八個有效的供應鏈管理原則ANDERSEN

TheEightEffectivePrinciplesofSupplyChainManagement0?1999AndersenConsultingWhatarethecostandmarginimplicationsofintegrationforthesupplychainparticipants?Whatlevelofintegrationisoptimal?Shouldintegrationbepursuedphysicallyorvirtually?Whatpiecesofthesupplychainarecandidatesforoutsourcing?Whatkeyinformationisrequiredtointegrate?Howwilltheinformationbesourced?Howshouldinformationbemanagedacrossthesupplychain?HowdoyoudrivevaluefromYear2000systemsinvestments?Towhatdegreearethesupplychainparticipantsreadytointegrate?Operationalexcellence?Informationmanagement?Economicincentive?Financialwherewithal?Capabilitytomanagechange?ArchitectureInformationReadinessManyquestionsshouldbeaskedbeforetakinganyconcreteSCMinitiatives.1?1999AndersenConsultingEightfundamentalprinciplesprovidetheleverstobalancecustomerserviceandprofitablegrowth.SupplyChainSynchronizationCustomer-DrivenManufacturingCustomizethe

LogisticsNetworkSupplyChain-WidePerformance

MeasurementsStrategicallySource

andProcureSupplyChain-WideTechnologyStrategyDesignandDifferentiate

ProductClosertotheCustomerPlanAccordingto

MarketDemandSignalsSegmentCustomersBasedonNeeds2?1999AndersenConsultingOne-size-fits-allapproachtoserviceCostsandprofitabilityaveragedacrosssegmentsUnabletogaugelikelyprofitabilityofcustomersNeeds-basedsegmentationofcustomersUnderstandthecosttoserve,predictmarginalprofitabilityforeachcustomersegmentIdentifysegment-specificservicepackageswhichmaximizeprofitabilityIdentifywhichcustomerswillgeneratethehighestlong-termprofitability—Traditional——Opportunities—“Wedon’tfullyunderstandtherelativevaluecustomersplaceonourserviceofferings”ServicebalancedwithprofitabilitySegmentCustomersBasedonNeedsSegmentationtypicallygroupscustomersbyindustry,product,ortradechannel.Segmentationbasedonserviceneedsallowsacompanytodevelopserviceportfoliostailoredtovarioussegments.3?1999AndersenConsultingSales&MerchandisingNeedsLowLowHighHighOrderFulfillmentRequirementsInnovatorsGraingerHomeDepotWal-MartLogisticsOptimizersChryslerWestinghouseMaytagDevelopingAutoZoneStaplesTraditionalistsSmallRetailStoresSmallIndustrialWholesaleDistributorsNeedsBasedSegmentationAnExampleofonewayinwhichserviceneedsmaybesegmentedistoconsiderorderfulfillmentrequirementsandsalesandmerchandisingneeds.SegmentCustomersBasedonNeeds

-Example:NeedBasedSegmentation4?1999AndersenConsultingPooron-timedeliveryperformanceMultipleplansfunctionally“optimized”LongproductdeliveryleadtimesFixedplanningcyclesanddatedtechnologyPlanningindependentofsupplyanddemandchainpartnersLimiteddecisionsupportcapabilityFastandaccurateorderpromisingDevelopsinglesharedplanacrosstheenterpriseLeadtimeisacompetitiveweaponRapidresponsetochangesindemandCollaborationandsynchronizationwithbusinesspartnersonsupplychainactivitiesUseofsimulationtechnologiestosupportbusinessdecisions—Traditional——Opportunities—Manyorganizationshaveidentifiedcustomer-drivenplanningprocessesbuiltaroundcreatingthe“perfectorder”,hittingthedeliverydateontimeinonecompletedamage-freeshipment,supportedbytimelycommunicationflows.PlanAccordingtoMarketDemandSignals5?1999AndersenConsultingCollaborativePlanningandExecutioninthePCindustryhasemergedasamethodtoimprovealignmentofsupplyanddemand.Exacerbatedby...ShortproductlifecyclesProductshortagesIndependentplanningandexecutiondecisionsPromotedby...SharedforecastinganddemandSynchronizedorderfulfillmentJointcapacityplanningCollaborative

Planning

and

Execution—Supply-DemandMismatch——Supply-DemandAlignment—LaunchdateEndofLifeTrueEndConsumerDemandChannelOrdersSupplyUnitsUnitsTimeTimeTrueEndConsumerDemandChannelOrdersSupplyLaunchdateEndofLifePlanAccordingtoMarketDemandSignals

