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Presentation 2012-10-12-13 Value Chain Management in Transportation System v1
The document provides an overview of logistics management within supply chain management, emphasizing its role in efficiently managing the flow and storage of goods and related information. It outlines key logistics activities and the importance of collaboration and integration with other business functions like marketing and finance. Additionally, it discusses value chain management and its significance in creating customer value and competitive advantage.
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Presentation 2012-10-12-13 Value Chain Management in Transportation System v1
- 1. Value Chain inTransportation System Nopporn Thepsithar 12 -13 October 2012
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- 3. CSCMP Definition ofLogistics Management Definition of Logistics Management Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements. Logistics Management â Boundaries and Relationships Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third-party logistics services providers. To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution--strategic, operational and tactical. Logistics management is an integrating function, which coordinates and optimizes all logistics activities, as well as integrates logistics activities with other functions including marketing, sales manufacturing, finance, and information technology. 3
- 4. CSCMP Definition ofLogistics Management âĒ Part of supply chain management âĒ Plan, implement, and control âĒ Forward and reverse flow and storage of goods, services and related information between the point of origin and consumption âĒ Meet customers' requirements âĒ Efficient and Effective 4
- 5. CSCMP Logistics ManagementActivities Inbound and outbound transportation management Fleet management Warehousing, Inventory management Materials handling Order fulfillment Logistics network design Supply/demand planning Management of third-party logistics services providers Packaging and assembly Sourcing and procurement Production planning and scheduling Customer service Planning and Execution in all levels : Strategic, Tactical, Operational Integratation of all Logistics Activities by coordination and optimization Including marketing, sales manufacturing, finance, and information technology. 5
- 6. āļāļļāļāļĨāļąāļāļĐāļāļ°āļāļīāđāļĻāļĐāļāļāļāđāļĨāļāļīāļŠāļāļīāļāļŠāđ âĒ āļāļąāļāļāļēāļĄāļēāļāļēāļāļāļīāļāļāļĢāļĢāļĄāļāļēāļāļāļēāļĢāļāļŦāļēāļĢ âĒ āđāļāđāļāļ§āļīāļāļĒāļēāļĻāļēāļŠāļāļĢāđ āđāļĨāļ° āļĻāļīāļĨāļāļĻāļēāļŠāļāļĢāđ âĒ āđāļāđ āļāļāļąāđāļāđāļāđ āļāļąāļāđāļāļ· āļāļāļĒāđ āļāļĒāđ āļāļāļāļķāļāļāļąāļāđāļāļ· āļāļāļŦāļĨāļąāļ āļāļĩāđāļāļ§āļēāļĄāļāļĒāļđāđāļĢāļāļāļāļāļāļāļĢāļīāļĐāļ āļą âĒ āļāļđāđāļāļāļēāļāļēāļāđāļĨāļāļīāļŠāļāļīāļāļŠāđ āđāļāđ āļāļĩ āļāđ āļāļāļŠāļ·āđ āļāļŠāļēāļĢāđāļāđ āļ āđāļāļī āļāļāļ§āđ āļēāļ āļĩāđ āļāļĢāļ°āļŠāļēāļāļāļĨāļāļĢāļ°āđāļĒāļāļāđ āļāđ āļāļĄāļāļ āđāļĨāļ° āļĄāļĩāļāļļāļāļāļĢāļĢāļĄ 6
- 7. Packaging Material Transportation Handling Site Selection Logistics Physical Information and Informational flow system Inventory Control Customer Service Order Warehousing Processing
- 8. Integrated Logistics withincompany Marketing and Sales Customers service level, Order Processing, Packaging Logistics Purchasing, Inventories, Plant Location, Return on Production investment, Scheduling Productivity Production Finance 8
- 9. Logistics Management Supplier Vendor DC Store Consumer Product and Service Information and Money Logistics Activities Logistics Activities âĒ Ordering âĒ Demand /Supply Planning âĒ Transportation âĒ Logistics Network Design âĒ Material Handling âĒ Logistics Integration âĒ Warehouse Management âĒ Outsourcing âĒ Inventory Management âĒ Customer Service âĒ Packing/Packaging âĒ Information Management 9
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- 11. CSCMP Definition ofSupply Chain Management Definition of Supply Chain Management Plan and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. Integrate supply and demand management within and across companies. Supply Chain Management â Boundaries & Relationships Link major business functions and business processes within and across companies into a cohesive and high-performing business model including all of the logistics management activities , as well as manufacturing operations Drive coordination of processes and activities with and across marketing, sales, product design, finance, and information technology. 11
