managing the complex supply- chain ecosystem matthew ... · • accept supply-chain complexity is a...
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Managing the Complex Supply-Chain Ecosystem
Matthew LittlefieldPresident and Principal Analyst
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Agenda
• About LNS Research
• Supply-Chain Complexity
• Building a Model for Operational Excellence
• Enterprise Quality Management Software
• Supplier Quality Management
• Key Recommendations
©LNS Research 2012
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About LNS Research
• Founded in Boston MA, 2011
• Provides executives a platform for accessing unbiased research and benchmark data to improve business performance
• Covering topics related to Quality, Manufacturing, Sustainability, and more
©LNS Research 2012
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About LNS Research
©LNS Research 2012
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Supply-Chain Complexity
©LNS Research 2012
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Drivers of Complexity
• Globalization: Manufacturing, Design, and Demand
• Multi-Tier Value Chain
• Product Complexity
• Compliance
©LNS Research 2012
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Globalization: Manufacturing
• JPMorgan PMI Index
� Highly Volatile
� Changing Centers of Power
©LNS Research 2012
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Globalization: Manufacturing
• Deloitte Global Manufacturing Competitiveness Index 2010
©LNS Research 2012
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Globalization: Manufacturing
• Deloitte Global Manufacturing Competitiveness Index 2010
©LNS Research 2012
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Globalization: Design
Single Design Center – No Design Partners
Single Design Center –Multiple Design Partners
Multiple Design Centers – No Design Partners
Multiple Design Centers –Multiple Design Partners
Increasing Complexity
New Proctor and Gamble China Innovation Center
©LNS Research 2012
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Globalization: Demand
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Multi-Tier Value Chain
• Loss of control by large OEMs, more focus on collaboration and orchestration
• Tier 1 Suppliers are now collaboration partners with design, manufacturing, and distribution responsibilities
• Tier 2 and 3 suppliers quickly expands to 100s or 1000s of companies
©LNS Research 2012
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Multi-Tier Value Chain
• Great Example is Boeing 787 Dreamliner Program, 17 collaboration partners distributed globally
©LNS Research 2012
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Product Complexity
Typical Car has 100 Million Lines of Code
©LNS Research 2012
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Compliance
©LNS Research 2012
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Building a Model of Operational Excellence
• Top Strategic Objectives for OEMs
• Top Strategic Objectives for Suppliers
• Quality as a Way of Life
• Key Performance Indicators
• Business Capabilities: People, Process, and Technology
©LNS Research 2012
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Top Strategic Objectives
©LNS Research 2012
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Top Strategic Objectives - OEMs
• Revenue Growth
� More successful new product introductions
� Improved manufacturing capabilities
� Increased supply-chain responsiveness
� Ensure no disruptions from compliance
©LNS Research 2012
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Top Strategic Objectives - Suppliers
• Revenue Growth
� Become trusted trading partner with brand owners
� Provide responsiveness and value added services for customers
� Reduce manufacturing costs
� Ensure no disruptions from compliance
©LNS Research 2012
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Quality as a Way of Life
• Quality is not a department but shared responsibility
• Most be infused throughout the organization: people, processes, and technology
• John Chambers, CEO Cisco:
“Quality is doing what you said you would do, when you said you would do it. Quality is never letting the customer down. Quality is being accountable for the total customer experience.”
©LNS Research 2012
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Key Performance Indicators
©LNS Research 2012
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Key Performance Indicators
• Cost of Quality: Good and Poor Quality
• Successful New Product Introductions: Time, Volume, and Quality
• On Time and Complete Shipments: Quality issues can impact delivery
• Overall Equipment Effectiveness: Availability, Productivity, and Quality
• Supplier Defect Rate
• Cost of Goods Sold
©LNS Research 2012
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Business Capabilities
©LNS Research 2012
PeoplePeople
ProcessProcess
TechnologyTechnology
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Business Capabilities: People
• Quality is an executive priority
• Open channels of communication and collaboration exist between quality and multiple roles in organizations
• Open channels of communication and collaboration exist between quality and trading partners
• All levels of organization have “buy in” for continuous improvement initiatives
©LNS Research 2012
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Business Capabilities: Process
• Flexible and standardized business processes embed quality throughout the organization and between disparate departments
• Automated workflow, collaboration, alerting, and reporting capabilities provide visibility into quality performance
©LNS Research 2012
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Business Capabilities: Technology
• Enterprise Quality Management Software standardizes and harmonized quality systems across the organization
• Enterprise Quality Management Software acts as a hub to create interoperability between other enterprise applications
©LNS Research 2012
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Enterprise Quality Management Software
• Fast growing and dynamic software space
• Serves a variety of industries and customer sizes
• Quickly becoming an enterprise level application that delivers tangible ROI
©LNS Research 2012
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Enterprise Quality Management Software
©LNS Research 2012
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Supplier Quality Management Software
• Traditionally functionality includes:
� Supplier scorecard/rating
� Finished goods testing/inspection
� Certificates of Analysis
©LNS Research 2012
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Supplier Quality Management Software
• Next Generation functionality includes:
� Web based supplier portals
� Real time visibility into supplier operations
� Collaborative design for quality environments (APQP/FMEA)
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Key Recommendations
• Accept supply-chain complexity is a reality that must be dealt with
• Understand the competitive advantages of your supply-chain (design, manufacturing, logistics)
• Evaluate the areas where quality issues impact
©LNS Research 2012
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Key Recommendations
• Build a model of operational excellence to address supply-chain complexity and quality
• Identify the right metrics and business capabilities
• As maturity allows, adopt EQMS and supplier quality management solutions in support of supply-chain goals
©LNS Research 2012
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Thank You!!For More Information:
Contact:Matthew LittlefieldPresident and Principal [email protected]