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SupplyChainManagement(II)DennyHong-MoYeh,Ph.D.,CPIMFeb.2007 ContentsConceptsofSCMLogisticsandSCMTheValueofInformationNetworkPlanningSupplyChainAlliancesDesignforSCMSupplyChainIntegrationInternationalIssuesInternalSupplyChainPlanning-MRPInternalSupplyChainPlanning-MPSExternalSupplyChainPlanning 當企業需要某功能時…內部執行：如果是企業的核心能力,且擁有資源及專業知識,就可以自己做。購併其他公司：如果是企業的重要核心能力,但久缺資源及專業知識。一般交易活動：如果不是核心能力,則可以用買的,但這種作法無法形成長期策略優勢。策略聯盟：兩家公司維持長期夥伴關係,分攤風險,共享利潤。可避免購併的問題,也比一般交易活動有共同的目標,彼此願意投入更多的資源,能帶來長期的策略利益。 策略聯盟(SP)應該能帶來…產品附加價值：若產品線互補或能改善交貨時間及維修能力，則可提高產品的附加價值。市場能力：擁有研發能力的企業和有行銷通路的企業策略聯盟,可改善進入市場的能力。營運能力：有季節性互補產品的企業策略聯盟可改善資源的效率。技術優勢：共享技術和專業知識,彼此切磋,更能解決技術問題。組織技能：互相學習,使供應鏈更有效率。財務優勢：共用資源降低成本,財務上互相融通。 StrategicPartneringTypesofSP:QuickResponse:VendorsreceivePOSdatafromretailers,andusethisinformationtosynchronizeproductionandinventoryactivitiesatthesupplier.Inthisstrategy,theretailerstillpreparesindividualorders,butthePOSdataisusedbythesuppliertoimproveforecastingandscheduling.MillikenandCompany:TheleadtimefromorderreceiptatMilliken’stextileplantstofinalclothingreceiptatseveralofthedepartmentstoresinvolvedwasreducedfromeighteenweeksdowntothreeweeks. StrategicPartneringContinuousReplenishment:VendorsreceivePOSdataanduseitprepareshipmentsatpreviouslyagreeduponintervalstomaintainagreedtolevelsofinventory.Wal-Mart,KmartAdvancedContinuousReplenishment:Suppliersmaygraduallydecreaseinventorylevelsattheretailer’sstoreordistributioncenteraslongasservicelevelsaremet.Inventorylevelsarethuscontinuouslyimprovedinastructuredway.Kmart StrategicPartneringVendorManagedInventory(VMI):JITDVMIProjectsatDillardDepartmentStores,J.C.Penney,andWal-Marthaveshownsalesincreasesof20to25percent,and30percentinventoryturnoverimprovements. RequirementsforEffectiveSPAdvancedinformationsystemsTopmanagementcommitmentMutualtrust ImportantSPIssuesInventoryownership:SupplierownsthegoodsuntiltheyaresoldRetailerownsthegoodsPerformancemeasures:Fillrate,inventorylevel,inventoryturns,leadtime,POSdataaccuracy,inventorydataaccuracy,deliveryreliability… ImportantSPIssuesConfidentialityCommunicationandcooperationWhenFirstBrandsstartedpartneringwithKmart,Kmartoftenclaimedthatitssupplierwasnotlivinguptoitsagreementtokeeptwoweeksofinventoryatalltimes.Itturnedoutthatthiswasduetothefactthatthetwocompaniesemployeddifferentforecastingmethods. StepsinSPImplementationContractualnegotiationsOwnership(retailerorsupplier)CredittermsOrderingdecisions(orderpoint,orderquantity)Performancemeasures(serverlevel,inventorylevel…)DeveloporintegrateinformationsystemsDevelopeffectiveforecastingtechniquesDevelopatacticaldecisionsupporttooltoassistincoordinatinginventorymanagementandtransportationpolicies MainCharacteristicsofSP AdvantagesandDisadvantagesofSPAdvantagesFullyutilizesystemknowledgeConsiderthepartnershipbetweenWhite-HallRobbins(W-R),whomakesover-the-counterdrugssuchasAdvil,andKmart.W-RinitiallydisagreedwithKmartaboutforecasts,andinthiscase,itturnedoutthatW-RforecastsweremoreaccuratebecausetheyhaveamuchmoreextensiveknowledgeoftheirproductsthanKmartdoes. AdvantagesandDisadvantagesofSPAdvantages(continued)DecreaserequiredinventorylevelsImproveservicelevelsDecreaseworkduplicationImproveforecasts AdvantagesandDisadvantagesofSPDisadvantagesExpensiveadvancedtechnologyisrequiredSupplier/retailertrustmustbedeveloped.Supplierresponsibilityincreases.Expensesatthesupplieroftenincrease. ExamplesofSPSuccessesandFailuresWesternPublishing-GoldenBooks:WesternPublishingisusingVMIforitsGoldenBookslineofchildren’sbooksatseveralretailers.POSdataautomaticallytriggersre-orderswheninventoryfallsbelowareorderpoint.Thisinventoryisdeliveredeithertoadistributioncenter,orinmanycases,directlytothestore.Ownershipofthebooksshiftstotheretaileroncedeliverieshavebeenmade.InthecaseofToysRUs,thecompanyhasevenmanagedtheentirebooksectionfortheretailer,includinginventoryfromsuppliersotherthanWesternPublishing. ExamplesofSPSuccessesandFailuresVFCorporation’sMarketResponseSystem:TheVFCorporation,whichhasmanywellknownbrandnames(includingWrangler,Lee,Girbaud,andmanyothers),beganitsVMIprogramin1989.Currently,about40percentofitsproductionishandledusingsometypeofautomaticreplenishmentscheme.Thisisparticularlynotablebecausetheprogramencompasses350differentretailers,40,000storelocations,andmorethan15millionreplenishmentlevels.VF’sprogramisconsideredoneofthemostsuccessfulintheapparelindustry. ExamplesofSPSuccessesandFailuresSpartanStoresSpartanStores,agrocerychain,shutdownitsVMIeffortaboutoneyearafteritsinceptionOneproblemwasthatbuyerswerenotspendinganylesstimeonreordersthantheydidbeforeThiswasbecausetheydidn’ttrustthesuppliersenoughtobeabletostopcarefullymonitoringtheinventoriesanddeliveriesoftheVMIitems,andinterveningattheslightesthintoftrouble. ExamplesofSPSuccessesandFailuresSpartanStores(continued)Furthermore,thesuppliersdidn’tdomuchtoallaythesefears.Theproblemswerenotwiththesuppliers’forecasts;instead,theywereduetothesuppliers’inabilitytodealwithpromotions,whichareakeypartofthegrocerybusiness.Sincetheywereunabletoappropriatelyaccountforpromotions,deliverylevelswereoftenunacceptablylowduringtheseperiodsofpeakdemand. 第三方物流(3PL)利用外包商執行全部或部分的物流管理和產品配銷功能。長期合約和多種功能或流程管理；傳統作法是以交易為基礎,且為單一功能。優點專注於核心技術享受技術彈性及資源彈性缺點失去對物流的控制權 ERP委外-企業IT部門的那些工作可以委外?硬體設備維護：PC、印表機、網路等,因為時效性考量,日常故障排除不應委外。系統軟體安裝及問題排除：如Windows和MSOffice等,不應委外。教育訓練使用者,了解使用者的需求,指導使用者如何用ERP系統來滿足需求,若ERP功能不足則和使用者討論,作出需求規格文件。很重要,不可委外。ERP營運：資訊安全、資料庫管理、和資料庫備份等,可以自己做也可以委外。ERP客製：須撰寫程式,應該委外。ERP升級維護：遠端遙控,可委外。每個客戶都有營運環境和測試環境,後者資料庫只有測試資料(故無機密問題),ERPpartner使用測試環境升級後,確定没有問題再遙控升級營運環境。 ERP營運可以委外嗎?企業的資料是非常寶貴的,必須嚴防被竊取或破壞一般人會把大筆現金放在家裡或銀行?會將貴重珠寶放在家裡或銀行的保管箱?銀行的客戶不擔心銀行會盜取他們的現金或貴重珠寶嗎?一般企業或ERPPartner,誰比較有能力阻擋駭客入侵呢?ERPPartner會盜取客戶的資料嗎?ERPPartner資訊安全的能力必須大過一般企業。必須建立絕對的誠信,絕不能讓客戶的資料受損或外洩。必須有賠償機制,在意外發生時能彌補客戶的損失。必須有移轉機制,客戶可以更換ERPPartner。也可以把ERP主機和資庫放在datacenter,並委由ERPPartner維護。 ERP委外客製的製程規格設計程式製作程式測試需求分析系統驗證導入上線IT了解使用者需求產生規格草稿Review&refine產生規格定稿產生程式碼產生測試報告回報錯誤IT協助使用者驗證系統流程IT指導使用者教育訓練,上線企業ERPPartner ERP委外客製-企業可專注於核心能力運輸、倉庫等物流都可以委外,為何ERP不能委外?客製SOA-ERP的6個製程中,規格設計、程式製作、和程式測試可以委外給ERPpartner,IT人員只需負責了解需求、驗收系統、和訓練使用者。在標準客製程序中,企業只要提出需求,ERPpartner即可代為客製程式。企業IT人員了解使用者需求並依標準格式寫出規格草稿。ERPpartner與IT人員討論,判斷應使用那些現成服務或要開發新服務,並作出含prototype的正式規格供使用者確認。ERPpartner開發並測試程式,由IT人員核對規格並驗證結果的正確性。ERPpartner將驗證過的程式安裝在ERP系統中,由IT人員教導使用者如何操作。 ERP委外客製-企業可以享受技術彈性及資源彈性技術彈性ERPpartner專注於ERP系統的研發,可即時引進新的資訊科技術。委託ERPpartner客製功能比由自己的IT人員更快,成本更低。企業當然不會把ERP委外給比能力自己差的partner。資源彈性客製的需求並不穩定,自己維持大批程式人員並不划算。委由ERPpartner客製,風險共攤(riskpooling)的效果。 ERP委外客製有没有缺點?企業會不會失去對ERP系統的控制權?會不會依賴ERPpartner過深?SOA-ERP是高度元件化的系統,容易維護,不像傳統軟體要原作者才看得懂。SOA-ERP有標準化的服務說明,利用應用程式產生器產生程式,內容完全標準化,企業不會喪失ERP的控制權。企業IT人員會不會失去重要性?IT人員了解使用者,是使用者和ERPpartner間的橋樑,ERPpartner只負責依IT人員開出的規格生產程式,IT人員仍然是企業的關鍵人物。客製效率增加會刺激客製需求的增加,使用者依賴IT人員越來越深,IT人員的地位越來越重要,成為使用者想討好的對象。 如何選擇ERP委外Partner?ERPpartner的價格。委外成本應低於自己客製ERPpartner的專業能力。專業能力一定要比自己高許多要有好的專案管理能力及標準作業程序要能確保產品品質ERPpartner的資源是否充足。規模大、人力足、有龐大顧客群者較優,但也要考慮其彈性和配合度ERPpartner的彈性、可靠性、配合度等。能不能快速交件?能不能繄急插單? ERP委外的注意事項ERPpartner必須尊重委託企業的資料保密性,不得對外公開。雙方必須把對方看成夥伴,承諾共同創造成功的夥伴關係。雙方必須建立暢通的溝通管道。雙方必須同意使用特定的績效評量方式。應討論確保達成績效目標的方法。應考慮仲裁議題並把解約條款納入合約中。應建立以互信為基礎的交易條件,例如以實際工時收費、有限度的規格變更、有限彈性驗收日期… 配銷商整合風險共攤:跨配銷網路的存貨共用體每位配銷商都能查其他配銷商的存貨並以約定價格互通有無需先進資訊系統引導顧客需求到最合適的配銷商配銷商各有專業能力,特殊需求顧客被引導至有合適專長的配銷商 ContentsConceptsofSCMLogisticsandSCMTheValueofInformationNetworkPlanningSupplyChainAlliancesDesignforSCMSupplyChainIntegrationInternationalIssuesInternalSupplyChainPlanning-MRPInternalSupplyChainPlanning-MPSExternalSupplyChainPlanning DesignEvolutionDesignforfunction(DFF).Designaproductthatworks.Designforcost(DFC).Designaproductwithlowestmaterialcost.Designformanufacturing(DFM).Designingistheonlywaytomakethemanufacturingprocessefficient.Designforlogistics(DFL).Bytakingsupplychainconcernsintoaccountintheproductandprocessdesignphase,itbecomespossibletooperateamuchmoreefficientsupplychain. DesignEvolutionforERPDesignforfunction:In-housedesignbasedonspecificuserrequirementsDesignforcost:PackagedERPsystem.Designforimplementation:Configurationparameters,implementationguide,dataconversiontools,trainingmaterials…Designforcustomization:OOP,frameworks,SOA…Designforlogistics:customerservice,applicationdevelopment,softwarecomponentsprovider,serviceprovider,… TheManufacturingEnvironmentRapidChangesNewproductsrapidlyintroducedShort,unknownproductlifecyclesHighVarietyofProductsLongProductionLeadTimesIncreasingstorageandtransportationcostsDifficulttoforecastdemand