- 12. Supply Chain Process âĒ Plan â Source â Make â Deliver - Return Plan Deliver Source Make Make Deliver Source Make Deliver Source Make Deliver Source Return Return Return Return Return Return Customerâs Supplierâs Customer Customer Supplier Supplier (Internal or (Internal or External) Enterprise External) External Internal External Collaboration Collaboration Collaboration Span of our Supply Chain Process 12
- 13. Building Internal &External Collaboration Customer Service/ Procurement Manufacturing Logistics Sales&Marketing Low Few change- High purchase overs Low inventories price Stable inventories Multiple schedules Low trans- High vendors Long run portation service lengths levels SOURCE MAKE DELIVER SELL Sequential Planning Logistics Procurement Manufacturing Sales Planning Planning Planning Target Synchronized, Concurrent Planning Process Approach (Plan-Source-Make-Deliver-Return) Logistics Procurement Manufacturing Sales Planning Planning Planning Target 13
- 14. Supply Chain ManagementFramework Network Design Years Strategic Supply Planning Months Demand Planning Tactical Production Distribution Planning Planning Weeks Production Packing & Transport Dispatching Days Operational Scheduling Scheduling Scheduling 14
- 15. Order Size Bullwhip Effect : The Dynamic of SCM Retailer Orders Distributor Orders Customer Demand Production Plan Time Source: Tom Mc Guffry, Electronic Commerce and Value Chain Management, 1998 15
- 16. Key Success Factorof Supply Chain Management Collaboration Communication Trust 16 10/11/2012
- 17. Marketplace competition isnot ............firm vs. firm, itâs ..... supply chain vs.supply chain.
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- 19. âValueâ is definedas âany activity that increases the market form or function of the product or service.â And in todayâs business climate, we need to maximize the value of every process in our business. 19
- 20. Value Management âĒ End-user segmentation Valued Customer âĒ Segment specific needs / decision-making process Who to serve? âĒ Anticipate technical trends / market dynamics ïĻ Targeting key end-user Source: Nirmalya Kumar, segments Marketing as Strategy, 2004 3 Vâs Value Network Value Proposition How to deliver ? What to offer? âĒ Functional/physical deliver of value proposition âĒ Benchmark current offering âĒ Channel/distribution network design âĒ Design new value proposition âĒ Required downstream integration âĒ Quantify value of offering ïĻ Integrated value network ïĻ Value based pricing 20
- 21. Value Management 3Vs framework is consisted of 1) Valued Customer, 2) Value Proposition and 3) Value Network Valued Customer Value Proposition Value Network ïŽ Which customer ïŽ Can we create a value ïŽ Can we run a better segment(s) do we want to proposition that delivers network or radically serve?. superior value through redefine the value delivery ï§ Comprehensive multi- dramatically higher benefits system for the industry ? level segmentation along or lower costs? ï§ Delivering our value the value chain For targeted segments proposition -Identify most important -from plant / silo to job-site ï§ In-depth knowledge of attributes specific requirements and -from marketing / TS to -Assessment / benchmark decision-making process end-user of current offering per segment â product -Design new value ï§ Design of required and service related proposition: products and channel / distribution ï§ Anticipate technical services network trends and business -Quantify value of offering ï§ Downstream integration dynamics of construction for customer to capture additional value industry or secure market position Source: Kumar, N. (2004). Marketing as strategy: understanding the CEOâs agenda for 21 driving growth and innovation, Harvard business school press
- 22. Example of 3Vs Flag Carriers easyJet Valued Customer Everyone, especially People who pay from their Own âWho to Serve?â Business class pockets and some who donât typically fly Value Proposition ï Flexible ï One-way fares âWhat to Offer?â ï Full-service ï No frills ï High prices ï Low prices Value Network âHow to Deliver?â Purchasing Integrated Outsourced Operations ï Multiple types of planes ï Single type of plane ï Short/long-haul routes ï Short-haul routes ï Worldwide network ï Select destinations Marketing ï Segmented customers ï Treat all customers the ï Varied meal services same ï Frequent flyer program ï âFocusedâ 22 Distribution Travel agents/all channels Internet/direct sales only
