Evolving Supply Chain from Cost Centre to Competitive Advantage
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Maureen O'Shea's presentation discusses evolving the supply chain from a cost centre to a competitive advantage. The presentation covers: 1) Developing a customer-centric organization by understanding customer needs and delighting them, 2) Designing the supply chain from the customer backwards based on evolving demand patterns, and 3) Segmenting customers and tailoring supply strategies to better meet their needs. The goal is to use advanced analytics, integrated planning, and deep customer insights to transform the supply chain into a strategic asset that delivers value to customers and the business.
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Evolving Supply Chain from Cost Centre to Competitive Advantage
- 1. Maureen O’Shea Biotech Global Product Supply Evolving the Supply Chain from Cost Centre to Competitive Advantage
- 2. 2 Today’s Agenda 1 – The Dream 4- Partnership with Commercial • Digital Opportunities • Perspective • Case Studies 3 - Evolving Markets • One size on longer fits all • Every market is now an evolving market • Segment to survive 1 2 3 4 Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 2017 2 - Developing a Customer Centric Organisation • The drum beat • 3 Degrees of Customer Satisfaction
- 3. Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 20173 Supply Chain as Cost Centre
- 4. Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 20174 Supply Chain as Competitive Advantage
- 5. 5 Today’s Agenda 1 – The Dream 4- Partnership with Commercial • Digital Opportunities • Perspective • Case Studies 3 - Evolving Markets • One size on longer fits all • Every market is now an evolving market • Segment to survive 1 2 3 4 Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 2017 2 - Developing a Customer Centric Organisation • The drum beat • 3 Degrees of Customer Satisfaction
- 6. Every day repeat the same 3 questions: 1) Who is my customer? 2) Do I understand his/her needs? 3) Am I delighting him/her? For a Truly Customer Centric Organisation: Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 20176
- 7. The 3 Degrees…when applied to Supply Chain High Service Low Cost Efficient Cash (inventory) LeadTime One of the these measures is excelled The performance adds value to the customers (delight them) Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 20177
- 8. 8 Today’s Agenda 1 – The Big Picture 4- Partnership with Commercial • Digital Opportunities • Perspective • Case Studies 3 - Evolving Markets • One size on longer fits all • Every market is now an evolving market • Segment to survive 1 2 3 4 Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 2017 2 - Developing a Customer Centric Organisation • The drum beat • 3 Degrees of Customer Satisfaction
- 9. Design the Supply Chain from the Customer (Demand) backwards How to cope when every market is an evolving market? In Pharma the majority of supply chain are designed based on product/process requirement. This means R&D/Mfg (Supply) driven. While this is definitively important, the paradigm shift is to design with the Customer Value (DEMAND patterns) in mind. Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 20179
- 10. 10 VALUE/ VOLUME VOLATILITY Mixed forecasting Statistical forecasting Active forecasting Statistical forecasting Map the Demand Patterns One size no longer fits all Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 2017
- 11. DEMAND STRATEGIES SUPPLY STRATEGIES Demand Pattern Statistical Fcst Statistical Fcst Mixed Fcst Active Fcst Designing the Supply Chain from the Customer (Demand) backwards Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 201711
- 12. Key indicators per cluster Key findings • A relatively small number of “HORSES" drive most of the business; however, they do not show required service level performance > OPPORTUNITY • One-size-fits-all is not appropriate for “JACKRABBITS" driving the worse ratio revenue vs Inventory and backorder > OPPORTUNITY • “MAD BULLS" products: Mixed forecasting model combined with LPD seems the best solution • Inventory-revenue ratio on “MULES" products ~ 3-times higher than on "core products" and still low service > OPPORTUNITY 61% 63% 42% 42%23% 16% 26% 8% 4% 11% 15% 11% 30% 35% 10% 11% 24% 66% Inventory BackordersLeadTime Requirements (> 5 days) 1% RevenueSKUs (products) 1% HorsesMad Bulls MulesJackRabbits 12 Segmenting to survive
- 13. low Replenish strategy Production setup Inventory sizing MTO Reserve dedicated capacity slots None MTS/Post- ponement Big lot sizes for bulk, small for filling Safety stock on finished goods and bulks MTS High production frequency, variable lot sizes based on EOQ Safety stock linked to target service MTO in countries, MTS in production 'Once a year', high lot sizes Reorder point 13 Segmentation in action
