Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out

Supply Chain Management at Atlas Honda

VIEWS: 268 PAGES: 62

Supply Chain Management at Atlas Honda document sample

More Info
									                         Supply Chain Day 2003

    Supply Chain Management in a Changing World-
    The Challenges for Organisations and Managers

    Alan Waller
    - Chairman - Institute of Logistics and Transport
    - Vice President - Solving International
    - Visiting Professor - Cranfield School of Management
    -   Project Director - European Council on Global Supply Chain
    -   Chairman - ELUPEG




Nyborg Denmark
6 November 2003
            AGENDA


   Understanding the business world
   Understanding the customer
   Understanding the organisation
   Understanding the value chain
   Understanding the individual manager
   Barriers to success
   The way ahead




                                           2
            AGENDA


   Understanding the business world
   Understanding the customer
   Understanding the organisation
   Understanding the value chain
   Understanding the individual manager
   Barriers to success
   The way ahead




                                           3
                  Global forces are shaping a radically
                  different competitive environment
… and the frontiers of competition are changing at an ever increasing rate

                    Competitive Pressures in the Supply Chain

                              Ever more
                              demanding            Changing market
                            customers and           boundaries and
                              consumers              new channels


      Shortening product                                              Aggressive global
          life cycles                                                   competition

                                    Hypercompetition
                                            +                              Industry
          Speed of
     technology change                 Globalisation                   consolidation and
                                                                           alliances



                   Stakeholder                                Environmental and
                    pressures                                    risk issues



               Serving localised customer needs through longer, more complex
                                        supply lines                                       4
            AGENDA


   Understanding the business world
   Understanding the customer
   Understanding the organisation
   Understanding the value chain
   Understanding the individual manager
   Barriers to success
   The way ahead




                                           5
                A new customer is emerging …

                 Consistency
      Service
                               Convenience


                                    Selection   Customers     want
                                                buying to be
Quality
                                                 easier
                                    Risk
                                                 faster
     Price
                                                 cheaper
                           Effort
                Time
                                                 more fun

                                                 … real value

    These trends are forced up through the value chain                6
Suppliers will seek solution-based
offers …
                   They   will focus on
                      providing tomorrow‟s customers
                       with solutions

                      shifting from commodity products
                       to differentiated solutions

                      world-class products and world-
                       class service

                      enthusing their customers

                      Reaching out to understand their
                       customers‟ customers

                   Suppliers  will expect their suppliers to
                   react in the same way


                                                       7
            AGENDA


   Understanding the business world
   Understanding the customer
   Understanding the organisation
   Understanding the value chain
   Understanding the individual manager
   Barriers to success
   The way ahead




                                           8
“Our Focus is on markets and brands, but
without an effective supply chain, we cannot
even begin to compete”




            Chairman, Unilever




                                               9
                      Business pressures in the new
                      millennium
    The top 5
         Globalisation
         Hypercompetition
         Focus on core competence
         Speed of change
         Stakeholder pressures


Source: European Supply Chain Directors Discussion Forum, - 2000 to 2002


                                                                           10
                            Doing nothing is not an option
      Globalisation




“As the world shrinks, supply chains become
        longer and more complex”



                                   Alan Waller


                                                 11
         Hypercompetition


   The customer demands excellence across
    all competitive dimensions


   Supply chain performance will make or
    break the competitive offering


   Businesses need to excel at designing and
    executing all key customer-facing business
    processes throughout the end-to-end value
    chain                                        12
                       Focus on core competence
Businesses are responding by focusing on core competencies and outsourcing
non-core activity creating networked organisations




            Vertical integration         Network organisation



      Source: Chatham House Forum                                    13
                  Speed of change - fuelled by technology
                Functional                   Design-make-sell                    Hierarchical


