operations & supply chain management - experience evening

OPERATIONS & SUPPLY CHAIN MANAGEMENT EXPERIENCE EVENING

17 SEPTEMBER 2013

© Vlerick Business School

PROGRAMME OF THE EVENING

WELCOME!

06.30 pm – 07.00 pm: Welcome drink

07.00 pm – 08.30 pm: I. About Vlerick II. Our expertise III. Q&A

08.30 pm – 10.00 pm: Networking & advice

2

I. ABOUT VLERICK


THE VLERICK MILESTONES

4


VLERICK ANNO 2013

5


VLERICK ANNO 2013

6

II. OUR EXPERTISE

SUPPLY CHAIN MANAGEMENT FROM OPERATIONAL TO STRATEGIC RELEVANCE

PROFESSOR ANN VEREECKE


AGENDA

9

Why change?

Challenges for the future supply chain

Opportunities for improvement

6 trends in operations & supply chain management


THE (SUPPLY CHAIN) WORLD IS CHANGING

September 2012

Hau Lee, Kevin O'Marah & Geraint John

www.scmworld.com

60% believe that the supply chain function now has equal status with sales and marketing, and R&D/product development within their organisations.

75% expect digital demand to force changes to their manufacturing strategies and their distribution networks, as customer demands for customised products and experiences increase.

10


A SOURCE OF INSPIRATION:

11


GARTNER TOP 25 SUPPLY CHAIN 2013

12

1. Apple

2-5. McDonald's, Amazon, Unilever, Intel

6-10. P&G, Cisco Systems, Samsung, Coca-Cola Company, Colgate-Palmolive

11-15. Dell, Inditex, Wal-Mart, Nike, Starbucks

16-25. Pepsico, H&M, Caterpillar, 3M, Lenovo, Nestle, Ford Motor, Cummins, Qualcomm, Johnson & Johnson

12


TODAY’S SUPPLY CHAIN PRACTICES

13


6 OPERATIONS & SUPPLY CHAIN TRENDS

Operational excellence

Agility

Resilience

Sustainability

Innovative supply chain design

Talent development

nr 7 ???

14


WHAT IS DRIVING THE CHANGE?

Supply chains

are complex,

vulnerable,

and subject to lots of uncertainty

15


SC’S ARE VULNERABLE AND COMPLEX

VULNERABILITY

Disruptions do happen September 11 (2001)

Hurricane Katrina (2005),

Volcano cloud (2010)

Tsunami & earth quake (2011),

…

COMPLEXITY

Do we know our sources of supply?

1st tier: OK

2nd tier: OK?

3rd tier: OK??

16

€ € € €

The (financial) impact of supply chain disruptions can be substantial


DO WE KNOW OUR SOURCES OF SUPPLY?

By Hans Greimel | AUTOMOTIVE NEWS

Posted March 28, 2011

TOKYO (March 28, 12:15 p.m. ET) -- Diodes, microprocessors, circuit boards, voltage regulators, copper foil -- the bottleneck in parts slamming Japan’s auto industry stretches far down the earthquake-rattled supply chain.

Indeed, many of the parts so badly needed aren’t even immediately recognizable as auto parts.

Ford Motor Co. has suspended orders for certain black and red vehicles because a Tier 2 supplier in Japan no longer can make a metallic paint pigment called Xirallic.

17


DO WE KNOW OUR SOURCES OF SUPPLY?

“Once it was ready to admit that some of the now dead workers might've been making its clothes, Benetton admitted that its supply chain — a labyrinth of contractors and subcontractors that includes 700 manufacturers across 120 countries — was so complex that the company didn't really know where its clothes were coming from”

(www.theatlanticwire.com, May 8 2013)

18

http://www.theatlanticwire.com/

http://www.theatlanticwire.com/


MORE UNCERTAINTY THAN EVER BEFORE

Changes in the global landscape

North Africa, a new emerging economy?

China, Bangladesh: labor forces coming on the streets

Political instability

19

www.nytimes.com/2010/06/11/business/global/11strike.html www.afdb.org/en/news-and-events/article/


MORE UNCERTAINTY THAN EVER BEFORE

Economic instability

Spain, Greece, Ireland, Italy, Portugal, ….

The first dip in industrial production was deep

Double dip?

Triple dip?

20

http://www.google.be/url?sa=i&rct=j&q=recession+2013+prediction&source=images&cd=&cad=rja&docid=2CnFUIM49n9pPM&tbnid=EdV42im3o3TizM:&ved=0CAUQjRw&url=http://businesstoday.intoday.in/story/eu-predicts-eurozone-recession-to-continue-in-2013/1/194653.html&ei=RLyLUeWNKKPw0gXv1YHwDA&bvm=bv.46226182,d.d2k&psig=AFQjCNH6PXqW9wvA91ioR-9r-cuwlQbyvQ&ust=1368198542064046


WHAT IS DRIVING THE CHANGE?

