Fundamentals of Supply Chain. John A. Caltagirone

Transcription

1 Fundamentals of Supply Chain John A. Caltagirone

2 Session Objective To introduce standardized fundamentals of SCM principles, to engage with clients in the next-gen manufacturing sector. Specifics Covered: Uniform principles Terminology Industry practice Experience and standard better practices

3 Underlying Basics

4 Supply Chain Supply Chain is a system of people, processes, and technology involved in moving and processing resources and services from raw materials to the end user

5 Definition of a Supply Chain Inter-Company The Supply Chain Intra- Company Suppliers Plants Distribution Centers Retailers Marketplace Marketing Product Development Operations Sales Material Information Finances

6 US State of Logistics Metric % Logistics Costs $1.204 t $1.287 t $1.331 t 3.4% % of GDP 8.3% 8.5% 8.5% Flat Trans Costs $769 b $821 b $846 b 3.0% Inv. Carrying $387 b $417 b $434 b 4.1% Source: Nancy Nix, Neely School of Business, Texas Christian University

7 What keeps the CEO up at night? Shareholder Value -Revenue -Cash Flow -Profitability -Market Share

8 Boardroom Expectations of SCM Reduce Costs Contribute to Overall Profit Use Less Inventory/ Effectively Manage Capital Manage Risk/ Encourage Sustainability Delight Customers

9 Overview of Planning

10 Integrated Business Management Framework

11 Supply Planning

12 Inventory Principles

13 Inventory Management The Asset No One Seems to Want!

14 Types of Inventory Raw Materials Finished Goods Work In Progress Retail Shelf

15 Manufacturing Strategies

16 Manufacturing Business Model Market Share Shareholder Value Revenue Cash Flow Supply Chain Profitability Buy Make Move Sell Labor Waste Materials Safety Cost Flexibility Quality Delivery Demand Customer Orders Forecast Inventory Capacity Service Reliability

17 4 Basic Manufacturing Strategies and Key Drivers Design Purchase Manufacture Assemble Ship Engineer-to- Order Inventory Manufacture Assemble Ship Materials Make-to- Order Manufacture Inventory Assemble Ship Materials/Parts Assemble-to- Order Manufacture Assemble Inventory Ship Key Drivers Finished Goods Customer lead time expectations Customer input into product design Volume and variety of product Product Life cycle Make-to- Stock

18 Logistics: Warehouse and Transportation Management

19 Managing the Warehouse The critical tradeoff when managing a DC is to make sure you have carefully evaluated Space utilization VS. Order picking efficiency

20 Transportation is a BIG DEAL Connecting link for moving goods from one place to another Key enabler to global commerce Transportation is necessary to: Move purchased goods from suppliers to buyers Move WIP between units of an organization Move finished goods to the customer

21 Logistics costs average 9.2% of sales; Transportation is the lion s share Source: Nancy Nix, Neely School of Business, Texas Christian University

22 Purchasing and Strategic Sourcing

23 Purchasing s Role in the Supply Chain Supplier s Supplier Supplier Purchasing Internal Customer External Customer Identifies, selects, and monitors sources of services and supply Continuously improves supplier quality, cost, cycle time, and overall performance Leads supplier dialogue on product innovation and new service offerings Understands and serves internal customers requirements Advises internal customers regarding supplier capabilities, constraints, and overall market conditions Serves as primary contact point for internal customers and suppliers across entire purchasing cycle

24 Category / Supplier Segmentation Segmentation : Divide, Control, Save? Follow a Segmentation Process: Identify the main strategies of the business Identify suppliers that have the capability or potential capability to meet strategic requirements

25 Segmentation - Identifying the Select Few

26 SCM Systems

27 Looking at the Value Chain Sourcing & Purchasing ERP EDI Receiving ERP RFID & Bar Coding RFDC Manufacturing & Processing Operations ERP Automated Material Handling Systems Maintenance Management Tools MES RFID & Bar Coding QMS HR Management Systems RFDC Inventory Management ERP RFID & Bar Coding WMS RFDC Sales ERP RFID & Bar Coding POS Systems or EDI CRM RFDC Distribution & Logistics ERP RFID & Bar Coding TMS RFDC

28 Trends and Challenges

29 Mega Trends Shifting Demographics China s middle class could double by 2020 Today, 450 million Indians have middle class incomes In Brazil, 30 million have moved to the middle class Huge population growth through 2050 will occur in developing nations

30 Top 5 Trends: for client consideration 1. Rise of Amazon 2. Higher customer expectations 3. Increasing hope for U.S. Manufacturing 4. Globalization of new sales/distribution channels 5. Outsourcing

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