  Products                        Process                       Organisations



                Innovative                   Sell-design-make                    Networked


                 Focused                         Passive                           Guarded


Manufacturing                    Customers                       Information


                  Agile                         Interactive                     Available to all


                   Fast                         Organised                          Turnover

   Speed of
                                  Planning                      Growth Focus
   Change

                Warp Speed                       Chaotic                             Profit



                             All areas of business are challenged                                  14
           Stakeholder pressures

   Customer pressures - attracting and retaining
    profitable customers


   Shareholder pressures - competing for funds - not
    just sales


   Employee pressures - competing for people - not
    just markets


   External pressures - legislation / regulators /
    environmentalists / public opinion                  15
            AGENDA


   Understanding the business world
   Understanding the customer
   Understanding the organisation
   Understanding the value chain
   Understanding the individual manager
   Barriers to success
   The way ahead




                                           16
                  Developing a strategic supply chain vision

   The globalised Supply Chain must deliver the required
    service at the lowest total cost ...
     This requires:
         ensuring all supply chain players work together, by integrating
                – across functions
                – across borders
                – across interfaces
         developing and implementing strategies to deploy all assets to give an
           optimised total value chain
                – plants and warehouses (internal and suppliers/distributors)
                – sales offices
                – product portfolios
                – service centres
                – IT and support services

                      ... which can only be achieved through

           EXPLOITING eSUPPLY CHAIN OPPORTUNITIES AND
               SOLUTIONS IN SUSTAINABLE PARTNERSHIPS
                                                                                   17
       Economies of scope in technology and innovation ...
       In automotive production resource sharing has already
       happened




                  One   people           Vehicle    manufacturers‟
                  carrier                 share
                      Galaxy                One plant

                      Sharan                One assembly track

                                             “Purchased by the hour”?


       Contract Manufacturing “Co-Makership” will increase



“Partner with your competitors and compete with your partners”
                                                                   18
                   Drivers of the 21st Century Supply Chain

Retailers                          Consumers
                                           Ever more demanding
    Global
                                                  Pro-active
    Seek solutions
                                                  Interactive
    Increase range

   Manufacturers
        Focus on core         Co-makership

        Network/outsource     Mass customisation                 SUPPLY
        Agility
                                                                    CHAIN
                               Process driven
   Systems                                                       RESPONSE
        ERP

        Bolt-ons

        Process driven


      Technology
              New channels

              New business

              Low cost                                                      19
                Three central themes emerge consistently on the CEO agenda


                        “How do we deliver distinctive value and
   Strategic             differentiated service to local customers whilst at the
  Imperatives
                         same time exploiting opportunities from a globalised
                         view of supply chain?”



   The Key              How do we align the whole enterprise - people,
   Enablers              processes,operations, technology, suppliers , other
                         business partners - around a programme of
                         progressive strategic change“?”


Managing at the         “How do we futureproof, and build agility, into our
Pace of Change           supply chain operations in response to the pace of
                         external change and ever increasing pressures from
                         shareholders and competitors?”




                                                                                   20
                 Twelve Imperatives for Outstanding
                 Supply Chain Performance
                                                                        Business Integration
 Adding Value to the                    Searching for
                                                                               and
     Customer                        Structural Advantage               Performance Drivers
                                   Strategic Imperatives               5. Integrating /
1. The Customer Value
                                                                         Synchronising the
  driven Supply Chain              3. Global Operations                  Supply Chain Network
2. Differentiation                   Restructuring                     6. Operations beyond
  through the Product              4. Strategic Sourcing and             the Productivity
  Offering                           Co-Venturing                        Edge
                                     Partnerships
                                       Key Enablers
                                        9. Business
                                       Structure and             10. High
                   8. People and
                                       Organisation            Performance
                    Behaviours                                                     11.
      7. Process                                               Partnerships
                                                                              Leveraging
          and
                             Managing at the Pace of Change                   Information
     Performance
                                    12. Agility and                               and
      Measures
                                       Ability to                             Technology
                                      Respond to
                                        Change



