Enabling Visibility and Effective Collaboration Across the ... · E2open Confidential / 3. Key Life Sciences Supply Chain Challenges ... Boeing Case Study -787 Global Collaboration

© 2009 E2open, Inc. All rights reserved.

Enabling Visibility and Effective Collaboration Across the End-To-End Demand-Supply NetworkBiotech Supply Chain AcademyOctober 20, 2009Richard McCluney

Agenda

• Introduction

• Current Challenges Facing Life Sciences Supply Chain

• What Capabilities Are Needed

E2open Confidential / 2

• Best-Practice Examples

– Hi-tech, Aerospace and Defense, Consumer Electronics

• Conclusions

• Questions

Business and Technical Challenges

Business

• Increased reliance and trust on partner networks

• Demand volatility in the global marketplace

Technical

• Lack of supply chain visibility and control

• Inflexible systems for trading partner and business process marketplace

• Manual internal and external business processes

• Complex regulations

• Varying levels of partner sophistication

partner and business process change management

• Inaccurate, incomplete, outdated information

• Lack of external business process collaboration tools


Key Life Sciences Supply Chain Challenges

DemandSupply

3PL Hubs3PL Hubs

Contract Contract

ManufacturerManufacturer Test &Test &PackagingPackagingSuppliersSuppliers

CustomersCustomers

HospitalsHospitals

ResellersResellers

DistributorsDistributors

My CompanyMy Company

ContractContract

ResearchResearch

UpstreamUpstream

SuppliersSuppliers

InternalInternal

ManufacturingManufacturing

LogisticsLogisticsPartnersPartners

ClinicsClinics


Upstream and Downstream Supply Chain Visibility

End-to-End Partner Collaboration

Integrated Business Processes

Capabilities necessary to create value


The Multi-Enterprise Network Model

Information flows linearly. No

business process integration.

Information radiates from hub.

Accessible to all.

Enterprise-Centric Supply Chain Models

Multi-Enterprise Network Value Models

Focus on centralizing information at

the manufacturer.

Information is incomplete.

Focus on optimizing performance

of entire network.

Complete data visibility, control,

and integration.


From Supply Chain 1.0 to 2.0Differentiation of the two paradigms

Supply Chain 1.0 Supply Chain 2.0

Scope

Direction

Traditional linear chains of

enterprises - silos

Demand signals are passed on

tier by tier

Network of enterprises

– multi-tier (incl. by-passing of tiers)

Demand driven signals are made

available to multiple tiers


Focus

Value

Drivers

Paradigm

tier by tier

Buy-side operations

Single tier cost containment

Control and comply

available to multiple tiers

Integrated business process

connecting demand & supply

ROI-based specialization /

outsourcing, revenue growth

Orchestrate and monitor

What Is Needed To Overcome These Challenges

DemandSupply

3PL Hubs3PL Hubs

Contract Contract

ManufacturerManufacturer Test &Test &PackagingPackagingSuppliersSuppliers

CustomersCustomers

HospitalsHospitals

ResellersResellers

DistributorsDistributors

My CompanyMy Company

ContractContract

ResearchResearch

UpstreamUpstream

SuppliersSuppliers

InternalInternal

ManufacturingManufacturing

LogisticsLogisticsPartnersPartners

ClinicsClinics

Capability Enablers


Software Deployment Operations Community

Elements Required for a Demand Value Network Solution

Service-Level

Measurement

Global Support

Operations

Program Management

Business Performance

Definition

Deployment

Event Management

Business Intelligence

Software

Trading Partners

Network

Community

Deliverying a Working Business Solution

Software Computing

Environment

Hardware Computing

Environment

Solution Management

Physical Environment,

Networks & Internet

Definition

Internal and Trading Ptr

Onboarding

Change Management

Solution Definition

and Configuration

Operations Preparation


Integration Infrastructure

Operations Management

Process Management

Best Practice

Templates

Practitioners

Community

Domain Expertise


© 2009 E2open, Inc. All rights reserved.

