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Supply Chain Enablers Organizational Infrastructure

Information Technology

Strategic Alliance

Human Resource Management

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Supply Chain Enablers

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Organizational Infrastructure Coherent business strategy that aligns

business units towards same goals 32%

!ormal "rocess#$ow methodologies toenable the SCM im"ro%ements 15%

&eo"le committed to and res"onsible forcross#functional "rocesses 14%

Right "rocess metrics identi'ed to guideo"erating units( "erformance towardstrategic organizational SCM ob)ecti%e #13%

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Information Technology O"erations* mar+eting * , logistics data

coordinated within the com"any 30%

-ata readily a%ailable to managers* notembedded in legacy system 27%

O"erations* mar+eting* , logistics data

coordinated between com"anies 18% .in+ing SCM to /R& systems 10%

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Strategic Alliance /0"ectations clearly stated* understood*

and agreed u"on u" front 48%

Collaborating on su""ly chain and"roduct ser%ice strategies 18%

To" management of "artneringcom"anies interface on a regular basis

9%To" management communicate why

strategic alliances are im"ortant andshould be "ursued 8%

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Human Resource Management

Enablers Source* hire* and select s+illed and 1uality

"eo"le at all management le%els 27%

!ind change agents to cham"ion SCMim"lementation 27% Com"ensation and incenti%es in "lace for

SCM "erformance 14% !inding the internal "rocess facilitators

+nowledgeable in SCM 13% A""ro"riate )ob descri"tion and

res"onsibilities 12%

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Driers of Supply Chain

!erformanceEfficiency Responsiveness

Inventory Transportation Facilities Information

Supply chain structure

Drivers

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Consi"erations for Supply Chain

DriersDriver Efficiency Responsiveness

Inventory Cost of holding Availability

Transportation Consolidation Speed

Facilities Consolidation /Dedicated Proximity /Flexibility

Information What information is best sited foreach ob!ective

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Functional vs. Innovative Products:

Differences in Demand

Functional2&redictable3

Innovative2un"redictable3

&roduct life cycle More than 4 years 5 months to 6 years

Contribution margin 78 to 498 498 to :98

&roduct %ariety .ow 269 to 49%ariants "ercategory3

High 2often millionsof %ariants "ercategory

!orecast accuracy2margin of error3

698 ;98 to 6998

A%erage stoc+outrate

68 to 48 698 to ;98

A%erage forced

mar+down

98 698 to 478

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!hysically Efficient s# Mar$et%Responsie

Supply ChainPhysically Efcient

Process

Maret!"es#onsive

Process&rimary "ur"ose Su""ly "redictable

demand e

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Efficiency%Responsieness &rame'or$

of Supply Chain

Match Mismatch

Mismatch Match

Functional Product Innovative Products

Efficient

SupplyChain

Re

sponsive

Su

pplyChain

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(one of strategic fit in supply chain

Certain

Demand

Implied

Uncertainty

Spectrum

Uncertain

Demand

Responsive SupplyChain

ResponsivenessSpectrum

Efficient Supply

Chain

Zone of

Strategic Fit

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Achieing Strategic &it ?nderstanding the Customer

.ot size

Res"onse time

Ser%ice le%el

&roduct %ariety

&rice

Inno%ation

Implied

Demand

Uncertainty

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The )alue Chain* +in$ing Supply

Chain an" ,usiness Strategy

New

ProductDevelopment

Maretin!

andSales "perations Distri#ution Service

Finance$ %ccountin!$ Information Technolo!y$ &uman Resources

'usiness Strate!y

New Product

Strate!yMaretin!

Strate!y Supply (hain Strate!y

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&lo's in a Supply Chain

(ustomer

Information

Product

Funds

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Procurement

Planning

Manufacturing

Planning

Distribution

PlanningDemand

Planning

Sequential Optimiation

Supply Contracts/Collaboration/Information Systems and DSS

Procurement

Planning

Manufacturing

Planning

Distribution

PlanningDemand

Planning

!lo"al Optimiation

Se-uential Optimization s#

.lobal Optimization

Source@ Duncan Mc&arlane

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The Dynamics of the Supply Chain

rderS

i!e

"ime

Source# "om Mc $uffry% Electronic Commerce and &alue Chain Management% '(()

Customer

Demand

Retailer rdersRetailer rdersDistributor rdersDistributor rders

Production PlanProduction Plan

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The Dynamics of the Supply Chain

rderS

i!e

"ime

Source# "om Mc $uffry% Electronic Commerce and &alue Chain Management% '(()

Customer

Demand

Production PlanProduction Plan