- 23. Value Chain Model: Michael E. Porter 23 Source: http://www.netmba.com/strategy/value-chain/
- 24. Supply Chain &Value Chain Management Supply Chain Plan âĒ Channel for movement of goods or services from source to end-user Source Make Deliver âĒ Product-focused âĒ Aim for competitive distribution, Return Return market share, market expansion Value Chain Manufacturing Distribution Marketing Service Sourcing and Sales âĒ Framework for understanding how a company adds value along the supply chain, from sourcing the raw material to servicing the end product in the hands of the customer âĒ Company-focused âĒ Aim for business value creation, business expansion & integration 24
- 25. Components of ValueChain Management Suppliers SRM SCM CRM Customers âĒ VCM is the main process in aligning company strategies with execution processes to delivery the right product at the right price and time, and supporting the key principles success âĒ VCM is considered sometimes as the next generation of SCM âĒ It has two major principles: 1. The end customer is the only entity that introduces money into the chain, the rest of value chain members shuffling his money back and forth 2. The only way for the value chain to succeed is to have every member profits from the business âĒ It has three components - Supplier Relationship Management(SRM) - Supply Chain Management( SCM) 25 - Customer Relationship Management( CRM)
- 26. Egg Value Chain Egg Egg Ping Gu Supermarket Production Delivery âĒ Kitchen of the World âĒ Provide value and âĒ Create Value solution along the chain âĒ World Chicken farm with âĒ Cost high innovative âĒ âCold-Chain Deliveryâ âĒ Convenience technology ïī Reliability & Availability Right time, Right âĒ Communication âĒ First Class Quality, Safety ïī quantity, Right product & Healthy Eggs âĒ Variety ïī Minimum Cost & Lean ïī Lab , UV hygiene âĒ Display âĒ Green Logistics âĒ Great egg productivity ïī Safety, Energy Saving âĒ Advice âĒ Environment friendly ïī Environmental Friendly âĒ Prevent animal epidemics âĒ VMI & CRP from close farm âĒ Shipment visibility âĒ More traceability FEED FARM FOOD FRESH FAMILY 26 PROFIT PEOPLE PLANET
- 27. Organic Cotton ValueChain 27
- 28. Value Chain ofAir Transportation 28
- 29. Natural Gas ValueChain Transportation 29
- 30.
- 31. Value Chain Management Value chain management is the process, by which opportunities for delivering business value via initiatives throughout the supply chain, are identified and acted upon. Sales, Design Sourcing Manufacturing Distribution Use and End of Service Life Develop product Bundle Growth customer can recycling market as green services with Business Value Drivers products Increase Pursue Reduce fleet Cost recyclability pollution accidents of supplier prevention pkg. Time to Streamline Assess risk Market permitting to reduce downtime Change Minimize Engage in Customer product to product packaging Focus reduce risk take-back 31 to customer
- 32. Business Strategy MaturityModel Continuous Innovation is Key to Success Internal SC Supply Driven SC Demand Value Driven Driven SC VC Supply chain Enterprise focus Collaboration Demand- Post-lean focus Strategy focus driven & lean focus Business Enterprise Extended Tier-based, Multi- Process Enterprise formalized enterprise, Focus trading grid KPI span Departmental Enterprise Supply Chain Value Chain Response Manufacturing Push with pull Pull Segmented, Model driven elements self-aligning 32
- 33. Level of SuppyChain Integration 33
- 34. Value Chain Model Example Main Role & Responsibility 1. Provide employee development Plan 2. Provide employee training schemes Main Role & Responsibility 3. Provide organization development Human Resources Dept. ï§ Provide information system Financial & Accounting Dept. ï§ Provide operation Sustainable EBITDA & system/WHS Main Role & Responsibility Information Mgt & System Operation Dept. ï§ Provide customer data base ï§ Provide financial control Transportation process Operation & Warehouse Inspection Control & Inventory & Delivery Mgt. Dept. Quality Sourcing control Material Dept. Dept. ï§ Provide accounting Dept. Raw management Main Role & Responsibility Main Role & Responsibility Main Role & Responsibility Main Role & Responsibility ï§ Inspect raw materials , fresh ï§ Provide stock model and ï§ Identify farming sources to ï§ Provide delivery plan as food by following company inventory management provide goods /products customers requirement procedure or qualification control process ï§ Provide tools , machine raw manual. ï§ Provide efficiency delivery ï§ Provide the best facility to material for packing mode & vehicles ï§ Ensure quality of all storage /stock to maintain ï§ Initiative â SRMâ and supply process to maintain quality quality of products ï§ Provide shipment visibility chain networks of goods/products process ï§ Provide sanitary and hygienic facilities ï§ Initiative âCRMâ 34