Best Practice Examples

Case Study

Business Challenges

ProcurementProcurement

QualityQuality• Part shortages impacting lead times• Poor component pricing visibility driving up product costs

ProcessesProcesses

• Lack of automation with suppliers impacting sourcing strategies• Lack of automation with suppliers impacting sourcing strategies• Lack of visibility to total landed cost across products impacting

procurement decisions

• Manual processes impacting long cycle times• Manual processes impacting long cycle times• Lack of flexibility to adopt better supply chain models impacting

partner relationship complexity


ProductivityProductivity

InfrastructureInfrastructure

Supply Chain

Policies

Supply Chain

Policies

partner relationship complexity

• Long order cycles impacting planning and execution cycle times• Lack of external collaboration tools impacting productivity

• Legacy systems impacting cost base for IT services• Legacy systems impacting cost base for IT services• Lack systems that support outsourcing and onboarding of new

partners impacting scalability

• Manual policy enforcement impacting cycle times• Manual policy enforcement impacting cycle times• Lack of automated collaboration impacting contract negotiation and

productivity

Supply Chain Visibility & Execution

Strategic Cost Planning & Management

Buy / Sell Execution

Global

Multi-TierSupply Platform

• Multi-tier Forecasting & VMI: planning and replenishment collaboration between Dell and suppliers as well as ODM & T2 supplierssuppliers

• Logistics Visibility: visibility to inventory in transit and accounting for in-transits within site projected inventory

• Asia Global Hub: multi-tier replenishment, SLCs pull from AGH• Part Shortage Management: Supply Chain Command Center

for shortage alerts, expedites, re-routes, SLC transfers• One Cost: multi-tier strategic cost management• Buy/Sell: multi-tier order management between outsourced

manufacturers, Dell Global Procurement and suppliers


Dell Supply Chain Processes and Data AutomationRapid, Real-time Visibility & Process Automation

Platform for Multi-Enterprise Demand/Supply ProcessesForecasting, VMI, Logistics Visibility, Auto PO Update, Virtual Hubs multi-tier replenishment, Global Procurement

, Buy/Sell Automation, Part Shortage Management, ODM Multi-tier Supply Assurance

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Event Management


Integration Infrastructure

Operations Management

Process Management

KEYKEYVMI/JIIT Virtual Hubs CP PSMBuy/Sell

MT SupplyAssuranceMaterial Flow


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Supplier (Parts)Supplier (Parts)

ODMODMProcurementProcurement

Buy/SellBuy/SellIPCIPC

ShortageShortage& WIP& WIP

CentralCentralProcurementProcurement

LSPLSP

Virtual HubsVirtual Hubs(in(in--transit, supplier & hub inventories)transit, supplier & hub inventories)

StrategicStrategicSLCSLC

InternalInternalFactoryFactory

ODMODMSLCSLC

ODMODMFactoryFactory

MergeMergeCenterCenterTransfers &Transfers &

ReRe--RoutesRoutes

Material FlowsMaterial Flows

Dell Business Benefits

• Improved supply assurance

• Reduced obsolescence

• Reduced inventory levels to support only 5 days of inventory

• Decreased transportation costs with reduction in expedites due to • Decreased transportation costs with reduction in expedites due to visibility to both shortages and upside availability

• Lower procurement overhead costs by eliminating 2 day delay in the collaboration process and 40% of buyer time allocated to prior manual process

• Reduced cost of goods sold (COGS) and improved margins


Case Study

Boeing Case Study - 787 Global Collaboration Challenges

Mission: Reduce costs while improving customer service

Goals:• Reduce inventory costs,• Reduce late deliveries,• Reduce expedited freight,• Reduce manual processes• Reduce disruptions

Strategy:• Partnered with 135 • Partnered with 135 companies across 12 countries for 1000’s of unique parts• Identified 11 “Volume Partners” to deliver 11 major sub-assemblies to Everett for final assembly• Coordinate events to ensure final assembly and delivery takes place in 9 days

External Collaboration in A&D is absolutely critical as more design, manufacturing and supply chain execution is entrusted to key partners


Business Challenges and Solution Objectives

Business Challenges:

• How to maintain visibility and control while transitioning from a vertically integrated manufacturing model to a global partner model in a highly regulated environment

• How to maintain contractual relationships with tier-2 suppliers while the day-to-day execution occurs between the tier-1 and tier-2 partner.


