Key note presentation from Windesheim - BLMC conference 19/06/2017 in Zwolle on "implementing supply chain management". Using the Supply Chain Triangle to explain what is supply chain management, how supply chain and finance is about optimizing the return on capital employed. Discussing how S&OP is THE key supply chain process to create alignment in the triangle

1. SCM als succesfactor
binnen en tussen organisaties Contact person: Prof.dr. Bram Desmet
bram_desmet@solventure.eu
+32 497 58 28 60

2. What is Supply Chain Management?

3. What is Supply Chain Management?
• “Process” type of definition
• Management of flow of goods + reverse flows of information/cash
• Cfr. SCOR model: Plan, Source, Make, Deliver, Return
• “Organisation/functional” type of definition
• SCM as extension of purchasing … or logistics
• SCM as combination of purchasing, logistics, planning, customer service … production (?)
• “Strategic” definition
• Drucker, Peter F., “Management’s New Paradigms”, Forbes Magazine, October 5, 1998
• “SCM is more than just the new name for the combination of purchasing, operations and logistics, that it’s about the
management of key business processes within the firm and accross the network of firms … but he doesn’t define which type of
processes”
• “There is a great deal of confusion regarding exactly what supply chain management involves. In fact, most people using the
name supply chain management treat it as a synonym for logistics or as logistics that includes customers and suppliers. Others
view supply chain management as the new name for purchasing or operations, or the combination of purchasing, operations and
logistics. However, successful supply chain management requires cross-functional integration of key business processes within
the firm and across the network of firms that comprise the supply chain. The challenge is to determine how to successfully
accomplish this integration.”
• Martin G. Christopher, “Relationships and Alliances: Embracing the Era of Network Competition,” in Strategic
Supply Chain Management, Gower Press 1998
• “One of the most significant paradigm shifts of modern business management is that individual businesses no longer compete as
solely autonomous entities, but rather with supply chains. In this emerging competitive environment, the ultimate success of the
single business will depend on management’s ability to integrate the company’s intricate network of business relationships.”
• It’s not about companies competing against companies, but supply chains competing against supply chains
• “My” definition … cfr. next slide

4. SCM = balancing the SC triangle of service, cost and cash

5. SCM = balancing the SC triangle of service, cost and cash
e.g. reduce cost by
sourcing in far East

6. SCM = balancing the SC triangle of service, cost and cash
e.g. increase market
share by extending
product portfolio

7. SCM = balancing the SC triangle of service, cost and cash
e.g. reduce inventory
by lowering safety
stocks

8. SCM = balancing the SC triangle of service, cost and cash
Focus/incentives in a
typical production
company …

9. SCM = balancing the SC triangle of service, cost and cash
Resulting pressure in
the triangle

10. Balancing the triangle = optimizing ROCE
Top-line
EBIT
Aligning the supply
chain triangle is about
maximizing ROCE
ROCE

11. Balancing in the ‘extended’ supply chain
RetailerFMCG SupplierB2B Supplier Consumer
Sales
Marketing
Logistics
Purchasing
Sales
Marketing
Production
Purchasing
Sales
Marketing
Production
Purchasing
Align externallyAlign externally
Align internallyAlign internallyAlign internally

12. How?
service
cash
ROCE
cost
Customer-
Product
Segmentation
Strategic Canvas
Product
Management
Review
PLC & Event Mgmt
Demand
Review
Collaborative
Forecasting
Inventory
Review
Policy,
Parameters,
Monitoring
Supply Review
Distribution,
Production &
Supply Planning
Executive
SIOP
Scenarios &
Decisions

13. Thank you!
Prof.dr. Bram Desmet
bram_desmet@solventure.eu
+32 497 58 28 60