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- 39. Product/Service Provider VS Solution Provider 39
- 40. Level of Solution-Selling Matrix customization and customer knowledge Loyalty High : Solution Program Relationship Selling Selling Focus Low : Stand-Alone Systems Transaction Product Selling Focus Selling Individual Product Systems Product Focus Focus Width of products/services
- 41. Product Division Corporate Center Customer Solution ï Product innovation ï Organizational ï Customer service orientation transformation orientation ï Search for economies orientation ï Search for economies of scale ï Search for common of scope ï Market-share focus culture, team sprit ï Share-of-wallet focus ï Revenues, profits, and growth focus ïDevelop new solutions ï Balance internal and ïChampion solutions ïBuild deep customer external supplier roles ïEncourage integration knowledge ï Design for service ïAlign structure, ïIdentify external ïStandardize interfaces systems, and partners and be modular incentives ïEncourage flexible ï Be flexible ïMediate conflicts teams ï Assume product P&L ïFacilitate external ïBe product agnostic responsibility relationships ïAssume customer P&L responsibility
- 42. The Products-to-Solutions 3Vs Transformation Product Focus Solutions Focus Valued Customer Almost all customers Segment focus Value Proposition âBetterâ products with End-to-end Solutions service that reduce customer costs and risks or increase revenues Value Network R&D ï New technology ï Customer Problem focus focus ï Stand-alone ï Modular products Products ï Open, Standards- ï Proprietary products based
- 43. The Products-to-Solutions 3Vs Transformation (continued) Product Focus Solutions Focus Value Network Marketing ï Cost-plus product ï Value-based pricing pricing ï Multiyear service ï Product sales contracts ï salesperson as ï Salesperson as order taker consultant ï Geographical ï Industry experts coverage ï Service-based ï Volume-based commissions commissions Distribution Products sold via Become a value-added many channels reseller VAR
- 44. The Products-to-Solutions 3Vs Transformation (continued) Product Focus Solutions Focus Value Network Operations ï In-house ï Partner with best manufacturing of providers and be products product agnostic ï Limited supply-chain ï Many complexity interdependent partners requiring high coordination Service âĒ Cost center, bundled âĒ Profit center, free with products unbundled from products
- 45. Value Chain inTransportation System 45
- 46. āļāļąāļ§āļāļĒāđ āļēāļāļāļļāļĢāļāļīāļāđāļāļĢāļ°āļāļāļāļāļŠāđ āļ âĒCareer â Transporter â 3 PL â 4 PL âĒ Ship Owner â Ship Agent â Shipping â Freight Forwarder âĒ Inspector â Lab. Test - Inspection Body â Certify Body âĒ Packing â Material Handling â Stevedore - Labor âĒ āļāļđāļāļĨāļīāļāļĒāļēāļāļāļēāļŦāļāļ° - āđāļĢāļāļāļēāļāļāļĢāļ°āļāļāļ - āļāļđāđāļāđāļāļĄāļĢāļ - āļāļļāļāļāļĢāļāđāļāļĢāļ°āļāļāļāļĢāļ āđ âĒ Warehouse â DC â Port â Air Port - Rest Area - Logistics Park âĒ āļāļļāļāļāļĢāļāđāļāļāļŠāđ āļāļāļāļāđāļēāļĒ : Pallet â Container - Crane âĒ Road Construction â Cement/Asphalt â Aggregate - RMC âĒ IT : EDI â ASP â ERP â TMS â GPS - RFID âĒ Safety - Insurance â Finance 46
- 47. āļāļĢāļāļĩāļāļąāļ§āļāļĒāđ āļēāļ âĒ āļĄāļēāļāļĢāļāļēāļQ āđāļāļ·āđāļ āļāļēāļĢāļāļąāļāļāļēāļāļđāļāļĢāļ°āļāļāļāļāļēāļĢāļāļāļŠāđ āļāļāļēāļāļāļ āđ âĒ Sunsweet âĒ āļāđ āļēāļāļēāļĨāļĄāļīāļāļĢāļāļĨ 47
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- 51. āļāļ§āļēāļĄāļāđ āļāļāļāļēāļĢāļāļāļāļĨāļđāļāļāđ āļē4 C vs 4 P âĒ āļāļļāļāļāđ āļēāļāļĩāļĨāļđāļāļāđ āļēāļāđ āļāļāļāļēāļĢ āđāļĄāđ āđāļāđ āđāļāđ āļŠāļī āļāļāđ āļē āđ Customer Value vs. Product âĒ āļāđ āļāļāļļāļāļāļāļāļĨāļđāļāļāđ āļē āđāļĄāđ āđāļāđ āđāļāđ āļĢāļēāļāļēāļāļēāļĒ Cost vs. Price âĒ āļāļ§āļēāļĄāļŠāļ°āļāļ§āļāļŠāļāļēāļĒāļāļāļāļĨāļđāļāļāđ āļē āđāļĄāđ āđāļāđ āđāļāđ āļāđ āļāļāļāļēāļ Convenient vs. Place âĒ āļāđ āļēāļ§āļŠāļēāļĢāļāđ āļāļĄāļđāļĨāđāļāļĨāļđāļāļāđ āļē āđāļĄāđ āđāļāđ āđāļāđ āļāļēāļĢāļŠāđ āļāđāļŠāļĢāļīāļĄāļāļēāļĢāļāļēāļĒ Communication vs Promotion 51
- 52.
