Real World Manufacturing for the Real Economy Wallace Fung November 2003

Transcription

1 Real World Manufacturing for the Real Economy Wallace Fung November 2003 A Passion for Manufacturing

2 Clash of Operating Philosophies King of Supply Chain Execution Purchase based on fast and cheap Drive down costs with supply chain efficiencies Operations King of Innovation Purchase based on unique and advanced functionality Use innovation to increase market and keep competition off balance R&D

3 innovation execution AND vs. Not mutually exclusive Elegant execution

4 yesterday: provided competitive advantage today: price of entry

5 elegant execution = freedom to create value through innovation the new equation:

6 the equalizer era Next 3 5 years New technologies deliver the Dell supply chain model to the mass market Supply chain execution a commodity Innovators win

7 Today? Persistent pain in the chain

8 Persistent Pain in the Chain OEM Inventory 0 to 15 days Tier 1 Inventory 15 to 30 days Tier 2 Inventory 30 to 60 days Tier 3 Inventory 60 to 90 Four to six weeks delay!! Time-to-Market and Supply Chain Cost

9 Auto Industry Evolution From Push to Pull Customer Responsiveness Ford & Sloan Mass Production Vertical Integration Current State Toyota Production System Lean Production Kaizen Build to Order Extended Enterprise X Day Car Collaborative Business Model over Time

10 5-day car 72 hours to build a car Six weeks for car demand information to flow through supply chain Give me exactly what I want, not what you think I want

11 6 weeks to 6 hours

12 Information Flow Can t Be is a Restraint

13 The Opportunity: Reduce Costs and Increase Market Share Take inefficiencies out of the order to delivery process Decrease cost of managing customers and suppliers Decrease lead time from order to delivery Decrease inventory throughout the supply chain Increase sales and market share through shorter lead times and more responsiveness Increase customer satisfaction through better service and more custom options

14 Value for the Manufacturer Increase Gross Margin 5% 11.5% 3.0% 2.5% 2.0% 1.5% Min Max 1.0% 0.5% 0.0% Sell-Side Supply Chain Direct Purch Indirect Purch Life Cycle Source: AMR Research Inc. Supply Chain Management, Oct. 2000

15 market evolution

16 Real-Time Enterprise The Real-Time Enterprise is an enterprise that competes by using up-to-date information to progressively remove delays to the management and execution of its critical business processes. Gartner

17 Lean defined Lean refers to a lean manufacturing system, of which the Toyota Production System is the foremost example, that has relatively little non-value-adding waste and maximum flow..it emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. -- Master Scheduling in the 21 st Century Wallace & Stahl

18 real-time enterprise + lean = lean enterprise

19 Lean Enterprise The Lean Enterprise combines up-to-date information with lean concepts and processes to deliver configured products to the customer when the customer wants it, how the customer wants it, at a competitive price. Pam Lopker, QAD

20 new manufacturing techniques

21 business drivers Manage demand variability Design problem resolution Complex, constrained manufacturing Reduce administration cost

22 MRP, JIT and Lean planning MRP for mid- and long-term planning execution JIT used for build-to-order or final assembly Lean for build-to-demand pull for component items

23 Typical Value Stream Sacks 5 Days Limited to no visibility to upstream demand Work cells are arranged by function Order quantity is sized for maximum machine output Administration deals with Invoices, Vouchers, and Check Payments

24 The Lean Enterprise / Real-time visibility of actual Supply and Demand Work Cells to support a flow process Setup is reduced to support frequent change Administration is automated with paypoints and automatic payments

25 Lean Enterprise planning Forecast Master Planning MRP execution Lean JIT Forecast Sales Order Ship request Kanban Card A-Qty 120 B-Qty 300 Supplier Assembly Line Customer

26 Planning Meets Execution in the Lean Enterprise Inventory Cost Inventory Cost Inventory Cost Asset Utilization Customer Service Asset Utilization Customer Service Asset Utilization Customer Service MRP/Factory Op Lean MRP+Lean Source: S. G. Cowen

27 QAD s position

28 About QAD QAD has delivered software applications and services to the manufacturing industry for more than 23 years. From day one, we have focused on providing integrated planning, management and transaction systems that allow our customers to reduce costs, accelerate production cycles, increase quality and become lean, profitable competitors.

29 QAD Snapshot QAD COMPANY INFORMATION NASDAQ: QADI Headquarters: Carpinteria, CA Offices: 24 countries Customer Sites: 5,400 worldwide Employees: 1,300 worldwide Revenues: $200+ million QAD CUSTOMER DISTRIBUTION QAD FACTS Gartner Group ERPII Magic Quadrant ranks QAD as vendor with strongest ability to execute, April % of Fortune 500 manufacturers use QAD 10% of manufacturing sites worldwide use QAD including 4 out of 5 of the world s largest electronics 3 out of 4 of the world s largest medical 4 out of 5 of the world s largest beverage 2 out of 4 of world's largest food 16 out of 25 of the world s largest automotive suppliers QAD start supporting Linux since 2001 and has a trend that increasing customers are going to install our application on Linux environment. The facts of increasing QAD customers using Linux environment are because of Low Cost Stable Performance Easy to Maintain

30 Global Manufacturers Choose QAD AUTOMOTIVE CONSUMER PRODUCTS ELECTRONICS FOOD & BEVERAGE INDUSTRIAL MEDICAL

31 What We Do? QAD provides Enterprise applications for global manufacturing companies at three levels 1. Enterprise 2. Extended Enterprise 3. Manufacturing Community

32 QAD Applications Enterprise Applications Customers EMEA Asia Pacific Americas Manufacturing Service Financials Extended Enterprise Manufacturing Community Warehousing Enterprise Suppliers

33 Thank You A Passion for Manufacturing