CIO Summit Latin America

Transcription

1 CIO Summit Latin America CMD Media The Role of Information Technology within Supply Chain Management Paulo Núñez, CIPM Panama June 2013

2 Key Items By the end of this session we will review the following topics Introduction to Supply Chain Management Competitive Advantage and Supply Chain Management The Synchronous Supply Chain The Supply Chain of the Future Key take aways for CIOs CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 2

3 Key Items By the end of this session we will review the following topics Introduction to Supply Chain Management Competitive Advantage and Supply Chain Management The Synchronous Supply Chain The Supply Chain of the Future Key take aways for CIOs CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 3

4 Introduction to Supply Chain Management Supply Chain Management Context SCM Context Supply Chain Management and Logistics are not new ideas. From the building of the pyramids and the relief of hunger in Africa, the principles underpinning the effective flow of materials and information to meet the requirements of customers have altered little. Throughout the history of mankind wars have been won and lost through logistics strengths and capabilities. CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 4

5 Key Items By the end of this session we will review the following topics Introduction to Supply Chain Management Competitive Advantage and Supply Chain Management The Synchronous Supply Chain The Supply Chain of the Future Key take aways for CIOs CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 5

6 Competitive advantage and Supply Chain Management Effective Logistics and Supply Chain Management have a vital impact in the achievement of competitive advantage Competitive Challenge¹ Implications High Be distinguished from competitors. Strong strength in many markets towards a decline in the strength of the brand. Relative differentiation Avoid being perceived as commodities (perceived product equality in the eyes of the customers). More difficult to compete in the pure basis of brand or corporate image. Low Low Relative delivered costs High In current competitive market, companies are forced to have a cost and value advantage. Source: 1) Christopher. M Logistics & Supply Chain Management,, 4 th Edition CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 6

7 Competitive advantage and Supply Chain Management Biggest business challenge and Opportunity Customer Satisfaction SOURCES OF DOMINANCE¹ AGE OF MANUFACTURING Mass manufacturing makes industrial powerhouses successful AGE OF DISTRIBUTION AGE OF INFORMATION AGE OF THE CUSTOMER Global connections and transportation systems make distribution key. Connected PCs and Supply Chains mean those who control information flow dominate Empowered buyers demand a new level of customer obsession ? Ford, RCA, GE, Boeing, P&G, Sony Walmart, Toyota, UPS, CSX Amazon.com, Google, Intuit, MBNA Contenders include Facebook, IBM, Best Buy, and Apple Successful Companies Source: 1) June 2011, Competitive Strategy in the Age of the Customer Forrester report CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 7

8 Competitive advantage and Supply Chain Management Biggest business challenge and Opportunity Customer Satisfaction Key Facts Today s competition takes place not between companies but between Supply Chains The proper view of costs has to be end-to-end, at the end all costs will impact the price to the customer (many companies only take into consideration what happens in the four walls) SCM Integration benefits Cycle time reduction (time is money). Inventory reduction ($ impact) Operational efficiency Speed up flow of information Substituiting inventory for information and responsiness (The earlier warning of customer requirements, and lead times are short, reliance on inventory can be reduced) More opportunities in the wider supply chain rather than in the own internal operations CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 8

9 Key Items By the end of this session we will review the following topics Introduction to Supply Chain Management Competitive Advantage and Supply Chain Management The Synchronous Supply Chain The Supply Chain of the Future Key take aways for CIOs CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 9

10 Context The extended Enterprise and the virtual Supply Chain achieving synchronization through shared information SCM Integration benefits Sources Converters Retailers Product and Services Flow Information Flow Funds Flow Suppliers Distributors Consumer Shared information is the way to get connected to the Supply Chain and enable a synchronized network. Synchronization implies each stage in the chain is connected to the other, and all march at the same drum beat. This requires a high level of process alignment. Information Highway CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 10