                                                                                               21
                Managing at (or beyond) the pace of change


Some key messages which emerge….
 “Board level leadership is essential for success”
 “Agility to respond to changing market circumstances is key for
  survival… and can be a competitive weapon in its own right”
 “Don‟t get locked in by assets, partnerships, people or systems”
 “Strategic change must be built into the „everyday job‟ “
 “Achieving agility should be seen as an investment, and therefore may
  require short term sacrifices”
 “The old model of strategy, design and implement is dead… the future
  model will be vision led… with continuous implementation,
  continuous benefits, “proving by doing” and pro-active adaptation of
  strategy”



                                                                     22
                      The benefits – some recent experience
   Client                    Value Identified                        Strategy Focus

 FMCG Manufacturer       8% reduction in total               Focused factory sourcing and
                           manufacturing and logistics          regional warehousing
                           costs
 Personal Care Products  5% reduction in total               Retail logistics restructuring, new
                           manufacturing and logistics          sourcing arrangements, European
                           costs                                DC
 Computer Supplies
                          15% reduction in total logistics    New European DC, with
                           costs, including significant         introduction of DRP
                           inventory reductions (30-40%)
 Engineering Plastics
                          25% decrease in total logistics     New sourcing arrangements,
                           costs                                centralisation of slow movers,
                                                                responsive transport system
 Healthcare Products
                           20% inventory reduction            Regional logistics structure
 Consumer Products
                           30% reduction in total logistics  Regional logistics consolidation in
                            costs                              heartland, with satellite warehouses
 Wines and Spirits
                           60% reduction in finished          National network rationalisation and
                            goods inventories and £2-3m         supply chain synchronisation
                            p.a. in operating savings


            In all cases, with increased Customer Service across Europe                        23
“By 2003, around 60% of SCM functionality will be
                   provided
  from outside the enterprise [80% probability]”




                                         Gartner Group




                                                    24
            Outsourcing in the supply chain continues to grow
            reflecting focus on core competencies


                                                               Is co-venturing a viable
                                                                     alternative?

Distribution and Transport

           Warehousing

 Information Management

             Production

New Product Development

Supply Chain Management
                                           Now
             Purchasing                    Within five years


                          0    1   2   3     4      5           No        0    Yes
                                                                     Overall trend
                         In                      Outsourced
                       house




  … and many now regard co-venturing as an alternative
                                                                                          25
                     Supply chain outsourcing requirements
                     in the new millennium

 The top 5
     help with developing strategic supply chain vision
     help with implementing supply chain vision
     access to economies of scale
     access to skills and competence
     access to technology and innovation



Source: European Supply Chain Directors Discussion Forum – 2000 to 2002



              eSCM capability will become golddust                        26
         Drivers of Collaboration Between
         Supply Chain Players



Along supply chains -
 Strategic optimisation – end-to-end supply chain structure
 Integration - supply chain processes across organisations
 Synchronisation – systems spanning organisations
And across supply chains-
 Economies of scope – multi-user solutions




                                                              27
       Collaboration is …


[i] “ Working with others for mutual
              benefit”




                                       28
      Collaboration is …


[ii] “Willingly assisting the enemy”




                                       29
             Collaboration - putting technology into
             perspective



“A business can have all the technology in the world, but if I don‟t trust my
trading partners then it becomes very difficult.”


“This is not about beating a supplier into submission - it‟s actually about
sharing information, some of it competitive.”



                                                            Gartner Group




                                                                        30
 “Enterprises that employ collaborative SCM
technologies to optimise business processes
will thrive, whereas those that do not will lose
                 market share.”



