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1、Supply Chain ManagementAccelerating Cost EffectivenessSupply Chain ManagementThe supply chain used to be a simple serial process with raw materials slowly moving in one direction through manufacturing production and onward via a distribution system to retailers and customers.Today, the talk is of su
2、pply networks, parallel chains, enhanced concurrent activities, and “customer centric with new information platforms and technology set to cut both inventory and lead-times throughout the delivery pipeline further.Top Issues Facing SCM ProfessionalsIn a recent quantitative survey, SCM professionals
3、were asked a open-ended subjective question, “What are the three biggest issues facing you personally in developing your logistics strategy?Source: AMR Research 2000The top three responses were;Cost (21%), Systems Applications (20%) and Integration (19%)SCM BenefitsManufacturerDistributors/Wholesale
4、rsCustomers SuppliersRetailersMaterials Flows Information FlowsCash FlowsUS companies expect to reap $3-400B of savings through a variety of benefits (3 5% of revenues)Source: PRTMMove From Push To PullManufacturersDistributors/ WholesalersCustomerSuppliersRetailersManufacturersDistributors/ Wholesa
5、lersCustomerSuppliersRetailersMake what we sell, not sell what we make!Move to Cross-Functional Business ProcessesPurchasingManufacturingDistributionInstall/MaintenanceSalesSourceMakeDeliverInstallSellOrder FulfillmentAvailable-to-PromiseSales & Operations PlanningDepartment PerformanceSupply Chain
6、OptimizationSynchronized, Sequential PlanningForecastingDistributionPlanningManufacturing PlanningProcurementPlanningSupply Chain OptimizationSynchronized, Concurrent PlanningDemandPlanningDistributionPlanningManufacturing PlanningProcurementPlanningPurchasingManufacturingDistributionInstall/Mainten
7、anceSalesCross-Functional Supply Chain MetricsProcess PerformanceSourceMakeDeliverInstallSellPerfect Order ProcessLSLUSLLSLUSLLSLUSLLSLUSLLSLUSLSharing and CollaborationManufacturerDistributors/WholesalersSuppliersRetailersSynchronized Production SchedulingCollaborative Product DevelopmentCollaborat
8、ive Demand PlanningCollaborative Logistics Planning Transportation services Distribution center servicesFull Value ProcurementObjective Lowest total cost of ownershipQuality meeting customer needsOn-time deliveryAcceptable supply riskProcess efficiencyDemand reductionUnderpinned by procurement infra
9、structure excellencePurchasePriceAcquisitionInstallationMaintenanceDisposalPrice is often just the tip of the iceberg!Strategic SouringTraditionalProgressiveTactical EmphasisAcquisition Cost FocusStaff FunctionCost CenterReactiveStrategic EmphasisTotal Cost FocusProfit CenterProactiveTacticalStrateg
10、icTacticalStrategicEvolving Model of ProcurementLogistic and TransportationLogistics accounts for 8-12% of sales. In 1998, it accounted for over 10% of the US GDPLogistic is one of the glues that holds the supply chain together. The techniques that most manufacturers employ to increase speed and red
11、ucing cost is outsourcingAverage cost reductions from outsourcing is 32% The 3PL market has enjoyed explosive growth over the past 5 years. Most 3PLs have reported annual growth rate of 25-50%Source: industry weekManufacturingMaterial. . . . .BOMPRTCustomerorderDocumentWork centerRoutingetc.Manufact
12、uring managers view efficiency and flexibility as two objectives which must be balanced in order to arrive the lowest total costWorld-class companies adopt strategies and tactics such as pull system, JIT replenishment, and cycle time reductions that enables a company to have lower levels of inventor
13、y while still driving reductions in production unit cost Companies frequently underestimate the commitment required to achieve an effective quality improvement which result in operation cost increases.StrategicBusinessPlanningForecasting and Planninghoursdaysweeksmonthsyear +OperationalTacticalStrat
14、egicSchedulingRolling ForecastDemand PlanningManufacturing PlanningSchedulingDistribution PlanningTransportationOrderPromiseSourceMakeMoveStoreSellTop Issues Facing SCM Professionalse-Business is a relatively low priority, coming in sixth of the top issues facing SCM professionals.However, this does
15、 not reflect the impact that e-Business will have on Supply Chain ManagementSource: AMR Research 2000e-Business will fundamentally change SCMENTERPRISE OPTIMIZATIONProcureProduceProductsManageLogisticsForecastDemandOptimizeNETWORK OPTIMIZATIONAFDGCEBCompanyCompanyCompanyCompanyCompanyCompanye-Busine
16、ss Is Driving a Fundamental Transformation in SCMThe larger the network of companies the greater the power of the network to reduce cost for its membersIncreased leverage with suppliersBroader market access for suppliersExpanded community and collaboration opportunitiesGreater integration across mar
17、ket supply chainsNetworkEffectEconomies of ScaleThe larger the Meta-Market the faster it can form and launch facilitate the operational excellentBroader communities to allocate R&D cost Operational efficiencies via back office shared services Depth of industry and procurement knowledge and resources
