科尔尼-供应链

1、Discussion paperShanghai, December 29th, 2002Challenges facing the pan-European supply chainA.T. Kearney 70/0026_Dec29/jz 2Executive summarynOverview: The pan-European supply chain faces four major challenges: Redesign of network, in-versus outsourcing, consolidation of supplier relationships and be

2、st practice tenderingnRedesign of network is driven by forces outside of the supply chain. These external forces could be, e.g., consolidation of manufacturing base or change in service requirementsnIn- versus outsourcing: Outsourcing provides strategic advantages, but it does not solve the problemn

3、Consolidation of supplier relationships: Trust and transparency are key for establishing long-term partnerships with suppliersnBest practice tendering: Insight about key performance drivers of operation will guarantee a successful tendering processnBenefits: Applying best practices to resolve these

4、issues can lead to significant competitive advantages A.T. Kearney 70/0026_Dec29/jz 3Four major challenges need to be mastered to establish a pan-European supply chainOverview1. Redesign of network2. In-versus outsourcing3. Consolidationof supplier relationship4. Best practice for tendering processR

5、ationalize European manufacturing locations and capacityRadically change service level to strengthen competitivenessConsolidate assets and free cash to finance growthExpand management capacity in core business areaOptimally use economies of scale for supply chainReduce in-house administration to man

6、age interface to service providersEnsure transparency and consistency of cost and performanceEnsure optimal target setting and performance commitment“Quick Win” versus strategic advantagesOne-time benefit versus continuous improvementCreating a pan-European Supply ChainMain driverDecision-making cri

7、teriaBenefitsA.T. Kearney 70/0026_Dec29/jz 4Redesign of networkA.T. Kearney 70/0026_Dec29/jz 5Type 1: Lead time driven Market managed replenishment (MMR)Type 2: Optimal factory utilizationFactory managed replenishment (FMR)Type 3: High product Region managed replenishment (RMR)Three types of repleni

8、shment concepts reflect needs of short lead time, optimal factory utilization and high product availability producesbased on market replenishment plan replenishesmarkets based on mutually agreed rules producesbased on regional replenishment plan coordinates all replenishmentactivities defines replen

9、ishment plan (control total chain inventory) defines inventory levels and develops sales forecast defines inventory levels and develops sales forecast defines sourcingand monitors inventories defines sourcingand monitors inventoriesFactory .Region .Market .Redesign of networkA.T. Kearney 70/0026_Dec

10、29/jz 6TodayShipment forecastOrderOrder quantityKey drivers for redesigning a network are service requirements, inventory policies, planning basis and shipment characteristicsRedesign of network100% mindsetMarket levelFactory levelAgreed service level is .Inventory policies at .Mid-term planning is

11、based on Shipments are triggered by Shipment quantity according to .FMRDepot/brand inventory target and lead timeChain levelSales forecastMarket demandReplenishment needs and factory optimizationClient ExampleA.T. Kearney 70/0026_Dec29/jz 72-3 inventory levels1 inventory level2 inventory levels1 inv

12、entory level1 inventory levelFactory warehouse with inventoryMarket stockin 1 or 2 stock levels before POSFactory warehouse with all inventory“Parcel Service”from factory warehouseFactory warehouse with inventoryStock at 1st level “regional” warehouseBuffer at factory (e.g. 2-5 days)The ideal physic

13、al network consists of one stock level between factory and POSRedesign of networkNotes: (1)This level may not exist(2)Local warehouses and/or transshipment pointWarehouseFactory1st level WarehousesLocal Warehouses/TP1)POS/PORSWarehouseFactoryPOS/PORSWarehouseFactoryLocal Warehouses/TP2)POS/PORSBuffe

14、rFactory1st level WarehousesPOS/PORSWarehouseFactoryLocal Warehouses/TPPOS/PORSStock at 1st level “central” in-market warehouseStock at 1st level “regional” in-market warehouseTypicalSituationScenario 1 “Factory Warehouse”Scenario 2“Factory and regional warehouse”Scenario 3“Central Warehouse”Scenari