Supply chains

are complex,

vulnerable,

and subject to lots of uncertainty

But also

plenty of opportunities

for supply chain improvement

and supply chain re-design

21


OPPORTUNITIES FOR SC IMPROVEMENT - DATA

More data is available than ever before

On-line real-time data

Delivery information

Service information

Consumption patterns

Location-based data

Geo-tagging, geo-fencing, ...

Social networking,…

Traffic reports

Weather forecasts

22

http://www.google.be/url?sa=i&rct=j&q=gps+icon&source=images&cd=&cad=rja&docid=ceA5PBOyrS33QM&tbnid=Xv0Dsuslnpop8M:&ved=0CAUQjRw&url=http://potrerito2012.wordpress.com/balizas/&ei=IpCoUfn_L-ax0AXPl4DQDg&bvm=bv.47244034,d.d2k&psig=AFQjCNHSz6tUH2xObh_dlPCs6O4t-eQEGQ&ust=1370087808489742


“BIG DATA IS SEXY, SMALL DATA BEAUTIFUL”

23

Google Trends


“If 3D printing becomes a common feature of large-scale manufacturing operations, the technology will have a huge impact on all phases of supply chain management.”

OPPORTUNITIES FOR SC IMPROVEMENT - TECHNOLOGY

24


OPERATIONS & SC TRENDS


Agility

Resilience

Sustainability


Talent development

???

25

1. OPERATIONAL EXCELLENCE


A CALL FOR OPERATIONAL EXCELLENCE

27 Source: www.conference-board.org/ilcprogram


A CALL FOR OPERATIONAL EXCELLENCE

Source: Clermonts and Ploos van Amstel, 2012

Logistics is inefficient

24% of all vehicle-km of heavy road transport in the EU is empty

A truck is loaded on average for 57% in the EU

A truck driver is on the road during 60% of his time

It takes on average more than 4 hrs to load or unload a truck

Moreover

Logistic resources are scarce

In the next 10 years, 20% of truck drivers in the EU will retire

It adds to the CO2 emission

28


Source: Supply Chain Decarbonization, World Economic Forum 2009

THE DARK SIDE OF LOGISTICS

2.500 Mega Tonnes CO2 in Logistics

29


OPERATIONAL EXCELLENCE

How and where it all started

30

http://www.google.be/url?sa=i&rct=j&q=toyota+production+system+logo&source=images&cd=&cad=rja&docid=OrnCX-ZnWGdH5M&tbnid=8nL9crYnTG70SM:&ved=0CAUQjRw&url=http://www.leanglobal.org/publications/the-toyota-production-system-beyond-large-scale-production/&ei=rIioUffnL8SX1AXur4HwDg&bvm=bv.47244034,d.d2k&psig=AFQjCNFr-JxUzFAFI9BjzZsLV88huVeznQ&ust=1370085856816254


THE KEY MESSAGE

Eliminate waste or “muda”

Continuous improvement or “kaizen”

31

http://www.google.be/url?sa=i&source=images&cd=&cad=rja&docid=qiDvhB9gtOHvJM&tbnid=yd0ccHTEJ7-H1M:&ved=0CAgQjRwwAA&url=http://www.beyondlean.com/7-wastes.html&ei=F50tUuvUA4jR7AbWnYF4&psig=AFQjCNH3o-RK6XQSrdPmvahIrJoHYXFN1A&ust=1378807447162115


TODAY, MANY COMPANIES HAVE THEIR “XPS”

Volvo Production System or “VPS”

Bosch Production System or “BPS”

Caterpillar Production System or “CPS”

32


CAT LOGISTICS (NEOVIA) IN LUMMEN

33

2. SUPPLY CHAIN AGILITY


SUPPLY CHAIN AGILITY

Bridging the gap: “design for supply”

35

A typical customer visits Zara …

17 times a year

Zara introduces approximately …

11.000 new items a year (Gap and H&M: 2.000 to 4.000)

From design to delivery, Zara needs …

4 weeks; 2 weeks for new versions of existing models (average retailer: 6 to 12 months)


AGILITY AND MASS CUSTOMISATION

Modular design

assembly-to-order offers variety in an efficient way

Open innovation

customer preferences lead to product innovations

36


TECHNOLOGY IS DRIVING CUSTOMISATION

Digital printing has changed the publishing supply chain

Print-on-demand books, manuals, leaflets, catalogues, T-shorts, cups, m&m’s…

37


TECHNOLOGY IS DRIVING CUSTOMISATION

3D-printing is changing supply chain logic

Manufacturing close to point of consumption

Distributed, flexible, small-scale manufacturing (at 3PL’s?)

