Supply Chain A Strategic Perspective

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Supply Chain - A Strategic Perspective
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Can Supply Chain Save the World?

• Save it from what? Whats happening in our
  World?
• Technology focused industries moving to large,
  emerging markets, not focused on retaining
  business in high-margin, lower volume, aerospace
  sector
• Results in limited number of qualified, developed
  suppliers
• Industry consolidation continues
• Long-term viability of domestic supplier
  capability questioned
• More technology invention product and process
  taking place off-shore
• ITAR restrictions hamper use of foreign suppliers
• Foreign requirements, product and environmental,
  different
• Aerospace electronics requirements continue to
  veer from commercial
• Lack of supply chain insight hinders ability to
  manage risk and ensure performance
• Who pays for, ensures, effective supply chain
  management?
• Whos making the make/buy and sourcing decisions,
  and do they represent best value to government?

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Not enough to understand evolving landscape

• Must organize to respond quickly, adapt in this
  environment
• Issues feel staggering, options seem limited (or
  limitless) and confusing
• What requires an immediate reaction? What are
  appropriate actions?
• USG and aerospace supply chain are
• Recognizing need and market advantage by ensuring
  access to critical supplied technologies
• Recognizing SCM as key process/system (are we
  investing as such?)
• Reducing supply base, focusing business into
  fewer, better, more strategically aligned
  suppliers
• More focused than ever on sub-tier supply
  management
• Contractual management giving way (begrudgingly)
  to relationship management
• Struggle for everyone, opportunity for those who
  can successfully integrate and manage their
  supply chain

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Can any - all - SCM save us?

• The discipline of Supply Chain Management is like
  a giant Chinese menu, filled with options
  regarding tools, systems, processes, structure,
  focus, personnel, reporting, contracting,
  relationship models.
• The key is to discern which possible elements,
  working in concert, are best applied for a given
  agency, business, endeavor, program, and
  situation
• Knowing what the options are and how they fit
  together is essential
• What is critical?
• What is superfluous?
• What is most efficient and cost-effective
• What produces the lowest total cost and lowest
  total risk?
• Effective SCM does not shift risk, it
  reduces/eliminates risk
• Effective SCM does not move cost, it removes cost
• Effective SCM allows for the best entities to
  produce the best outcomes
• Effective SCM is objectively measured and managed

So what is Supply Chain Management?
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Evolutionary depiction of Supply Chain Management
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Know Thyself

• Good Supply Chain Management begins with
  organizational self-awareness
• More about what you do than whats done to you
• If you dont know who you are and what you do,
  its very difficult to know who you need and what
  you need
• Your supply chain and supply base are an
  extension of who you are, in a sense they are you
• Your supply chain extends to the supply base, but
  its success begins and ends with your decision
  making
• Its the beginning of successful risk management
• You can outsource capacity. You can outsource
  capability. You can out source expertise.
  Ultimately, you cannot outsource risk.
• Again, that is you (your success) out there
• Greater level of risk, greater level of control
• Difficult to be a visionary
• Easier to be an Exceptional Thief
• Discipline before tools
• Know when to invest in collaborative design and
  mfg tools
• Learn to saw before you buy a chain saw

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So who are we? SCM links customer needs with
supplier offerings
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Strategic Supply Management drives tactical
drumbeat
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The Integrated Supply Chain

• Supply Chain Mapping extended network design,
  multi-tier sourcing/functionality
• By supplier, technology
• How involved do you want to be? Do you really
  want to manage Tier 2 and Tier 3 suppliers? Do
  you need to? When, where, why?
• Discriminating Technologies
• Supply Chain map of a particular critical
  supplied technology
• By data flow and/or function
• By cash and/or product
• Objectives of Optimizing the Internal Supply
  Chain

• Building a competitive advantage
• Reduced cycle times
• Part selection time
• Supplier lead times
• Lower costs
• piece parts, assemblies
• labor
• part mastering, parts expediting
• Reduced material waste
• Strategic vs. Tactical focus
• Optimized supply base support and flexibility
• Actual costs easily used in proposal setting

• Reducing the risk in executing programs
• Reduced program schedule slips
• Increased on-time delivery performance
• Increased of parts received by need date
• Assured part availability
• Improved quality of parts, assemblies
• Reduced level of part obsolescence
• Improved supplier performance
• Optimized prioritization of work
• Improved materiel, supply chain visibility
• Access to availability within the supply chain

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Example of Integrated Supply Chain Depicts
tactical flow with continuous feedback from
strategic activities
Project future part, technology requirements
Update Preferred Parts list over time
Focus business into Preferred Suppliers through
use of PA process
Drive improved supplier performance through
supplier report cards, performance reviews
Track supplier trends, reduce obsolescence
Design in optimized solution Identify, use
preferred parts (symbols in CAD)
Product Structure, mastered parts, BOM
Requirements ready to be planned and bought
initiate, drive product structure into MRP
Parts Management - Time-phased Material Planning
Quantities, need dates, requisitions
Supply Mgmt Tactical buying, Strategic Supply
Mgmt
Inspection Prioritized, expedited
Inventory Optimized stock
Receipt
ACTS
MRP
CAD
Standardized quality levels
Preferred Parts from Preferred Suppliers routed
Dock-Stock
PDM
Consolidate forecasted material requirements into
RFQs for Purchase Agreements (PAs)
Establish PAs, negotiating reduced costs and
leadtimes, based on forecasted needs
Engineering
Supply Chain Mgmt
Mission Assurance
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Examples of Integrated Supply Chain Metrics
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In Conclusion

• SCM is an increasingly important discipline and
  provides a broad array of options
• Understanding and articulating the various
  aspects is essential to optimum use of SCM
• Performance begins with a holistic view of the
  flow of the technologies required, their
  development and sources, and an analytical
  approach to defining, developing and improving
  the supply base
• Significant advantage to those who can pull this
  off
• Whether Supply Chain can save the world is yet
  to be determined
• but properly employed SCM systems, processes,
  tools and personnel can dramatically improve an
  organizations performance