The document discusses key issues and trends in supply chain management, including performance assessment, cycle time compression, and the importance of omnichannel strategies. It emphasizes the benefits of segmentation in tailoring services to different customer groups and highlights risks faced in supply chains, as well as the need for effective risk management. Additionally, it outlines actionable steps for improving supply chain effectiveness and mitigating risks.

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Supply Chain Hot Topics
by
Tom Craig
tomc@ltdmgmt.com

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Is This Your Supply
Chain?
What do you know about your SC
performance?
Do much fire-fighting (reactive vs proactive)
Have little/no metrics, beyond complaints or
charge backs or costs

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Yours?
Monolithic supply chain operation
Little / no service differentiation beyond
customer order requirements
Defined by costs, tasks, and/or functions?

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Is This Your Supply
Chain?

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Perfect Order
Delivered / Complete / Accurate / On-
Time
How well do—
you do with customer orders?
your suppliers do with your POs?

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Benefits of Real SCM
Customer advantage -- IT’S ABOUT THE
CUSTOMER!!!!!
Competitive differentiation
Translates into better revenue and
margins

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Are You Happy with the
Supply Chain that You
Built?

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How Do You View
Global Logistics?

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SCM—Hot Topics
Time Compression
Omnichannel / MultiChannel
Segmentation
Risk Mitigation

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Cycle Time Compression

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Cycle Time
Cycle time--time from recognize need
(before PO is issued) until product delivered
to you--and sold, and paid by customer
(funds availability affects procurement)
Not just length, includes variance
Time—important for business

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Cycle Time
Inventory-factor of uncertainty (buffer)—
longer the cycle time, more the
uncertainty, more the inventory
Key factor for responsiveness and agility
In Lean, extra time is waste

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Cycle Time Compression
Identify and assess each sub-cycle
Look for gaps, redundancies, and
meaningless
External and internal (especially)
Streamline practices & operations

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SC Omnichannel /
Multichannel

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What It Is
Selling through multiple channels
For B2C and B2B
Sell 24/7 from anywhere in the world
From any device (e-commerce and m-
commerce)

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Omni
Think Amazon and more
Home Depot
building 3 e-commerce fulfillment centers
100,000 products (vs 35,000 for stores)

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SCM Omnichannel Issues
Speed and accuracy of order shipment
How to position inventory
Where to position inventory
What inventory to position
Technology— integrated visibility for
inventory and orders in all channels

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Multi/Omni Channel
Direct shipping of gloves “from/for” other
party’s ecommerce site
E-tailer does not have to hold inventory
Can your suppliers ship to customers
elsewhere in world for you?

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Supply Chain
Segmentation

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What Segmentation Is
Superior best practice
Dividing business into discrete groups
(not based on business units) based on
similar characteristics
Address important company issues
Serves strategic purpose

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Key Issues for
Segmenting
 Differing markets
 Product portfolios
 Customer portfolios
 Inventory yield
 Omnichannel sales

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More Issues for
Segmenting
 Global operations
 Channel partners
 Customer attrition
 Suppliers
 Supply chain risk

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Why Segment
Stop one-size-fits-all “service” approach
Reduce internal and external noise that
creates chaos & diverts resources
Design & align operations for different
sectors
Build competitive differentiation

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How to Segment
1) Identify segments
2) Profile sectors--and customers in them
3) Determine how customers in each
segment differ for SC services
4) Evaluate supply chain services,
including ones not met, and
performance for each segment

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Segment Approaches
Cost—good concept—allocating and
assigning costs—not direct costs
Value—economic—not good to identify
segment characteristics
Need—drivers that segments have for
specific service(s)

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What To Do with Results
--Have Actionable Info--
1) Prioritize segments
2) Be specific
3) Evaluate the quality of service
4) Implement services for each segment
5) Develop metrics for each segment’s
service and measure

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Example
Order Size and Annual Volume
Order Requirements

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Large Orders Segment

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Special Preparation Segment

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Direct to Store Segment

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Redesigned Supply Chain

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Supply Chain Risk
Mitigation

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What Risk Is
About business continuity
Concept traction—Fukushima
Insurance focus—assets
Plus contingency planning

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Supply Chain Risk
Complexity
Geographic scope
offshoring/sourcing
outsourcing
Low inventory
lean manufacturing
JIT manufacturing

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Supply Chain Risks
Deloitte global survey
45% say SC risk program only somewhat
effective or not effective
53% say SC disruptions have become more
costly
48% say frequency of risk disruptions with
negative outcomes have increased

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More Deloitte
Technology, industrial products,
diversified manufacturing most likely to
say SC disruptions have become more
costly
Most costly outcome—margin erosion
71% say SC risk is important in strategic
decision-making

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More
Top challenges to risk management (RM)
lack of cross-functional collaboration (32%)
cost of implementing RM strategies (26%)
SC RM is organized around silos (75%)
leads to lack of visibility and collaboration
makes difficult to assess and manage
risk on holistic basis

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Threat Sources
 Natural disasters
 Geopolitical
 Pandemics
 Technological
 Terrorists
 Commodity prices

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Sources
 Labor costs
 Currency
 Ports
 Markets
 Suppliers
 Execution

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Intl Country Risk Guide
39 China, Peoples' Rep.
62 Thailand
86 Indonesia
114 Sri Lanka
129 Pakistan
Rank in
06/12 Country
1 Norway
2 Brunei
3 Luxembourg
4 Switzerland
5 Singapore
6 Sweden
7 Oman
8 United Arab Emirates
9 Germany
10 Canada
11 Hong Kong
12 Taiwan
13 Qatar
13 Saudi Arabia
15 Denmark
16 New Zealand
17 Japan
18 Kuwait
19 Finland
20 Korea, Republic
21 Trinidad & Tobago
22 Netherlands
23 Australia
24 Austria
24 Malaysia
54 Mexico
Source: PRS Group

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Suppliers
Tier 1 Suppliers and More

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Risk
Measure risk—
Financial Impact
Time to Recover
Identification and mitigation—not just for
MNCs
Cannot mitigate what you do not identify

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Where Will Your
Supply Chain Take You?