- 53. āļāļļāļāļāļĨāđāļāđ āļĨāļ°āļāļ āļāļ§āļēāļĄāļāļīāļ-āļāļīāļāđāļ āļŦāļąāļ§āđāļ āļāļīāļāļ§āļīāļāļāļēāļ āļāļĢāļīāļĐāļąāļ āļāļąāļāļāļāļīāļ - āļāļēāđāļĄ āļŠāđ āļāļĄāļāļ āļāļĢāļ°āļŦāļāļąāļāđāļĨāļ°āđāļāđ āļēāļāļķāļ āļāļāļīāļāļąāļāļīāđāļĨāļ°āđāļŠāļāļāļāļāļ āļāļ§āļēāļĄāļāļķāļāļāļāđāļ āđāļĢāļāļāļąāļāļāļēāļĨāđāļ āļāļ§āļēāļĄāđāļāđ āļēāđāļāđāļĨāļ°āļŦāđ āļ§āļāđāļĒ āļ§āļīāļŠāļąāļĒāļāļąāļĻāļāđ - āļāļ°āđāļĢ āļāļ§āļēāļĄāļŠāļēāļĄāļēāļĢāļ āļāļ§āļēāļĄāļŠāļēāļĄāļēāļĢāļ āļāļ§āļēāļĄāļŠāļēāļĄāļēāļĢāļ āļāļēāđāļŦāđ āļāļēāđāļĢ āļāļēāđāļŦāđ āļāļĨāļąāļāļĄāļēāļāđāļēāļāļĩāļ āļāļēāđāļŦāđ āļĒāļāļĒāļ·āļāļāļēāļ§āļĢ āļąāđ āļāļļāļāļāđ āļē - āļāļĒāđ āļēāļāđāļĢ āļāļĩāļāļ§āđ āļēāđāļāļīāļĄ āļŠāļĢāđ āļēāļāļāļ§āļēāļĄāđāļāļāļāđ āļēāļ āļāļēāđāļŦāđ āļĢāđāļđāļŠāļķāļāđāļāļāļāđ āļēāļ 53 Marketing 3.0 by Philip Kotler āļāļēāļĢāļāļĨāļēāļ 3.0 āđāļāļĒ āļāļī āļĨāļīāļ āļāļāļāđāļĨāļāļĢāđ
- 54. āļāļēāļĢāļāļąāļāļāļēāđāļāļāļĒāļąāļāļĒāļ·āļ (Sustainable Development) āđ āļāļēāļĢāđāļāļīāļāđāļāļāļēāļāđāļĻāļĢāļĐāļāļāļīāļ Economic Growth āļāļēāļĢāļāļąāļāļāļēāđāļāļāļĒāļąāļāļĒāļ·āļ āđ Sustainable Development āļāļēāļĢāļĢāļąāļāļĐāļēāļŠāļīāđ āļāđāļ§āļāļĨāđ āļāļĄ āļāļ§āļēāļĄāļĢāļąāļāļāļīāļāļāļāļāļāđ āļāļŠāļą āļāļāļĄ Environmental Corporate Social Performance Responsibility āļāļ§āļēāļĄāļĢāļąāļāļāļīāļāļāļāļāļāđ āļāļŠāļą āļāļāļĄ āđāļĨāļ° āļāļēāļĢāļĢāļąāļāļĐāļēāļŠāļīāđ āļāđāļ§āļāļĨāđ āļāļĄ āļāļ·āļ āđāļāļāļāļļāļāļēāļāđāļŦāđ āļāļĢāļ°āļāļāļāļāļļāļĢāļāļīāļ 54
- 55. āļāļāļŠāļĢāļļ āļ âĒ āļĢāļđāđāđāļĢāļē āļĢāļđāđ āđāļāļē āļāļāļ°āđāļāļĒāđāļĄāđ āļāđāļāļāļĢāļ âĒ Tangible and Intangible Value âĒ Our Core Value - 3 V ï Strategic Vision âĒ Value Chain â CRM + SRM + Supply Chain â Logistics âĒ Alignment â Synchronization â Collaboration âĒ Communication - Trust âĒ Standardization â Innovation âĒ Business Transformation âĒ People Transformation âĒ Supply Chain Leader ï Value Creator 55
- 56. Thank you 56