                                     Gartner Group



                                                31
The Present – A Case Study
Show me the network!



John Doran
Logistics Director (until 30/9/03)
Sony Europe – EMCS
(Engineering, Manufacture & Customer Service)
                 Sony Europe EMCS logistics

                            Current situation
   Direct control and influence
      Consumer electronics



3PL / 4PL
     • Games – Playstation

     • REE (Recording, Energy, Europe)

     • BPE (Broadcast & Profesional Europe)



    Total logistics spend                       > €300 million
                                                            33
                Current network locations


5 Hub Warehouse

18 Country Stockholding Location
                                                                                                    Helsinki
5 Plants
                           Dublin                                            Copenhagen
                                             Hamms Hall
                            Pencoe          Thatcham
                            d                                 Tilburg
                                                                   Cologne    Prague
                                          Eragny
                                                Ribeauville                               Trnava
                                                                 Zurich
                                                                                 Vienna
                                                                                          Godollo
                                                                Milan
     Lisbon
                                    Barcelona



                                                                                                        Athens




                                                                                                                 34
                Network locations 2003/2004


5 Hub Warehouse

3 Country Stockholding Location
                                                                                                Helsinki
Plant
                                                                         Copenhagen
Closed Whs.
                             Pencoe       Thatcham
                             d                              Tilburg
                                                                          Prague

                                              Ribeauville                             Trnava
                                                                Zurich
                                                                                      Godollo
                                                              Milan

                                  Barcelona



                                                                                                    Athens




                                                                                                             35
         Sony Europe EMCS logistics

                   Current situation
   Warehousing mostly internal some outside
   Transport
      Very fragmented

      125 companies

      25 relationships with Deutsche Post

      200+ accounts with DHL

   Project to rationalise

                                               36
                  Who Can Satisfy Sony Requirements ?
   European One Stop Shop
           Channel

           Geography

           Relationship management

   Uniform standards
           Service

           KPI‟s

           Tariffs

   Partnership
           Share risk & benefits

           Build long term

   Flexibility
           Allow our business to change

           Manage resource up & down

           Share risk

   Innovate
           What value to do you add?                              37
           Why should I choose TNT above Versteijnen Transport?
                       How to move forward

Improving European Transport/Logistics – Catalysts for Change

Initiative Source                              Ranking



Collaboration                                  1

Shippers                                       2=

LSPs                                           2=

E-Freight Exchanges                            4

E-Marketplaces                                 5

Technology Providers                           6

Capital Providers                              7

Consultants                                    8



Source-European Survey Alan Waller 2001-2002                    38
           European Logistics Users ,
           Providers and Enablers Group
Achieving step-change in the performance of European
Logistics by Collaboration


ELUPEG MISSION

To achieve real improvements in the performance of
European Logistics by action -based collaborative projects
involving users, providers and enablers whose business
success depends on sound European Logistics.



                                                         39
           Background to ELUPEG


• Alan Waller and John Doran (Sony) gave a presentation
  on board the Oriana for the Logistics Forum 2001 to tell
  the story of European Logistics as they saw it - the history,
  the current situation and the potential future
  developments.
• This was backed up by a survey which showed that the
  satisfaction levels of users, providers and enablers with
  the various aspects of European Logistics were between
  40% and 60%.
• At the request of Oriana 2001 delegates, a group was
  assembled to tackle the issues on a joint collaborative
  basis - this was the origin of ELUPEG                    40
              ELUPEG Formation and Development



•   Members engage in collaborative action-based projects to improve European
    Logistics.
•   Open to all users, providers and enablers of European Logistics services -
    but members must engage in collaborative projects, which are intended to be
    self-funding.
•   Representation must be at appropriate and senior level.
•   Over 200 European companies are registered to receive ELUPEG progress
    reports.
•   Full membership is currently approaching 100 major businesses, with users
    representing some 20% of the logistics spend in Europe.
•   Run by members for members, with independent chairman plus steering
    group of user/provider/enabler leaders and secretariat.
•   User driven but democratic.
•   Non-profit-making with modest meeting/joining fee to cover costs.

