presentation - john langley

7/31/2019 Presentation - John Langley

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1The Eight Keys to Supply Chain Success

The Eight Keys to

Supply Chain Success

C. John Langley Jr., Ph.D., 2002. The materials contained herein are not to be used or

reproduced without permission. Unauthorized sale or use of these materials is prohibited.

C. John Langley Jr., Ph.D.

Professor of Supply Chain ManagementDirector, Supply Chain Executive Programs

Georgia Institute of Technology, USA

November 8, 2002November 8, 2002


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Agenda for This Mornings

Presentation

Agenda for This Mornings

Presentation

What are the Eight

Keys to Success?

What are the Eight

Keys to Success?

Supply Chain Management:Where Would We Like To Be?

Supply Chain Management:Where Would We Like To Be?

Supply Chain Management:

Where Are We Now?


Where Are We Now? Propositions

For Success

Closing

Thoughts


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The Last Decade Has Been a Busy One

for Supply Chain Management

Lean Manufacturing/JIT

MRPII

ERP CRM

eProcurement

eFulfillment

Integrated Supply Chain Management

Advanced Planning & Scheduling (APS)

Product Data Management

Warehouse Management (WMS)

Manufacturing Execution Systems (MES)

Exchanges

3rd Party Logistics

Collaborative Planning

Supplier Integration

TQM

Six Sigma

Quality Circles

1992 1996 20021994 1998 2000

MFG Outsourcing

Source: Adapted from Accenture, 2002.

Service Parts Logistics

Supply Chain Visibility

Transportation Management (TMS)

4PL


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But the Business Environment

Still Poses Many Challenges

Globalization

War (Where/When?)

Convergence/Consolidation

Technology Integration

The Internet Potential forDisintermediation

Post-Sale Expectations

E&HT Market Impacts Supply Chain Requirements

Speed, Flexibility, Scalability

Collaboration

Configure to Order

Seamless Integration

Security

Parts & Service Offerings

Extended Supply Chain Financial Performance

Solutions

Value

Trends in High-Tech/Electronics Industries

Source: Adapted from Accenture, 2002.


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Worldwide Supply Chain Expenditures

Continue to Grow

Worldwide Supply Chain Expenditures

Continue to Grow

1980 1985 1990 1995 2000

2100

1680

1260

840

420

0

B

illions(1980$US)

16 Percent

World GDP

16 Percent

World GDP


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Where Would We Like To Be?


Where Would We Like To Be?

FunctionalExcellence

FunctionalExcellence

ProcessExcellenceProcess

Excellence

ChannelExcellenceChannelExcellence

IntegrationExcellence

IntegrationExcellence

Time

ValuePerformance

Deliver Value

Effective

Efficient

Deliver Product

Network

Excellence

Desired Future

Progress

Most Current

Progress


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Eight Keys to


Customer &Demand Mgt

Customer &Demand Mgt

CoreCompetencies

CoreCompetencies

GlobalizationGlobalization

LogisticsOutsourcing

LogisticsOutsourcing

PerformanceMeasurement/

Value

PerformanceMeasurement/

Value

CollaborativeRelationships

CollaborativeRelationships

InformationTechnology

InformationTechnology

EffectiveStrategies

EffectiveStrategies

ValueValue

VisibilityVisibility

VelocityVelocity


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The Ability to Anticipate, Respond to,

and Sometimes Create Customer

Demand Will Be a Key Determinant of


Importance of the Customer

and Demand Management


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Obstacles to Enhancing

Customer Satisfaction

Insufficient knowledge of customers needs

Technically cant create a need, but can create demand Functional silos cause little or no coordinated

response to demand information

Too much emphasis on forecasts of demand,with less attention on

Collaborative efforts

Strategic as well as tactical use of demand informationSupply-demand misalignment, and a need

exists for better demand management


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If You Cant Measure It

You Cant Manage ItAnd

If You Cant Quantify It You Cant Sell It

Performance

Measurement and Value

Not everything that can be counted counts,

and not everything that counts can be counted.

(Albert Einstein)


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Performance Measurement and Value

Determination: Top Priorities

Relentless Pursuit of Value

Must be customer-driven

Must include comprehensive, objective measurement ofvalue

New Scorecards for Everyone Throughout Supply

Chain Very Few are Customer-Driven

Need to Develop New Tools for Value Measurement

and Quantification

Encompass elements of value that are hard as well aseasy to quantify

Focus on service as well as cost/top-line and bottom-line


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Information Technology:

Theres Still A Lot to Be Done!

In the flush of internet mania, most businesses overspentwildly on all sorts of disparate software and systems. A lot

of it still doesnt work properly. At almost every big

company, applications that any idiot knows should be

linked for instance the sales system and the one that

tracks inventory remain unconnected and autonomous

islands of data. Employees were told this stuff would

change their lives. Instead theyre screaming infrustration. (Fortune, March 18, 2002)


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Supply Chain Functional Scope:Planning and Execution

International Trade Logistics Mgmt.