-Example6StandardproductandservicedeliveredtoallcustomersMaketostockLongdevelopmentleadtimesFunctionallybaseddevelopmentprocessesSegmentbasedserviceswithproductsconfiguredtoneedsofcustomerTimelydeliveryof“shelfready”product(packagetoorder)RapiddevelopmentcycletimesTeam-baseddevelopmentprocessesWebenableddesignintegrationIntellectualcapitalleveragedforcompetitiveadvantage—Traditional——Opportunities—Massproductionmanufacturingefficienciesnolongerprovidecompetitiveadvantage.Theabilitytodesignflexibilityintoproductsandproductionprocesseswillallowcompaniestogivetheircustomersexactlywhattheywantfasterandwithlesscost.Design&DifferentiateClosertoCustomerPostponementisonepracticeofthisprinciple.7?1999AndersenConsultingHighperformingglobalelectronicscompanieschangetheirdemandforecastsmuchclosertoproductionthanlowandmediumperformers-75%ofthemwithinaweekofproduction.Source:MarketingandManufacturingManagers(4/2/97data)-HowClosetoProductionCanMarketingFormallyChangetheDemandForecast-0%25%50%75%100%Low

PerformersHigherPerformers60%20%20%55%27%18%25%45%30%Medium

PerformersDesign&DifferentiateClosertoCustomer

-Example:ChangeDemandForecast8?1999AndersenConsultingBuildtoamixofordersandforecastComplexplanningprocesssupportedbyMRP/ERPsoftwareLotsizesbasedonprocurementandeconomiesofscaleJustInTimedeliveryfromvendorwarehousesSophisticatedshopfloorcontrolsystemsQualityinspectedintoproductaccordingtopartspecificationCustomerdemandlinkeddirectlytomanufacturingQuickresponseorvendormanagedreplenishment(orVMI)Web-basedintegrationtosuppliersandcustomersforpointofconsumptiondataTeambasedfocusedfactoryworkorganizationwithflexiblemulti-skilledoperatorsandfewindirectstaffQualityengineeredintheproductandmanufacturingprocessthroughjointdevelopment—Traditional——Opportunities—Productionstrategiesareevolvingrapidlyandprovideasustainablesourceofcompetitiveadvantage.Customer-drivenmanufacturingisdesignedtoimprovemanufacturingoperations,buttheconceptsapplyacrossthesupplychain.Customer-DrivenManufacturing9?1999AndersenConsultingHighperformingglobalelectronicscompaniesscorehigherontraditionalinternalmanufacturingmetrics.AndersenConsulting’s1997GlobalElectronicsStudyCompletedOrderFillRate0%25%50%75%100%Low

PerformersHigherPerformers18%CycleTime

(PCandOtherCompanies)01Weeks2Low

PerformersHigherPerformers67%-InternalManufacturingMetrics-Customer-DrivenManufacturing

-Example:PerformanceMetrics10?1999AndersenConsultingOldParadigmEngineeringproblemControl$“Crisisplanning”BestofBreedtoolsComponentteams“Mfgwillfixit”We’redoneatJob1“Firefighter”NewParadigmProductdevelopmentHours,quality,$CommonmethodologyIntegratedtoolsPlatformteamsConcurrentviewProcessmetrics“Bythebook”-ACulturalChange-Theintroductionofanew“manufacturing”culturefocusedonmaterialflowandcontrol,quality,andateam-basedapproachhasproducedsignificantimprovements.Factorymetric ResultsSpacereduction 40-60% Inventoryreduction

WIP 75-90%

F/G 25-50%Lead-timereduction 75-90%Qualityimprovement 75-90%Directlaborproductivity 10-15%Indirectlaborproductivity 50-90%-Benefits-Customer-DrivenManufacturing

