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7/31/2019 Futrue Supply Chain Model
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FUTURE SUPPLY CHAIN MODELS
From the beginning efforts have been directed to improve processsteps in SC.
Techniques, best practices, technologies were introduced in SC.
Future look at SCM will involve collaborations & technology.
Industry leaders are thriving to create networked enterprise thatdominate market and industry.
This movement will be pioneered by a large branded nucleus firmsrather than by smaller entities.
The use of external resources is to achieve optimal conditions ondaily basis.
Network effort will expand to include activities normally left outsidethe scope of supply chain.
It will include collaborative focus on productivity quality, andadministrative issues that related to achieving optimized supply chainconditions.
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TECHNOLOGY QUALITY
PRODUCTIVITY IN SC
Honeywell International failed to become part of General Electric.
After years of use of six sigma they found that it is not enough toachieve goals in competition.
This prompted Co; to reinvent & align & coordinate plant across four
units involving HRD, finance, legal & SC.
The team delivered a plan setting $500 million savings target to beachieved by 2005.
There will be merging of technology, productivity, quality, effort withan end to end focus on extended enterprise network supply chainoptimization.
Overall, objective was to gain market dominance through superior
customer satisfaction with SC being at the enter of strategy. RWJ/lv/xp-9
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P & G also made a move in this direction to improve but it
termed it as Reliability Engineering.
It applied defect and failure analysis productivity analysis,
manufacturing technology to improve SC.
This improved profit/savings across organization.
Blending of technology with productivity & quality
improvement, end to end process improvement is the next
frontier trying to optimise supply chain efforts.
P & G developed operating arrangement with key customers for
joint process development/management.
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Steps Applied at Honeywell
Selecting a technology team to lead the efforts so the criticalingredient would be included in implementation actions.
Taking inventory of existing and planed technology initiatives so theright blending of legacy and new systems would be enabling factors
and not obstacles.
Developing an institutional planning process to include:
Using a scorecard to monitor and manage allocations.
Assigning a champion to drive success within each unit &function.
Developing awareness and value of digital strategies andownership at the business unit level.
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New Business Model
Struggle for survival is important in global business environment
Important areas would be cost, quality productivity, asset utilization,customer satisfaction, time to market, value adding services.
Competitors will ambush wherever black siding takes place.
Solution. must be provided to the most demanding customer beforecompetitor can.
Firms should review their current business model, strategies andcapabilities & determine sufficiency of SC network.
Nucleus company works more closely with network partners sharingvital information investment.
Model must drive the firm to ward Advanced Supply ChainManagement (ASCM) techniques & participate in network
enterprise using collaboration & technology.
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Future State Extended Enterprise Network
Tier nSuppler
Designpartners
CreativeArtists
Tier 1Suppler
ConstraintAnalysis
Direct ship
Portals
ComponentSupply
Subcontractors
AssemblyManufacturers
StrategicSuppliers
Competitorsoutsource
supplyAgents Brokers
Distributors
Auctions
e-Procurement
Networkexchanges
SupplierRelationshipManagement
Partnering
System
DesignDevelopment
Manufacturing
DemandForecasting
Engineering
InventoryManagement
NucleusFirm
Cost toServe
CustomerSatisfaction
IntegratedSolutions
CustomerRelationshipManagement
CollaborativePlanning, Fore
Casting &Replenish
DistributorsResellers
Logisticsprovider
WarehousingDistribution
Exchanges Internal External
Enterprise wide planning & replenishment
Full Network connectivity
Network Business Management
CollaborativeDesign &
ManufactureBusinesscustomers
Retailers
COMPTI
ON
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Nucleus Firm to Organize Keiretsu
Figure gives general view of the future state of extended
enterprise networks
Nucleus firm & network companies must learn to balance
conflicting demands for optimization.
Company should discover to create & deliver new valueadding proposition to the most important customers.
Raw material suppliers will be in tiers but the closest
suppliers will assume responsibility for delivering
material.
Extranet technology can be used for viewing, tracking etc.
information.
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Constraint analyse will analysis the actual needs of themanufacturers supply chain and suppliers capabilities for
the direct flow of materials. Material are supplied to the place of consumption.
Company sponsored portals, where key suppliers gainaccess to manufacturing schedules & make deliveries
linked to codeveloped plans.
Items of low importance are handled by e-procurement.
The suppliers are linked through SRM system.
Agents, brokers are also needed. Design partners & creative artists trusted allies will be
linked through collaborative design & manufacturingsystem.
