1. Supply Chain Enablers Organizational Infrastructure
Information Technology
Strategic Alliance
Human Resource Management

2. Supply Chain Enablers

3. Organizational Infrastructure
Coherent business strategy that aligns business units towards same goals – 32%
Formal process-flow methodologies to enable the SCM improvements – 15%
People committed to and responsible for cross-functional processes – 14%
Right process metrics identified to guide operating units’ performance toward strategic organizational SCM objective - 13%

4. Information Technology
Operations, marketing , & logistics data coordinated within the company – 30%
Data readily available to managers, not embedded in legacy system – 27%
Operations, marketing, & logistics data coordinated between companies – 18%
Linking SCM to ERP systems – 10%

5. Strategic Alliance
Expectations clearly stated, understood, and agreed upon up front – 48%
Collaborating on supply chain and product service strategies – 18%
Top management of partnering companies interface on a regular basis – 9%
Top management communicate why strategic alliances are important and should be pursued – 8%

6. Human Resource Management Enablers
Source, hire, and select skilled and quality people at all management levels – 27%
Find change agents to champion SCM implementation – 27%
Compensation and incentives in place for SCM performance – 14%
Finding the internal process facilitators knowledgeable in SCM – 13%
Appropriate job description and responsibilities – 12%

7. Drivers of Supply Chain Performance
Efficiency
Responsiveness
Inventory
Transportation
Facilities
Information
Supply chain structure
Drivers
How does a supply chain make the efficiency / responsiveness tradeoff and position at the appropriate point - using Inventory, Transportation, Facilities, and Information decisions.

8. Considerations for Supply Chain Drivers

9. Functional vs. Innovative Products: Differences in Demand
Functional (Predictable)
Innovative (unpredictable)
Product life cycle
More than 2 years
3 months to 1 years
Contribution margin
5% to 20%
20% to 60%
Product variety
Low (10 to variants per category)
High (often millions of variants per category
Forecast accuracy (margin of error)
10%
40% to 100%
Average stockout rate
1% to 2%
10% to 40%
Average forced markdown 0%
10% to 25%
Delivery Lead time
6 months to 1 year
1 day to 2 week

10. Physically Efficient vs. Market-Responsive Supply Chain
Physically Efficient Process
Market-Responsive Process
Primary purpose
Supply predictable demand efficiently at the lowest possible cost
Respond quickly to unpredictable demand to minimize stockouts, forced markdowns, and obsolete inventory
Manufacturing focus
Maintain high average utilization rate
Deploy excess buffer capacity for flexibility
Inventory strategy
Generate high turns & lower inventory cost
Deploy significant buffer stock of all stock items
Lead-time focus
Shorten lead time at low cost
Invest in ways to reduce lead time
Approach to choosing suppliers
Select primarily for cost and quality
Select primarily for speed, flexibility, and quality
Product-design strategy
Maximize performance at minimum product cost
Use modular design to postpone product differentiation

11. Efficiency-Responsiveness Framework of Supply Chain
Functional Product
Innovative Products
Match
Mismatch
Efficient Supply Chain
Responsive Supply Chain

12. Zone of strategic fit in supply chain
Responsive Supply Chain
Responsiveness Spectrum
Zone of Strategic Fit
Efficient Supply Chain
Implied Uncertainty Spectrum
Uncertain Demand
Certain Demand

13. Achieving Strategic Fit
Understanding the Customer
Lot size
Response time
Service level
Product variety
Price
Innovation
Implied
Demand
Uncertainty

14. The Value Chain: Linking Supply Chain and Business Strategy
New Product
Strategy
Marketing
Strategy
Supply Chain Strategy
New
Product
Development
Marketing
and
Sales
Operations
Distribution
Service
Finance, Accounting, Information Technology, Human Resources

15. Flows in a Supply Chain Supply Chain Customer Information Product
Funds
Supply Chain

16. Sequential Optimization vs. Global Optimization
Procurement
Planning
Manufacturing
Distribution
Demand
Sequential Optimization
Supply Contracts/Collaboration/Information Systems and DSS
Procurement
Planning
Manufacturing
Distribution
Demand
Global Optimization
Source: Duncan McFarlane

17. The Dynamics of the Supply Chain
Production Plan
Distributor Orders
Retailer Orders
Order Size
Customer
Demand
What is shown here is how divergent these various forecasts are in relation to real demand.
Why?? Because they are developed independently from each other and are dated, and unconnected to each other and the daily fluctuations in the market
Time
Source: Tom Mc Guffry, Electronic Commerce and Value Chain Management, 1998

18. The Dynamics of the Supply Chain
Production Plan
Order Size
Customer
Demand
What is shown here is how divergent these various forecasts are in relation to real demand.
Why?? Because they are developed independently from each other and are dated, and unconnected to each other and the daily fluctuations in the market
Time
Source: Tom Mc Guffry, Electronic Commerce and Value Chain Management, 1998