TheGoalsoftheManufacturingOrganizationResponsivenessCompetitivepricingEfficiencyCustomerserviceConflictingGoals!HighcapacityLowcapacityLowcapacityHighcapacity WhyDoTheseGoalsConflict?ForcesforkeepinglowinventoryinventoryexpensivelowsalvagevaluesForcesforkeepinghighinventorylongleadtimescustomerserviceisimportantdemandishardtopredictreductionintransportationquantityLowcapacityLaborexpensiveNosalvagevalueSameSameSameNoForERP DesignForLogisticsProductandprocessdesignarekeycostdriversofproductcost.DesignforManufacturingusesdesigntodecreasemanufacturingcosts.Majorsupplychaincostsincludetransportationcosts,inventorycosts,distributioncosts. DesignForLogisticsDesignforLogisticsusesproductdesigntoaddresslogisticscostsKeyConceptsofDesignforLogisticsEconomicpackagingandtransportationConcurrent/ParallelProcessingStandardization EconomicTransportation,PackagingandStorageDesignproductssothattheycanbeefficientlypackedandstoredDesignpackagingsothatproductscanbeconsolidatedatcrossdockingpointsDesignproductstoefficientlyutilizeretailspace ExamplesIkeaWorld’slargestfurnitureretailer143storesin35countriesLargestores,centralizedmanufacturing,compactlyandefficientlypackedproductsRubbermaidClearClassicfoodcontainers-designedtofit14x14”Wal-Martshelves Concurrent/ParallelProcessingObjectiveistominimizeleadtimesAchievedbyredesigningproductssothatseveralmanufacturingstepscantakeplaceinparallelModularity/DecouplingiskeytoimplementationEnablesdifferentinventorylevelsfordifferentparts TheNetworkPrinterExampleStage1(Europe)Stage2+Integration(FarEast)Customer(Europe)BoardPrinterStage1(Europe)Integration(Europe)Customer(Europe)BoardPrinterPlastics,motors,etc.Stage2(FarEast) StandardizationShorteningleadtimesisnotalwayspossibleHowelsecaninventorylevelsbereducedandforecastaccuracyimproved?StandardizationofproductsandprocessesProductcommonalityProcesscommonality ModularityinProductandProcessModularProduct:CanbemadebyappropriatelycombiningthedifferentmodulesItentailsprovidingcustomersanumberofoptionsforeachmoduleModularProcess:Eachproductundergoadiscretesetofoperationsmakingitpossibletostoreinventoryinsemi-finishedformProductsdifferfromeachotherintermsofthesubsetofoperationsthatareperformedonthem ModularityinProductandProcessSemiconductorwaferfabricationismodularsincethetypeofchipproduceddependsontheuniquesetofoperationsperformedOilrefiningisnotmodularsinceitiscontinuousandinventorystorageofsemi-finishedproductisdifficultAremodularproductsalwaysmadefrommodularprocesses? ModularityinProductandProcessModularproductsarenotalwaysmadefrommodularprocessesBio-techandpharmaceuticalindustriesmakemodularproductsbutusenon-modularprocesses;manyproductsaremadebyvaryingthemixofasmallnumberofingredients TypesofStandardizationPartStandardizationCommonpartsareusedacrossmanyproductsProductredesignmightbenecessaryProcessStandardizationStandardizingasmuchoftheprocessaspossible,makingagenericorfamilyproductDelayingdifferentiationCalled“Delayeddifferentiation”,“Postponement” Postponement:ExampleDemandforblackt-shirts50%probability10050%probability200Sameforwhitet-shirtsProductionalternativesProduce150ofeachcoloraheadoftimeProduce300whichcanbedyedafterdemandisobserved Postponement:ExampleFirstAlternative25%probability--short50ofeach25%probability--extra50ofeach50%probability--short50ofone,extra50oftheotherSecondAlternative25%probability--short50ofeach25%probability--extra50ofeach50%probability--noshortageorextra Postponement:KeyConceptsDelaydifferentiationofproductsinthesamefamilyaslateaspossibleEnablestheuseofaggregateforecastsEnablesthedelayofdetailedforecastsReducesscrappedorobsoleteinventory,increasescustomerserviceMayrequirenewprocessesorproductdesignwithassociatedcosts PostponementConsiderationsTradeoffincreasedproductcostwithdecreasedinventoryNeedtodecidewheretopostpone-thepush-pullboundaryPositioninproductlifecycleisfactorinpostponementstrategiesInventoryvaluemayincreaseConsidertariffsandduties Hewlett-Packard:LaserJetsLaserJetsaremanufacturedinJapanPreviously,theprintershadtwodifferentpowersupplies(110,220volts)DifferentiationhadtohappenimmediatelyAnimproveddesignenablesasinglepowersupplytoworkforbothvoltages.5%CostSavings