Download - IBM Supply Chain Management Ppt
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Supply Chain Management – New competitive realities
Linda B. BanManagement Briefing SeminarAugust 2, 2004
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Agenda
Supply chain management – why is it so hard?
Manufacturer and supplier findings
What affect IT has on supply chain
The road ahead
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“Why is supply chain so hard?”In-depth interviews with twenty-nine automotive executives– Sixteen manufacturing and supplier
companies
– Global organizations
– European and North American participation
Interviews covered a broad range of questions around SCM activities within the organization and its impact with its value net– Current opportunities and challenges
– SCM’s influence on the organization
– Technology’s influence/impact on SCM
– Activities and future plans
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We broadly defined supply chain management (SCM)
We defined SCM to also include the customer delivery channel
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We heard several points over and over again from interviewees
The performance of SCM lags its recognized importance
SCM crosses numerous boundaries, both internally and externally
Globalization has an increasingly larger impact on supply chain tasks
Complexity, ranging from company cultures to product design, multiple sourcing and pricing configurations continues to create significant challenges
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Manufacturers have some specific challenges. . . .
Intense cost pressures
Managing the global supply chain– Establishing additional manufacturing footprints
– Identifying sourcing partners
“Being able to efficiently support an increasing number of lower volume vehicle models, each with a higher level of option content and complexity, is a fundamental challenge. To the automotive supply base, this challenge results in greater product and process complexity, lower volumes of individual parts
or options, and a higher level of variation in supply chain demand flows.”
- Manufacturer respondent
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. . . see room for improvement in several areas. . .
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. . . and are focusing heavily on technology
Standardization– Common nomenclature and data formats
– Common tools
Integration– diverse computer systems
– supply chain processes with engineering, purchasing, logistics, etc
Implementation of portal technologies
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Suppliers face similar challenges with a different twist . .
Increased complexity of manufacturer orders
Cost and pricing issues
Risk management in the supply chain
Collaboration and relationship management in the supply chain
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. . . feel they are performing well in several areas. . .
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. . . and are focusing on the use of technology a little differently
Connection and collaboration with the Tier N supply base
Cost reduction
Inventory visualization
Computer system integration
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Manufacturers and suppliers agree on some of the most important things. . .
Inventory is the hidden cost within the supply chain– Taking cost out is still a major problem
Globalization has a significant impact – Identifying and managing suppliers from afar is challenging
Complexity continues to increase– Both product design and in management of relationships
“Success is taking cost out of the supply chain structure, not just moving margins.”
- Manufacturer respondent
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…but ambiguity still exists
Selection vs development models– Shifting purchasing philosophies
Component vs module vs system decisions– No consistent definition of the process
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IT is important to both manufacturers and suppliers
Portal technology– One face to all suppliers and
functions
– Accessibility of information
– Fast access to ratings• Delivery, cost, quality
Accessibility of information– Inventory optimization
– Better continuous improvement efforts • Information flows more quickly
to all involved parties
Manufacturers Suppliers
Integration of legacy systems to deliver information to portals
Security
Challenges
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Access Publish Transact Integrate Internally
Integrate Externally
Adapt Dynamically
Early
Integrating
Advanced“Get on the Net”
“Buying, not browsing…Working, not surfing”
“Optimize operations…dynamically respond to the
needs of customers, employees, partners.”
Manufacturers and suppliers are using technology to move towards optimal integration
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By contrast, China auto suppliers have a different focus
Survey of 299 auto suppliers in China– Joint venture and domestic
respondents
Most use in-house technology
Most orders are placed by fax and telephone
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By comparison with Europe and North America, IT spending by Chinese automotive suppliers is much lower
0%
10%
20%
30%
40%
50%
60%
Less than $50,000 50,000-100,000 100,001-200,000 200,001+
Chinese firmsJoint ventures
Half of all surveyed firms spend less than $50k a year, 81% spend less than 100kof the 56 companies spending more than that, 33 are joint ventures
Source: Economist Corporate Network “China auto suppliers survey”, 2004
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The road ahead for SCM efforts
Key success factors include:
Better linkages between forecasts and material requests
Use of portal technologies to integrate internally AND externally
Integration of functions to improve performance, increase effectiveness and reinforce consistent organizational cultures
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Linda Ban
Global Industrial Sector Leader
IBM Institute for Business Value
Automotive Practice
248-552-4570