Supply Chain Management for Food and Agriculture – Software Platforms and Functionality

Cristian Herghelegiu, PMP,Partner Account Manager,Micosoft Romania

01 November 2006 - Bucharest

Regional Competitiveness

Initiative

Improve Cost, Efficiency, and Quality through Supply Chain Management IT Integration

Agenda

• Agribusiness - Key challenges• Typical Supply Chain Management (SCM)• SCM selected benefits• Microsoft Dynamics solutions• Summary & Actions…

Agribusiness players

• Producers & Vendors (small, medium and large)

• Fruits and vegetables• Meat Industry• Milk industry• Beverage

• Integrated companies (meat, alcohol)

•Technology level (or absence)

•Standards lacks, raw materials quality

•Sales/Purchase Prices

•Purchase price (pressure on vendors)

Agribusiness key challenges

• Competition at all levels;• Operational margins – operational;• Prices (sales);• Standards and regulations– ability to sell in

further context;• Level of investment;• Human resources!

• Business Control!

What customers want*?

• Precision• Accesibility• Partnership• Consultancy

*Gallup research

Challenges

GlobaliGlobalisationsation

CompetitionCompetition

Customer Customer requestsrequests

StandardStandardss

Technological Technological EvolutionEvolution

Business Business resultsresults

Priorities

Customer relationshipCustomer relationshipexcellenceexcellence

Suppliers relationshipSuppliers relationshipexcellenceexcellence

Innovative productsInnovative productsand servicesand services

Operational excellenceOperational excellenceCost reductionCost reduction

How to hit priorities?

1. Business Acumen and vision!2. Business tools to allow and support:

• Focus on main business and not on operations;

• The best operational pattern;• Business Agility;• Affordable costs (ROI, TCO);• Easy adoption by the team (training time,

operational cost);• Easy to support (integrated with the rest of

platform);

Short definition of SCM

• Supply-chain management simply refers to the management of the entire set of production, distribution, and marketing processes by which a consumer is supplied with a desired product.

“…a set of interdependent companies that work closely together to manage the flow of goods and services along the value-added chain of agricultural and food products, in order to realize superior customer value at the lowest possible costs” *.

Folkerts and Koehorst, Challenges in international food supply chains: vertical co-ordination in

the European agribusiness and food industries. British Food Journal, 100, 385–388.

Typical Supply Chain

Operational effectiveness

• Many aspects of SCM, are efforts to improve the operational effectiveness of a chain:

– improved logistics, shared information systems, better information flows, reduced transaction costs, preservation of product quality, standards and integrity throughout the chain;

• Important in matching competitors;• Increasingly SCM becomes necessary condition for

access to certain markets (export markets, supplying to supermarkets);

• Will not guarantee a sustainable competitive advantage.

Basis Of Competition

The Past ...The Past ... The Future ...The Future ...

Product Product versus versus

ProductProduct

Supply Chain Supply Chain

versus versus

Supply ChainSupply Chain

Supply Chain Benefits

ManufacturingManufacturing DistributionDistribution RetailRetail ConsumerConsumer

Why SCM? – a vision at least…

• Sales forecasting• Purchase planning | stock replenishment• Capacity planning• Capacity Load (resource allocation)• Minimize inventory (to Just in time)• Time to market• Delivery cycle and Logistics

• Overall: cost reduction, higher return on invested capital, higher turn over… higher profitability

6 keys for successful SCM

• Recent studies of supply chains in Australia identified six key principles of successful SCM (AFFA et al. 2002):

1. focus on customers and consumers;2. the chain creates and shares value with all its

members;3. making sure the product fits the customers’

specifications;4. effective logistics and distribution;5. an information and communication strategy that

includes all chain members 6. effective relationships that give leverage and

shared ownership.

Benefits of Supply Chain Planning• Competitive advantages due to a greater quality

of service, shorter throughput times and cost savings.

• Lasting increase in customer satisfaction due to increased delivery reliability and increased ability to respond.

• Reduced costs due to minimization of warehouse stocks and more efficient resource planning.

• Increased efficiency due to assisted decision-making (planning algorithms, simulations) and alert functions.

Benefits of Supply Chain Controlling• Reduced costs as problems in the supply chain are recognized

and the appropriate measures set in motion early on.

• Lasting increase in customer satisfaction due to increased transparency and ability to react.

• Increased efficiency due to the optimal coordination of all supply chain processes.

• Competitive advantage due to the systematic recording and controlling of the complex relationships in the supply chain network.