Solution Objectives:

• Eliminate latency in communicating demand /supply changes and change impacts across partner tiers

• Ensure continuity of supply while minimizing supply disruptions

• Improve on-time delivery and ship-to-commit date with end customer

• Provide global visibility to all partners involved in the delivery of the completed assemblies

Boeing Solution Highlights

Central control tower to enable Boeing to integrate with and orchestrate its business processes in a

distributed supply network of 135 partners in 12 countries including 11 major sub-assemblies


Case Study: Consumer electronics OEMGetting the multi-tier supply chain under control

Material Availability

450,00%

300,00%

150,00%

0,00%

1

1

1

Material Availability

Pre-Implementation Go-Live StabilizationProcess inControl


Week 917Week 914Week 911Week 909Week 903Week 845Week 840Week 836Week 831Week 828

Customer profile

• Leading Global Consumer Electronics Brand

• High-volume, high-value low-margin product with short product life cycle

• Mix of owned and outsourced manufacturing – multi-tier supply network

Problem

• Component inventory management process out of control

• 3X excess inventory with risk of obsolescence

• Stock outs leading to poor customer service with negative revenue and market share impact

Results

• 4-week reduction in component inventory

• Zero stock-outs

• Eliminated obsolescence

Best Practice

• Multi-enterprise platform as common system of process across multiple tiers of owned and outsourced manufacturing sites and component suppliers

• Collaborative exception management process based on timely and accurate data

Conclusions

• Strategy– Requires an over-arching supply chain strategy to drive priorities

• Bi-directional Visibility– Connecting the multiple tiers of supply and demand is an imperative– Connectivity for all participants – regardless of size (don’t forget “Mom & Pop”)

• Collaboration and Alignment– Clear value proposition for each participant in the Network

• Business Process Innovation • Business Process Innovation – Automating processes and moving to exception based management– Don’t underestimate change management– Incremental steps vs. Big Bang

• Enabling technology– Business should drive technology requirements and pace of deployment – Multi-enterprise solution providing one version of the truth– Leveraging on-demand technology increases flexibility and reduces cost and risk

• It’s a Journey!


Award Winning: E2open and Its Customers

Customer Excellence• Dell, Cisco, IBM: Top 25 Supply Chains | AMR

Research, 2009

• Celestica: Innovation in Technology Award | Material Handling Management, 2009

• Boeing: Top 50 Company | Progressive Manufacturing, 2008

• Celestica: CIO 100 Award | CIO Magazine, 2008

E2open Excellence• SDC 100 | Supply & Demand Chain Executive, 2009

• Innovative Award Winner | Celestica TCOO Supplier Awards, 2008

• Top 50 Technology for Manufacturing | START-IT Magazine, 2008

• Top 40 Emerging Vendor | MBT, 2007

• 100 Great Supply Chain Partners | Global Logistics and Supply Chain Strategies, 2007

• “Pro to Know” | Supply & Demand Chain Executive, 2006-7


Industry Leaders Rely on E2open


What do you think?

Questions?


We appreciate your time!

Thank You


Richard McCluney

General Manager - International

E2open

Tel: +1 650 645 6630

[email protected]

Documents

Enabling Visibility and Effective Collaboration Across the ... · E2open Confidential / 3. Key Life Sciences Supply Chain Challenges ... Boeing Case Study -787 Global Collaboration