15、o 4 “Regional warehouse”A.T. Kearney 70/0026_Dec29/jz 8Combined scenarios will balance inventories and transport costsPros Low transportation costs Short lead times to POSCons Medium stock planning Medium stock level Medium transportation planning 2 handling steps for part of the volume between prod

16、uction and POSScenario 5 “Combinations”Redesign of networkWarehouseCentral Warehouse(s)Local POSPOSPOSCentral warehouse of A-customersTransshipment pointDirect delivery full-truck loadDaily replenishment half/full pallets onlyNo storage, buffer onlyExampleWarehouseFactory1 level Warehouse(s)POS/PORS

17、TransshipmentA.T. Kearney 70/0026_Dec29/jz 9The approach is to identify sequential changes based on the existing model and as is costs123451234CurrentNew network volumes .+ new production .+ new network .+ new procurementVolume factorProduction factorNetwork factorProcurement factorAs is CostsModele

18、dCostsRedesign of networkClientExampleA.T. Kearney 70/0026_Dec29/jz 10In- versus OutsourcingA.T. Kearney 70/0026_Dec29/jz 11The ever increasing level of outsourcing reflects concentration on core competenciesIn- versus OutsourcingSpecialists4%14%21%8%50%28%50%52%14%70%70%4%11%47%45%0%0%2%CurrentPlan

19、 2003TransportationInternal distribution/warehousingTransportation managementITValue-added activitiesOrder handlingInvoicingInventory managementTotal logisticsManufacturing CompaniesRespondents That Have OutsourcedChemicalIndustryCoreCompetencesSource: A.T. Kearney surveyA.T. Kearney 70/0026_Dec29/j

20、z 12Companies like the cost effects from outsourcing, but fear losing controlReasons for Outcourcing58%90%55%51%25%11%Access to other marketsMake cost visibleAccess to outside expertiseIncrease cost variabilityImprove service qualityReduce costChemical companies 72%26%29%40%51%Confidentiality/Intell

21、ectual pro-perty protectionMore expensive than in-houseRequired capa-bilities not availableLoss of controlReasons Against OutcourcingThe role of outsourcingSource: A.T. Kearney surveyA.T. Kearney 70/0026_Dec29/jz 13Outcourcing of transportation and logistics services provides infrastructure advantag

22、esThe role of outsourcingInfrastructureSharing of assetsSharing of networksSharing of technologiesRisk and capitalsharingAvailabilityControlShipsTanksTerminalsPipelinesTruck fleetsTerminal densityDistribution pointsCross-docking pointsTransportation partners (regions, products, sizes)Service partner

23、sSchedulingTracking and tracingNavigationElectronic document exchange/processingBenefitsExamplesA.T. Kearney 70/0026_Dec29/jz 14Four key success factors need to be ensured in advance: Never outsource operational problems to service providersKey Success Factors for OutsourcingFeasibilityCheck availab

24、ility of competent service providers with enough capacityVerify possibility to transfer knowledgeable operators to 3rd partySet feasible targets for outsourcingDependencyLoss of competence and experience acquisition Loss of qualified employees long termConvenience to exchange service providersLimite

25、d power to influence service providers if low volumeAdministration costFine tune interfaceInstall information managementEliminate functional redundanciesReduce multiple stages in value chainLimit transformation cost end ensure benefit trackingManagement/controlling processShare productivity gainMain

26、tain and sustain quality and service levelUnderstand and define performance measurementsEnsure transparency of key cost/performance dataInstall performance controlling for service providersThe role of outsourcingA.T. Kearney 70/0026_Dec29/jz 15Consolidation of supplier relationshipsA.T. Kearney 70/0

27、026_Dec29/jz 16The goal of enhancing supplier relationships is to reduce labor costs, ensure shared resources and improve productivityConsolidation of supplier relationshipsTargeted savings opportunitiesProductivity improvementShared resourcesLabor cost reductionRedesign handling process, implement