                                                                          41
              ELUPEG Progress 2003


High Tech/Electronics Collaborative Working Group
  Opportunities being addressed
     Network Integrity: Security/Track-and-Trace/e-POD
     Asset-sharing:Combine deliveries/Warehouse use/Air Freight
     Benchmarking
     Customs
  User Companies Involved Include
     Sony
     Samsung
     Philips
     Panasonic
     EMI
     Xerox                                                        42
         ELUPEG Progress – 2003

Automotive Collaborative Working Group
   Opportunities being addressed
      Common Inbound
      Spares and Repair
      Reverse Logistics
   User Companies Involved Include
      Ford/PAG
      GM
      Honda
      Pirelli
      Unipart
      Renault-Nissan                    43
          ELUPEG Progress – 2003

CPG/FMCG Collaborative Working Group
   Opportunities Being Addressed
      Common Trunking/Delivery Lanes
      Road Freight Cubing:Heavy on Light
      Reverse Flows:Scandinavia/Baltic
   User Companies Involved Include
      Kimberly Clarke
      Georgia Pacific
      Rexam
      Heinz
      Sylvania
                                            44
      Sara Lee
           ELUPEG Progress – 2003

Chemical/Industrial Collaborative Working Group
   Opportunities Being Addressed
      Return Flows
      Tanker Pooling
      Shared Fleet Facilities
      IBC Consolidation
   User Companies Involved Include
      Du Pont
      Wavin
      Atlas Copco
                                             45
      Dow
              Collaboration in Action-1

Manufacturing Consolidation Centre (NL)
   Opportunity
       Historically independent logistics hubs serving each manufacturer
        and separate delivery to retail DCs
   Approach
       Single Consolidation Centre serving both manufacturers with
        consolidated deliveries to retailer DCs
       Start-up Feb 2003
   Benefits
       Increased delivery frequency
       Fewer truck movements
       Increased on-time performance
       Lower inventory
       Fewer out-of-stock situations
   Players
       Lever Faberge
       Kimberly Clarke (NL)

                                                                            46
         Collaboration in Action-2

Asset Pooling (UK)
    Opportunity
        Two Competing Breweries run own delivery using own
         barrels
        Three deliveries to outlets per week for each brewery
    Approach
        One consolidated delivery per week-or more-using
         common barrels
        Third party buys the barrels
        RFID tags on barrels
        Announced Sept 2003
    Benefits
        Reduced Barrel investment
        Reduced Supply Chain Inventory
        Reduced Distribution Costs
    Players
        Scottish Courage
        Carlsberg-Tetley
        Trenstar                                                47
             Collaboration in Action-3

Fleet Pooling (UK)
  Opportunity
      Two Competing Dairy Businesses collect 4.5 m litres of
       milk from 7,500 farms using 500 trucks in the UK
  Approach
      Consolidated collection using common LSPs
      6 month project to set the strategy
      Announced Aug 2003 to start Autumn 2003
  Benefits
      Increased fleet utilisation
      £8m pa saving
  Players
      First Milk
      Dairy Farmers of Britain
      Wincanton
      Lloyd Fraser
      Bibby
      Interoute                                                48
        Collaboration-Conclusions

The  most important core skill for the
future will be the ability to develop and
sustain effective partnerships between
providers, shippers, customers, business
partners and with competitors
This skill is probably the one shortest in
supply at this point in time
There  is now an appetite for
collaboration that is essential to drive
forward improvement in Supply Chain           49
Performance
            AGENDA


   Understanding the business world
   Understanding the customer
   Understanding the organisation
   Understanding the value chain
   Understanding the individual manager
   Barriers to success
   The way ahead




                                           50
            Impact on the manager in the supply chain
             Jobs for life             Education for life            Reference books

Employment                   Education                  Knowledge


             Life of jobs              Life of education        Gateway to the world

      Manage the business                                             Organisational
                                  Functional Performance
                                                                       performance
Management                     KPI‟s                        Vision


