(A) DESNET Identification. UK Government Department supply of operational forms and marketing materials. Identification

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1 V-LAB-Instruction Ver 4.0.doc (A) DESNET Identification Name Addres s Web site E - mail UK Government Department supply of operational forms and marketing materials ervices/4.asp Identification Keywords issues product Sector Terms of process Operation English native language (German) software & application Software & Anwendungen Information & description Information & Beschreibung method Methode/Vorgehensweise automotive Automobil money & right Banken und Rechtswesen chemistry Chemie advertisement & media Werbung & Medien nature & environment Natur & Umwelt architecture Architektur / Bauwesen biology Biologie electronic & computer Elektronik & Computer mechanical engineering Maschinenbau education & science Forschung & Wissenschaft authorities & federations Behörden & Verbände aerospace Luft- und Raumfahrt engineering Konstruktion manufacturing Produktionsplanung Research & development Forschung & Entwicklung service Dienstleistung marketing Marketing production Produktion design Design controlling Controlling cooperation Kooperation communication Kommunikation coordination Koordination distribution of production operations Verteilung der Produktionsbetriebe u. - 1

2 & volumes ausgaben Structure (OS) employment of different skills optimizing of logistic transport capacities over internal links Verwertung von verschiedenen Fähigkeiten Optimierung von logistischen Transport - kapazitäten durch interne Vernetzung communication of management responsibilities and information Kommunikation von Management Aufgaben und Informationen Organization Arrangement (OA) negotiation of internal agreements/ control mechanisms, or agreements with external bodies selecting of assure best efficiency/ effectiveness of organization chart or coordination strategy Übermittlung von internen Vereinbarungen/Regelmechanismen oder Vereinbarungen mit Externen Auswahl zur Sicherung der Leistungsfähigkeit/Wirksamkeit der Organisationsübersicht oder der Koordinationsstrategie Interactions with Socio-Economic Environment (ISEE) negotiation of commercial agreements with client/supplier for max profit for the network deciding of a network innovation program by the partners and negotiated with financiers forecasting of dynamic evolution of a network Vermittlung der kommerziellen Vereinbarungen mit dem Lieferant für den maximalem Profit des Netzwerks Entscheidung über das Programm eines Innovations-Netzwerkes durch die Partner und Verhandlung mit Investoren Voraussage der dynamischen Entwicklung eines Netzes Abstract Management of a supply chain in a complex Government policy affected demand network. Links English native language Strong Points explained Links to further DESNETs in the V-LAB Links to papers in the V-LIB UK Government supply network for printed material used in high street offices. Simple supply process, with high product complexity and high demand volatility To be updated To be updated Further information 2

3 Network Overview Network type Distribution on the region Personnel / skills Coverage of product market Estimated annual sales Area description Average firm dimension Export volumes of the DESNET General Information Qualitative Information Supply Chain for printed material (forms, and marketing material) used by the UK s Department for Work & Pensions, the 2 nd largest Government Department. Print production is concentrated in North West of UK and coordinated and distributed by sites in the North West and in the Midlands UK high street sites, mainly Government Offices are supplied with additional sites at HQ locations. Range Marketing, Supply Chain Management, Logistics, Print production. Approximately 400 staff in total, spread throughout the full range of functions and multiple companies. Market is for printed material required by the Government department. This network supplies around 40% of this, mainly covering standard print items (about 10,000 product lines). The remaining 60% is regional / location specific products which are sourced differently due to time, product customization issues, and informal procurement arrangements. Performance Indicators Quantitative Information 40 million per year Production focused North West. Warehousing North West and Midlands (60 / 40 split). Product design in London / Leeds. 2 companies involved in Supply Chain Management / Warehousing and approximately 100 involved in print production. Most companies are regional SMEs employing between skilled print personnel. The largest firms are involved in the warehousing / supply chain management functions. One of these firms dominates considerably being a multinational print management company. Within each company, only a proportion of the staff will be dedicated to supplying this network, and the highest proportion being within the labour intensive warehousing / supply chain management function. None Operation Structure Division of labour among firms Qualitative Information Printers are coordinated by 2 print management companies focused on the storage and distribution of product range ( product lines). Orders for product are received and fulfilled from stock, with inventory replenishment managed on a reorder point basis. Suppliers are chosen depending on characteristics of the product and price. These suppliers coordinate raw 3

