transportation costs

Reduced inventories

Fast deliveries

Reduced labor costs

Desired results

The planning process must evaluate alternatives and recommend the most
cost and service effective plan for total business logistics . . . .

Product/ Identify
Define Demand
Strategic
Market Chain Operating
Operating
Objectives
Environment Alternatives SCREEN
ASSESS

Develop a Execute
Develop a Develop Preferred
Segmented Set of Business Operating Operations Implementation
Strategic Success Operating Strategy and its
Requirements Objectives Environment Implementation Plan

Identify SCREEN Define
Define Business
Strategic
Operating Strategic
Deployment
Mission
Alternatives Objectives

PHASE I PHASE II PHASE III


ASSOCIATES
MANAGEMENT CONSULTANTS
20 NASSAU STREET, SUITE 244
PO BOX 7345
PRINCETON, NEW JERSEY 08543-7345
Phone: 609-275-4444
Fax: 609-924-9668
E-Mail: REM.Murray@REMAssoc.com
web: http://www.remassoc.com


Supply Chain Strategy Profile

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