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These partners will work hard to put nucleus firm ahead ofcompetitors.
CRM will finally flourish & link nucleus firm with mostimportant business customers.
CPFR will be at work with any retailer etc.
Distributors & retailers will play a role in new model as theytake product & services to specific markets.
Logistics companies will assume responsibility forwarehousing distribution & fulfillment.
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Composite Supply Chain Model
Figure shows the process map detailing product &information flows occurring across nucleus co: to its
partners.
For complex manufacturing system, this model will growin complexity.
External participants are to be included & each stepbecome subject of analysis and improvement.
Technology plays key role in Kairetsu.
Figure illustrates how choice of EDI and BPM is affected.Higher tier supplier will bring information forward to theirfist tier supplier via EDI showing schedules, inventory
movement, logistics plans, fill rates.RWJ/lv/xp-9
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Supply Chain Model
Vendors
ProductionPlants
Suppliers
General
Ledger
CategoryManagement
Sales Force
CustomerContact Team
DevelopSales plan
Prices, Volumes, Planned Promotions
PromotionManagement
Sales
Fore
cost
Adjust
Fore
cost
DistributionPlanning
DistributionPlanning
DemandPlanning
PurchaseOrder Mgmt.
Promotion requests
Planned Orders
Supply
Adjustments
Demand
Adjustments
Prom
otion
Eligibility
Pro
motion
Re
quests
Promotion Requests
Planned Orders
Purchases
ReturnsAuthorisation
Invoices
DistributionPlanning
On OrderInventory
OnOrder
Inventory
PlannedTransfers
Available
Topromise
Shippoint
demand
DistributionPlanning
CommittedInventory
Receipts
Onhand
Inventory
Anticipated
WorkLoad
Shipments
PlannedTransfers
ReturnsAuthorization
Customer OrderManagement
Accountspayable Accounts
payable
PaymentDeductions
MatchedReceipts
Authorisation toreceive orders
Authorisation to ship
Authorisation to pay
Returns
Shipment
Shipment
Returns
Payables Receivable
Payment
Deductions
Authorisationto ship order
Authorisationto receive returns
Authorisation to bill
Creditstatus
Planed
Orders
Supply plan(weekly by SKU)
NetRequire
Mends Demand Plan
(Weekly by SKU)Planed
Orders
Orders
Invoices
Cyclical
Inventories
Promotion
adjustments
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Strategies
Access to demand Signals
Inventory tied to use
Interactive Design
Product collaboration
Planning connectivity/
control
Automated Order Mgt.
Electronic payment
Strategic souring
Supplier Relationship Mgt.
Virtual Logistics
Application Systems
Integration
VMI
Decision Support
CRM
Tools
Forecasting algorithm
Online InventoryVisibility
ERP-to-ERP Systems Integration
e-commerce
Content management
B2B Integration
Management Systems
e-business software
Standards
IT fusion
Event Tracking
Enabling the Network Enterprise
LogisticsData
InventoryEDISchedule
ShipmentsPaymentproduct
Enterprise Apps
DataDelivery
DataApplications
payment
ChannelsOf DistributionSystemInventory
BPM
ExperiencePromotionsEvents
Prices
SegmsentsService needs
AccessTrends
Orders
ServersPlanning
InventoryControl
ProductSelection
Consumers
Business
Customers
Nucleus Firm
Strategicsuppliers
SecondTierSupplier
Technology Enables
e-markets for commodity supply
Smart procurement for MRO & Supplies Ariba, Aspect,
Commerce one
Middleware Extricity Syncra
Shaved Scheduling SAP, i2, Meningitis
ERP Systems SAP, Baan, JDE,
People Soft
Retail applications Retek
CRM Data Siebel
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First tier supplier & strategic supplier will interface directly
into the nucleus firms extranet, making information visible
on shipment orders & products.
Payment will be transferred electronically.
Nucleus firm used enterprise application for planning.
Servers are used to send data to customers.
BPM technology increases connectivity with key partners,
systems are interfaced to share vital orders, market data &
payment executed.
Service need, trends in buying patterns are found.
Product selection is reviewed with customers for jointly
planning promotions.
Pricing becomes a joint decision
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Future Models will Depend on House in Order
Internal house should be set in order i.e. prepared for
collaboration. People in side the firm should be ready to participate on
equal footing with technology being applied through networkconnectivity.
Hill & Knowlton, Inc. have crated half million dollar system
to makes information sharing more meaningful. Intranet lowered costs & increased revenues.
Information on new employees displaced.