Hewlett-PackardDiskDrivesManufacturingProcessRedesignHP’sdiskdrivedivisionsuppliedseveralcustomersCustomer1Customer2Customer3PCBInsertiontestsCustomer1Customer2Customer3PCBInsertiontestsCouponInsertioncommontestsPCBinsertionpostponedGenericPCB BenettonBackgroundAworldleaderinknitwearMassivevolume,manystoresLogisticsLarge,flexibleproductionnetworkManyindependentsubcontractorsSubcontractorsresponsibleforproductmovementRetailersMany,smallstoreswithlimitedstorage BenettonSupplyCyclePrimarycollectioninstoresinJanuaryFinaldesignsinMarchofpreviousyearStoreownersplacefirmordersthroughJulyProductionstartsinJulybasedonfirst10%ofordersAugust-Decemberstoresadjustorders(colors)80%-90%ofitemsinstoreforJanuarysalesMinicollectionbasedoncustomerrequestsdesignedinJanuaryforSpringsalesTorefillhotsellingitemsLateordersasitemsselloutDeliverypromisedinlessthanfiveweeks BenettonFlexibilityBusinessgoalsIncreasesalesoffashionitemsContinuetoexpandsalesnetworkMinimizecostsFlexibilityimportantinachievingthesegoalsHardtopredictwhatitems,colors,etc.willsellCustomersmakerequestsonceitemsareinstoresSmallstoresmayneedfrequentreplenishments Itishardtobeflexiblewhen...LeadtimesarelongRetailersarecommittedtopurchasingearlyordersPurchasingplansforrawmaterialsarebaseduponextrapolatingfrom10%oftheordersHowtobeflexible?Postponement BenettonOldManufacturingProcessSpinorPurchaseYarnDyeYarnFinishYarnManufactureGarmentPartsJoinParts紡紗梁紗 BenettonNewManufacturingProcessSpinorPurchaseYarnManufactureGarmentPartsJoinPartsDyeGarmentFinishGarmentThisstepispostponed BenettonPostponementWhythechange?ThechangeenablesBenettontostartmanufacturingbeforecolorchoicesaremadeWhatdoesthechangeresultin?DelayedforecastsofspecificcolorsStilluseaggregateforecaststostartmanufacturingearlyReacttocustomerdemandandsuggestionsIssueswithpostponementCostsare10%higherformanufacturingNewprocesseshadtobedevelopedNewequipmenthadtobepurchased ProcurementStandardizationConsideralargesemiconductormanufacturerThewaferfabricationfacilityproduceshighlycustomizedintegratedcircuits(ASIC)ProcessingequipmentthatmanufacturesthesewafersareveryexpensivewithlongleadtimeandaremadetoorderAlthoughthereisadegreeofvarietyatthefinalproductlevel,eachwaferhastoundergoacommonsetofoperationsThefirmreducesriskofinvestinginthewrongequipmentbypoolingdemandacrossavarietyofproducts ProductStandardizationDownwardSubstitutionProduceonlyasubsetofproducts(becauseproducingeachoneincurshighsetupcost)GuidecustomerstoexistingproductsSubstituteproductswithhigherfeaturesetforthosewithlowerfeaturesetWhichproductstooffer,howmuchtokeep,howtooptimallysubstitute? AFrameworkforStandardizationModularProductStandardizationProcurementStandardizationNon-ModularNon-ModularModularProductProcessProcessStandardizationPartStandardizationLeverageequipmentandpartcommonalityacrossproductsCarryalimitednumberofproductsininventoryMaximizecomponentcommonalityacrossproductsDelaycustomizationaslateaspossible HPDeskJetCase:BackgroundHighvolume,highspeedmanufacturinginVancouverManydifferentmodels,allcompletedinVancouverThreedistributioncentersNorthAmericanAsianEuropeanManufacturingtimeoneweekTransportationleadtimes:Asia,Europe:4-5weeksUS:1dayAtdistributioncenters,simplestandardizedprocess HPDeskJetCase:AnalysisProblemsHighinventorylevelsInventoryimbalanceinEuropeCausesUncertaintyaboutcorrectinventorylevelsManygeographicoptions(localization)LongleadtimesUncertainmarketDifficultyatgettingdivisionstoworktogetherWhatareHP’soptions? HPDeskJetCase:OptionsShortTermRationalizesafetystockLongTermAirshipmentEuropeanfactoryMoreinventoryBetterforecastingDClocalization EvaluatingAlternativesAirShipmentExpensiveEuropeanFactoryNotsufficientvolumeBetterForecastingHow?MoreInventoryMoreproblemsDCLocalizationWhatwillsavingsbe? EvaluatingDCLocalizationInDClocalization,riskpoolingcanbeusedtoreducetotalinventorywhilemaintainingservicelevelsToevaluateinventory,comparetotalsafetystockheldifindividuallocalizedunitsareheldininventoryorifgenericunitsareheldOthercostsmustalsobeevaluated EvaluatingDCLocalization