Global Supply Chain Management Role of Emerging Economies An Perspective S Asokan Director Supply chain Contact# 98182 39393 Rev 1.2
Supply Chain Management A Quiz When was the term Supply Chain Management first used in the public domain? 1982 Keith Oliver a consultant with Booz Allen Hamilton used the term Supply Chain Management in an article published in the Financial Times on June 4, 1982.. He described the overall process of Planning implementing and controlling what goes on at the supply chain in order to satisfy customers needs in a quick efficient manner as Supply Chain Management. 1986 : PRTM began using the term in manufacturing strategy training conducted for the American Electronics Association. 1992: Organizing the detail findings of a multi-company, cross-functional Supply Chain Benchmarking study, four key supply chain elements are organized as Plan/Source/Make/Deliver* 1996: Supply-Chain Council and PRTM co-develop the "Supply-Chain Operations Reference-model" (SCOR). 2005: Council of Logistics Management (CLM) changed to Council of Supply Chain Management Professionals (CSCMP).
Supply Chain Management A Quiz Which company first formally embraced the term supply chain by naming a vice president, integrated supply chain? 1982 Xerox s Steve Tierney became Vice President, Integrated Supply Chain A Good Move. The position previously referred to as Vice President Corporate Logistics and Asset Management a.k.a VP CLAM 1994: AT&T, Digital Equipment Corporation, IBM, and Xerox formed a consortium to develop a standard set of definitions and metrics that companies could use to define this thing called the supply chain.
1 Supply Chain Evolution 4
Supply Chain Management A Look Back EVOLUTION Extended Enterprise Traditional Procurement EOQ Strategic Sourcing Materials Management MRP DRP JIT QR Supply Chain Management 1960 s-70 s 1980 1985 1995 2000 2005 and beyond SCHEDULING Moving towards an Extended Enterprise: Creative Partnerships Co-Creation is the key Need both technological capability and a high level of trust. Company culture that de-emphasizes short-tem company specific gains in favor of a network of supply chain partners Greater information sharing, developing trust and encouraging relations at all levels. Integrating suppliers with leading-edge practices VMI ERP APS CPFR EOQ MRP DRP JIT QR VMI APS CPFR Economic Order Quantity Material Requirements Planning Distribution Requirements Planning Just in Time Quick Response Vendor Managed Inventory Advanced Planning Systems Collaborative Forecasting Planning and Replenishment
Supply Chain Progression Stage 1 Functional Focus Supply chain processes and data flows are well documented and understood Resources are managed at department level and performance is measured at the functional level Stage 2 Internal Integration A company wise process and data model exists and is measured at company, process, and diagnostic level Resources are managed both functionally and cross functionally Stage 3 External Integration Strategic partners collaborate to identify joint business objectives and action plans Strategic partners collaborate to enforce common processes and data sharing Strategic partners collaborate to define, monitor and react to performance metrics Stage 4 Cross-Enterprise Collaboration Collaborative supply chain enabled by advanced IT for alignment of supply chain partner's business objectives and associated processes. Collaborative supply chain enabled by IT for real time planning, decision making and response to customer requirements 6
2 Differentiation Telecom Vs Manufacturing 7
Supply Chain Differentiation Vs Manufacturing Price is Key Supply Chain (Indirect) Supply Chain (Direct) Price is Key Price is Key Supply Chain (Indirect) Information Sources Offering/ Process Development Production Management Infra Management Offering/ Process Development Provision & Operations Infra Management Relationship Distribution Chain Market Insight Differences In SC Human labor forms a significant component Not entirely possible to have standardized and centralized procedures and controls in SC as many of the decisions are taken locally and the variation and uncertainties in outputs are higher because of the human involvement. Manufacturing Supply Chain of the human involvement. Relationship Distribution Chain Value/Cost is Key Buy Side Inside Sell Side Market Insight Focus of efficiencies in service supply chains is on management of capacity, flexibility of resources, information flows, service performance and cash flow management. Similarities Demand Management Relationship Supplier Relationship Supply Chain 8