Small batches of highly customised products at low cost

38

Made in China Made at home


3D-PRINTING IN MEDICAL APPLICATIONS

39 Vlerick SC Conference 2012 – W. Vancraen


3D-PRINTING IN MEDICAL APPLICATIONS

40 Vlerick SC Conference 2012 – W. Vancraen

3. SUPPLY CHAIN RESILIENCE


RESILIENCE

Supply chain risk management

Containment of supply chain disruptions and prompt recovery from it

42


TOYOTA GETS READY FOR THE NEXT EARTHQUAKE

43 www.reuters.com/article 6 Sept 2011


SUPPLY CHAIN RESILIENCE

Toyota aiming for quake-proof supply chain

BMW’s real-time risk assessment

Supplier plants and locations are tagged and matched to geographical and surveillance data

44

http://www.google.be/url?sa=i&source=images&cd=&cad=rja&docid=cKfnW_YY1Pi0HM&tbnid=lStQ2HTpDiu-MM:&ved=0CAgQjRwwAA&url=http://www.grcea.com/sales-target-closer-for-bmw-than-previously-expected.html/bmw-logo&ei=FzWOUYTvKInL0AXg1ICoAQ&psig=AFQjCNEaQjb7BWMZkWYpp5bwlLLwa06qRQ&ust=1368360599759157

http://www.google.be/url?sa=i&source=images&cd=&cad=rja&docid=eaamfmRhZjncgM&tbnid=Z7mfeoRPIPZdeM:&ved=0CAgQjRwwAA&url=http://www.mobileapptesting.com/toyotas-mobile-app-strategy/2011/03/toyota-logo/&ei=tzaOUZH5OcPB0QWujYDQBw&psig=AFQjCNFgwL8EhfcW5GAN93rL9DND4tSfdQ&ust=1368361015990421

4. SUSTAINABILITY


BALANCING THE 3 P’S

“no Supply Chain can survive if it’s not sustainable”, COO food company

“most companies have so far devoted relatively little effort to the idea of sustainable supply chain, largely because their

customers seem unwilling to pay for it.

But the importance is now rising sharply.” PWC report, 2013

46


THE 3 P’S: PRESERVING THE PLANET

Preserving the planet

Use of material

Product design, new materials

Recycling, re-using, remanufacturing

Use of energy

Energy-efficient transportation

Avoiding pollution

Clean factories

CO2 neutral factories

Short supply chains

47


THE 3 P’S: RESPECTING THE PEOPLE

Working conditions at Apple factories in China

A selection of recent press articles

You are NOT allowed to commit suicide: Workers in Chinese iPad factories forced to sign pledges (www.dailymail.co.uk; 1 May 2011)

In one factory it had found 42 children working on the production line and has now terminated its contract. (www.telegraph.co.uk; 15 Feb 2011)

Two people died in an explosion at the Chinese factory which produces the iPad 2. (www.telegraph.co.uk; 21 May 2011)

48



Working conditions at H&M factories in Asia

A selection of recent press articles

21 workers die in fire at H&M factory (www.independent.co.uk 2 March 2010)

What’s poisoning workers in H&M factory Cambodia? Mass faint in factory (businessnewscambodia.com; Sept 2011)

49



Rana Plaza – Bangladesh, April 27 2013 (www.huffingtonpost.com)

50

http://www.huffingtonpost.com/


CLOSER TO HOME

51

Amazon accused of abusing Christmas staff (www.thelocal.de, Febr 15 2013)

Amazon 'used neo-Nazi guards to keep immigrant workforce under control' in Germany (www.independent.co.uk)

Amazon unpacked; The online giant is creating thousands of UK jobs, so why are some employees less than happy? (Financial Times, February 8, 2013)



Respecting the people in the supply chain

Safety & health regulation

Education & training

Fair remuneration

Fair trade

Supplier selection and auditing

52


SUSTAINABILITY AT STARBUCKS

Starbucks’ priorities

Purchase 100% responsibly grown and ethically traded coffee by 2015

Provided $14.6m in 2010 to organisations that make loans to coffee farmers

Forest carbon programmes in Chiapas, Mexico and Sumatra, Indonesia through partnerships with Conservation International

Make 100% of the electricity used in global company-owned stores renewable energy equivalent by 2015

53

5. INNOVATIVE SUPPLY CHAIN DESIGN


INNOVATIVE SUPPLY CHAIN DESIGN

Multi-channel distribution & e-logistics

55


SOLUTION PROVIDERS

Product providers become solution providers

Supermarket becomes systems provider

Yihaodian launches opens supply chain platform SBY (Service By Yihaodian)

Car producer becomes supplier of mobility

Products and technology are converging

56


PROSUMERS

When consumers become producers

57

“Prosumption” of electricity “Prosumption” of information


ORCHESTRATORS

58


CAR-POOLING FOR CARGO

March 2011: first shared shipment of UCB and Baxter

Initially from Belgium to Romania

Then to Bulgaria, Slovakia, Slovenia, Hungary & Czech Republic

Plans to expand to other countries

Plans to add 3rd and 4th partner

Realised benefits (UCB annual report 2011)