-Example:ManufacturingCultureChange11?1999AndersenConsultingPricefocusedReducednumberofvendorsEDIlinkstovendorsMinimalfocusonnon-productionpurchasesVendorsviewedasresourcesnotassets(onlycontactisthroughpurchasing-negotiateprice,placeorder)SupplierbasedinspectionandqualityreviewsTotallifecyclecostandvaluefocusGroupingcommoditiestoleveragebuyingpowerTotalcostofownershipVendorintegrationintosupplychainFact-basednegotiationLeveragesuppliersknowledgeinproductdesignWeb-basedplanningandconsumptionAutomatedcompliancetocontractJointcostandtimereductionthroughrobustdesignandprocesscapabilities—Traditional——Opportunities—Traditionally,manufacturershavehadashortterm“bestpricing”focus.However,leadingedgemanufacturersrealize“oursupplier’scostsareineffectourcosts.”StrategicallySourceandProduce12?1999AndersenConsulting5-20%costreductionFact-BasedNegotiationTotalcostapproacheProcurement’svaluepropositionishighbecauseitreducesoperatingcostsforbothbuyersandsuppliers.Howcanwesavesomuch?SavingsforBuyerVolumeLeverageProductivityInventorySavingsforSupplierSales&OrderMgt.TimetoCollectInventoryStrategicallySourceandProduce

-Example:AribaAlliance13ProfitImpact%oftotalspendCriticalityImportanceofquality(Willunsatisfiedsupplyleadtoshutdown?dropinproductivity?disqualifiedproductsorservices?Lostopportunitiesforgrowth?)ImpactofshortageValueaddedprovidedbyvendorSupplyRiskNumberofvendorscapableofdeliveringquantity&qualityrequiredIntensityofcompetitionamongsuppliersExistenceofcompetitivedemandPricefluctuation/PriceriskLeadtime/DeliveryriskSubstitutionpossibilityTodifferentiateamongitemspurchased,twodimensionsstandoutintheItemManagementMatrix.StrategicallySourceandProduce

-Example:CAPCOStrategicSoucing14?1999AndersenConsultingStrategicallySourceandProduce

-Example:CAPCOStrategicSoucingWithintheItemManagementMatrix,Itemspurchasedcanbefurthergroupedinto4quadrants.MaterialsManagementSupplyManagementPurchasingManagementSourcingManagementLowHighLowHighLeverageItemsStrategic

ItemsNon-critical

ItemsBottleneck

ItemsProfitImpactSupplyRiskItemManagementMatrix15?1999AndersenConsultingLevelsofSophisticationNon-criticalitems:DecisionLevel-LowermanagementlevelDecisionAuthority-Delegatedtoend-users,andauditedafterwards;PAinitiatedintervention,whenformalcontractingandvendorconsolidationisjustifiedProcurementFocus-ConvenientforbusinessMainTasks-Convenienttransactionmodes(e.g.B/OwithEDIhookup);Vendorconsolidation;Productstandardization;Inventoryoptimization;Sources-LocalsupplierswithalternativeonesidentifiedTimehorizon-upto12monthsLeverageitems:DecisionLevel-MediummanagementlevelDecisionAuthority-CategoryteamProcurementFocus-ReduceprofitimpactMainTasks-

Exploitationofpurchasingpower;Monitoringpossibilityofsolutionsubstitution;Requestsformorevalue-addedservices;Sources-Chieflysupplierswithlocalpresence;alternativeonesqualifiedTimehorizon-1-3yearsBottleneckitems:DecisionLevel-SeniormanagementlevelDecisionAuthority-CategoryteamProcurementFocus-ReducesupplyrisksMainTasks-

Volumeandqualityinsurance;Securityofinventory;Explorationofalternatives;Sources-Mostlyhighlydependentontheresourcesnecessaryforde-bottleneck;alternativeonesexploredTimehorizon-

Variable,dependentonthenatureofsupplyrisksStrategicitems:DecisionLevel-TopmanagementlevelDecisionAuthority-CategoryteamconsistsofseniormanagementProcurementFocus-

MakeconsciousdecisionstobalanceprofitimpactandsupplyrisksMainTasks-

Formulationofsupplymanagementstrategiesexplicitlylinkedtothecorporatestrategy;Partneringwithsupplierstoidentifyjoint-costreductionopportunities;Activeexplorationofopportunitiesofalliancewithmembersinthevaluechainorevenwithcomplementorinotherindustries(e.g.purchasinggroup)Sources-

GlobalsuppliersTimehorizon-

Over3yearsDifferentquadrantsimplydifferentprocurementmanagementapproaches.StrategicallySourceandProduce

-Example:CAPCOStrategicSoucing16?1999AndersenConsultingAllpurchaseitemsareputinto4quadrantsanddifferentsoucingstrategiesandpurchasingprocessesaredefinedtooptimizeprocurementcost.HighLowHighSupplyRiskLowProfitImpactPXHACSmall-ScaleProjectLarge-ScaleProjectSpecialtyChemicalsGasTankageTransportationGeneralServiceGeneralInsuranceUtilityCommonSparePartsCapitalEquipment&SpecializedSparePartsItemManagementMatrixStrategicallySourceandProduce

