The importance of SCM - Teknisk Logistik · The importance of SCM Executives surveyed for an...

Lunds Universitet/Dag Näslund ,Sep 7, 2010

Accenture (2010) 1

The importance of SCM Executives surveyed for an Accenture, INSEAD, Stanford University research project

Critical Very Important

Moderately Important

Not Important 1%

10%

45% 44% Increased Significantly

Decreased 2%

Not Increased

Increased Somewhat 51%

9%

38%

How important is SCM to your business?

Has the importance of SCM increased?


A Bit of History: 1930-1950

• Bank Robber “Slick Willie” Sutton

• When asked why he robbed banks, Sutton simply replied

• "Because that's where the money is."

SCOR Benchmarking - Presentation 2


• Supply-chain generally accounts for between 60% and 90% of all company costs1

• A 2% improvement in process efficiency for supply-chain processes has 3000% - 5000% the impact of a 2% improvement in efficiency for… IT, HR, Finance1… Sales…

• Any surprise most Process Methodologies or techniques had their origin primarily in Supply-Chain Management?

– Six-Sigma Lean BPR ERP ISO MRP-II TQM…

Where the Money Is

3 SCOR Benchmarking - Presentation

Fortune-10 Company Supply-Chain Cost % Total Costs2

GM Ford Conoco Wal-Mart Chevron IBM Exxon GE Citi1 AIG1

94% 93% 90% 90% 88% 77% 75% 63% 0% 0%

1 Exclusive of Financial Services companies 2 Source: Hoovers 2006 Financial Data, Supply-Chain Council 2006 SCM Benchmark data on SCM cost for discrete & process industries


600 Minutes Supply Chain Studie

Utvecklingsprojekt och intresseområden för beslutsfattare inom logistik

Kvalitativ studie med 137 beslutsfattare Kvantitativ studie över Internet med 76 beslutsfattare Hösten och vintern 2009/2010.


Respondenternas befattning

7%1%

41%

38%9% 4%

Logistikchef/-direktör

Supply Chain Manager/-director

Transportchef/Distributionschef

Platschef/Fabrikschef/Produktionschef

Utvecklingschef/Affärsutvecklingschef

VD/Vice VD

Respondenter

(n=76)


Investeringar inom IT

25

22

19 1918

17 17 17

0

5

10

15

20

25

Kommande investeringar inom IT Förbättra befintliga ERP-system

Logistiksystem

RFID

EDI (Electronic DataInterchange)

Ökad visiblitet gentemotleverentörer och kunder

Planeringssystem

Lagersystem

Systemintegration

(N=40)


1615

13 1312

98

0

2

4

6

8

10

12

14

16

Kommande investeringar inom IT

Prognossystem

E-handelssystem

Spårbarhetssystem

Transportplaneringssystem

Implementera ett nytt ERP-system

MPS-system

Mobilakommunikationslösningar

Investeringar inom IT

(N=40)


3837

2928

27 26 26 26

0

5

10

15

20

25

30

35

40

Kommande investeringar inom affärs- och verksamhetsutvecklingOptimering av Logistik Flöde

Leverantörssamarbete

Transportlösningar

3Parts Logistik

Global Sourcing

Lean

Miljöbaserade lösningar

Tull- och transportadministration

Investeringar - affärsstödjande tjänster

(N=40)


4,1

3,73,6 3,6

3,53,3

3 3,0

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

Bedömning av forumets huvudteman

Flexibilitet i Supply Chain

Lean

Miljölogistik

Leverantörsrelationer

IT-stöd

Lagerhållning

Strategiska lokaliseringsfrågor

Möta konjunktursvängningar

Huvudteman

(N=76)


Ett akademiskt område kan definieras av:

• Definitioner • Modeller • Terminologi • Standarder • (mätsystem)

Eller av: • Brist på definitioner • Olika modeller • Oklar terminologi • Brist på standarder • Inga mätsystem


SCM Definitions

• Stock and Boyer (2009) reviewed 173 definitions

• “Without the adoption of a uniform definition accepted by researchers, confusion will continue to hinder the study and further development of SCM; and research will extend in various directions, rather than build upon itself” (Stock and Boyer, 2009, p.691)


