Operational Excellence with an Integrated Supply Chain

Transcription

1 Welcome to Session 227 Operational Excellence with an Integrated Supply Chain Jennifer Sherman Senior Director, Applications Strategy, Oracle Corporation Presented by: Tom Singer Principal, Tompkins Associates Sponsored by: 2012 Material Handling Industry. Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.

2 Agenda Challenges in the Modern Supply Chain A New Approach: Information Driven Value Chain Convergence Benefits of a Consolidated Logistics Platform Supply Chain Systems Landscape and Trends Factors that Drive Supply Chain Systems Strategies

3 Supply Chain Challenges McKinsey Global Survey 2010 McKinsey Global Survey (2010). The survey was in the field from October 12 to October 22, 2010, and received responses from 639 executives representing the full range of regions, industries, and tenures. At the C-level, the range of functional specialties is also represented.

4 Traditional Supply Chain Approach Inside the four walls : perfect internal functions New Regulations Unanticipated Events Disruptive Changes Supplier Strike Demand Shocks External Processes & Information Competitor Plans Predefined Processes Corporate Objectives M&As Undefined, Ambiguous Information Price Flux Cross-LOB Programs Rigid processes optimized for static conditions A new approach needed for a new environment

5 A Better Approach: Information Driven Real-time global visibility into Demand signals Supply network Market dynamics Information contextualization Collaboration Process framework Decisions, planning, execution all driven by real time actionable information

6 Operational Challenges Procurement Manufacturing Order Management Warehouse System 1 Warehouse System 2 Warehouse System N RF Middleware RF Middleware RF Middleware Integration and Operation Complexity, Localized Solutions

7 Information Driven Approach For a dynamic, global environment EXTERNAL INPUTS UNPLANNED SCENARIOS CORPORATE OBJECTIVES Information Driven Approach AMBIGUOUS DATA DISRUPTIVE CHANGES NEW PROGRAMS Allows enterprises to Predict market requirements & risks Adapt to volatile market conditions NIMBLE PROCESSES Align operations across global networks Inbound Logistics Operations Outbound Marketing Logistics & Sales Service

8 Performance Value Chain Transformation From Fragmented Supply Chain to Integrated Value Chain Align Logistics Processes Manual Inventory Basic Work Execution Support Maximize Work Efficiency Marginal Stable Advanced Best Practice Manual Automated Optimized Aligned Inventory Accounting Basic Execution Process Integration Multi-Enterprise Orchestration

9 Value Chain Management Information Driven Value Chain: Core Principles Information-Driven Value Chain Profitable Innovation PRODUCT DEMAND Demand Driven Alignment Real-Time Information Fulfillment Excellence SUPPLY Demand Driven Predict and shape demand Fulfillment Excellence Adaptive supply through integrated logistics & mfg Profitable Innovation Reduce time-to-market, improve quality & compliance Value Chain Alignment Profitably balance supply, product with demand and corporate goals Maximize Value Creation by Integrating & Optimizing Demand, Supply and Product Chains. Drive Operational and Innovation Excellence.

10 Value Chain Management Information-Driven Value Chain DEMAND Demand Driven Alignment Profitable Innovation PRODUCT Fulfillment Excellence SUPPLY Real-Time Information

11 Transforming the Value Chain Why It Matters Leaders have: 15% less inventory 17% better order fulfillment 35% shorter cash-to-cash cycle times Which translates to: 60% better profit margins 65% better EPS 2-3X the ROA Source: AMR Benchmark Gartner/AMR Demand Driven Value Network Gartner/AMR Demand Driven Value Network: Top 25 Supply Chains

12 Integrated Optimization Value Chain Execution Heterogeneous Order Capture Solutions Fleet Mgmt Transportation Management Order Management Global Trade Automation & RFID Warehouse Management Labor Integrated Business Intelligence Quality Production Service Transaction Integration Process Synchronization Converged Optimization Analytics

13 Integration & Choice Choose The Solutions You Need Select The Deployment That s Right For You Upgrade On Your Schedule