- 14. 14 Today’s Agenda 1 – The Dream 4- Partnership with Commercial • Digital Opportunities • Perspective • Case Studies 3 - Evolving Markets • One size on longer fits all • Every market is now an evolving market • Segment to survive 1 2 3 4 Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 2017 2 - Developing a Customer Centric Organisation • The drum beat • 3 Degrees of Customer Satisfaction
- 15. 15 d Operational Planning Descriptive & Predictive Advanced Analytics Prescriptive Supply Chain Digitalization Road Map Integrated Business Planning (IBP) process Consensus demand forecast with breathing space visibility, agreed by all functions Master Data • Integrated digitalized collaborative platform for planning & execution • Demand & Supply balancing • Data Management LEAN ERP & Planning Visualization Machine Learning • Advanced visualization and predictive forecasting • Focused on external opportunities & on trade channel • Competitive advantage in capturing market opportunities • Dashboarding of internal data, sales and Supply Chain KPI • Statistical forecasting algorythms
- 16. 16 Palantir Centro outcome: platform visibility examples Product 360 alerts The Product 360 provides a comprehensive view of all data available for each product. From this page, analysts can proactively identify potential issues with the existing sales plan, simulate changes, and then save adjustments to the forecast. The platform not only surfaces defensive alerts but also highlights anomalies in market and shipping data that show potential opportunities to increase sales and seize market share. Competitors products analysis Market analyser The Market Analyzer shows a country by country breakdown of brand performance, allowing analysts to quickly identify under performing regions and size the potential gains from bringing those regions in line with the mean. Also provided is a time series performance of top competitors. This information is useful for identifying the share of the market that a product currently holds and how much additional value could be captured should we capture it.
- 17. 17 Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 2017 • Have an in-depth understanding of our customer demand patterns • Have Predictive analytical tools that enable us to know when our customer is going Out of Stock before they do • Have advanced analytical tools, enabling us to mine that data for business critical insights • Have deeply integrated supply chains, enabling us to rapidly turn insights in action • Have on-the-ground knowledge of our customers physical distribution networks • Have access to a deeper and more diverse talent pool than ever before Thus – the value proposition we can bring to our Commercial partners is higher than ever before! Today our cutting-edge Supply Chain teams
- 18. Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 201719 In Supply Chain, we have a unique perspective on the business….
- 19. 20 Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 2017 • Tesco Pampers promotions • Next day replenishments • Optimising our customers PD pain points • Shipping Bavencio to the patients one working day after FDA approval • Bavencio – sold 1 year forecast in 6 weeks Meaning we can be the ones to connect the dots and identify the unique new ways we can add value
- 20. 21 Evolving the Supply Chain from a cost centre to a Competitive Advantage | 6 June 2017 In Summary
Editor's Notes
- In the past, Supply Chain was the unloved step-child of manufacturing – solid and dependable, but far from glamorous. At best, we were a cost centre to be squeezed! No matter how hard our Subject Matter experts focused on how to squeeze that last pallet into the truck, we struggled to get a seat at the table for the strategic discussions shaping the future of our companies. Now, the world is shifting to digital and on-demand, thrusting us centre stage. The right supply chain for today’s rapidly evolving business climate can be the difference between profit and loss for our companies; this is our Cinderella moment! In this session, we will look at what being a supply chain delivering true competitive advantage looks like, exploring the key challenges and opportunities: Developing a customer centric organization (out of the ashes of an internally focused one) Visibility of developing market opportunities and anticipating the commercial value of those Building a true partnership with commercial to together deliver outstanding top and bottom line business results