11 Integration enablers Processes that need to be liked, upstream and downstream, to provide the foundation for supply chain synchronization Planning and Scheduling Design New product Introduction Product content mgmt Order management Sourcing and procurement Material positioning/visibility, advanced planning, scheduling, forecasting, capacity mgmt Mechanical design, electrical design, design for supply chain, component selection Bill of materials, prototyping, design validation, testing, production validation, transfer to vol. Change generation, change impact assessment, product change release Order capture/configuration, available-to-promise, order tracking, exception management Approved vendor management, strategic sourcing, supplier selection, component selection Role of Information Technology in the virtual Supply Chain Extention of information beyond classical dimensions, ability to link the customer directly to the suppliers, replenishment of the product in the market with their upstream operations and those of their suppliers through the use of shared information. Source: 1) Cookson, C. Linking supply chains to support collaborative manufacturing, Ascet, Vol.3 CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 11

12 Impacts NOT EXHAUSTIVE Typical impacts when the Supply Chain is not synchronized Conventional Supply Chain Management set up (internal focus, separate functions), result in need to buffer with inventory and/or time lags. More pipeline inventory is required. Increase of inventory carrying costs. Forecast errors remain. Increase/Sustain current levels of safety stock. Stock outs happen. As End-to-End pipeline times are long, responsiveness is low, and total costs are high. CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 12

13 Key Items By the end of this session we will review the following topics Introduction to Supply Chain Management Competitive Advantage and Supply Chain Management The Synchronous Supply Chain The Supply Chain of the Future Key take aways for CIOs CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 13

14 Context Summary on the key facts Activities once performed inhouse now outsourced Trend in Supply Chain focus has increased. Apple had an order backlog of more than USD 1bn after significantly underestimating demand at the launch of a new product in 1995 Toyota produced less vehicles than planned and quarterly profit shrank by 75% following the tsunami in Japan 2011 Dramatic increase in volatility in business environment. Tendency to make decisions on their supply chain network as it is or as it was. Higher leves of uncertainly in both demand and supply, breaking the balance in the equation. CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 14

15 Emerging of Mega-trends Analysis of global mega trends in order to understand future development of trade and transport Demographic Changes Growing Infrastructure Congestion Shifting Centers of Economic Activity Sustainability E-substitution Continuing Globalization Changing Competitive Landscape Consumerism Global Uncertainty and Increasing Volatility Increasing Complexity and Specialization Big Data/ Digitization What are the top 3 trends that have the highest impact on your business in the coming 5 years? CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 15

16 Deep-dive: Shifting Centers of Economic Activity Share of global trade excluding intra-regional trade 1990 Source: 1) Deustche Post DHL Study CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 16

17 Deep-dive: Shifting Centers of Economic Activity... until 2020 Share of global trade excluding intra-regional trade 2020 estimate Source: 1) Deustche Post DHL Study CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 17

18 How to get prepared? Need for adaptability and agility in business model Structural Flexibility: Reflects the ability of the Supply Chain to adapt or re-configure its architecture in response to major changes on the demand or supply. Enablers: - Visibility and information sharing - Access to capacity - Access to knowledge and talent - Inter-operability of process and information systems - Network orchestration CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 18

19 Key Items By the end of this session we will review the following topics Introduction to Supply Chain Management Competitive Advantage and Supply Chain Management The Synchronous Supply Chain The Supply Chain of the Future Key take aways for CIOs CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 19

20 Key questions for CIOs Is your business strategy considering Supply Chain Management synchronization? Is your IT Strategy looking only in to the four walls and not the bigger picture? Are you trying to improve the linkage within your extended Enterprise and Virtual Supply Chain? How much of you time and budget is dedicated to that? Do you have metrics, integrating your efforts and Supply Chain key levers (e.i impact on inventory reduction, etc.). CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 20

21 Do You Have Any Questions? Thanks! CIO Summit Latin America CDM Media Paulo Núñez June 2013 Page 21