Trends in Supply Chain Management. Maciek Nowak, PhD

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1 Trends in Supply Chain Management Maciek Nowak, PhD

2 Logistics (or supply chain management) is... that part of the supply chain process that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers requirements. Council of Supply Chain Management Professionals OR the management of inventory at rest or in motion. Mercer Management Consulting, Inc.

reverse flow and storage of goods, services, and related information between the point of origin and the point of

3 Logistics is... that part of the supply chain process that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers requirements.

controls the efficient, effective forward and reverse flow and storage of

4 Logistics is... that part of the supply chain process that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers requirements.

5 Logistics is... that part of the supply chain process that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers requirements.

6 Logistics is... that part of the supply chain process that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers requirements.

7 Logistics is... that part of the supply chain process that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers requirements.

8 US Business Logistics Costs $ in billions 3 4 All Business Inventory,64,6,45,46 Interest 3 3 Taxes, Obsolescence, Depreciation, Insurance Warehousing % change from 3 C arrying C os ts % Truck - Local 4 6 Truck - Interc ity Motor C arriers Railroads Water Oil pipelines Air Forwarders Other C arriers S hipper Related C osts Transportation C osts % Logis tics Adminis tration Total logistics cost,,33,35,44 4.6%

5% Truck - Local 4 6 Truck - Interc ity 43 445 453 46 Motor C arriers 6 647 657 7 Railroads 6 7 74 Water 3 35 37 4 Oil pipelines 3 3 7

9 Logistics Costs as Part of GDP $ $ $4 $6 $ $, $, $,4 $, Source: Rosalyn Wilson, State of the Logistics Union report, 5 % of GDP Billions of $

6 7 3 4 Source: Rosalyn Wilson, State of the

10 What are supply chain managers most concerned with? Global supply chains What is the impact of manufacturing thousands of miles from your customers? Is manufacturing coming home? How about those emerging markets?

manufacturing thousands of miles from your customers?

11 Shifting Demographics China s middle class could double by Today, 45 million Indians have middle class incomes In Brazil, 3 million have moved to the middle class Huge population growth through 5 will occur in developing nations

In Brazil, 3 million have moved to the middle class Huge

12 Manaus: lemonade out of lemons 3 million people living in the heart of the Amazon

13 What are supply chain managers most concerned with? Big data What drives every supply chain? How do you utilize all of the information you re collecting?

14 Simulation methods Evaluating expectations through repetitive testing Scenario planning for risk and change management

15 Forecasting techniques Predictive snapshot of operations Driving the entire supply chain

16 Network Optimization Determining the best solution for your network Evaluating problems that only years ago were unsolvable

17 Information Visualization Analysis Understand your data better and act upon that understanding Presentation Communicate and inform others more effectively

18 What are supply chain managers most concerned with? Collaboration / Supplier Relationship Management More than just sharing of information

19 What are supply chain managers most concerned with? Risk Lack of visibility in supply chain How secure is your supply chain? Are you prepared for various plausible scenarios?

20 What are supply chain managers most concerned with? Volatility of energy costs When costs go up, speed goes down Sustainability Can you (or your customer) report on the environmental impact of your process? Aging infrastructure

down Sustainability Can you (or your customer) report on

21 Congestion

22 Projected Congestion 4

24 Effective Supply Chain Leaders Applying certainty to uncertain situations affecting others, such as in forecasting or decision making Balancing risk and reward in careful analysis using hard and soft skills Aligning tactics to strategy in planning and harmony with organizational culture Maintaining and improving relationships of supply chain partners Satisfying competing priorities and stakeholders on an ongoing basis Supply Chain Leadership Report: Many Styles Generate Success, 5, APICS

Supply Chain Management Introduction Outline What is supply chain management? Significance of supply chain management. Push vs.

Supply Chain Management Introduction Outline What is supply chain management? Significance of supply chain management. Push vs. Pull processes 1 A Generic Supply Chain Sources: plants vendors ports Regional