achieve an outcome-driven transformation with scor and...
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© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 0 | 3 June 2014
Achieve an Outcome-Driven
Transformation with SCOR and M4SC
Caspar Hunsche – Research Director, SCC
Valerian Harris – Vice President, IGATE
Speakers:
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 1 | 3 June 2014
Supply Chain Council to Merge with APICS
Combination Creates Global Leader in Supply Chain
Research, Education and Certification Programs
APICS is the leading professional association for
supply chain and operations management
Premier provider of research, education and certification
programs that elevate end-to-end supply chain
excellence, innovation and resilience.
Over 37,000 members and more than 250 international
partners, APICS is transforming the way people do
business, drive growth and reach global customers.
Supply Chain Council (SCC) is a global nonprofit organization that is known for its SCOR framework, training, certification and benchmarking tools
Since 1996, SCC has developed and trained thousands of supply chain professionals at over 1,000 companies on six continents.
SCC has created a growing international community of supply chain professionals that are changing the way industries deliver products and services to customers
• The merger unites two industry leaders with complementary offerings to
create the premier global provider of supply chain research, education and
certification programs.
• Together, SCC and APICS offer a single-source solution for individuals and
corporations looking to evaluate and improve supply chain performance.
• Both APICS and SCC believe that this combination creates a global leader
in supply chain solutions, poised to benefit members, customers, partners
and employees
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 2 | 3 June 2014
“95% of our transformation projects are
implemented successfully, yet
only 30% of projects add business value”
Fortune 500 CIO chief of staff
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 3 | 3 June 2014
Transformations
Functionality driven
• Best practice
• Opinions-based
• Standardization
• Success = Implementation
Outcome driven
• Aligned to business strategy
• Metrics-based
• Prioritization
• Success = Improvement
0% 25% 50% 75% 100%
Adding BusinessValue (count)
SuccessfulImplementations
=
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 4 | 3 June 2014
Outcome-Driven Transformation
Key Questions
1. What supply chains do I need?
2. What performance do I need for each supply chain?
3. Can my supply chain meet performance needs?
4. What are the network constraints/opportunities?
5. Which processes do not meet performance goals?
6. How can I improve performance of critical processes?
7. Where are my resource constraints?
8. What resource changes can I make?
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 5 | 3 June 2014
Outcome-Driven Transformation – A Framework
Supply Chain
Resources Feedback
Drives Supply Chain
Processes Feedback
Drives
Business
Strategy
Supply Chain
Network Feedback
Drives Supply Chain
Strategy
Drives
Feedback
Segment business into supply
chains, determine performance
Optimize network for strategic
performance requirements
Manage processes towards
strategic network goals
Continuously align resources
to meet process goals
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 6 | 3 June 2014
• Segment customers/products, Set performance goals
› All customers are NOT equal
› We keep our promises to all customers, but the promises differ
› Differentiate on performance goals
Replacement parts for core products
• Availability (up-time of asset)
• Low cost, high volume
• Stock-out = lost opportunity
Core product for core customers
• Configurable products
• Value added services
• Reliability key decision factor
Reliability
Responsiveness
Agility
Cost
Asset Management Efficiency
Align Strategy
Reliability
Responsiveness
Agility
Cost
Asset Management Efficiency
parity advantage superior
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 7 | 3 June 2014
• Align supply chain configuration to performance goals
› Different goals may require different configurations
› Material flows, high level process capabilities differ
› Standardize shared processes where possible
Replacement parts for core products
• Make-to-stock
• Distributed inventory at/near customers
• By-products for subset of products
Align Network
Core product for core customers
• Make-to-order processes
• Postponement
• Consignment inventory (raw materials)
Suppliers Our operations Customers
Suppliers Our operations Customers
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 8 | 3 June 2014
Align Processes
• Align process performance to network configuration
› All processes are NOT equal
› Network changes drive process level goals and changes
› Standardize processes where possible
Replacement parts for core products
• Make-to-stock finished goods, weekly pull based
• Source-to-stock finished goods, weekly pull based
• Zero/low raw materials inventory (consignment)
Core product for core customers
• Zero-finished goods inventory
• Run-rate based semi-finished goods
• Zero/low raw materials inventory (consignment)
Inte
gra
ted
su
pp
ly c
ha
in
pla
nn
ing
Raw
ma
teria
l
so
urc
ing
Ma
ke
-to
-
ord
er
Ma
ke
-to
-sto
ck
Finished goods
sourcing Sa
me
-day
(sto
ck)
de
live
ry
Facto
ry
dire
ct
de
live
ry
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 9 | 3 June 2014
Align Resources
• Maintain resources to support optimized processes
› Hire, develop, allocate and redeploy staff
› Acquire, maintain, retire technology resources
› Plan and deploy program resources
Replacement parts for core products
• Inspection and quality ownership by all
• New order expeditor position/processes
• VMI for buy goods: reduction of 1 buyer
Core product for core customers
• Make-to-order goods planning expertize
• Product quality: Parts genealogy
• Merge-in-transit for large projects
•H
ire
: p
lann
er
w/m
ake
-to-
ord
er
exp
erie
nce
•P
lann
ing
co
nce
pts
tra
inin
g
•S
up
plie
r m
essa
gin
g
pro
ject
•G
en
ea
log
y
tra
ckin
g
pro
ject
•F
ork
lift/co
nve
yo
r
lease p
roje
ct
•F
ork
lift tr
ain
ing
• Inspection training
• Redeploy: 1 buyer •In
ve
nto
ry
accu
racy
pro
ject
•Q
ua
lity
tra
inin
g
•H
ire: ord
er
exp
ed
ito
r
•M
erg
e-i
n-
tra
nsit
pro
ject
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 10 | 3 June 2014
SCOR and M4SC
M4SC™ – Management for Supply Chain framework
• Developed from experiences of companies that do this well
• Standard repeatable processes – predictable outcomes
• Adopted by supply chain business community
SCOR® – Supply Chain Operations Reference framework
• Developed by and for companies that operate supply chains
• The de-facto standard to describe supply chain performance,
processes, practices and skills
• Adopted by supply chain business and IT communities, implemented
in software solutions
© 2014 Supply Chain Council. ALL RIGHTS RESERVED. | Outcome Driven Business Transformations | 11 | 3 June 2014
Conclusions
• Most companies have the ability to implement change
• Most companies struggle with identifying what and how to change
› Functionality driven
› Difficulty linking transformations to performance
• Most companies struggle with prioritization
› Focus on the transaction
› Missing the big opportunities
• M4SC and SCOR can help
› M4SC™ – Standard processes to determine supply chain
strategy, configuration, processes and priorities
› SCOR® – Standard language to describe strategy, configuration,
processes and priorities
© 2014 IGATE TECHNOLOGIES INC. | Outcome Driven Business Transformations | 12 | 3 June 2014
Visit us at Booth No. 317 to learn more about
Transforming your Supply Chains to Demand Networks
Benchmarking your business to identify improvement opportunities
Implementing Supply Chain Solutions from SAP
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