28、a new incentive system, etc.Share handling resources (labor, forklifts, etc.) and stocking capacity with other warehouse operations in surrounding area to compensate for business fluctuationsAdapt compensation of current staff to market levelLimit overtime by introducing flex-timeA.T. Kearney 70/002

29、6_Dec29/jz 17Establishing mutually beneficial and long-term partnerships calls for trust and transparencynOpen booknFair profit marginnActivity- and cost-based charge with performance target (ABC)nFlexibility (shared resources)nContinuous improvement Consolidation of supplier relationshipsA.T. Kearn

30、ey 70/0026_Dec29/jz 18An uniform and consistent methodology is a must to consolidate pan-European supplier basesConsolidation of supplier relationships445435472024272121142330151583Fixed storageFixed operating costsVariable handlingManagement feesTotal US$ mil.4.23.11.31.0A14,000Defining CriteriaWar

31、ehouse capacity/palletB19,500C7,500DCost Breakdown of Four Categories (in % of Total Cost)ExampleWarehousing220,000Pallet throughput220,00075,000ManualManual or automated warehouseAutomatedManualManualModerateAmount of extra handlingLowHighModerateHighCompetition for warehousing in locationLowModera

32、teHighUKCountryFranceBelgiumSwedenA.T. Kearney 70/0026_Dec29/jz 19Best practice for tendering processA.T. Kearney 70/0026_Dec29/jz 20Improvement opportunities can be realized by initiating a series of actionsnPlanning improvements: Reduce overtime by matching staffing with activities (e.g. standard

33、weekend staffing) Renegotiate requirements and charges for additional activities Ensure visibility of inbound shipments to contract warehousesnImprovements in productivity by unbundling variable handling rates, identifying barriers to efficiency, and attempting to reduce impact where possiblenReduct

34、ion in operator profits - margins are hidden in numerous charges - once unbundled, a fair return can be negotiated Example: warehousingBest practiceA.T. Kearney 70/0026_Dec29/jz 21The savings estimate for warehousing is based on a review of each single warehouseBest practiceExample of a pan-European

35、 Warehousing Network: Total Cost US$/ Plt-throughput0510152025303540050100150200250300350FinlandSpainN. IrlandIrelandBelgiumItalyUK1UK 2SwedenDenmarkFranceUK 3UK 4Total Cost US$/pltSize of warehouse in 000 plt-throughput p.a.A.T. Kearney 70/0026_Dec29/jz 22“Should costs” are estimated by conducting

36、a detailed review of each contract, activity and invoice practiceBest practiceExample of a pan-European Warehousing Network: Variable Cost US$/ Plt-throughput% of mixed case handling0510152025300102030405060708090100DenmarkUK 4BelgiumIrelandUK 2SwedenItalyUK 3FranceUK 1N. IrelandShould cost areaA.T.

37、 Kearney 70/0026_Dec29/jz 23BenefitsA.T. Kearney 70/0026_Dec29/jz 24Savings of more than 10% can be realized by establishing a pan-European supply chain15%16%16%15%19%19%20%11%16%19%20%33%43%43%37%5%6%6%6%6%CurrentNew volume(Base)+ new production+ new network+ procurementDeliveryTrucking3rd party wa

38、rehousesPlant warehousingAdministrationSavings relative to base 0 (-4%) +4-5% 11-18%79%100%104%95%-96%82%-89%12345Network savings4-5%Procurement savings7-13%A.T. Kearney project experienceBenefits12%-13%12%-13%14%-17%18%-19%33%-34%A.T. Kearney 70/0026_Dec29/jz 25Warehouse consolidation is a key driver to reduce inventoriesBenefitsWarehouse stock (MDM)Sept. 97 = 350Oct. 95 = 737July 96 = 547Aug. 96 = 529Sept. 96 = 490-3