European Commission 1 INFORMATION A Cornerstone for Competitiveness.
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Transcript of European Commission 1 INFORMATION A Cornerstone for Competitiveness.
European Commission
1
INFORMATION INFORMATION A Cornerstone for CompetitivenessA Cornerstone for Competitiveness
European Commission
CustomersCompetition
Change
People
ProcessesProducts
The Business The Business EnvironmentEnvironment
STRATEGYSTRATEGY
European Commission
0
2
4
6
8
10
12
14
16
18
20
1960s 1970s 1980s 1990s 2000s
% o
f G
DP
0
5
10
15
20
25
30
35
40
Days
Logistics Costs (% GDP)
Inventory Costs (% GDP)
Cycle Time Requirements (days)
Logistical Improvements Logistical Improvements Manufacturing Sector 1960-2000Manufacturing Sector 1960-2000
European Commission
Strategic Planning
Information TechnologyMarketing
Supply ChainManagement
2000s
1980s
Evolution of Logistical IntegrationEvolution of Logistical Integration
MaterialsManagement
Demand Forecasting
PurchasingRequirements
PlanningProduction Planning
Manufacturing Inventory
Warehousing
Materials Handling
Packaging
PhysicalDistribution
Inventory
Distribution Planning
Order Processing
Transportation
Customer Service
Logistics
1990s
European Commission
Logistics in the 90'sLogistics in the 90's
% of Products Shipped for “Just-in-
Time” Manufacturing
0
5
10
15
20
25
30
35
40
45
1990 1992 1995 2000
Logistics has given rise to two fundamental features of the contemporary economy:● Just-in-Time (JIT).● Door-to-Door (DTD).
Both favour use of the least energy efficient modes:● Road.● Air.
Impact:Impact:● Cycle time requirements
down by 25% between 1990 and 2000.
● Half of the productivity boom of the late 1990s resulted from logistics.
European Commission
Distribution Fleet management Returns and reverse logistics Sorting
Warehouse Warehouse operations Inventory management Order picking and
packing
Local delivery
Call center
Online
OR
Data center Order processing Customer
analysis Inventory
analysis
Order origination Order receipt Order tracking Customer and call
center management
A Supply Chain PerspectiveA Supply Chain Perspective
50% inventory reduction. 40% increase in on-time deliveries.27% decrease in cumulative cycle time.Doubling of inventory turns coupled with a nine-fold reduction in out-of-stock rates.17% revenue increase.
European Commission
Supply Chain LogisticsSupply Chain Logistics
First Generation(1970s - 1980s)
Transportation / warehousing
Freight forwarders / brokers
Shipper’s agents
Second Generation(1980s - 1990s)
Non asset-based companies
Asset-based companies with increased service offerings
Third Generation( 2000 and beyond)
Online freight marketplaces
Web-based 3PLs
Increasing supply chain integration
Bro
ad
er
more
in
teg
rate
d
serv
ices
European Commission
34.239.6
46.0
54.0
1997 1998 1999 2000
Market Growth of 3PLMarket Growth of 3PL
European Commission
Source "What's ahead for 3PLs“ Modern Materials Handling, April, 2000
The Main Users of 3PL The Main Users of 3PL
Computer
Consumer
Retail
Chemical
Medical
Automotive
75.9
71.1
61.4
56.2
53.8
82.2
Industry
European Commission
Information has become the fuel of our knowledge society. The ability to manage the right information in due time is therefore pivotal for the assurance of competitive advantages.
Technology doesn't usually save companies time or money but, in a competitive world, it often keeps them in business.• Anonymous
The Role of Information The Role of Information
European Commission
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1991 1998 1999 2000 2001 2002 2010 2015
Inland Waterways Rail Road
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
750
800
850
900
950
1000
1050
Volume
Year
20002000
20202020
Freight Market – A SnapshotFreight Market – A Snapshot
European Commission
Consumer
The Freight Business ProcessThe Freight Business Process
Producer
European Commission
A Supply Chain A Supply Chain BusinessBusiness Rationale RationaleImprovement of customer service by
delivering
• The right goods
• In the right quantities
• In the right condition
• Delivered to the right place
• At the right time
• For the right cost.
• Ensure revenue growth
• Improve asset use
• Reduce inventories
• Accelerate “cash to cash” cycle
• Enhance supplier/supply management
• New integrated higher-revenue services(e-services-based)
• Responsive order management
• Improvement of demand planning
• From supplier to partner
CustomerCustomerFocusFocus
GlobalGlobalCompetitivenessCompetitivenessInnovationInnovation
European Commission
Innovative business and operational processes from service origin through to destination
Continuity of service, notably across borders
Coherent management of information across the commercial, logistic and operational chains of the railways
More reliable and flexible management of infrastructure and mobile assets notably under degraded operating conditions
Enhanced demand/supply management
TAF-TSI TAF-TSI An Enabling Information Backbone An Enabling Information Backbone
TAF TSI – A “quick start”TAF TSI – A “quick start”
Not a final goal Not a final goal
European Commission
TAF TSI TAF TSI Potential Deployment ScenariosPotential Deployment Scenarios
System DevelopmentPartnerships
Information Providers
SystemNetworking
European Commission
TAF TSI - A SWOT AnalysisTAF TSI - A SWOT Analysis
Strengths
Opportunities
Weaknesses
Threats
European Commission
A SWOT Analysis I A SWOT Analysis I
•Quality of Service across Value-Chain• Better management of operational processes • Responsiveness mainly in degraded mode
conditions• Innovation capability
Strengths
•Quality of information/Confidentiality Issues•Management of intangible rather than
tangible assets• IT systems know-how of the rail sector
(railways and traditional suppliers alike)• Contractual Issues relating to System
Procurement
Weaknesses
European Commission
A SWOT Analysis IIA SWOT Analysis II
• Competition interests between parties• Fragmentation of deployment• Limitations of legacy IT systems• Priority of Investments/ROI timing• Problems of interoperability of IT systems• Cultural Change
Threats
• Innovation potential for revenue growth• Requirements from customers• Shortcomings of legacy IT systems• “In lieu” investments – IT as a means to
achieve enhanced operational performance• Better management of assets
Opportunities
European Commission
System Development Challenges System Development Challenges
European Commission
0
20
40
60
80
100
1955 1970 1985 2000
Hardware
Year
Perc
en
t of
tota
l co
sts
SoftwareSoftware
DevelopmentDevelopment
MaintenanceMaintenance
System LCC – Cost BreakdownSystem LCC – Cost Breakdown
2 5 65
7
867
Requirements
Specification
Design
Coding
Testing
Integration
Maintenance
European Commission
It is not necessary to change. It is not necessary to change. Survival is not mandatory.Survival is not mandatory.
EpilogueEpilogue
The mind is like a parachute,It works much better when it is open.