Globalization & SCM Transformation Best SCM players in Korea. i2 Technologies Korea March, 2006

Transcription

1 Globalization & SCM Transformation Best SCM players in Korea i2 Technologies Korea March, 2006

2 Contents Best SCM players in Korea PI and SCM Journey SCM ongoing initiatives 2006 i2 Technologies, Inc. CONFIDENTIAL 2

3 Best SCM players in Korea Catching up and advancing beyond Korean companies have been working hard to learn from both teachers; 1. Japanese firms' advanced manufacturing technology, TQM, lean manufacturing, Kanban and Kaisen 2. American corporation's use of information technology, Business Process Reengineering and restructuring strategies Some companies in Korea, after making rapid advancement, escaping catch-up mode and are rapidly differentiating from their global competitors : The year of establishment Korean companies Japanese companies High-tech Samsung Electronics (1969) SONY (1946) Metal POSCO (1968) Japan Iron & Steel, the predecessor of Nippon Steel (1934) Auto Hyundai Motor (1967) Toyota Motor (1937) 2006 i2 Technologies, Inc. CONFIDENTIAL 3

4 Best SCM players in Korea Catching up and advancing beyond Fortune magazine highlighted that Today Samsung Electronics ranks No.1 in the world in eight product categories, including flash memory chips, computer monitors, big LCD screens, and CDMA mobile phones. CEO Yun s goal is to double that number of No.1 rankings in three years, and triple it in five years (September 5, 2005 issue) Revenue 2004 YEAR-OVER-YEAR-CHANGE Profits 2004 SAMSUNG $71.6 billion +31.5% $9.4 billion SONY $66.6 billion +0.4% $1.5 billion EMPLOYEES 66, ,400 HOUSEHOLD-NAME PRODUCTS STATE-OF-THE ART PRODUCTS None Flat-panel TVs Cellphones Memory chips Trinitron TV Walkman PlayStation Electronic games Robotic dog Source: FORTUNE (september 5, 2005) 2006 i2 Technologies, Inc. CONFIDENTIAL 4

5 Achievement AMR Global Top 25 Supply Chain, i2 Technologies, Inc. CONFIDENTIAL 5

6 Contents Best SCM players in Korea PI and SCM Journey SCM ongoing initiatives 2006 i2 Technologies, Inc. CONFIDENTIAL 6

7 Key innovation areas enabled by SCM Global demand mgmt. and consensus base forecasting As-Was As-Is Customer Salesman W14 ISD Total Demand Forecast (all SKUs) Local Marketing Customer Salesman Local Marketing W14W15W16W17W18W19W20W21W22W23W24W25W26W27W28W29 W14 ISD Total Demand Forecast (all SKUs) Traditional PSI method amplifying bull whip effect W14 W15 W16 W17 W18 W19 W20 W21 W22 W23 W24 W25 W26 W27 W28 W29 W14 ISD Total Demand Forecast (all SKUs) Global Support W14 W15 W16 W17 W18 W19 W20 W21 W22 W23 W24 W25 W26 W27 W28 W29 HQ Marketing Global Support Every individual s sales plan/forecast Kept In one real-time view Checked against actual HQ Marketing Sequential to concurrent & consensus-based forecasting process on a single table MBO based on forecasting/inventory personalization (by sales subsidiary & salesman) Sales plan based on consensus responded by RTF(Return to Forecast) by GOC 2006 i2 Technologies, Inc. CONFIDENTIAL 7

8 Key innovation areas enabled by SCM Global optimization by concurrent planning As-Was Allocation by each plant Supply plan and Distribution plan by local plants Korea Plant As-Is Global Allocation by Global Command Center Concurrent Optimized Plan & Synchronization of Supply-Demand Global Command Center China Plant Europe Plant N.America Plant Suppliers Plants Sales Subs Suppliers Plants Sales Subs Global production/distribution planning with consideration of all sales and manufacturing subsidiaries Strategy driven planning for global resource optimization & profit optimization Global visibility of all global operations (Integrated APS Monitoring UI) 2006 i2 Technologies, Inc. CONFIDENTIAL 8

