CMTC - CA Member of US Manufacturing Extension Partnership Supply Chain Management Strategies

CMTC - CA Member of US Manufacturing Extension Partnership What is Supply-Chain Management? Supply-chain is a term that describes how organizations (suppliers, manufacturers, distributors, and customers) are linked together. Supply-chain management is a total system approach to managing the entire flow of information, materials, and services from raw-material suppliers through factories and warehouses to the end customer.

CMTC - CA Member of US Manufacturing Extension Partnership Supply Chain Management Evolution nHistorical operational stages: –From disconnected. nExclusively focus on growth/cost. nSeparately managed functions. nInternal performance measurements. –To integrated. nEnd-to-end process approach. nCustomer focus, profitable growth, liquidity, functional integration.

CMTC - CA Member of US Manufacturing Extension Partnership T3 T2 T1T2 T1 T2T3 T2 T1 OEM 1 Retailer Web Site Direct Sales Force Distributor/Retailer Distributor Warehouse Consumer Tier2 and 3 Suppliers Retailer Tier 1 supplier Retailer Supply Chain of a Typical Original Equipment Manufacturer OEM 2

CMTC - CA Member of US Manufacturing Extension Partnership Overall Strategy nA Supply Chain is fully optimized when: –Total supply chain costs are at the lowest level. –The supply chain contributes to profitable sales growth by creating cost/service advantages. –Worldwide effective tax rates are at the lowest level. –Capital efficiency is at the lowest level. –The supply chain is made flexible to respond to changes faster than competitors and to stratify service levels by product, customer, and geography.

CMTC - CA Member of US Manufacturing Extension Partnership Supply Chain Excellence nNew corporate state of being: –Supply chain excellence requires effective strategies, sustained management commitment, and changes in attitude, culture, and organization. More importantly, it requires superior execution.

CMTC - CA Member of US Manufacturing Extension Partnership Principles For Supply Chain Excellence nInvest/reinvest in supply chain information technology to manage flows end-to-end. IT should support both planning, analysis, and execution. nInvest/reinvest in supply chain knowledge, people, skills, and learning. Supply chain practice is relatively new. Change is a constant, with innovations and problems always occurring. Organizations must invest in ongoing training, mentoring, education, and feedback systems.

CMTC - CA Member of US Manufacturing Extension Partnership Principles For Supply Chain Excellence nThink globally…build regionally…operate locally. The best performing supply chains are managed with centralized planning, regional approaches, and local operations. nThe most critical principle: Execution!!! Focus on it, measure it daily or real time, and give people the authority and accountability to excel at it.

CMTC - CA Member of US Manufacturing Extension Partnership Costs of Quality External Failure Costs Appraisal Costs Prevention Costs Internal Failure Costs Costs of Quality