10% cost savings shipment

30% CO² reduction

59

6. SUPPLY CHAIN TALENT


SKILLS OF THE SC MANAGER “YESTERDAY”

1 2 3 4 5

Knowledge on environmental issues

Knowledge of laws, regulations

Technical skills related to product and processes

ICT skills

Knowledge of process analysis techniques

Knowledge of international business practices

Planning and inventory management skills

Logistics expertise (e.g. cost analysis and…

Negotiation skills

Analytical skills

Coordination and cooperation skills

People management/leadership skills

Decision making skills

Communication skills

very important not important

1. “soft” skills !!

2. functional expertise

3. knowledge of the business context

Vlerick research in 2008 (n = 743)

61


SKILLS OF THE SC MANAGER “TODAY”

0,00 0,10 0,20 0,30 0,40 0,50 0,60 0,70

Analytical skills

Communication skills

Planning and inventory management skills

Decision making skills

Coordination and cooperation skills

Knowledge of process analysis techniques

People management/leadership skills

Logistics expertise (e.g. cost analysis and budgeting)

Technical skills related to product and processes

Negotiation skills

ICT skills

Knowledge of international business practices

Knowledge of laws, regulations

Knowledge on environmental issues

large increase no increase

n = 743

Vlerick research in 2008 (n = 743)

62


RESPONSIBILITIES OF THE SC ORGANISATION

TO WHAT EXTENT IS YOUR SC ORGANISATION INVOLVED IN ACTIVITIES WITH OTHER BUSINESS PROCESSES?

•No role 1

•Informed (after decisions, during actions) 2

• Consulted (prior to decisions/ actions) 3

•Responsible for action 4 •Ultimately accountable (individual or in team) 5

Vlerick research in 2012

63


INTERFACES WITH PARTNERS IN THE CHAIN

Vlerick research in 2012 64


INTERFACES WITH PARTNERS IN THE CHAIN

Vlerick research in 2012 65

7? TO CONCLUDE


7 SUPPLY CHAIN TRENDS


•Eliminating waste; continuously improving

Agility

•Speed of innovation; Mass customisation

Resilience

•Assessing and managing risk

Sustainability

•Balancing the 3 P’s


•Multi-channel, solution providers, prosumers, orchestrators

Talent development

•From experts to innovative networkers

???

67


SOME SOURCES OF INFORMATION

POMS conference, Denver, May 2013

PWC, “Next-generation supply chains”, 2013

SCM World, “The chief supply chain officer report”, 2012

CAPS research

Harvard Business Review, “3-D printing will change the world”, March 2013

MIT CTL, “Transforming the future of supply chains through disruptive innovation”, spring 2011

International Labour Organization, “Global employment trends for youth”, 2013

Gartner Top 25 Supply Chain 2010, 2011 & 2012

68


TOOLS & TECHNIQUES

ENTERPRISE

MANAGEMENT

HANDS-ON MANAGERIAL

69

OUR VLERICK PROGRAMMES COMBINE


INTERNATIONAL COLLABORATIONS & ENDORSING PARTNERS

70

Operations & Supply Chain Management

Operational Excellence

Executive Master Class

in SCM

Purchasing Management

Supply Chain Finance


OPERATIONAL EXCELLENCE SHORT-FOCUSED PROGRAMME

Module 1: Essence of Operational Excellence

Strategic Importance of Operational Excellence

Mapping the value stream

Lean thinking and lean toolbox

Lean planning & scheduling

Lean maturity

Company visit: putting theory into practice

Module 2: Success Factors in Operational Excellence

Bottleneck management - theory of constraints - factory physics

Capacity management and variability analysis

Quality management

Lean supply chains

Change management

Lean Competency Accreditation (optional)

An optional exam will allow participants to obtain the certificate ‘Lean Competency’, an international accreditation by the Lean Enterprise Research Centre of Cardiff University.

72 www.vlerick.com/opex


INTENSIVE PROGRAMME – STRUCTURE

73


EXECUTIVE MASTER CLASS IN SCM INTENSIVE PROGRAMME

74 www.vlerick.com/emcscm


OTHER PROGRAMMES

SPECIALISED:

Purchasing Management www.vlerick.com/purchasing

Supply Chain Finance www.vlerick.com/scf

GENERAL MANAGEMENT:

Project Management www.vlerick.com/projectmanagement

Executive Development Programmes for Young, Middle & Advanced managers

www.vlerick.com/edp

75

http://www.vlerick.com/purchasing

http://www.vlerick.com/scf

http://www.vlerick.com/projectmanagement

http://www.vlerick.com/edp

III. Q&A