SCM Definitions

• “For practitioners, the absence of a comprehensive SCM definition makes it more difficult for supply chain executives to claim authority and responsibility for the “right” combination of functions and processes. It also makes it more difficult to benchmark against other companies and industries on supply chain metrics, job responsibilities, and other human resource issues, because of the differences that exist from one company to the next.” (Stock and Boyer, 2009, p.691)


En bild av en supply chain


DOWNSTREAM

FOCAL 1st tier 2nd tier

UPSTREAM

3rd tier 1st tier 2nd tier 3rd tier

S O U R C I N G M A N A G E M E N T

M A N U F A C T U R I N G M A N A G E M E N T

C U S T O M E R R E L A T I O N S H I P M A N A G E M E N T

O R D E R F U L F I L M E N T

S U P P L I E R R E L A T I O N S H I P M A N A G E M E N T

R & D M A N A G E M E N T

D E M A N D M A N A G E M E N T

R E T U R N M A N A G E M E N T

© Source: Arlbjørn, de Haas, Mikkelsen & Zachariassen (2010)


1998 CLM DEFINITION OF LOGISTICS

….is that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point-of-consumption in order to meet customers' requirements.

[Council of Logistics Management, 1998]


2006 CSCMP DEFINITION OF SCM

Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies. [Council of Supply Chain Management Professionals 2006]


CSCMP 2012 – SCM Boundaries and Relationships

Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology.


SUPPLY CHAIN MANAGEMENT

…is the integration of key business processes

from end user through original suppliers, that

provides products, services, and information

that add value for customers and

other stakeholders.

[The International Center for Competitive Excellence, 1994] [The Global Supply Chain Forum, 1998]


• Supply Chain Integration: 2 • Supply Chain Information Sharing: 1.8 • Supply Chain Visibility: 1.5 • Supply Chain Collaboration: 1.8

Pilot Study – 10 companies


Strategic Tactical Operational

Data Information Knowledge

Informationsöverföring


Conclusions SCM Integration

What to integrate? • Number of aspects (technologies, processes, performance measures…) • No clear guidelines for practitioners regarding what to integrate in the different stages of

the integration process

How to integrate? • Several recommendations (inter-firm collaboration, SC design, information sharing…) • Different opinions regarding in what sequence to conduct internal and external integration • Chronologically structured approach is missing Who to integrate with? • Strategic and systematic managing only between T1-F-C1 • Dyadic supplier-buyer relationships

• only coordination of order processing, operational scheduling

Why to integrate? • Number of benefits both on general level and more specific level presented • Lack of concrete empirically proved evidence confirming the proposed benefits


Category Sub-categories Terminology Definitions, frameworks, standards Organizational Structure, process orientation,

measurement and reward systems Relationships Trust, mutual understanding, power

and control, privacy and security Technology Information systems, complexity,

standards General Eco-System,laws,trends,

globalization, business models

Hinder och drivkrafter


SCM Frameworks

• GSCF (Lambert) • SCOR (scc) • CSCMP • Mentzer • Others (e.g cfpr, sustainability)


n

2

3

1

2

1

1

n

2

1

3

n

2

1

3 1

n

2

n

1

2

n

1 Con

sum

ers/

End-

cust

omer

s

n

Initi

al S

uppl

iers

Tier 1 Customers

Tier 2 Customers

Tier 3 to Consumers/ End-customers

Tier 2 Suppliers

Tier 1 Suppliers

Tier 3 to Initial suppliers

n

1

n

1

n

Members of the Focal Company’s Supply Chain

Focal Company

Non-members of the Focal Company’s Supply Chain

Managed Process Links

Not-Managed Process Links

Non-Member Process Links

Monitor Process Links

Types of Inter-company Business Process Links

1

n

Source: Adapted from Douglas M. Lambert, Martha C. Cooper, and Janus D. Pagh, “Supply Chain Management: Implementation Issues and Research Opportunities,” The International Journal of Logistics Management, Vol. 9, No. 2, 1998 7


Supply Chain Management Vision The key to achieving an integrated flow of product and information throughout the supply chain is to create a focused customer interface, a focused supplier interface, and an integrated, process-oriented, supply chain which is driven by the customer.