Supply Chain Differentiation Telecom Complexity Supply Chain (Indirect) Information Sources Supply Chain (Indirect) Supply Chain (Direct) VAS Content Offering/ Process Development Provision & Operations Infra Management Offering/ Process Development Provision & Operations Infra & Asset Management Relationship Distribution Chain Relationship Distribution Chain Buy Side Inside Sell Side Market Insight Differences Both Direct & Indirect Buying as in Mfg. VAS & Content Buying Concept of Right to Use. Co Creation & Co Ownership Concepts. Focus on Value Vs Cost. Experience is critical. Supply Chain Huge CAPEX costs. Market Insight Telecom Supply Chain Asset Management becomes key portfolio Similarities: Critical Demand Management Relationship Supplier Relationship 9
3 Airtel Supply Chain 10
Airtel Supply Chain Model Develop New Acquire & Manage Markets & Productss Marketing Product Sales & Care Billings & Collection Develop & Provide Network s Assurance Network Planning & Deployment Network Operations & Maintenance Manage Enterprise Retail Logistics F&A P2P (Direct, & Indirect) Planning & Analysis Direct & Control Operate & Execute Market & Brand Strategy Brand Marketing, Comms & Promotion Market/ Research & Analysis Product Planning Product/ Devpmt & Retirement Execute & Manage Campaigns Sales Strategy Billing Channel & Care Strategy Strategy Sales Channel CRM Billings & Support & Collection Readiness Sales IBM Commercial in Confidence Contact Operations Network Planning Supply Planning Supply Planning Demand Planning Asset & Inventory Readiness Network Inventory Device & Inventory Mgt (Mobiles Supplier Spare Parts &(Mobiles) SLA/QoS Order & Field Force Accesory Supplier Performance & Reporting Problem Reporting & Problem Mgt Maintenance Activation Performance Warehouse & Logistics Resource Provisioning Ware hse Logistics & Transport s F&A Strategy Asset Real Estate Accounts Payable Financial & GL Reporting e-rfx Contract Catalogue PO/ SOW Supply Chain: BSS: OSS:
Airtel Supply Chain Innovation People and Processes Supply Chain PEOPLE SME Relationship Focus Team Work Communication Governance OME Matrix Org Design Automated E a sy PROCESSES Flexibility Sourcing Process Self Governing isupplier Portal
Airtel Supply Chain Innovation Partnerships NETWORKS Consolidation IT Infra Strategic Call Center Collaborative Towers Long Term Joint Go to Market Co Create IT & Telecom solutions Marketing & Products Web Based s M COMMERCE EMAIL Positive Sum Performance
Airtel Supply Chain Innovation Productivity Approach: Phased Approach for ramp-up National Rate Contracted Items/Partner Selection at Sub-Family level Review Analyze PRODUCTIVITY Phase I Feb'09 ~ Mar 09 Managed s Network Electronics Switching Equipments SDH,MPLS,DWDM,DSLAM SIM Cards Cables & Ducts CPE Modem, Tel Inst. Volume: 38% Value: 77.7% Phase II Apr'09 ~ Jun 09 Bandwidth Infra Equipments Recharge Coupons Transportation* Routers Servers Printing Activity* Nationalized s Contract Marketing Items* Volume: 75.2% Value: 92.3% Shared s Center Continuous Improvement to cover more Volume / Value Exclusions Circle specific POs/Buying: Admin Category Marketing & CSD Items s Categories Office Infrastructure Physical Receipt/Issue of Material Customs Clearance Month End Closures Inventory Management Reverse Logistics One Airtel Centralized Synergy Process Automation Consolidation Efficiencies
Airtel Supply Chain Future Old Approach Current Future Arm s length; interfaces totally defined and controlled ARCHITECTURAL INNOVATION Collaborative; but constrained by prior workshare arrangements Collaborative and seamlessly integrated, enabling architectural innovation Major modification of how components in a system / product are linked together Significant improvement in system / product architecture through changes in form / structure, functional interfaces or system configuration Knowledge integration over the supplier network (value stream perspective ; prime-key, supplierssub-tiers; tapping supplier technology base) 15
Being
Supply Chain in Telecom Raw Material Produce Transport Distribute Retail A Typical Supply Chain Raw Material Product Product/ To build Infrastructure Right to Build Right to market O P E R A T O R Distribute Retail A Telecom Supply Chain 17