DCLocalizationSafetyStockReductionCurrent19,089units(3.55weeks)Withlocalization12,792units(2.4weeks)OtherbenefitsLowervalueoftransitinventoryFreightreductionsLocalpresenceof“manufacturing”CustomsimplicationsLocalprocurementoflocalizationmaterialsButtherearecostsProductredesignDCmodifications ImplementationR&DSupport“Theproductisworking,sowhybother?”DCSupport“Notourcorecompetency”NewpackagingCapitalinvestment ResultsSuccessfulimplementationMillionssavedServicelevelsincreasedPackagingwonawardsBestpracticespreadtootherHPdivisions SupplierIntegrationintoProductDevelopmentCompetitiveforcesaredrivingfirmstointegratesuppliersintoproductdevelopmentSpectrumofSupplierIntegrationNoneWhiteBox–InformalintegrationGreyBox–Formalintegration,withcollaborativeteamsBlackBox–Interfacerequirementsaregivenbythebuyers,productisreturnedfromthesuppliers SupplierIntegrationWhatapproachisappropriate?DetermineinternalcompetenciesDeterminecurrentandfutureproductdevelopmentneedsIdentifyexternaldevelopmentandmanufacturingneedsIffutureproductshavecomponentsthatrequireexternalexpertiseandcanbeseparatedfromothercomponents,ablackboxapproachmakessense.Ifcomponentscannotbeseparated,agreyboxapproachmakessense.Ifsomeexpertisecanbefoundinhouse,awhiteboxapproachmightmakesense. The“Bookshelf”ApproachMonitorthedevelopmentofnewtechnologiesFollowsuppliersthathavedevelopedexpertiseWhenappropriate,integratethesenewtechnologiesThisbalancestheadvantagesanddisadvantagesofbeingonthecuttingedgeofnewtechnology:Noneedtogainexperiencewiththetechnology,becausesuppliersaredoingthisforyou.Canintroducethetechnologieswhenneeded. MassCustomizationThedeliveryofawidevarietyofcustomizedgoodsatlowcost.Thekeyismodularproductsandprocesses,sothatcustomerrequestscanbemet.AccordingtoPine,companiesneedtoevolvetowards“modularcompanies”,withmanagersensuringthatmodulesarecompatible.ConsiderNationalBicycle(p.256) MassCustomizationandSupplyChainManagementAnadvancedsupplychainisessentialThisisparticularlytruewhen“modules”extendbeyondasinglecompany.ConsiderPostponementforregionalcustomizationThevalueofstrategicpartnershipsandsupplierintegrationDell ContentsConceptsofSCMLogisticsandSCMTheValueofInformationNetworkPlanningSupplyChainAlliancesDesignforSCMSupplyChainIntegrationInternationalIssuesInternalSupplyChainPlanning-MRPInternalSupplyChainPlanning-MPSExternalSupplyChainPlanning TheOldParadigm:PushStrategiesProductiondecisionsbasedonlong-termforecastsOrderingdecisionsbasedoninventory&forecastsWhataretheproblemswithpushstrategies?InabilitytomeetchangingdemandpatternsObsolescenceThebullwhipeffect:ExcessiveinventoryExcessiveproductionvariabilityPoorservicelevels ANewerParadigm:PullStrategiesProductionisdemanddrivenProductionanddistributioncoordinatedwithtruecustomerdemandFirmsrespondtospecificordersPullStrategiesresultin:Reducedleadtimes(betteranticipation)DecreasedinventorylevelsatretailersandmanufacturersDecreasedsystemvariabilityBetterresponsetochangingmarketsBut:HardertoleverageeconomiesofscaleDoesn’tworkinallcases但時間總需要的? PushandPullSystemsWhataretheadvantagesofpushsystems?Whataretheadvantagesofpullsystems?Isthereasystemthathastheadvantagesofbothsystems? AnewSupplyChainParadigmAshiftfromaPushSystem...Productiondecisionsarebasedonforecast…toaPush-PullSystem Push-PullSupplyChainsPush-PullBoundaryPUSHSTRATEGYPULLSTRATEGYLowUncertaintyHighUncertaintyTheSupplyChainTimeLineCustomersSuppliers AnewSupplyChainParadigmAshiftfromaPushSystem...Productiondecisionsarebasedonforecast…toaPush-PullSystemInitialportionofthesupplychainisreplenishedbasedonlong-termforecastsForexample,partsinventorymaybereplenishedbasedonforecastsFinalsupplychainstagesbasedonactualcustomerdemand.Forexample,assemblymaybasedonactualorders. ConsiderTwoPCManufacturers:BuildtoStockForecastdemandBuyscomponentsAssemblescomputersObservesdemandandmeetsdemandifpossible.AtraditionalpushsystemBuildtoorderForecastdemandBuyscomponentsObservesdemandAssemblescomputersMeetsdemandApush-pullsystem Push-PullStrategiesThepush-pullsystemtakesadvantageoftherulesofforecasting:ForecastsarealwayswrongThelongertheforecasthorizontheworstistheforecastAggregateforecastsaremoreaccurateTheRiskPoolingConceptDelayeddifferentiationisanotherexampleConsiderBenettonsweaterproduction