Customer Relationship Management

Supplier Relationship Management Process

Fulfillment Customer Service Management

Manufacturing Flow Management

Demand Management

Underlying Process Vision

Customer

Source: 3M


Supp

ly C

hain

Man

agem

ent P

roce

sses

Tier 1 Supplier

Tier 2 Supplier Logistics

Purchasing Marketing

R&D

Customer Consumer/ End - user

PRODUCT FLOW Production Finance

Manufacturer

Information Flow

Source: Adapted from Douglas M. Lambert, Martha C. Cooper, Janus D. Pagh , “Supply Chain Management: Implementation Issues and Research O pportunities”, of Logistics Management , Vol. 9, No. 2, 1998, p. 2. The International Journal

RETURNS MANAGEMENT

PRODUCT DEVELOPMENT AND COMMERCIALIZATION

SUPPLIER RELATIONSHIP MANAGEMENT

MANUFACTURING FLOW MANAGEMENT

ORDER FULFILLMENT

DEMAND MANAGEMENT

CUSTOMER SERVICE MANAGEMENT

CUSTOMER RELATIONSHIP MANAGEMENT

Supply Chain Management Integrating and Managing Processes Across the Supply Chain


IMPLEMENTATION OF SUPPLY CHAIN MANAGEMENT

Information Architecture, Data Base Strategy, Information Visibility

Research & Development Logistics Purchasing Finance Marketing

Business Processes Production

Demand Management Forecasting Capability

Planning Sourcing Demand Planning

Customer Relationship Management

Requirements Definition

Manufacturing Strategy

Sourcing Strategy

Customer Profitability

Account Management

Requirements Definition

Customer Service Management

Performance Specifications

Coordinated Execution

Account Administration

Technical Service

Manufacturing Flow Management

Production Planning

Integrated Supply

Manufacturing Process Stability

Order Fulfillment Network Planning

Plant Direct

Selected Supplier(s)

Distribution Cost

Special Orders

Product Development and Commercialization

Process Specifications

Material Specifications R & D Cost Product

Design Business

Plan Movement

Requirements

Priority Assessment

Cost To Serve

Tradeoff Analysis

Process Requirements

Environmental Requirements

Packaging Specifications

Prioritization Criteria

Supplier Relationship Management

Integrated Planning

Supplier Management

Materials Cost

Material Specifications

Order Booking

Inbound Flow

Cost

CU

STO

MER

S

SUPP

LIER

S Typical

Functional Silos

Returns Management

Note: Process sponsorship and ownership must be established to drive the attainment of the supply chain vision and eliminate the functional barriers that artificially separate the process flows.

Information Architecture, Data Base Strategy, Information Visibility

Product Life Cycle

Product Design

Reverse Logistics

Remanu-facturing

Material Specification

Revenue & Costs

Source: Adapted from Douglas M. Lambert, Larry C. Guinipero and Gary J. Ridenhower, “Supply Chain Management: A Key to Achieving Business Excellence in the 21st Century”, unpublished manuscript as reported in Keely L. Croxton, Sebastián J. García-Dastugue and Douglas M. Lambert, “The Supply Chain Management Processes”, The International Journal of Logistics Management, Vol. 12, No.2 (2001), p. 31.


The SCOR® model – an industry open standard

• SCOR is a supply chain process reference model containing over 200 process elements, 550 metrics, and 500 best practices including risk and environmental management

• Organized around the five primary management processes of Plan, Source, Make, Deliver and Return

• Any interested organization can participate in its continual development

SCOR Benchmarking - Presentation

Supplier

Plan

Customer Customer’s Customer Suppliers’

Supplier

Make Deliver Source Make Deliver Make Source Deliver Source Deliver

Internal or External Internal or External

Your Company

Source

Return Return Return Return Return Return Return Return

28


Cus

tom

ers

Supp

liers

P1 Plan Supply Chain Plan

P2 Plan Source P3 Plan Make P4 Plan Deliver

Source Make Deliver S1 Source Stocked Products M1 Make-to-Stock

M2 Make-to-Order

M3 Engineer-to-Order

D1 Deliver Stocked Products

D2 Deliver MTO Products

D3 Deliver ETO Products

S2 Source MTO Products

S3 Source ETO Products

Supply-Chain Operations Reference-model (SCOR) 10 – Level 1 and Level 2 Processes

Return Source

P5 Plan Returns

Return Deliver

Enable

D4 Deliver Retail Products


SCM Frameworks (Mentzer)


SCM Sustainability (Carter and Rogers 2008)

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