• Productivity, from each entity to whole organization

• Empowerment: simple access to business vital information

• Expertise

Microsoft DMicrosoft DyynamicsnamicsCRMCRM

MicrosoftMicrosoft Dynamics DynamicsNNAVAV

Microsoft Microsoft DynamicsDynamicsAAXX

„„Microsoft GreenMicrosoft Green““

Integrated solutions

Categorii de solutii:Financiar, Resurse

Umane, Salarii, Mijloace Fixe

Categorii de solutii:Automatizarea vanzarilor, Marketing, Service

Categorii de solutii:Automatizarea

lanţului de aprovizionare

Gestiune, Stocuri,Automatizarea

serviciilor

Categorii de solutii:Enterprise Reporting, BI, KPI

Enterprise Resource

Management

Supply Chain

Management

Customer Relationship Management

Enterprise Resource

Management(ERP)

BusinessOperations

(SCM)

Analytics

Customer Relationship Management

(CRM)

The Breakthrough

The Strategy

Microsoft Microsoft

DynamicsDynamics

Significant Investment In Business Applications

• 23 years in business applications

• 9,300 partners• Over 298,000

customers worldwide*

* Includes Microsoft Dynamics, Microsoft FRx, Microsoft Forecaster, Microsoft Retail Management, Microsoft Small Business Financials and C5 customers

The Challenge

Sara,Sara,CFOCFO

Julia,Julia,SystemsSystems

Benjamin,Marketing

Karl,Karl,LogisticsLogistics

Kevin, Kevin, Account Mgr.Account Mgr.

Inga,Purchasing

Penny,Penny,PayrollPayroll

FinanceFinance

OperationsOperations

Sales & MarketingSales & Marketing

ITIT

• Familiar Look & Feel • All level integration

with Microsoft Outlook• Role based

AprilApril

“Very few know how many verifications and what work is required within the payment process. "

Platform integration

Secure the investment in technology

Trusted decisions

The right information, at the right time and in the right format

Specializare/Verticalizare

• Microsoft Dynamics – platforma ideală pentru verticalizare

• Sute de soluţii disponibile în prezent

• Flexibilitate pentru partener – valoare adaugata pentru client

• Productivitate pentru partener

RetailTransport şi LogisticăProducţie

DiscretăDe procesHigh TechModăUtilaje Alimente, Băuturi, Tutun Componente electrice şi electroniceSisteme de calcul Mobilă

DistribuţieAlimente & BăuturiProduse de consumProduse industriale

ServiciiFinanciare – Leasing, AsigurăriIT - Computer & SoftwareManagement & Consultanţă

ÎnchirieriDealership Auto

Focus pe industrii

Core Manu-facturing Core Retail Core Distribution Core Professio-nal Services Core Public Sector

Financial ManagementCore

CRM SCM Analytics

Vert

ical

Law Firms

Govern-ment

Health-care

Not-for-Profit

Educa-tion

Motor Vehicles

Specialty Retail

Hospita-lity

Physi-cians

ReliefOrgs

Private Schools

Municipa-lities

Restau-rants

PatentLawyers

Pharma-cies

Military vehicles

• O suita CRM completa  incluzand automatizarea fortei de vanzari, marketing si managementul contractelor de service

• Suita de aplicatii pentru managementul firmelor si institutiilor incluzand functionalitati de management financiar, SCM, CRM si planificare si control bugetar

• Management financiar pentru intreprinderi mici• Managementul firmelor de retail si POS • Managementul contactelor, contabilitate si

servicii online, integrate in pachet cu Microsoft Office

Portofoliul Microsoft Dynamics in Romania

Model de Business Indirect

Produse,Branding, MarketingSuport & Metodologie

Localizare,Produs & Marketing localSuport, Certificare şi trainingpentru parteneri

Analiză, Design, Configurare, Dezvoltare, Implementare, TrainingSuport

MicrosoftBusinessSolutions

MicrosoftBusinessSolutions

Birou MBSlocal

Birou MBSlocal

Reţea de parteneriReţea de parteneri

ClienţiClienţi

Vânzări,Informaţii de piaţă

Vânzări,Informaţii de piaţă

Vânzări,Informaţii de piaţă

Conclusions

• In new agro-industry development, building a supply chain has been demonstrated to be just as critical to the success of the industry as establishing adequate agronomic and pest-management practices;

• Microsoft Dynamics offers the integrated solution in order to optimize the operational, financial and customer and supplier related operations.

Actions

• Contact us at:– www.microsoft.com/dynamics

• Contact us and our partners at:– www.microsoft.ro/dynamics

cristian.herghelegiu@microsoft.com