                                       Cross-functional               Supply chain
      Change the business
                                         performance                  performance
             Solo working                   Direction                   Competitive
  Ways of
                             Leadership                 Relationships
  working


            Team working                  Empowerment                 Collaborative


                                                                                 51
              Managers will need to be focused but flexible - for life
            AGENDA


   Understanding the business world
   Understanding the customer
   Understanding the organisation
   Understanding the value chain
   Understanding the individual manager
   Barriers to success
   The way ahead




                                           52
                 Bridging the Implementation Gap
                        Pan-regional supply chain integration across Europe
% of Companies
    100%                                                               Opportunity Awareness


                                                                       Strategy Planning
     75%
                                                                       Active Implementation

     50%


     25%
                                                                       Effective Implementation


      0%                                                                    Source: Surveys 1992,
           „86    „88       „90   „92    „94   „96   „98   „00   „02               1994 , 1996
                                                                                   and 2002




                 There are major challenges in translating vision into reality           53
               People and information are the critical
               ingredients and information depends on people
Barriers to supply chain improvement – 1998 /2000 survey
                                                      Management of
           Management of People
                                                        Information
                    ( 43% )
                                                           ( 24% )


        Company             Quality of
                                                                   No. 1
                                                     Lack of
         Culture           Management             appropriate IT
          10%                 10%                   systems
                                                      14%


Organisatio
n Structure                              Work-
    and                                  force                         Lack of
Performanc                               Skills                     information
e Measures                                4%                         availability
    8%             Power      Fear of                                    and
                    Play      Change                                 integrated
                    6%          5%                                    planning
                                                                        10%


                                                                                54
Unlike 2-4 years ago the systems are now available
               New mindsets and management behaviours
               are required

                     Total
                                             End-to-End Supply
                 Commitment to
                                              Chain Mentality
                Customer Service




          Anticipate End         Key                     Focus on
          Customer and                                Performance of
         Manage Demand
                              Management                Extended
           Proactively        Behaviours                Enterprise




                  Switch from a
                 Stock Push to a              Management of
                  Demand Pull                  Partnerships
                   Philosophy



                                                                              55
For many this is a major shift away from today‟s functional ways of working
          Leveraging Technology – the key issues




“The technology is now available to do whatever we
  want in the supply chain ----
---- the problem is that either it is not mature enough
   to be used or we are not mature enough to use it”


               Source – Discussions groups Logicon Interactive 2001 , 2002 & 2003




                                                                                    56
            AGENDA


   Understanding the business world
   Understanding the customer
   Understanding the organisation
   Understanding the value chain
   Understanding the individual manager
   Barriers to success
   The way ahead




                                           57
                  The Way Ahead
   Stand back and take a careful look at where you sit in your supply chain
   Decide the critical elements of the proposition to the end customer and
    how the total supply chain needs to help deliver this
   Decide what your critical focus needs to be and which other supply
    chain players are critical to your success
   Decide who you are going to partner with and how you will do it
   Get your own house in order and then reach out to your supply chain
    partners
   Develop strategy, processes, and connectivity
   Start small and use trials to “prove by doing”
   Agree up front how to share the investment and benefits
   Ensure that technology and systems are backed up by cross business
    processes, new people skills, and a partnership culture across the 58
    organisations
 The Business shape of the future

                                    - Outsourcing
Supply Chain Performance            - Collaboration
                                    - Partnering




          Business
        Performance




Focus on core competence                    59
The Manager of the future

                              Supply Chain
  Business Breadth            capability
                              Team working
                              Leadership
                              Networking

       Professiona            Knowledge
                              development
            l
                              Professional
          Depth               development


  •Functional capability
  •Skill development
  •Professional development                60
The way ahead - for your organisation – and for you




   GET T-SHAPED !


                                                      61
           For further information contact




   Professor Alan Waller
   Solving International
   email: alanw@solvinginternational.com




   Mobile:+44(0)7802 170507

                                             62

								
To top