9 Key innovation areas enabled by SCM Global Real-Time Order Promising (ATP) As-Was As-Is Inv. Shortage ATP based on local inventory Customer ATP based on supplying plan HQ ATP? On- Hand If you don t have products in your warehouse and you can t supply them, I will buy them from another vendor. Allocation On- Hand In- Transit Manager In Prod. Salesman Prod plan Customer Mat. Plan Salesman Pre-allocation down to salesman level based on forecast and production constraints ATP based on global inventory & production plan ATP policy based on customer priority and business policies 2006 i2 Technologies, Inc. CONFIDENTIAL 9

10 Key innovation areas enabled by SCM SRM Strategic Sourcing As-Was No leverage of global buying power during negotiation at local site As-Is Frequent negotiation at the global and/or local level with global visibility Manual & subjective supplier evaluation once or twice a year only Spend analysis by suppliers & parts at site level only Corporate Local Plant Business unit Local Plant Business unit Local Plant Global aggregation at any time & level Corporate Spend analysis by suppliers & parts at both global and site levels Business unit Local Plant Business unit Local Plant Local Plant Corporate spend aggregation, spend visibility by region, by business unit Baseline price and variance management Strategic procurement decision support by providing rapid & accurate information 2006 i2 Technologies, Inc. CONFIDENTIAL 10

11 Key innovation areas enabled by SCM Centralized Logistics Optimization As-Was Transportation plan and execution were done by different dedicated regional 3PLs As-Is Centralized & integrated transportation management (managing all operations, plan to execution) Centralized logistics MFG Region Dedicated 3PL DC Customer MFG X-Docking Direct Ship Regional DC Customer Minimizing transportation cost by selecting optimized route and utilizing X-Dock, direct shipment etc. (Carrier selection is done by competitive bidding when required: no dependency to a single carrier) Real-time proactive monitoring and multi-dimensional KPI management 2006 i2 Technologies, Inc. CONFIDENTIAL 11

12 Contents Best SCM players in Korea PI and SCM Journey SCM ongoing initiatives 2006 i2 Technologies, Inc. CONFIDENTIAL 12

13 SCM ongoing journey Business Value Shortcut for latecomer Technology limitation Expectation over capability Target Achieved Technology immaturity Trials and errors Competition among industry leaders ERP Implementation APS Implementation Theoretical Best 2006 i2 Technologies, Inc. CONFIDENTIAL 13

14 Sales revenue to date below target Volume below plan ASP below plan Market below plan Ineffective (below plan) Promotions Inventory below plan Competitor price drop Product mix skewed to lower price Ineffective bundles Promote Substitute Product Re-optimize list prices with reduced margin targets Expedite supply Promote alternate product Match Competitor Price Change bundle composition Increase Bundle Value to support higher price point Reduce Inventory Levels Bias incentives toward higher priced products Theoretical Best fast PDCA Order Forward Visibility Order Order Order Order - Order Mgt. layer Tracking Brokering Promising Pricing - Events --DOE Individual Order Plan Forward Visibility - Planning layer - Future knowledge - APS SCM Factory Plan Business Plan S&OP Master plan Replenish Plan Order Configur. Order Entry Demand Mgmt Workflow Process Playbook Fast PDCA Act Plan Check Do Backward Visibility - Transaction layer - Past & Current status --ERP ERP ERP ERP ERP Data synchronization Performance Indicator Physical Supply Chain Design Design Supplier Warehouse Manufact. D/C Sales Co. Channel End user Agile Business Framework 2006 i2 Technologies, Inc. CONFIDENTIAL 14

15 In Pursuit of Theoretical Best Best SCM players continuously expand global optimization scope to include their trading partners (suppliers, distributors) in order to differentiate further with even faster PDCA based on already built SCM capability Global Supply Chain Optimization Fast PDCA Demand Shaping Business Process Configuration Agility of Extended Supply Chain as a competitive weapon 2006 i2 Technologies, Inc. CONFIDENTIAL 15

16 Thank you!