WhatistheBestStrategy?PullPushPullPushIComputerIIIVIIIDemanduncertainty(C.V.)DeliverycostUnitpriceLHHLEconomiesofScale SelectingtheBestSCStrategyHigherdemanduncertaintysuggestspullHigherimportanceofeconomiesofscalesuggestspushHighuncertainty/EOSnotimportantsuchasthecomputerindustryimpliespullLowuncertainty/EOSimportantsuchasgroceriesimpliespushDemandisstableTransportationcostreductioniscriticalPullwouldnotbeappropriatehere. SelectingtheBestSCStrategyLowuncertaintybutlowvalueofeconomiesofscale(highvolumebooksandcd’s)Eitherpushstrategiesorpush/pullstrategiesmightbemostappropriateHighuncertaintyandhighvalueofeconomiesofscaleForexample,thefurnitureindustryHowcanproductionbepullbutdeliverypush?Isthisa“pull-push”system? CharacteristicsandSkillsRawMaterialCustomersPullPushLowUncertaintyLongLeadTimesCostMinimizationResourceAllocationHighUncertaintyShortCycleTimesServiceLevelResponsiveness LocatingthePush-PullBoundaryThepushsection:UncertaintyisrelativelylowEconomiesofscaleimportantLongleadtimesComplexsupplychainstructures:ThusManagementbasedonforecastsisappropriateFocusisoncostminimizationAchievedbyeffectiveresourceutilization–supplychainoptimization LocatingthePush-PullBoundaryThepullsection:HighuncertaintySimplesupplychainstructureShortleadtimesThusReactingtorealizeddemandisimportantFocusonservicelevelFlexibleandresponsiveapproaches LocatingthePush-PullBoundaryThepushsectionrequires:SupplychainplanningLongtermstrategiesThepullsectionrequires:OrderfulfillmentprocessesCustomerrelationshipmanagementBufferinventoryattheboundaries:TheoutputofthetacticalplanningprocessTheinputtotheorderfulfillmentprocess. LocatingthePush-PullBoundaryERPadd-onsERPdelivery(customization)(systemtest) ImpactoftheInternet–ExpectationsWereHighE-businessstrategiesweresupposedto:ReducecostIncreaseservicelevelIncreaseflexibilityIncreaseProfit(SOA,framework)(distanceSA,testing,installation) RealityisDifferent…..Amazon.comExampleFoundedin1995;1stInternetpurchaseformostpeople1996:$16MSales,$6MLoss1999:$1.6BSales,$720MLoss2000:$2.7BSales,$1.4BLossLastquarterof2001:$50MProfitTotaldebt:$2.2BPeapodExampleFounded1989140,000members,largeston-linegrocerRevenuetripledto$73millionin19991stQuarterof2000:$25MSales,Loss:$8M RealityisDifferent….Furniture.com–launchedin1999,withthousandsofproducts$22MillioninsalesthefirstninemonthsOver1,000,000visitorspermonthDiedNovember6,2000Logisticscoststoohigh RealityisDifferent….DellExample:DellComputerhasoutperformedthecompetitionintermsofshareholdervaluegrowthovertheeightyearsperiod,1988-1996,byover3,000%(seeAndersonandLee,1999) WhatisE-Business?E-businessisacollectionofbusinessmodelsandprocessesmotivatedbyInternettechnology,andfocusingonimprovingtheextendedenterpriseperformanceE-commerceistheabilitytoperformmajorcommercetransactionselectronicallye-commerceispartofe-BusinessInternettechnologyisthedriverofthebusinesschangeThefocusisontheextendedenterprise:Intra-organizationalBusinesstoConsumer(B2C)BusinesstoBusiness(B2B)TheInternetcanhaveahugeimpactonsupplychainperformance. TheBookSellingIndustryFromPushSystems...BarnesandNoble...ToPullSystemsAmazon.com,1996-1999Noinventory,usedIngramtomeetmostdemandWhy?And,finallytoPush-PullSystemsAmazon.com,1999-present7warehouses,3Msq.ft.,Whytheswitch?Margins,service,etc.Volumegrew Direct-to-Consumer:CostTrade-Off IndustryBenchmarks:NumberofDistributionCentersSources:CLM1999,HerbertW.Davis&Co;LogicToolsAvg.#ofWH31425PharmaceuticalsFoodCompaniesChemicals-Highmarginproduct-Servicenotimportant(oreasytoshipexpress)-Inventoryexpensiverelativetotransportation-Lowmarginproduct-Serviceveryimportant-Outboundtransportationexpensiverelativetoinbound TheGroceryIndustryFromPushSystems...Supermarketsupplychain...ToPullSystemsPeapod,1989-1999PicksinventoryfromstoresStockouts8%to10%And,finallytoPush-PullSystemsPeapod,1999-presentDedicatedwarehousesallowriskpoolingStockoutslessthan2% ChallengesforOn-lineGroceryStoresTransportationcostDensityofcustomersVeryshortordercycletimesLessthan12hoursDifficulttocompeteoncostMustprovidesomeaddedvaluesuchasconvenienceIsapush-pullstrategyappropriate?Whatmightbeabetterstrategy? Lessthan300,000shoppersSource:D.Ratliff