18、 available to develop supplier contractsCompanyThe Impact of e-Business on SCMe-Business affects four broad categories that determine the production and transaction costs of a firm: The cost of executing a saleThe costs associated with procuring production inputsThe costs associated with making and
19、delivering a product or service The cost associated with logisticsThe Cost of e-Business SalesAccessibilityAn e-Business web site is open 24 hours per day, 7 days per week. A business no longer has to build separate physical establishments to attract a larger customer base. A virtual storefront also
20、 allows an e-business to manage one store instead of multiple stores, thus eliminating duplicate inventory costs. The Cost of e-Business SalesOrder ReworkAnother aspect of e-Business is that it enables more efficient order configuration. For example, both General Electric (GE) and Cisco Systems repo
21、rted nearly one-quarter of their pre-Web-site orders had to be reworked because of errors-a total of more than 1 million orders, in the case of GE. Since adopting a Web-enabled customer interface, Cisco reports an error rate of only 2 percent. Produce or Service OutputCritical Customer RequirementDe
22、fects: Service unacceptable to customerBAThe Cost of e-Business SalesFundamental ShiftClearly, e-Business represents a fundamental shift in how the sales process is executed by a company. As a result, e-Business compels existing businesses to re-examine how they interact with customers, even as new
23、entrants exploit e-Businesses to reach customer bases previously thought unreachable. LowHighCost of Sale“Off-the-RackCustomisedValue-Addedof SaleDirectSalesFace-to-face sales$500/sales contactDistributors/VARs$2-300/sales contactTelephone sales and service$25 per sales contactNo human contact$1 per
24、 sales contactResellersTele-channelElectronicChannelsSource: Dr. Rowland Moriarty, Cubex Corp.The Costs Associated With Procuring Production InputsWeb-based procurement of maintenance, repair, and operations (MRO) supplies is expected to reach more than $100 billion worldwide by the year 2000. MRO c
25、omprises those goods required to run a company that are not raw materials used in the direct manufacture of a product or the provision of a service.SuppliersSuppliers Connected to MarketPlace via Web or ERPBuyersBuyers connected to marketplace via E-Procurement AppB2B MarketPlaceProfitOtherCostsPurc
26、hases 100 10045504547.557.5-5%A 5% reduction in purchase cost can result in a 50% increase in profit margin.+50%The Costs Associated With Procuring Production InputsLower transaction costs coupled with the ability to enforce purchasing policy across the enterprise have been instrumental in driving W
27、eb-based MRO procurement. Two additional factors have accelerated the trend. The first factor is a defensive reaction by firms that note the cost savings being enjoyed by rivals switching to an e-business procurement mode. The second, and possibly more important factor is the insistence by large fir
28、ms such as Ford, that their suppliers link into their Web-based procurement systems as a condition of doing business with them. Source: RB WeberCOST PER POPOTENTIAL COST PER POCURRENTCOST PER POThe Cost of e-Business Supply Chain ManagementEven the scope of MRO procurement pales beside the possibili
29、ties for reorganizing supply chains around e-business. Rather than increasing production and inventory in advance of actual customer demand, e-businesses are looking to make both their own supply chains and those of their customers and suppliers respond in real time to actual sales.SupplierManufactu
30、rerDistributionRetailerConsumerInformationThe Cost of e-Business Supply Chain ManagementVisibility of the entire supply chain is necessary so a business can analyse the interplay between interactions such as procuring materials, components, and subassemblies from various suppliers; shifting producti
31、on between installations or business partners; and moving goods to the final consumer. Understanding relationships between all players in a particular value chain allows an e-business to adjust to new contingencies in real time.The Transformation of Logisticse-Business transforms logistics from simp
32、ly packaging and moving goods and turns it into an information business. Introducing online parcel order and tracking via a proprietary network in 1983, Federal Express took nearly 12 years to sign up 50,000 customers. In 3 years, between 1995-1998, after FedEx offered essentially the same service v
33、ia the Web, the number of customers rose to 1 million. FedEx estimates nearly 70 percent of the 3 million packages it processes each day now are initiated via interactive networks.Supply Chain Managemente-BusinessDriving TransparencyWhen building visibility of the entire supply chain, this also incl
34、udes customers. e-Business gives the customer access to the suppliers product data, ordering and delivery information. This drives transparency within the organization and forces the supplier to develop better delivery and support systems.EnterpriseConnectivityProduct Lifecycle ManagementCustomerManagementSupplier CollaborationDesign PartnersConsumers and ChannelsRecommendationsInclude e-business as part of your top three supply chain agenda items. Put in effort to articulate a value proposition for e-business w
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