Master in

Supply Chain Management

Dr. Christoph Bode

Department of Management

Agenda

1. Supply chain management – An overview

2. Careers in supply chain management

3. Master in Supply Chain Management at Tilburg University

4. Participants’ perspective

5. Summary

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1 Supply chain management

– An overview

What is supply chain management?

• “Supply Chain Management is the

integration of key business processes

from end user through original

suppliers that provides products,

services and information that adds

value for customers and other

stakeholders” (Stock and Lambert,

2000).

• Supply chains compete, not

companies (Christopher and Towill,

2002)

• Key issues include multimodal

transport, outsourcing, globalization,

sustainability, lean management,

information systems, collaboration,

planning

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Why has supply chain management become topical?

Wells Fargo & Company East India Company

Change from “rigid” to “flexible” manufacturing

Ford: T-Model (“Tin Lizzy”)

Detroit, USA, 1908

Breakdown in single tasks

Specialization of jobs

Focus: Intra-organizational

Highly standardized products

Focus on cost efficiency

Rigidity

Production/supply networks

Specialization of performance units

Focus: Inter-organizational

Smart: fortwo

Hambach, France, 2008

Highly customized products

Focus on differentiation (and cost)

Flexibility

Example

Supply chain complexity:

Many supply chain tiers

OEM 1st tier supplier (seats)

2nd tier supplier (leather firm)

3rd tier supplier (tannery)

4th tier supplier (farmer)

Example

Customer Dealer

Configuration

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Supply chain complexity:

Many suppliers

• Mercedes-Benz E-class (W212, SOP: 2009)

• ~ 150 major direct suppliers

• Many of them deliver on a JIT or JIS basis

Example

Supply chain complexity:

Many geographic locations

Wafer Fabrication

Portland Salt Lake City Midget Haemek Santa Clara Arlington Greenock

Assembly & Testing

Cebu Malacca Penang Bangkok Toa Payoh

Prime Distribution Center

Swindon Portland Santa Clara Tokyo Hong Kong

Example

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The traditional "divide"

Supply chain managers' concerns Top management' concerns

Primary

concerns

Availability of supply

Fulfillment of customer orders

Customer lead times

Market share and growth

Profits

ROI

Stock price

Secondary

concerns

Quality

Cost

Raw materials

Manufacturing

Order processing

Logistics

Inventory

Strategic direction

Markets – Products

Markets – Geographies

Customer segments

Technologies

Competitors

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SCM's impact on the balance sheet

Source: Christopher, 2005

Balance sheet Supply chain

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SCM's impact on ROI

Source: Christopher, 2005

Supply chain

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Cost Of Goods Sold (COGS)

• Direct costs attributable to the production of the goods sold by a company, including

• Cost of materials used in creating the good ("purchasing cost")

• Direct labor costs used to manufacture the good ("manufacturing cost")

• How to reduce purchasing cost?

• Purchasing price

• Supplier selection

• Global sourcing

• Supplier management etc. etc.

• How to reduce manufacturing cost?

• Manufacturing footprint

• Manufacturing processes

• Lean management

• Inventory management etc. etc.

Supply chain

management and

operations!

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COGS at Unilever

Example

Supply chain and

operations costs:

~ 60% of revenues

from products

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Profit impact of purchasing: Reducing purchasing

costs vs. increasing revenues

47%

40%

50%

59%

0% 20% 40% 60% 80% 100%

Mechanical Engineering

Chemical Industry

Foods

Trade

Operative MarginOther CostsStaff CostsPurchasing costs

EBIT Margin

3.4 %

2.5 %

5.0 %

3.3 %

Lowering

purchasing

costs by 3 %

will have the

same EBIT-

effect as an

revenue

increase of …

Revenue

increase of

52 %

60 %

24 %

43 %

PI = EM

PC x PCR

PC = Purchasing costs in % of revenues

PCR = Purchasing costs reduction in % of the purchasing cost

EM = EBIT Margin %

PI = Profit impact of purchasing as compared to necessary

revenue growth

Examples

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Who are some supply chain leaders?