Inventory Management

Supply Chain Execution

Supply Chain Planning

Seconds/

Minutes

Hours/

Days

Weeks/

Months

Quarters Years

Strategic

Planning

Tactical

Planning

Operational

Planning

Decision Scope

Time Horizon

Source: Adapted from AMR Research, Inc. 2000

Order Management

Supply Planning

Production Scheduling

Distribution Planning

Demand Forecasting and Planning

Supply Chain Network Design

Manufacturing Planning

Supply Chain Collaboration

Warehouse Management

SC Event Management

Transportation Management

St t i f Eff ti U f S l


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Strategies for Effective Use of Supply

Chain Information Technologies

Achieve enhanced visibility and event management

Real-time window on status of orders and inventory, across

processes, modes, and carriers while in-transit Emphasis not somuch on wheres my stuff? but when is it going to get there?

Achieve improved visibility through collaborative logistics andintegrity among supply chain participants

Need to control total cost of technology, including

implementation and integration

Real-time window on status of orders and inventory, across

processes

Customers must be ready for capable software Need to rely

on suppliers of supply chain services for needed technology

expertise

C ll b ti


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Logistics/Supply Chain Managementis the

Sweet SpotSweet Spotfor Collaboration

Collaborative

Relationships

CollaborativeMarketplace

Th D i d Obj ti Sh ld B


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Shippers & Carriers

Contract & Shipment Management Shippers and Suppliers

Inbound Management

Shippers and Customers Customer Service

Shippers and Partners

Continuous Moves and SharedRoutes

Carriers

CustomersShippers

Suppliers Partners

Collaborative Business Processes Reduce Costs,

Improve Service and Streamline Operations

Full

Collaboration

The Desired Objective Should Be

Full Collaboration


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The Strategic Use of Outsourcing

Is A Vastly Under-UtilizedLogistics/Supply Chain Strategy

The Strategic Use of Outsourcing

Is A Vastly Under-UtilizedLogistics/Supply Chain Strategy

Logistics Outsourcing

B kth h T d i


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Annual U.S. Industry Revenues > $60 Billion;CAGR = 7-8%

Major ConsolidationsContinue to Occur

New CompetitorsArriving on the Scene

Realization That Using a 3PL is

Not an All or NothingDecision

Very Large LogisticsOutsourcing Initiatives

Breakthrough Trends in

Outsourced Logistics Services

E t d P t f T t l L i ti


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42.7%

59.6% 51.0%

74.1%

0%

20%

40%

60%

80%

100%

North America Western Europe

20022005-2007

Expected Percentage of Total Logistics

Expenditures to be Directed to Outsourcing

Source: Georgia Tech, 2002 Third Party Logistics Study.

Next Generation of Logistics


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Next Generation of Logistics

Outsourcing Approaches?

Emphasis

onManagement

of ... Relationships

Integration

Information

Knowledge

InsourcingInsourcing

Basic Services

(Logistics Service Providers)

Value-Added(Third Party Logistics)

Lead Logistics(4PL)

AdvancedServices

Evolutiona

ryMig

ratio

n


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Customers are Desperately Searchingfor Capable Suppliers of Global Supply

Chain and Global IT-Based Services

Globalization

Global SCM:


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Global SCM:

Key Areas of Greatest Need

Managing the Evolution of Global Priorities from Mexico toEastern Europe, Now to Asia-Pacific/China

Transformation or Redesign of Best or Proven Practices toGlobal Supply Chain Setting

Recognize challenges unique to global objectives

Achieve end-to-end process integration and shipment visibility

Involvement of capable facilitators to achieve desired success

Global Supply Chain Strategies to Significantly Impact OverallBusiness Strategies

Interaction of Global Supply Chain Executives to: Identify Common Issues and Problems

Determine Responsive Strategies for Improvement


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Knowing Your Core Competencies

Will Allow You toFollow the

To Effective Supply Chain Management

Core Competencies

Three Essential Tests for


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Three Essential Tests for

Core Competencies

Expertise

Do We Have TheNeeded Skills? StrategicFit

Consistent WithOrganizational

Mission?

Ability to

Invest

Is the ROIAttractive?

Effective Supply Chain


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Supply Chain WinnersWill Be Those Who Identify and

Successfully Implement

the Best Strategies

Effective Supply Chain

Strategies

Key Imperatives for Supply Chain


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Drive Logistics and Supply Chain

Issues Higher Into CustomerOrganizations Make SCM a

Strategic Organizational Priority

Align Supply Chain Strategies With

Overall Business Strategies

Have High Expectations for

Logistics and SCM

Service and Responsiveness

Financial Performance

Key Imperatives for Supply Chain

Success

Capitalize on the Skills of

People Throughout SupplyChain

Fully Utilize All AvailableResources to Effectively

Manage Information

Knowledge

Relationships

Integration

Create Outstanding ValueThrough Logistics andSupply Chain Management

The Future of SCM:


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The Future of SCM:

Two Closing Thoughts of Wisdom

Consider how hard it is to changeyourself, and youll understand whatlittle chance you have of

changing others.(Albert Einstein)

The best way to predict

the future is to create it.(Dr. Peter F. Drucker)

Golden Gate BridgeGolden Gate Bridge


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Golden Gate Bridge

The Two Towers Cant Stand By Themselves

Golden Gate Bridge

The Two Towers Cant Stand By Themselves


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