Supply Chain Strategy

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1 Supply Chain Strategy Webcast March (1) (781) Page 1 This report has been prepared by Boston Strategies International at the request of CLIENT for the purpose of establishing its operating strategies. It may not be appropriate for other purposes or audiences. This report contains forward-looking statements and projections with respect to anticipated future performance of CLIENT, suppliers, customers, and/or general or specific economic conditions and factors that are based on Boston Strategies International s analysis of market trends and external data. Forward-looking statements and projections are not guarantees of future performance and involve significant business, economic and competitive risks, contingencies and uncertainties, which are difficult to predict. Accordingly, these projections and forward-looking statements may not be realized and actual results may vary up or down. This report may not be reproduced or distributed without express written approval from Boston Strategies International.

2 Global Supply Chain Economists Industry Cost and Pricing Strategy Research Analysis Consulting Page 2

3 Agenda Background: why supply chain? Definitions Strategy vs. management Supply chain strategies Choosing a strategy Organizing for supply chain management Measuring supply chain success After supply chain Page 3

4 Background: why supply chain? Globalization Longer supply chains Bullwhip effect High cost Inadequate service Page 4

5 Definitions Supply management Supply chain Supply chain management Demand chain management Operations management Logistics Page 5

6 Strategy vs. management Strategy Intention Competitive advantage High level Results focus Harder to quantify Often unstructured Abstract Management Actual situation Internal improvement Low level Process focus Easier to quantify Usually highly structured Concrete Page 6

7 Supply chain strategies Overriding Supply Chain Financial Objective Strategy Key Functions Increase asset utilization Shape capacity Finance Production Reduce Working Capital Synchronize the process Logistics Transportation Increase Revenue Shorten cycle time, Demand Planning including NPI R&D Reduce Operating Simplify the Engineering Cost product or service R&D Increase Margin Shift demand Marketing Sales Page 7

8 Supply chain strategies (continued) Shape capacity- Finance & Production Shift demand- Marketing & Sales Synchronize the process-logistics & Transportation Simplify the product or service- Engineering & Shorten cycle time, incl NPI- Demand Page 8

9 Choosing a supply chain strategy Supply Chain Strategy Extraction Process Mfrs Shape capacity Value-Added Service Providers (like tollers) Discrete Mfrs Value added Distributors and Resellers Synchronize the process Shorten cycle time, including NPI Simplify the product or service Shift demand Page 9

10 Organizing for supply chain management Culture Trust Partnering Training CPM, CPIM, CIRM CSCP, CPSM, CSCA Organizational structure Logistics S&OP Inventory management Game theory Transportation,Routing Forecasting Ops management Production Typical Owner (Function or Department) Customer Service Demand Planning Engineering Finance IT Logistics Marketing Materials mgmt Procurement Product Development Production Control Sales Transportation Page 10 Process or Activity Returns, repairs, recycling, mx S&OP Sales forecasts and customer orders DFx Early supplier involvement PLM Standardization Value engineering Cost analysis Hedging TCO EDI - e-collaboration portals Collaborative inventory management DRP Postponement VMI Channel design Value analysis Yield management TQM Auctions/events Compliance mgmt. Gainsharing Global sourcing Outsourcing Supplier collaboration and administration i ti Supplier consolidation Supplier development NPI Constraints management Six sigma Lean -CPFR Personalization Pull (ECR, JIT, etc.) Cross-docking

11 Measuring supply chain success Page 11

12 Global supply chains Service supply chains Green supply chains Para-supply chains Supply networks After supply chain Page 12

13 Global Supply Chain Economists Boston Strategies International helps supply chain executives make critical supply chain decisions that involve investment and risk by forecasting the evolution of supply markets and technologies. Our mission is to help our clients develop globally competitive supply networks that maximize Supply Chain Value. Our products and services include: Industry Research that helps investors and policy makers identify emerging issues that affect their supply chains, and quantify the impact that they will have Cost and Pricing Analysis that helps financial and operational managers plan and budget by providing benchmark, best practice, and forecast data tailored to their companies' supply chains Strategy Consulting that helps supply chain leaders make high-stakes decisions related to mergers & acquisitions, market entry, capital investments, outsourcing, off-shoring, and make-or-buy Boston, MA, USA 445 Washington St Wellesley, MA USA Dubai, UAE Executive Suite P.O. Box Sharjah, United Arab Emirates (U.A.E.) Shanghai, China 31F Jin Mao Tower 88 Shi Ji Avenue Shanghai , China David Jacoby: Page 13