Innovation in Supply Chain Management

Sanjay More

Barloworld Logistics, Dubai

26 September, 2012

Contents

• Definitions• Current trends• Innovations in supply chain • Cutting edge solutions• Matching it to your business

Innovation

• Innovation is the development of new customer value through solutions that meet new needs, unarticulated needs, or old customer and market needs in new ways.

• This is accomplished through different or more effective products, processes, services, technologies, or ideas that are readily available to markets, governments, and society.

• Innovation is not equal to Invention or Improvement.

• In short “doing things differently”

Source: Wikipedia

Supply Chain Management

• Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.

• Another definition is provided by the APICS Dictionary when it defines SCM as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally."

Source: Wikipedia

A typical supply chain model

Innovations that changed Supply Chain Management

#1. Container & CranesThe box that changed the world

• It gave the world an unit to ship

• Standardized the size and capacity

• Set tariffs across a distance

• Defined the capacity of ships

• Road transport and trucking

• Helped warehousing to measure and build capacity.

• Helped manufacturer and traders in making and ordering decisions.

Innovations that changed Supply Chain Management

#2. Pallets & ForkliftsMovement of goods made easy

• Movement made easy

• Storage made easy

• Counting made easy

• Stock taking made easy

• Air Freight made easy

Innovations that changed Supply Chain Management

#3. Racking system and VNAStorage of goods made easy

• Systematic storage

• Stock taking became easy

• Segregation of Fast Moving vs slow moving goods

• Facilitated unique location

• More capacity

Innovations that changed Supply Chain Management

#4. Barcoding & RFIDTracking and data collection

• Stock replenishment

• Tracking

• Intelligence building

• Real-time data

• Facilitated planning

Innovations that changed Supply Chain Management

#5. Production line and LEANProductivity and process management

• Improved efficiency

• Reduced the lead time

• Reduced the cost

• Simplified production and also principles were applied across the supply chain

Innovations that changed Supply Chain Management

#6. Computer & Web technologyThe power of computation and connecting

• Computer facilitated the computation of complex formulas and large amount of data

• Facilitated analysis and trends

• Web enabled data sharing

• Real-time data analysis

• Conversion of data

Innovations that changed Supply Chain Management

#7. Mobile & Communication The speed of communication

• Real time data capturing

• Simplification of process

• Shorter processes

• Enabling data conversion

• Facilitates quick analysis

• Speed in response

• Less paperwork

Innovations that changed Supply Chain Management

#8. DRP & ERPDistribution and Resource planning

• Streamlining processes • Quick access to information • Best business practices • Improved efficiency • Improved customer satisfaction • Improved on-time delivery• Reduced inventory costs • Better planning, tracking and

forecasting

Innovations that changed Supply Chain Management

#9 DTS & TMSDedicated Transport and management

• Improved financing, cash-flow• Increase visibility• Reliability• Route mapping and optimisation• Optimisation of resources• Integration

Innovations that changed Supply Chain Management

#10. Inventory & Demand planningReduce costs and improve availability

• Reduce excess inventory

• Improve cash flow

• Forecast demand

• Reduce gut feel risks

• Improve availability

• Improve customer satisfaction

• Better return on investment

Innovations that changed Supply Chain Management

#11. Inventory OptimisationCreating a strategic advantage

• Deal with greater levels of complexity

• Manage longer lead times and uncertain supply

• Deal with bigger production runs and supply constraints

• Different modes of transport

• Network optimisation

Innovations that changed Supply Chain Management

#12. Supply Chain design and network modellingEnd to end supply chain solutions

• Global supply chain network modelling with mapping, locations and road network databases for any combination of countries in the world.

• Reach your full supply chain planning potential

• Carbon Footprint mapping

Areas for innovation• Supplier demand planning• Manufacturer demand planning• Wholesaler / distributor Inventory planning• Retailer Inventory planning• Consumer Value / Price

• All these major points are connected with one or the other forms of transportation.

– Production planning, ERP– Production Planning Demand Planning, Distribution planning, network

modeling, Inventory optimisation, – Warehousing and Distribution– Air Freight, Sea Freight, Sea Air, Road, Rail, multimodal

The future of Supply ChainTechnology• We as a supply chain industry haven’t used the available technology to the full extent.

Collaboration• The supply of goods moves from one network to another network therefore collaboration

amongst these networks is very important. i.e. Suppliers and their suppliers, customers and their customers (if applicable).

• Collaboration with government bodies, regional legal and tax compliance, association and international norms and regulations are some of the areas also calls for the collaboration.

Planning and Strategic alignment• Improve Customers performance• From suppliers order point to customers demand point• Dell Computer’s direct-sales model for business clients

Drag reduction 35-43%

Fuel saving 7-10%

Monthly saving AED 4250

Carbon reduction 14 Tons in 6 months

The Green Trailer

Link to Barloworld Logistics case studies

thinkingoutsidethe box

Thank you