ANewTypeofHomeGrocergrocerystreet.comOn-linewindowforretailersTheon-linegrocerpicksproductsatthestoreCustomercanpickproductsatthestoreorpayfordelivery TheRetailIndustryBrick-and-mortarcompaniesestablishvirtualretailstoresWal-Mart,K-Mart,Barnes&Noble,CircuitCityAneffectiveapproach-hybridstockingstrategyHighvolume/fastmovingproductsforlocalstorageLowvolume/slowmovingproductsforbrowsingandpurchaseonline(riskpooling)Dangerofchannelconflict E-FulfillmentHowhavestrategieschanged?FromshippingcasestosingleitemsFromshippingtoarelativelysmallnumberofstorestoindividualendusersWhatisthedifferencebetweenon-lineandcatalogueselling?ConsiderforinstanceLand’sEndwhichhasbothchannels E-FulfillmentRequiresaNewLogisticsInfrastructure E-businessOpportunities:ReduceFacilityCostsEliminateretail/distributorsitesReduceInventoryCostsApplytherisk-poolingconceptCentralizedstockingPostponementofproductdifferentiationUseDynamicPricingStrategiestoImproveSupplyChainPerformance E-businessOpportunitiesSupplyChainVisibilityReductionintheBullwhipEffectReductioninInventoryImprovedservicelevelBetterutilizationofResourcesImprovesupplychainperformanceProvidekeyperformancemeasuresIdentifyandalertwhenviolationsoccurAllowplanningbasedonglobalsupplychaindata DistributionStrategiesWarehousingDirectShippingNoDCneededLeadtimesreduced“smallertrucks”noriskpoolingeffectsCross-Docking CrossDockingIn1979Kmarthad1891storesandaveragerevenuesperstoreof$7.25millionWal-MartwasasmallnicheretailerintheSouthwithonly229storesandaveragerevenuesunder$3.5million10YearslaterWal-MarthadhighestsalespersquarefootofanydiscountretailerhighestinventoryturnoverofanydiscountretailerHighestoperatingprofitofanydiscountretailer.TodayWal-MartisthelargestandhighestprofitretailerintheworldKmart???? WhataccountsforWal-Mart’sremarkablesuccessAfocusonsatisfyingcustomerneedsprovidingcustomersaccesstogoodswhenandwheretheywantthemcoststructuresthatenablecompetitivepricingThiswasachievedbywaythecompanyreplenishedinventorythecenterpieceofitsstrategy.Wal-Martemployedalogisticstechniqueknownascross-dockinggoodsarecontinuouslydeliveredtowarehouseswheretheyaredispatchedtostoreswithouteversittingininventory.ThisstrategyreducedWal-Mart’scostofsalessignificantlyandmadeitpossibletooffereverydaylowpricestotheircustomers. CharacteristicsofCross-Docking:Goodsspendatmost48hoursinthewarehouseCrossDockingavoidsinventoryandhandlingcosts,Wal-Martdeliversabout85%ofitsgoodsthroughitswarehousesystem,comparedtoabout50%forKmartStorestriggerordersforproducts. SystemCharacteristics:VerydifficulttomanageRequiresadvancedinformationtechnology.Why?Whatkindoftechnology?AllofWal-Mart’sdistributioncenters,suppliersandstoresareelectronicallylinkedtoguaranteethatanyorderisprocessedandexecutedinamatterofhoursWal-Martoperatesaprivatesatellite-communicationssystemthatsendspoint-of-saledatatoallitsvendorsallowingthemtohaveaclearvisionofsalesatthestores SystemCharacteristics:Needsafastandresponsivetransportationsystem.Why?Wal-Marthasadedicatedfleetof2000truckthatservetheir19warehousesThisallowsthemtoshipgoodsfromwarehousestostoresinlessthan48hoursreplenishstorestwiceaweekonaverage. DistributionStrategies TransshipmentWhatisthevalueofthis?Whattoolsareneeded?Whatifthesystemisdecentralized? ContentsConceptsofSCMLogisticsandSCMTheValueofInformationNetworkPlanningSupplyChainAlliancesDesignforSCMSupplyChainIntegrationInternationalIssuesInternalSupplyChainPlanning-MRPInternalSupplyChainPlanning-MPSExternalSupplyChainPlanning Wal-MartinSouthAmericaWhyisWal-MartnotassuccessfulinLatinAmericaastheyareintheUS?WhatmistakesdidWal-Martmake?IfyouwererunningWal-Mart,whatwouldyouhavedonedifferently? Wal-MartinSouthAmericaProductdifferencesArethereglobalproducts?Isthisatrend?Whatisthebalancebetweenlocaltastes,globalproducts?Dealingwithestablishedcompetition,aggressivecompetitorsDevelopingmarketknowledge Wal-MartinSouthAmericaLackofcriticalmassDifferentinfrastructure/businessenvironmentdistributionproblemsdifferentequipmentstandardsculturaldifferencespostdatedchecksIssueswithforeigngovernmentsDeeppocketsforsuccess