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B. Mktg. 880 Spring 1999

B. Mktg. 880 Spring 1999. “Perspective 2000 and Beyond ”. The Enterprise Stakes. What would happen to the future of your firm if a competitor could: deliver an equivalent value faster or more consistently to your customer provide the same level of service with half of your inventory

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B. Mktg. 880 Spring 1999

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  1. B. Mktg. 880Spring 1999 “Perspective 2000 and Beyond”

  2. The Enterprise Stakes What would happen to the future of your firm if a competitor could: • deliver an equivalent value faster or more consistently to your customer • provide the same level of service with half of your inventory • provide the same level of service with a significantly lower asset investment • reduce transaction cost by 50% or more • provide customize product, shipments and transactions and turn on a dime • develop an off-shore partner that can provide equivalent value at 60% of your cost What if your competitor could do all of these things??? 368

  3. Factors that will Affect the Growth and Development of Logistics 244 Source: 1998 OSU Career Patterns

  4. Challenges for the 21st Century Challenge No. 1: Identifying, monitoring & responding to rapidly changing customer value requirements.

  5. Best Practices in SCM and Logistics:Customize an Approach for Each Key Account(median percentage) 206 Source: 1998 OSU Career Patterns

  6. Best Practices in SCM and Logistics:EDI with all Key Accounts(median percentage) 207 Source: 1998 OSU Career Patterns

  7. Identifying value Monitoring value Responding to value Implement key partner strategy Move closer to demand point Agile mfg., product design & devel., process, custom. Customer Value Implications Actions

  8. Challenges for the 21st Century Challenge No. 2: Develop new supply chain global metrics reflectingshared vision & values between customer, supplier, & third party.

  9. Best Practices in SCM and Logistics:Co-design of Products with Key Suppliers(median percentage) 203 Source: 1998 OSU Career Patterns

  10. Importance of metrics Broaden view of metrics Expand customer value Develop SC metrics To develop macro metrics To the balanced scorecard Share Supply Chain Vision/ Values/ Metrics Implications Actions

  11. Challenges for the 21st Century Challenge No. 3: Develop the capability to collaboratein forecasting, value metrics & other value creating operational activities

  12. Best Practices in SCM and Logistics:Strategic Partnership with Key Customers(median percentage) 201 Source: 1998 OSU Career Patterns

  13. Best Practices in SCM and Logistics:Strategic Partnership with Key Suppliers(median percentage) 200 Source: 1998 OSU Career Patterns

  14. Best Practices in SCM and Logistics:Strategic Partnership with Key 3rd Party Providers(median percentage) 202 Source: 1998 OSU Career Patterns

  15. Develop focused cost SC anticipation Postponement strategy Shared visions/ values Implement ABC or related Collaborative forecasting full pipeline visibility To demand visibility To strategic partnership with key SC partners Supply Chain Collaboration Implications Actions

  16. Challenges for the 21st Century Challenge No. 4: Create a business process which leverages EDI/Internet & related technology to reduce transaction costs & increase information/ inventory velocity.

  17. Percentage of Domestic Customer Orders which are Transmitted via Electronic Commerce(median percentage) 214 Source: 1998 OSU Career Patterns

  18. Percentage of Total Orders to Vendors which are Transmitted via Electronic Commerce(median percentage) 213 Source: 1998 OSU Career Patterns

  19. Leverage Information Implications Actions • Transactional Relationships • Manufacturing cost • Inventory Level • To contractual relationships • To total cost to serve • Inventory Velocity

  20. Challenges for the 21st Century Challenge No. 5: Find new organizational alternatives & learning tools that mirror the results of supply chain wide process reengineering.

  21. Best Practices in SCM and Logistics:Cross Functional Teams(median percentage) 205 Source: 1998 OSU Career Patterns

  22. From traditional c/c vertical organization From traditional learning media & methods To strategies for horizontal SC management To new & efficient learning delivery systems Organizational Alignment Implications Actions

  23. Challenges for the 21st Century Challenge No. 6: Create a corporate environment where change management is a positive value & “thinking out of the box” is an accepted option.

  24. From risk adverse decision making From traditional logistics processes From long term resource allocation To entrepreneurial decision making To new processes for delivery value To long run resource utilization Vision Implications Actions

  25. New Metrics for the 21st Century Today21st Century Functional Costs Total Costs Cycle Time Time Definite Inventory Level Inventory Velocity Turnover Cash to Cash Cycle Domestic Global Firm Metrics Shared SC Metrics 853

  26. Principles of SCM 1. Engineer by account demand visibility as close to source of demand as possible 2. Allow SCM to manage (and intervene) in inventory flows the can’t see and don’t own 3. Develop collaborative vision, metric, & processes with key accounts 4. Develop costing systems that reflect horizontal S.C. processes 870

  27. Principles of SCM(continued) 5. Think “horizontally” rather than “vertically.” 6. Reduce transaction cost by trading information technology for transaction processing 7. Align the firms internal & external business processes to focus on “customer value” delivery 8. Utilize information technology as a learning/ teaching medium for all supply chain partners 871

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