14 Information Driven Value Chain Delivering on Core Principles: Fulfillment Excellence Value Chain Execution Align Processes Optimize Decisions Evolve Fulfillment Standardize and automate logistics processes Converge processes: eliminate functional silos Optimize decisions: labor, shipments, assets, compliance Business intelligence driven operations: faster & better decision making Flexibility to adapt to new business models & changing conditions Global operations: all lines of business, flows & regions

15 Stages of Transformation From Fragmented to Integrated Value Chain Execution KEY AREAS MARGINAL STABLE ADVANCED BEST PRACTICES WMS Paper based inventory control Barcode enabled, user driven execution System directed complex material routings Customer compliance Networked cross docking Logistics support in manufacturing and service centers Proactive Labor Management TMS Manual routing guides Automated carrier selection & tendering Optimization of outbound shipments Track & trace visibility Optimization of all freight across lines of business, supply chain flows, geographic regions Proactive in-transit supply chain management Global Trade Manual compliance reviews Automated denied party screening System driven trade compliance for specific regulatory regimes Anywhere-to-anywhere global control of all import/exports Centralized trade policy management

16 Comprehensive Logistics Solution Integrated Logistics Adapts to Changes Carriers / 3PLs Global Customers Collaboration & Event Management Inbound Supply Source Plan Pack Book / Manage Pick & Rate & Track Settle Tender Wrhs Label Ship Integrated Planning & Execution Outbound Demand Destination Continuous Improvement On-Time Performance Customer Satisfaction Carrier Analysis

17 Comprehensive Logistics Solution Enables Cross-Functional Process Optimization Planning (Plan & Monitor) Inventory Optimization Warehouse (Store & Manage) Dynamic Rerouting & Drop Ship Supply / Demand Matching Stage & Cross Dock Transport (Move & Track)

18 WMS and Manufacturing Extend Beyond Sales Order Inputs Solution Integration Enables: Sales Orders Discrete Mfg Processes - Task-managed component picks - Cross-dock to / from manufacturing - Directed ship from manufacturing - Compliance labeling - LPN and lot / serial creation and tracking Supports Full Spectrum of Tasks: - Simple kitting to full BOM / work order jobs WMS Solution - Seamless CTO flow

19 WMS and Service / Spares Integrate all Inventory Transactions Warehouse Mgmt Manage high volume DC operations (pick, pack and ship) with WMS and leverage internal orders to release parts to the field Distribution Center Provide a single, common view of all inventory Regional / Field Warehouses Field Technician Stock Service / Spares Mgmt Integrate and manage internal and field inventory locations Consolidate / coordinate all field requests to maximize DC efficiency

20 Align <Insert Picture Here> Vision without execution is hallucination Albert Einstein Nobel Laureate 20

21 Value Chain Transformation ROI Best in Class Examples 30% increase in operator productivity 30% decrease in handling cost/unit 95% reduction in overtime used 30% reduction in scrap 50% increase in on time shipments 19% improvement in production accuracy 99% improvement in WIP accuracy 33% in mfg productivity Optimize and Streamline fulfillment operations Synchronize processes across functional silos Monitor supply chain performance to Goals Collaborate with trading partners for Accurate supply chain Data Globalization & Standardization of processes Drive customer compliance Support expansion into new markets and higher business volumes Greater Agility to respond to Change Support Warehousing Discipline across all functions in the supply chain

22 SUPPLY CHAIN SYSTEMS LANDSCAPE AND TRENDS

23 Supply Chain Systems Landscape

24 Supply Chain Solutions Evolution Custom Point Solutions. Internally developed application or commercial application heavily customized. Best-of-Breed Packages. Commercially available, point solution package. Custom or pre-packaged connector-based integration to core enterprise solutions. Supply Chain Suites. Commercially available suite covering two or more core supply chain systems components Platform Solutions. Integrated enterprise solution with full featured supply chain modules. Custom Point Solutions Best-of- Breed Packages SC Suites Platform Solutions

25 Drive toward Integrated Solutions What is an Integrated Solution? Multiple core modules provided by single vendor Out-of-the-box integration between modules Common technology and application stack Evolutionary Pressures. Supply chain challenges Build out of best-of-breed and ERP vendor solutions. Acquisitions and market conditions Integration Complexity Avoidance. Cost, time, and resource requirements to integrate point solutions with other enterprise applications Lower Cost of Ownership. Platform acquisition, ongoing administration and internal support costs. Desire for Common Tool Set. Standard rules engine, extensibility tools, visibility platform, integration framework, and business intelligence platform.