-Example:CAPCOStrategicSoucingExpectedtoreleasebenefitsatleastUS$10Millionannually.17?1999AndersenConsultingCustomizethelogisticsnetworktotheservicerequirementsandprofitabilityofcustomersegments.LogisticsnetworkdesignedtomeetasinglestandardTypicallyeither:AverageorToughest

servicerequirementsCross-dockingLogisticsindependentofmanufacturingCompanyownedwarehousinganddedicatedfleetsMulti-levellogisticsnetworktoprovidesegment-specificservicesRobustlogisticsplanningenabledby“real-time”decisionsupporttoolsOutsourcesomeorallelementsofthesupplychainInclusionofvalueaddedlogisticsproviderorFourthPartyLogisticsproviderIntegratethemanufacturingandlogisticsprocessesConfigurethenetworktoreducecostandreplenishmentleadtime—Traditional——Opportunities—...ofcourse,customerneedsandpreferencesdonottellthewholestory,theservicepackagesmustturnaprofit.CustomizetheLogisticsNetwork18?1999AndersenConsulting1,2001,0008006004002000$8,470$7,700$10,010$8,000BaselineOption1Option3Option2CustomerFreightInterfacilityFreightTotalNetworkCost($000)10,20010,10010,0009,0008,0007,000TotalNetworkCost($000)5060708090100Option1Option4Option2Option6Option3Option5PercentageofVolumewithinTargetLeadTimeTotalLogisticsCostCostServiceTrade-offCurveWarehousingInventoryCarryingEfficientdistributionstrategiesmayrequireanalysisofalternativenetworkscenarioswhichbalancecostandservicerequirements.CustomizetheLogisticsNetwork

-Example:CostServiceTrade-offCurve19?1999AndersenConsultingBymovingfromamyopicviewofindividualoptimizationtoachannel-wideview,estimatesinthefoodindustrysuggest42%reductioninpercaselogisticscostand73%reductionintotaldaysinthesystemValue-addedDistributorFoodRetailerDistributionCentresSupplierDistributionCentresIndividualOptimizationChannel-wideOptimizationTransitiontoChannel-WideOptimizationAveragecost/case=$2.36

#ofdaystothestore=73Averagecost/case=$1.37

#ofdaystothestore=24CustomizetheLogisticsNetwork

-Example:Channel-wideOptimization20?1999AndersenConsultingEDIShopfloorcontrolFunctionallybasedsystemsacquisitionsSeparateordisparatesystemsPoorcustomertooperationslinksIndependentfinancialsystems(notruepurchase-to-payororder-to-receivemodel)LeveragewebcapabilitiestospantheentiresupplychainGlobalizationofcorporatesystemsInformationclearinghousesSupplychainoptimizationusingdecisionsupporttoolsBusinesssimulationtrainingElectroniclinkstocustomerdemandAutomatedordergenerationforPO’swithtrackingCustomerconnectivity(analysisandresponsetopromotionsandmarketingimpact—Traditional——Opportunities—Massproductionmanufacturingefficienciesnolongerprovidecompetitiveadvantage.Theabilitytodesignflexibilityintoproductsandproductionprocesseswillallowcompaniestogivetheircustomersexactlywhattheywantfasterandwithlesscost.SupplyChain-wideTechnologyStrategy21?1999AndersenConsultingSupplyChain-wideTechnologyStrategy

-Example:LucentTechnologyEnablingtechnologiesaresignificantlyimpactingthecosttoprocure.CustomerInteractionTypeHighLowDirectMailContact$0.25-$5.00(1)Self-ServiceVRU/WebInteraction$0.10-$0.40(5)TelephoneCustomerServiceInteraction$2-$5(4)Fax/MailInteraction$3-$6(3)TelemarketingInteraction$8-$24(1)TelephoneProductSupportInteraction$4-$75(2)FieldSalesInteraction$40-$400(1)AutomatedFace-to-FaceCurrentFutureUSInteractionCostsCustomerInteractionCostsSources:(1)LucentTechnologiesMarketingCosts(2)HelpDeskInstitute-HelpDeskandCustomerSupportPractices(946companiessurveyed)(3)TechnicalAssistanceResearchProgram(TARP)(170companiessurveyed)(4)PurdueUniversityCenterforCustomerDrivenQuality(200