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0AutomotiveBestPracticesForumSupplyChainManagement1WELCOME!Today’smeetingwillfocusontheresultsoftheSupplyChainManagementAssessment,completedby22automotivesupplierexecutivesand3vehiclemanufacturerexecutives.Introduction2TableofContentsIntroduction4-13SupplyChainManagement14-21DefinitionsandStrategy22-32UnderstandingExpectations33-38SupplyChainManagement39-47PerformanceMeasurement48-55TechnologySolutions56-60SCMOpportunities61-72PageNumber3IndustryForcesandIssuesIntroductionTheautomotivesupplychainisgoingthroughaperiodofunprecedentedchangeinordertomeetincreasingconsumerexpectationswithregardtoprice,delivery,andproductcustomization.Themanagingofthesupplychainpipelineisthereforefacedwithanumberofkeyissuesincluding;ElevatingsupplychainmanagementasacriticalsuccessfactortoachievingcompetitiveadvantageAligningtheorganizationalstructuretosupportglobalsupplychainmanagementEstablishingaprocessoriented,functionallyintegratedsupplychainForecastingtheimpactofchangingglobalmarketsonsupplychaincostsandcapabilitiesDefiningkeyperformanceindicatorsandmeasuringsupplychainperformanceUnderstanding,selectingandintegratingsupplychainmanagementenablingtechnologyAnticipatingandrespondingtotheimpactofsupplierconsolidationsAnticipatingandrespondingtotheimpactofOEMconsolidationsDefiningandtrackingtotalsupplychaincosts4IntroductionDefinesupplychainmanagementanditscomponentsUnderstandtheelementsofasupplychainstrategyPositiontheroleofasupplychainexecutiveIdentifytheelementsofsupplychainmanagementUnderstandtheroleofinformationtechnologyapplicationsIdentifyhowtoutilizeperformancemeasuresinthesupplychainprocessUnderstandhowtousebestpracticesandbenchmarkinginsupportofsupplychainmanagementUnderstandroleofcustomers,suppliers,andthirdpartiesforcollaborativesupport.Today’sObjectives5Theintegratedsupplychainconcepthasgonethroughthreedistinctphases...•“Push”erafocusedondistributionoffinishedgoods•ManagedWIP,rawmaterials,andfinishedgoodsasseparatefunctions•MgmtrequiredproductiontobebalancedwithcustomerrequirementsPhaseI1960-1975•Importancerealizedinintegratingoperationswithintheenterprise•Computerhorsepowerappliedtomanagematerialflow•Companiesbegantomigratefrom“inventorypush”toa“customerpull”channelPhaseII1975-1990•Significantproductivityincreasescouldonlyberealizedthroughmanagingrelationships,informationandmaterialflowacrossenterpriseborders•Recognizedthe“deliveryofenhancedcustomersandeconomicvaluethroughthesynchronizedmanagementoftheflowofphysicalgoodsandassociatedinformationfromsourcingtoconsumption”PhaseIIIlate80’s-presentSource:BernardLaLonde,professoremeritusoflogisticsatOhioStateUniversityHistoryofSCMSCMOverview6ThefollowingrepresentsomeoftheotherinitiativeswhichhaveeitherhelpeddeveloporhavebeenspawnedfromtheSCMmovementAgileManufacturingEfficientConsumerResponseTotalQualityManagementDirectivesChannelManagementSharedServicesConstraintBasedSchedulingChannelIntegrationValueChain(extended)FlowReplenishment/FluidDistributionDistributionResourcePlanningVendorManagedInventoryTheoryofConstraintsChangeBasedStrategyVendorManagedInventory(VMI)FlexibleManufacturingTimebasedmfg./logisticsContinuousReplenishmentPlanning(CRP)QuickResponse(QR)ReverseFlowLogisticsTheoryofConstraintsSynchronousManufacturingJust-in-time(JIT)ThirdPartyLogistics(3PL)FlexibleDistributionCategoryManagementContinuousReplenishmentPlanningSCMRelatedConceptsSCMOverviewJust-in-time(JIT)TotalQualityManagementSynchronousManufacturingTheoryofConstraints7ValueComplexityFunctional“Silos”VirtualExtendedChainsIntegratedInternalSupplyChainIntegratedExternalSupplyChainSelectVendor/CustomerCollaborationSelectedCross-functionalTeamingInternallyFocusedOptimizationSupplyChainContinuumSCMOverview8Asurveyconductedonsupplychainessentialsresultedinamanagementresponsefrom451companiesin25countriesAlmostone-third(29%)ofthecompaniessurveyeddonotinvolvetheirsuppliersininventorymanagementNearlyone-quarterofthecompanies(22%)donotinvolvetheircustomersinplanningmanufacturingrequirementsOnly13%ratedtheirabilitytocommunicatewithcustomersonforecastingasstrong1.Planninganddeployinginventoryeffectively2.Providingpredictabledeliveryperformance3.Creatingnewproductsandservices4.Reducingorderfulfillmentcycletime5.Havingproductsinstock6.Decreasingmanufacturingcycletime7.Reducingtransportationcosts8.Reducingcustomerreturns9.CommunicatingelectronicallywithcustomersandsuppliersTopSupplyChainEssentialsSource:1997KPMG/NorthwesternSupplyChainStudyCurrentStateofSCMMovementSCMOverview9DegreeofCompletionThemajorityofcompaniesareimplementingsupplychaininitiatives.Thisfigurehasincreaseddramaticallyfrom10%reportedin1996.Question35%35%60%0%0%0%0%10%20%30%40%50%60%70%80%90%100%ImprovementinitiativesarecompletePlantobeginaddressinginitiativesbeyond2000NoinitiativesoropportunitiesplannedPlantobeginaddressinginitiativesduring1999CurrentlyevaluatingimprovementopportunitiesCurrentlyimplementinganimprovementinitiative(s)%ofRespondentsSCMOverview10CustomerServiceNetworkStrategyChannelDesignWarehouseDesignandOperationsTrans