26 Supply Chain Solution Sources Supply Chain Consortium. Subscriber SCM Solution Provider by Type Source: Supply Chain Consortium (

27 Enterprises with Multiple WMS Solutions Supply Chain Consortium. Subscribers with Single and Multiple WMS Solutions Source: Supply Chain Consortium (

28 WMS Standardization Approach Supply Chain Consortium. Subscribers Seeking to Standardize on Single WMS Solution by Solution Type Source: Supply Chain Consortium (

29 Supply Chain Consortium Respondents Supply Chain Consortium. WMS Respondents by Industry Type Source: Supply Chain Consortium (

30 FACTORS THAT DRIVE SUPPLY CHAIN SYSTEMS STRATEGIES

31 Supply Chain Solution Strategy Drivers Requirements Functional Integration Size/Complexity Extensibility Current State Landscape Heatmap Roadmap Financial Position Target Solution Perceptions Enterprise Departmental Individual External Ownership Cost Platform Administration Internal Support External Support

32 Supply Chain Solution Differentiators Solution Type Vendor Package, Custom, Internal Type of Vendor Platform, Supply Chain Suite, Single Solution Operation Size and Characteristics Cost Deployment Model On-Site, Hosted, SaaS Industry Experience Functionality Vendor Viability and Ability to Deliver IT Foundation Platform and architecture Integration Auto-ID support Assess Select Implement Support

33 Basic Point Solution Integration Map Enterprise System (Purchasing, Order Mgmt, Inv. Mgmt,) Item & X-Ref PO ASN Receipts Orders Inv Status Ship Confirmation Inventory Trans/ Synch Integration Layer Item & X-Ref PO ASN Receipts Orders Inv Status Ship Confirmation Inventory Trans/ Synch Warehouse Management System

34 5 Reasons to Pursue Integrated Solution 1. Lower Integration Cost & Complexity. Out-of-box integration. Eliminate 3 rd party middleware. Reduce implementation resources requirements and risks. Reduce custom integration development costs. 2. Lower Cost of Ownership. Common platform reduces acquisition and ongoing administration costs. Lower internal support costs. 3. Standard Tools. Common user interface, rules engine, extensibility tools, visibility framework, and business intelligence platform. Enhances usage and value as well as lowers ownership costs 4. Single Source of Truth. Promotes master data management by eliminating information silos. Enhances data synchronization across enterprise and supply chain partners. 5. Enterprise Alignment. Provides common systems roadmap across enterprise. Promotes process alignment across organization. Reduces change management complexity.

35 Best Practices Approach to Determining Supply Chain Solutions Strategy Requirements Centric. Strategy and selection process that focuses on functional and businesss requirements. ROI Driven. Decision process based on structured cost and benefits analysis. Scope and Roadmap Clearly Defined. Scope matched against organization size and complexity as well as requirements. Target solution clearly identified on enterprise roadmap. Path between as-is and to-be states identified. Organization Aligned. All organization entities impacted by solution are aligned with strategy and approach. Resulting decision and project are not owned by single entity (e.g. IT or Logistics) but by enterprise. Risks Identified. Risks inherent in strategy are identified and understood including controlled (e.g. ability to deliver ) and uncontrolled (e.g. unforeseen business change, vendor viability) factors.

36 Summary Drive to Value Chain Transformation: flexible, optimized and aligned processes for fulfillment excellence Establish Global, anywhere-to-anywhere fulfillment support across lines of business, supply chain flows and regions Look for a Best-in-class modular solution that enables incremental deployment

37 Next Generation Logistics Responsive Fulfillment Optimized Decisions Aligned Processes

38 Questions? Q&A

39 For More Information: Speaker: Home Page: Speaker: Home Page: Visit us at MODEX 2012 in booth Material Handling Industry. Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.