Strategic Supply Chain Management. Medical Device Supply Chain Council 1 October 2013

Transcription

1 Strategic Supply Chain Management Medical Device Supply Chain Council 1 October 2013

2 Section 1 Why is strategic supply chain management important?

3 Section 1 Introduction Strategic supply chain management is more important than ever Shorter economic cycles Increased pressure on companies and their supply chains Increased competition Shorter product life cycles More frequent natural disasters Rising costs in low-cost countries Reduced access to working capital Competition for talent Greater focus on sustainability Strategic supply chain management is more challenging and much more critical to the bottom line Multiplication of channels and segments 1990 s Today Slide 3

4 Section 2 Your supply chain as a strategic asset Leading companies have a specific focus in their supply chains Design the supply chain from the customer in tailoring structure, operating models, and practices to maximize customer value Acquire and develop the best supply chain Talent with the right mix of skills to handle today s more challenging activities Make the supply chain a strategic asset Obsessively drive excellence in Execution to deliver increasing customer value at lower cost Plan the supply chain - integrating with business plans and collaborating with suppliers and customers Unlock the full power of supply chain Information to enable the best decision making, from the boardroom to the shipping dock Slide 4

5 Section 2 Your supply chain as a strategic asset Leaders reap significant benefits from strategic supply chain management as it improves the top line Best-in-class companies (BICC) sales growth is almost 50% higher than non-bicc Sales growth BICCs Non-BICCs Percentage of industry average it improves the bottom line Best-in-class companies have 20% higher profitability than non-bicc Profitability BICCs Non-BICCs Percentage of industry average Slide 5

6 Section 2 Strategic supply chain management s five core disciplines

7 Section 3 The five core disciplines of Strategic Supply Chain Management The book details the five core disciplines that drive performance Design the supply chain around a defined basis of competition to enable the overall business strategy Use metrics to measure the health of each core supply chain process and identify problem areas Develop integrated supply chain processes and systems that interface efficiently with the rest of the enterprise Understand core competencies and choose partners to maximize focus and profitability Develop and maintain organizational structure and skills to define and manage the supply chain of the future Slide 7

8 Section 3 The five core disciplines of Strategic Supply Chain Management Core Discipline 1: View your supply chain as a strategic asset Four primary bases of competition Innovation time to market and time to volume Quality procurement and production excellence and quality control Customer experience interactions designed from the customer s perspective Cost efficient, low cost supply chain configurations and processes Supply chain strategy Align your supply chain with your business strategy and your primary basis of competition Align your supply chain with your business strategy Consider customer service proposition, sales channels, value system, operating model and and your asset primary footprint in basis your supply of chain strategy competition Re-evaluate the supply chain strategy regularly Slide 8

9 Section 3 The five core disciplines of Strategic Supply Chain Management Core Discipline 1: View your supply chain as a strategic asset Case in point: Luxury menswear company Custom orders in US, fabrics designed in Italy and garments made in China Operates with the philosophy that custom-fitted clothes can be provided at the cost of off-the-shelf garments Style consultant meets customer Style consultant meets customer Ordering Make Delivery Customer on-line order Launch production Delivery to customer Source: Strategic Supply Chain Management: The 5 Disciplines for Top Performance, second ed., McGraw-Hill, 2013, p.6 Slide 9

10 Section 3 The five core disciplines of Strategic Supply Chain Management Core Discipline 2: Develop an end-to-end process architecture Core Enterprise process model Leadership and strategy Business planning Objectives deployment Products, services, and technology development Marketing and sales Supply chain (Plan, Source, Make, Deliver, Return, Enable) Customer service and support Ensure the supply chain process architecture encompasses Plan, Source, Make, Deliver, Return, and Enable Use processes your basis of competition to choose and Integrate the supply chain with the other core prioritize enterprise specific processes activities and practices Use your basis of competition to choose and prioritize specific activities and practices Governance HR IT Support Finance Legal Slide 10

11 Section 3 The five core disciplines of Strategic Supply Chain Management Core Discipline 2: Develop an end-to-end process architecture Case in point: Global on-line retailer Offers the Earth's Biggest Selection Seeks to be world's most customer-centric company, where customers can find and discover anything they may want to buy online Stocked by on-line retailer Distributors Exact delivery date Best Practice Partner companies Estimated delivery date Common, robust processes Proactive shipping notification 24x7 order status Link to carrier s web site Items available in millions Source: Strategic Supply Chain Management: The 5 Disciplines for Top Performance, second ed., McGraw-Hill, 2013, pp Slide 11

12 Section 3 The five core disciplines of Strategic Supply Chain Management Core Discipline 3: Design your organization for performance Designing a Supply Chain Organization Skills and talent Roles and responsibilities Organizational structure Ensure the talent mix and pipeline cover execution, planning and enabling activities Consider context, culture and complexity when designing your supply chain structure (centralized, decentralized and hybrid) Insist on clarity in accountabilities, with a priority on cross-functional roles & activities Slide 12

13 Section 3 The five core disciplines of Strategic Supply Chain Management Core Discipline 4: Build the right collaborative model The Collaboration Spectrum Extensive Degree of collaboration Limited Too many best friends Synchronized Coordinated Cooperative Transactional Little pain, little gain Master internal collaboration as an enabler for collaboration with external partners Segment supply chain partners to determine the needed type of relationship Trust your partners while ensuring that you manage your interests Many Number of relationships Few Slide 13

14 Section 3 The five core disciplines of Strategic Supply Chain Management Core Discipline 5: Use metrics to drive supply chain performance Level 1 metrics Perfect order fulfillment Order-fulfillment cycle time Upside supply chain flexibility Upside supply chain adaptability Downside supply chain adaptability Total cost to serve Overall value at risk Cash-to-cash cycle time Return on supply chain fixed assets Return on working capital Level 1 Metrics Performance attributes Focused on the customer Reliability Responsiveness Agility Internally focused cost Assets Measure from your customer s perspective Choose the metrics that will drive your supply chain strategy forward Ensure your metrics are balanced and comprehensive Benchmark to understand potential performance levels Source: Supply Chain Operations Reference Model, Supply Chain Council Slide 14

15 Section 3 Transforming the supply chain

16 Section 4 Transforming the supply chain Leaders start with a clear understanding of the type of change needed Types of Supply Chain Change Impact on Business Performance Supply chain improvement Supply chain excellence Making incremental year-on-year performance improvements Supply chain innovation Achieving industry-leading performance in service, cost, or quality Introducing new ways of competing in your industry or changing your basis of competition typically part of a broader operational transformation Effort / investment required Slide 16

17 Section 4 Transforming the supply chain Leaders use a comprehensive approach for supply chain transformation The unique challenge of supply chain transformation Cross-functional involvement End-to-end outcomes Interfaces with other core enterprise processes Multiple teams and sites around the globe Involvement of customers and suppliers Operations continuity is essential Slide 17

18 Strategic supply chain management a different mindset and a focus on making change happen can enable superior performance and industry leadership This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it PricewaterhouseCoopers LLP. All rights reserved. In this document, refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.