4 material supply (paper). Organization of logistics and distribution Logistics between partners and to customers is provided by a single central contract with a national parcel and freight logistics company. Performance Indicators Quantitative Information Degree of concentration of production Logistic bodies; carriers; personnel Applied ICT technologies Production and 60% of distribution from NW of UK. Remaining 40% of distribution from Midlands. Design and Marketing focused on London, and Leeds (Department Head Office locations) Little cross-company ICT. Customer uses bespoke web based trading tools to access catalogue, order is then transferred to coordinating companies using EDI. At coordinating companies, suppliers are managed using ad-hoc tools which do not provide high levels of information visibility no MRP / ERP systems employed. Focus of ICT development has been to allowed greater visibility for the customer. Some thoughts regarding moving away from existing production method to enable electronic delivery of information (web, pdf, etc) or the introduction of on-demand technologies to remove inventory and delays from the network. Organization Structure Agreements and control mechanisms among partners Responsibilities in the network Existence of collective agreement with external bodies Qualitative Information 2 different methodologies currently adopted 60% of the supply chain is managed by vendor managed inventory, with a print management function responsible for maintaining service levels. The top 20 suppliers are on long term supply agreements, with limited spot buying for specialized products. 40% organized via a contract for a managed warehouse, with separate contracts for print. In this environment, supply chain decisions are mainly made centrally (internal to the department) rather than outsourced to the contractor. All print is organized via spot buying, no contracts are in place with supply base. None None 4

5 Existence of larger leading firms in the DESNET Type of coordination body & function Type of organization structure N. leading firms, average size of leading and ancillary firms Dominated by multi-national company with print management contract they are the only company with sufficient control to take significant decisions regarding the structure of the network and choice of suppliers. Relationships within this network can be very adversarial. Performance Indicators Quantitative Information None Prime dominated network. This structure is further consolidating into a Logistic Service Integrator (prime contractor taking risk for supply chain). Supply chain management firms (currently 2) have approximately 30 staff dedicated to network. Ancillary / print production firms, significantly lower 5 to 10 staff. 5

6 Interaction with Socio-Economic environment Marketing strategies Degree of integration of the DESNET with its local labour market Commercial agreements versus final clients & suppliers Percentage of employees in DESNET firms over the population (ready to work people) N. DESNET firms over N. firms in the area Qualitative Information None co-ordinated. All companies operate different plans, with little collaboration between partners on development projects or on marketing. Internal competition is evident, both for existing work, and for future contracts. This limits level of internal cooperation. High. Majority of labour is blue collar and sourced from existing work pool. Companies (bar the leading company) tend to be family owned firms. Performance Indicators Quantitative Information Contracts in place to account for approximately 40% of spend within the department. Ad-hoc procurement accounts for remaining spend. Within the network, relationships may be very adversarial. Ultimately controlled by Government policy. Minor Minor Note REMARK: The following further tables contain information related to the financial status and the future plans: their collection requires the direct contribution from the DESNET, which can be invited to be a Registered member of the CO-DESNET network. 6

7 (B) Analysing the DESNET Expected Development Innovation Progress Qualitative Information Participation of DESNET in innovation programs Planned education programs for personnel Interaction with public / private bodies Performance Indicator Quantitative Information Investments in R&D programs Number of R&D programs Agreements with public/private bodies 2 research projects funded by partner organizations with Academic institution Current undergoing conversion to Logistics Service Integrator ( ) 7

8 (C) Analysing the DESNET Financial Status (OPTIONAL) Financial Start-up Qualitative Information Balance sheet of the network, if any Description of actual investments and sales Description of industrial costs Unknown High investment in print equipment and ICT supplier management tools. The cost of print machinery creates a large barrier to entry. Staff costs are high as print is a skilled industry in the UK, and highly unionized. Savings have been made through the centralization and de-skilling of the warehousing / dispatch functions. Performance Indicator Quantitative Information ROI; ROE Unknown low due to the high costs of capital equipment required. Investments amount; payback Unknown Marginal profit Approx 7% NOTE (C): these data should be referred either to the DESNET organization, or to some typical firms (as one leading firm and one ancillary firm). 8

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