TaxonomyofInternationalSupplyChainsWhataresomeadvantages,disadvantagesof:InternationaldistributionInternationalsuppliersOff-shoremanufacturingFullyintegratedglobalsupplychain IncreasingGlobalization1/5ofoutputofUSfirmsproducedabroadUSCompanieshold$500Billioninforeignassetstocks(7%annualgrowth)1/4ofUSimportsbetweenforeignaffiliatesandUSparentcompaniesOverhalfofUScompaniesincreasedthenumberofcountriesinwhichtheyoperate(late80’stoearly90’s) ForcesDrivingGlobalizationGlobalMarketForcesTechnologicalForcesGlobalCostForcesPoliticalandEconomicForces GlobalMarketForcesForeigncompetitioninlocalmarketsGrowthinforeigndemandDomesticconsumptionfrom40%to<30%ofworldconsumptionsince1970ForeignsalesfuelgrowthGlobalpresenceasadefensivetoolNestle’sandKellogg’sPresenceinstate-of-the-artmarketsJapan--consumerelectronicsGermany--machinetoolsUS:software,SUV’s TechnologicalForcesDiffusionofknowledgeManyhightechcomponentsdevelopedoverseasNeedcloserelationshipswithforeignsuppliersForexample,Canonhas80%oflaserenginesTechnologysharing/collaborationsAccesstotechnology/marketsGloballocationofR&DfacilitiesClosetoproduction(ascyclesgetshorter)Closetoexpertise(Indianprogrammers?) GlobalCostForcesLowlaborcostDiminishingimportance(Costsunderestimated,benefitsoverestimated)OthercostprioritiesIntegratedsupplierinfrastructure(assuppliersbecomemoreinvolvedindesign)SkilledlaborCapitalintensivefacilitiestaxbreaksjointventurespricebreakscostsharing PoliticalandEconomicForcesExchangeratefluctuationsandoperatingflexibilityRegionaltradeagreements(Europe,NorthAmerica,PacificRim)ValueofbeinginacountryinoneoftheseregionsImplicationsforsupplynetworkdesignReevaluationofforeignfacilities(Productionprocessesdesignedtoavoidtariffs) PoliticalandEconomicForcesTradeprotectionmechanismsTariffsQuotasVoluntaryexportrestrictionsJapaneseautomakersinUS(Infinities&Lexus)Localcontentrequirements(自製率)TI/IntelfactoriesinEuropeJapaneseautomakersintheEUHealth/environmentalregulationsJapaneserefusedtoimportUSskisformanyyears(differentsnow)GovernmentprocurementpoliciesUpto50%advantageforAmericancompaniesonUSDefensecontracts AddedComplexitiesSubstantialgeographicdistancesAddedforecastingdifficultiesInfrastructuralInadequaciesWorkerskill,performanceexpectationsSupplieravailability,reliability,contractsLackoflocaltechnologiesInadequaciesintransportation,communicationsinfrastructure AddedComplexitiesExchangerateuncertaintiesCulturaldifferencesacceptedpartnerships,stylesvalueofpunctualityPoliticalinstabilitytaxratesgovernmentcontrolAddedcompetition“athome” AdditionalIssuesInGlobalSCMRegionalvs.InternationalProductsCarsvs.Coca-colaLocalAutonomyvs.CentralControlSmithKlineintroducingContacttoJapanShorttermexpectationsCollaboratorsbecomecompetitorsChinaToshibacopiers,Hitachimicroprocessors ExchangeRatesTransactionExposureTheresultsoftransactionsdenominatedinforeigncurrencieschange(cashdeposits,debtobligations)TranslationExposureResultoftranslatingforeignfinancialstatementsintothecurrencyoftheparentcompanyFinancialinstrumentsusedtohedgethese OperatingExposureChangesafirm’scompetitivepositionandfuturecashflowsIntheshortrun,changesincurrencyratesdon’tnecessarilyreflectchangesininflationratesRegionaloperationsbecomerelativelymoreorlessexpensive EffectofOperatingExposureDependsonCustomerreactionsCompetitorreactionsmarketshareprofitSupplierreactionsGovernmentreaction ExamplesCompanywhichmanufacturesandsellsexclusivelydomesticallyCompanywhichimportsandsellsdomesticallyCompanywhichmanufacturesandsellsglobally OperationalStrategiesToAddressTheseRisksSpeculativeStrategyBetonasinglescenarioJapaneseautomanufacturinginJapanHedgedStrategyLossesinoneareaoffsetbygainsinanotherVWinUS,Brazil,Mexico,GermanyFlexibleStrategy OperationalFlexibilityFlexibilitytotakeadvantagesofoperationalexposureRequiresaflexiblesupplychainmultiplesuppliersflexiblefacilitiesexcesscapacityvariousdistributionchannelsCanbeexpensivetoimplementcoordinationmechanismscapitalinvestmentslossofeconomiesofscale OperationalFlexibilityProduction/sourcingshiftsarekeytostrategyThishasmanyswitching/startupcostsDistributionchannelsmustbeflexibilitysosourcingisinvisibletoendcustomersOtherbenefitsinclude:improvedinformationavailabilityglobalcoordinationpoliticalleverage