AutomotiveBestPracticesForumSupplyChainManagement WELCOME Today smeetingwillfocusontheresultsoftheSupplyChainManagementAssessment completedby22automotivesupplierexecutivesand3vehiclemanufacturerexecutives Introduction TableofContents Introduction4 13SupplyChainManagement14 21DefinitionsandStrategy22 32UnderstandingExpectations33 38SupplyChainManagement39 47PerformanceMeasurement48 55TechnologySolutions56 60SCMOpportunities61 72 PageNumber IndustryForcesandIssues Introduction Theautomotivesupplychainisgoingthroughaperiodofunprecedentedchangeinordertomeetincreasingconsumerexpectationswithregardtoprice delivery andproductcustomization Themanagingofthesupplychainpipelineisthereforefacedwithanumberofkeyissuesincluding ElevatingsupplychainmanagementasacriticalsuccessfactortoachievingcompetitiveadvantageAligningtheorganizationalstructuretosupportglobalsupplychainmanagementEstablishingaprocessoriented functionallyintegratedsupplychainForecastingtheimpactofchangingglobalmarketsonsupplychaincostsandcapabilitiesDefiningkeyperformanceindicatorsandmeasuringsupplychainperformanceUnderstanding selectingandintegratingsupplychainmanagementenablingtechnologyAnticipatingandrespondingtotheimpactofsupplierconsolidationsAnticipatingandrespondingtotheimpactofOEMconsolidationsDefiningandtrackingtotalsupplychaincosts Introduction DefinesupplychainmanagementanditscomponentsUnderstandtheelementsofasupplychainstrategyPositiontheroleofasupplychainexecutiveIdentifytheelementsofsupplychainmanagementUnderstandtheroleofinformationtechnologyapplicationsIdentifyhowtoutilizeperformancemeasuresinthesupplychainprocessUnderstandhowtousebestpracticesandbenchmarkinginsupportofsupplychainmanagementUnderstandroleofcustomers suppliers andthirdpartiesforcollaborativesupport Today sObjectives Theintegratedsupplychainconcepthasgonethroughthreedistinctphases Source BernardLaLonde professoremeritusoflogisticsatOhioStateUniversity HistoryofSCM SCMOverview ThefollowingrepresentsomeoftheotherinitiativeswhichhaveeitherhelpeddeveloporhavebeenspawnedfromtheSCMmovement SCMRelatedConcepts SCMOverview Value Complexity Functional Silos VirtualExtendedChains IntegratedInternalSupplyChain IntegratedExternalSupplyChain SelectVendor CustomerCollaboration SelectedCross functionalTeaming InternallyFocusedOptimization COLLABORATION PULL PUSH SCMContinuum SupplyChainContinuum SCMOverview Asurveyconductedonsupplychainessentialsresultedinamanagementresponsefrom451companiesin25countriesAlmostone third 29 ofthecompaniessurveyeddonotinvolvetheirsuppliersininventorymanagementNearlyone quarterofthecompanies 22 donotinvolvetheircustomersinplanningmanufacturingrequirementsOnly13 ratedtheirabilitytocommunicatewithcustomersonforecastingasstrong 1 Planninganddeployinginventoryeffectively2 Providingpredictabledeliveryperformance3 Creatingnewproductsandservices4 Reducingorderfulfillmentcycletime 5 Havingproductsinstock6 Decreasingmanufacturingcycletime7 Reducingtransportationcosts8 Reducingcustomerreturns9 Communicatingelectronicallywithcustomersandsuppliers TopSupplyChainEssentials Source 1997KPMG NorthwesternSupplyChainStudy CurrentStateofSCMMovement SCMOverview DegreeofCompletion Themajorityofcompaniesareimplementingsupplychaininitiatives Thisfigurehasincreaseddramaticallyfrom10 reportedin1996 Question3 5 35 60 0 0 0 0 10 20 30 40 50 60 70 80 90 100 Improvementinitiativesarecomplete Plantobeginaddressinginitiativesbeyond2000 Noinitiativesoropportunitiesplanned Plantobeginaddressinginitiativesduring1999 Currentlyevaluatingimprovementopportunities Currentlyimplementinganimprovementinitiative s ofRespondents SCMOverview Therearemanyapproaches concepts models andideologiesdevelopedtodescribeSCM BuysfromManufacturer Wholesaler Storesinwarehouses MovesittoRetailers Storesitonshelves SellsittoCustomers Supplier W house W house Retail Retail Customer Trucks SCMApproaches SCMOverview SourceThisportionofthemodelpertainstoprocurementofgoods rawmaterials semi finished orfinished andservices Partnershipbuilding strategicsourcing organizationcompatibility technologicalcapabilities andcommitmentstocontinuousimprovementareallimportantelements ProduceThissectionofthemodeladdressesthephysicalmanufacturingprocessandanycorrespondingconstraints ifapplicable Productionscheduling laborscheduling andminimizingdowntimeandsetupcostsareallkeyfactorsintheproductionprocessandsupplychainmanagement Moreimportantly thecoordinationoftheseeffortswithotherfunctionalareasofacompanymustbeevaluatedtoensurethegreatestsupplychainefficiency StoreTheStoresegmentofthemodelreferstoreceivingandshippingpractices inventorymanagement warehousemanagement andselectionofproductsfordistribution Internalvs outsourcingalternatives processflows layouts andstorage densitypracticesmustbeevaluatedintermsofcost quality andspeed Theeconomicandcompetitiveconsequencesofvariouswarehousingstrategiesmustbeanalyzedtoensureabetterreturnonassetsandlong term bottom lineimpact SupplyChainModel SCMOverview PlanDisciplinedplanningisneededtomaximizethecoo