System can alert HK about a particular client that has been
added in database. Person can be told online.
Brokers & suppliers carry large files for claims under theirarms.
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Lloyd decided to process claims electronically by London.
Insurance markets suing changing Software.
Linking the system with a new document repository cuts the cost of
processing complex industrial claims. The repository not only lets brokers, underwriters, & adjusters digitally
access the information they need, it provides tools such as online chat,
instant messaging video over internet protocol (IP) for real time
collaboration.
C.B. Richard Ellis built intranet to deliver document library to itsemployees.
This library makes available all companies procedures manuals available
at reducing costs for printing & procedures reducing costs for printing &
distribution.
Employees get instant access to upto data information. Employees get involved & play greater role in SC
Speed pass is a radio frequency identification device. Driver uses by
handling it close to receive built into gasoline pump. The driver
transmits credit information & customer ID to Exxaon Mobils
information network. Transaction is approved & customer pumps gas.RWJ/lv/xp-9
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Nucleus Firm Should be Capable
Ability to establish and successfully implement process
integration across extended enterprise.
Automate connectivity & ability to collaborate with key
business partners.
Technology links the constituents by extranet, informationsystem.
Nucleus firm will have to lead the drive for automation &
links ERP & other means for exchanging knowledge
Figure shows the future technology linkage.
Process execution & deployment facilities will be established
with a limited but critical supply chain constituents.
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IT system will be connect over an extranet designed for
sharing important knowledge.
Joint data bases & direction are setup to link back end
applications.
BPM technology will be at the heart of the effort as processservers are set up to use the BPM language to facilitate access
to key information & its sharing across many companies.
Business to business collaboration is the focus of
connectivity.
Global networks will become visible as BPM becomes means
to connect firms.
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Technology Will Link Value Chain
IT System
Applications
Process
Execution
Facilities
Process
Execution
Facilities
Databases
Directories
Back End
SystemConvergence
CORBA
SZEE
UML
XML
WMC
LDAP
DSML
BPM
CPFR
FPML
TMF
BPML Org.
BPQL
Process
Repository
BPML
B2B
Collaboration
B2B Protocols
Rosetta Net
ebXML
Bin Talk
ProtocolsWSDL
XAML
Services
UDDI
tpa ML
Front End.RWJ/lv/xp-9
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The focus of supply chain effort will move from efficientprocessing to sensible innovations that add value across thenetwork.
Metrics, Cycle times, increased networks sales, greatercustomer satisfaction & retention of most valued customers.
Autochoice.com is an example of new technology enabled
network model.
Consumer can brouse for new automobile coordinator AVIS,Bank of Scotland, Boston Consulting Group etc. providingcreative collaboration.
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Customer can select a new car, finance option, can return carin 7 days & get a refund.
Siemens is also undergoing Kieretsu. Boeing Toulouse, France based Airbus, the European aircraft
manufacturers are using technology as competitive weapon.
Project has spent $ 48.5 million to automate procurement of
material to better manage SC interactions & trackperformance, data on suppliers.
Ariba has created Enterprise Sourcing 4.0 for buyers.
It automatically creates a RFP, comparison ofcosts etc.
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ERP SystemKey for Connection
Takes advantage of potential offered by integrating networked
enterprises through linking ERP System.
Savings in inventory, synchronised planning & fulfillment to
optimise the entire supply chain.
Real power comes from integrating data across the network &
delivery many of the promises.
If each company achieves benchmark, reductions in inventory
levels would be enormous.
Visibility across the network showing forecasts, reliable data
& actual replenishment needs.
Discussion with key constituents, analysis of information
leads to more robust model lowering stocks across supply
chain.
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Only few business organization have used there systems toimprove supply chain performance.
Planners will be able to access what they need to improveforecast accuracy & plan closer to actual requirement.
Buyers will order to match what is required to manufacture.
Special shipments can be dramatically reduced.
Material shrinkages, lost product problems will surface.
RFID tags can track items after purchase so manufacture caneasily recall defective goods.
Theft can be reduced by RFID tags.
Product movement & consumption information will helpfirms divert shipments & trigger other control steps in SC.
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Companies adopt business intelligence extranets.
Fedex uses. Partnering companies access reports aboutrevenue, transit time analysis & other performance data.
Energy companies use such extranets to let commercialcustomers access power consumption data.
Personalization is an other phenomena email, multimediacontacts, voice messages moving into marketing functions.
Site creacted by by Dow Chemicals has improved sales..
Firms in hospitality business are trying hard to make similarachievements..
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