Group 9: Ardales DionsonSolomon

Chua Hizola

IExplorer : TRIUMPH FOR SUPPLY CHAIN

OCTOBER 14, 2013

But First… Let’s Recap!

What is Supply Chain Management?

• The management of the flow of goods. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin.

• The streamlining of a business' supply-side activities to maximize customer value and to gain a competitive advantage in the marketplace.

Five Basic Components of SCM

Sectors of Supply Chain Management

• Demand Management Planning• Strategic Lead Time Management• Product Development and

Commercialization

Managing Strategic Lead Times

• Time Based Competition• Life Cycle and Lead Time• Drive to Reduced Inventories• The Concept of Lead Time• The Order to Delivery Cycle• Cash to Cash Cycle• Logistics Pipeline Management• Lead Time Gap• Reducing Logistics Lead Time• Improving Visibility of Demand

Time Based Competition

• Price and quality important, but increasingly cost of time is crucial element in choice: Shortening life cycles Customers drive for reduced inventory Volatile markets making reliance on forecasts

dangerous

Life Cycle and Lead Time

Drive to Reduced Inventories

• The drive towards Just in time delivery has had a major impact . Responsiveness can only be achieved

through time compression in supply chain.

• Volatile Markets & Forecasts: History tell us that no matter how

sophisticated the forecasting technique it will be wrong

The Concept of Lead Time

• The time it takes for customers to receive their purchases.

• The order to delivery cycle• Customers are increasingly sensitive to

time.• Shortening delivery time a major potential

source of competitive advantage

The Order to Delivery Cycle

Cash to Cash Cycle

• Time taken to convert order in to cash.• The longer the pipeline from the source of

materials to the final user the less responsive to changes in demand the system will be.

• Ensuring timely response to volatile demand will require a fundamentally new approach.

Logistics Pipeline Management

• The process whereby manufacturing and procurement lead time are linked to the market.

• Key managing the supply Chain as a single entity.

• Common fallacy long lead times give security. It’s the other way around!

Lead Time Gap

• If logistics lead time = customers required order cycle. Forecast & inventory not required!

Reducing Logistics Lead Time

• The visibility of the logistics process must be increased.

• Fundamental questioning of why we do things the way we do.

• Optimising Production Technology (OPT): All activities can be categorised as bottleneck

(slowest activity in the chain)or non bottle necks. Throughput of whole system is determined by

bottlenecks. Bottlenecks often associated with information flow

Improving Visibility of Demand

• Key requirement of getting earlier warning about customer’s requirements.

• Real demand may happen a lot earlier than demand penetrating the system.

Improving Visibility of Demand

• How: Improving information flow so

manufacturing gets to hear about changes in the market earlier.

Postponement of commitment of product to its final form

Earlier notification of customer intentions get customers to order more frequently

End of Presentation…

Thanks for Listening!