MANAGING THE GLOBAL SUPPLY CHAIN

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MANAGING THE GLOBAL SUPPLY CHAIN Iowa State
University
October 7, 2004
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Objectives

• Provide an overview of the key Objectives,
  Strategies, and Performance Measures for Managing
  a Global Supply Chain
• Discuss a selection the Key Elements -
  People - Process - Tools - Culture -
  Partnerships
• Get Specific Describe the tangible operational
  Challenges, Risks, and Opportunities in a Global
  Supply Chain
• Promote discussion with this group
• Have some fun!

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Managing the Global Supply Chain
For Competitive Advantage
Brand Marketing Product Innovation Supply
Chain Excellence Corporate Responsibility Fi
nancial Discipline
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Supply Chain Management Objectives
Precision

• Delivery Precision (Full Supply Chain Lifecycle)
• Product Development Commercialization
• Manufacturing Delivery Performance
• Freight Consolidator
• Customer Service Center
• Customer Delivery
• Customer Satisfaction / Consumer Delight

Objective
Satisfy customers through product delivery and
information accuracy
Measures
Delivery performance Customer query resolution
time
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Supply Chain Management Objectives
Flow

• Manage Multiple Dimensions of Flow Throughout the
  Supply Chain
• SKU Effectiveness
• Replenishment Strategies
• Demand Pull Model
• Sell Thru Data Drives Critical Decisions
• Embrace the Power of the Consumer
• Balance Demand Supply
• Increase Forecast Accuracy, or
• Provide Rapid Response

Objective
Plan flow fresh product assortment to match
consumer needs retail space
Measures
of controlled retail space of customers with
planned flow
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Supply Chain Management Objectives
Speed

• Shorten Lead Times
• Rapid Design and Prototyping
• Demand Pull / Material and Component Staging
• Direct Shipment / Direct Store Delivery
• Accelerate Manufacturing Flexibility withLean
  Manufacturing Initiatives

Objective

Shorten lead times in the supply chain
Measures

• Sales order to customer delivery cycle time
• Purchase order to goods delivered cycle time

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Supply Chain Management Objectives
Agility

• Diverse Consumer Requirements Drives the Needfor
  Multiple Supply Chain Models
• Make to Stock
• Demand Pull
• Auto Replenishment / Quick Turn
• Reduce Inventory Through Supply Chain
  Efficiencies
• Increase Direct Shipments
• Bundled Services

Objective
Build responsive supply chains to support
multiple business models
Measures
of business in replenishment Profitability
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Supply Chain Management Objectives
Balance

• Effective Balance of Supply and Demand Requires
• Timely Consumer Insights
• Forecast Accuracy
• Assortment Planning and SKU Management
• Fresh, Innovative Product Balanced AgainstSKU
  Proliferation
• Just-in-Time vs. Just-in-CaseInventory
  Positions

Objective
Match supply with demand
Measures
Inventory Closeouts Lost Demand
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Voice of the Customer
Supply Chain Management Objectives
Balance

• Listen, Listen, Listen
• Customer Satisfaction Surveys
• Claims, returns and charge-backs
• Customer Facing Performance Measures

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Supply Chain Management Objectives
Control

• Full Lifecycle Cost Analysis
• Product / Manufacturing
• Freight (Land, Sea, Air)
• Distribution / Customer Service Center -
  Processing, Storage, etc.
• Duties/Tariffs/Commissions/Finance Charges

Objective
Manage supply chain costs
Measures

• Supply Chain cost ( of revenue)
• Cost per Unit

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Global Storage Processing Capacity
Supply Chain Management
Enablers
People
Partnerships
Process
Disciplined processes and technology NT OO
EOO
Skilled team leading cross-functional SCM
agenda Make the Vision Clear Empower Team to
Act Accountability is a Must
Leveraging strong partnerships
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Managing the Global Supply Chain
Balanced Scorecard
The Balanced Scorecard Fact-Based Decision Making
Basic Construct

• Objectives
• Align the right performance measures with
  incentives to change behavior
• Ensure transparency throughout the system
• Drive continuous improvement
• Reward outstanding performance

Financial
HRP (Innovation/Learning)
Process (Operations)
Brand / Consumer

• Cost
• Quality
• Delivery
• CorporateResponsibility

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Managing the Global Supply Chain
Balanced Scorecard
Open Discussion
Thank You.