Rank Company Peer

Opinion

Gartner

Opinion

3-year weighted

ROA Inventory Turns

3-year weighted

Revenue Growth

Composite

Score

25% 25% 25% 15% 10%

1 Apple 3203 470 22.30% 82.7 52.50% 9.51

2 McDonald's 1197 353 15.80% 147.5 5.90% 5.87

3 Amazon.com 3115 475 1.90% 9.3 33.60% 5.86

4 Unilever 1469 522 10.50% 6.5 9.00% 5.04

5 Intel 756 515 15.60% 4.2 11.40% 4.97

6 P&G 1901 493 8.60% 5.8 3.60% 4.91

7 Cisco Systems 1167 517 8.50% 11.2 7.80% 4.67

8 Samsung Electronics 1264 298 11.60% 18.5 15.70% 4.35

9 Coca Cola Company 1779 278 11.70% 5.5 14.00% 4.33

10 Colgate-Palmolive 794 324 18.90% 5.2 3.60% 4.27

11 Dell 1409 342 6.20% 30.7 -0.60% 4.05

12 Inditex 745 221 18.00% 4.2 13.40% 3.85

13 Wal-Mart Stores 1629 282 8.80% 8.1 4.90% 3.79

14 Nike 955 236 14.10% 4.2 10.60% 3.62

15 Starbucks 808 159 16.50% 4.8 11.50% 3.41

Source: Gartner 2013 17

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2. Careers in supply chain

management

The supply chain management profession

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• Supply chain management is…

• interdisciplinary,

• collaborative,

• independent of specific industry,

• dynamic,

• and global.

• Essential capabilities:

• Overarching understanding of functional areas (from finance to marketing)

• Analytical skills

• Collaborative skills

• Major subfields:

• Purchasing management

• Logistics and distribution management

• Production and operations management

The link between supply chain management and

strategy

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New

product

development

Purchasing

and Supply Operations Distribution

Marketing

and

sales

Support: Finance, accounting, information technology, human resources

Competitive strategy

Product

development

strategy

Marketing and

sales strategy

Consistency and support between competitive strategy, supply chain strategy, and other functional strategies is important

Supply chain strategy

“The Hot New MBA: Supply-Chain Management”

(Wall Street Journal, June 6, 2013)

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Source: Wall Street Journal (2003):

http://online.wsj.com/news/articles/SB10001424127887324423904578523591792789054

Importance of SCM is increasingly reflected in top

management positions

Barbara Kux to take charge of SCM at Siemens CPO Agenda, 14 November 2008

The former Philips CPO joins the firm next Monday to take control of

the group's new supply chain management group. Her position will also

make her the only female board member of any company trading on the DAX 30,

Germany's stock market of the country's top 30 firms.

As head of supply chain management she will be responsible for the group's €42 billion

worldwide procurement spend. She will also become the company's Chief Sustainability

Officer, a role she also held at Philips.

"In view of the current global economic challenges, the appointment of Ms Kux comes just at the right

moment," said President and CEO of Siemens Peter Löscher. He added her responsibility for

procurement would be critical to improving the firm's overall efficiency.

Kux worked at Philips from 2003 until September this year and has also worked at Ford, Nestlé and

consultancy McKinsey. In 2007 she was ranked as Fortune magazine's nineteenth most powerful

woman in business.

Example

Source: CPO Agenda, 2008 22

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3. Master in Supply Chain

Management at Tilburg

University

Positioning of MSc in SCM

Starting

positions

• Manufacturing: Entry management positions in supply chain, operations,

purchasing, or logistics

• Service industries: Entry management positions at logistics service

provides

• Consulting: Generalist or specialist

Knowledge Scientific advances in purchasing, production/ operations, distribution, and

other advanced topics

Skills Qualitative and quantitative research skills required for academic studies

and practice

Additional practical skills (design, planning, modeling, ICT, collaboration,

coordination)

Teaching

policy

• Strong research focus and academic excellence

• Strong links to practice

Mindset Analytical, problem-solving, collaborative

Labor market Currently 1.9 months to find first job, alumni feed back generally positive,

still in high demand

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Curriculum (August Entrants)

Purchasing

Management

Production

Management

Distribution

Management

Research Skills

SCM

Corporate

Entrepreneurship

Supply Chain

Collaboration

Planning, Modeling,

and ICT Skills

Master

Thesis

Unit 1 Unit 2 Unit 3 Unit 4

Skills training and

topic definition

Extended proposal

development under

supervisor

Full-time

research Thesis:

• Heavy unit 1

• Optimal sequence

• Relatively fast 25

March 19, 2014

Curriculum (January Entrants)

Purchasing

Management

Production

Management

Distribution

Management

Research Skills

SCM

Organization

Theory

Supply Chain

Collaboration

Planning, Modeling,

and ICT Skills

Master

Thesis

Unit 1 Unit 2 Unit 3 Unit 4

Skills training and

topic definition

Extended proposal

development under

supervisor

Full-time

research Thesis:

• Heavy unit 3

• Less optimal sequence

• No flexibility at the end 26

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Course example:

“Collaboration game and advanced topics”

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Finished productComponents

Supply Production Distribution

Supply Chain

Purchasing Operations Sales

Reflect

Discussions

Presentations

Conceptualize

Lectures

Guest speakers

Apply

Rounds of play

Exercises

Experience

Feedback from the simulation

• A simulation game to reinforce supply chain fundamentals and apply advanced methods

• “The Fresh Connection”

• Web-based simulation of a fresh juice producer

• Goal: Highest ROI (costs, revenue, investments)

• Cross-functional teams

• Decision-making at the tactical/strategic level

• Six rounds with increasing task complexity

• (Advanced) topics we will address:

• Supply chain fundamentals

• Supply chain strategy and its implementation

• Agri-food supply chains

• Supply chain planning and S&OP

• Forecasting

• Supply chain collaboration

• Supply chain risk

• Close loop value creation

• 80% company assignment

• Albert Heijn: combining inbound and outbound

transportation flows

• DAF: spare parts management

• Coca Cola: redesign warehouse layout

• Closed loop supply chains at Philips, Assembleon, Oce,

Lage Landen

• Purchasing management at Nedtrain

• Maintenance of F16 jet fighters

• Also SMEs (e.g.,lean projects)

Examples of Master’s Theses

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Graduates: Some examples (since 2008)

Danny Baars Business consultant

Harm Jan Bech Procurement analyst Enexis

Hilde Botden Supply chain engineer VDL

Victor Breugem Supply chain planner, FrieslandCampina

David de Kruijf Supply chain planner Pearle

Willem Jan Castelijns Warehouse manager Panalpina

Niels de Rooij Business analyst Ploeger

Geoffrey Dickenson Operations manager WoonVeilig

Mark Ebbers Consultant Planon

Robbert Janssen PhD candidate VU

John Koers Interim Professional at Yacht

Robin Law Consultant at Every Angle

Inna Kostuyek Service analyst Philips Healthcare

Ronald Sol Teacher HAS Hogeschool

Dirk van Dooren Supply chain analyst LHC consulting

Robbie Vughts Head of EMEA Edwards Lifesciences SA

Yvonne van Mierlo Wethouder Economische Zaken, Sociale Zaken, Financiën en

Brainport. Beroepsloopbaancoach en mediator

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4. Participants’ perspective

5. Summary

• Conclusion

• Information market

• Questions?

• Career services and alumni relations

Closing

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For all students:

• Enroll via Studielink

Non TiSEM students who want to enroll in a (Pre-)Master also need to:

• Submit an application for admission

For more information go to

www.tilburguniversity.edu/education/masters-programmes/admissionprocedure/feb/

Admission & Application

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Guiding you in your career planning process

• Career Advice

• Career Workshop

• Internships

• TiSEM Career Mentor Program

Simone Hofland (K18)

Career Services Officer

013 466 4203

s.b.hoflandlokin@tilburguniversity.edu

www.tilburguniversity.edu/studentcareerservices

TiSEM Career Services

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March 19, 2014

Alumni are our most important ambassadors and our goal is to

continue to support our alumni to succeed in their professional

lives by providing opportunities to

• Expand Your Future

• Knowledge

• Skills

• Network

As a student, you can benefit from the experiences of the

thousands of alumni in the network

Pam Dupont

Alumni Officer

013 466 3603

alumni-tisem@tilburguniversity.edu

http://www.tilburguniversity.edu/alumni-tisem

TiSEM Alumni Relations

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March 19, 2014