KPMG_Supply_Chain.ppt

1、What are the Challenges FacingStrategic Supply Management (2) a financial interface that permits planning to be done in financial and operating terminology, and (3) a simulation capability which can be used to perform “what-if” planning scenarios.,Strategic Supply Management - is an integrated manag

2、erial and organizational approach used to combine the elements of MRP, MRP 11, DRP, & JIT systems by stretching their capabilities,Activities typically involved in this integrated approach are product design,procurement, inventory management, receiving, stores & warehousing, in-plant materials handl

3、ing, production planning, control & traffic, transportation, surplus & salvage, and the most important aspect . customer interfacing.,STRATEGIC SOURCING,AGILE OR SYNCHRONOUS MANUFACTURING,Development Selection Qualification Certification Communication,Material Flow Analysis Material RequirementsPlan

4、ning ManufacturingResource Planning Capacity Planning Inventory Analysis Production Scheduling Shop Floor Control,GLOBAL DISTRIBUTION,Warehousing Transportation Delivery Networks Distribution Planning,Customer service, minimized total material ownership costs and the strategic application of a firms

5、 assets are the major drivers of supply chain integration.,What is Supply Chain Integration?,Supply Chain Integration is the proactive linkage of all the elements within the Supply Chain.,Supply Chain Integration is the strategic acceleration of raw, work-in-process, and finished goods inventory tow

6、ard the customer.,A supply chain is the physical, electronic, and communication infrastructure which allows materials to move from the point of origin, be converted, and then move on to the point of use.,Supply Chain Integration unites the traditional internal and external components of a silo-based

7、 organization into a series of customer driven, integrated cross-functional, cross-organizational business processes.,Demand Forecasting and Production Planning,Order Processing,Warehousing,Transportation,Packaging and Material Handling,Inventory Management and Control,Customer Service,Purchasing,In

8、tegrated Supply Management,Marketing: Sales Goals Market Research Product Strategies Financial Agreements,Functions rather than processes Does not control more then a few steps Duplicated and competing functions Focus on function and assignment completion Emergence of functional silos,The traditiona

9、l approach to materials management,Distribution: Customer Service Outbound Logistics Channel Service,Traffic: Vendor decisions Scheduling Requirements Compliance Inbound logistics,Accounting: Profit/Loss Inventory Investments Parts pricing Financial agreements,Warehousing: Inventory Levels Re-Order

10、Quantities Safety Stock Needs Inventory Management,Production: Scheduling Raw Material Requirements Capital Needs Quality,Copyright 1995 KPMG Peat Marwick LLP.,The major business processes interacting with material flow which provide the foundation for Supply Chain Integration,Order Fulfillment New

11、Product Development Manufacturing Production Planning Scheduling Engineering / Design Change Quality Assurance Customer / Supplier Interfaces Transportation,Copyright 1995 KPMG Peat Marwick LLP.,Achieving Supply Chain Integration,Stage 1: Baseline,Stage 2: Functional Integration,Stage 3: Internal In

12、tegration,Purchasing,Materials Control,Production,Sales,Distribution,Materials Management,Manufacturing Management,Distribution,Materials Management,Manufacturing Management,Distribution,Marketing &Sales,Production,Distribution,Stage 4: External Integration,Achieving Supply Chain Integration, contin

13、ued.,Timely, accurate, paperless information flow,Suppliers,Customers,Smooth, continual product flow matched to consumption,OrderManagement,Planning,ProductLife Cycle,R&D and NewProductDevelopment,CustomerRelationshipManagement,Sourcing,Administration,CustomerAccounting,Services &TechnicalSupport,Ho

14、w can Supply Chain Integration be implemented across the traditional organization?,GENERAL MANAGER,ENGINEERING,PRODUCTION,MATERIALS MANAGEMENT,QUALITY ASSURANCE,Cost estimating Product engineering Value engineering,Production eng. Process eng. Incoming inspection,Purchasing Inventory control Traffic

15、,Supplier QA,VERTICAL MANAGEMENT,HORIZONTAL OR CROSS FUNCTIONAL MANAGEMENT,Functionally driven rather than process driven A function does not control more then a few steps Prone to duplicated and competing functions Critical focus on function and assignment completion, task centricity,Traditional Sh

16、ortcomings:,The impact of horizontal or cross functional integration onSupply Management,Function,STRATEGIC SUPPLY MANAGEMENT,Supplier Quality Assurance Incoming Inspection Components Engineering Cost Targeting Value Engineering Purchasing Inventory Control Traffic,Quality Assurance Manufacturing En

17、gineering Materials Management,Department,Commodity Grouping (1),An example organizational chart forcross functional teaming,- Materials & Production Planning - Procurement Planning - Capacity Management - Customer Service - Quality Assurance - Engineering,Commodity Grouping (2),Customer Grouping (3

18、),Process or Product Grouping (1),PP,MP,PP,CM,CS,MP,PP,CM,CS,MP,PP,CM,CS,MANAGER,MP,MP,CM,CS,PP,New Product Development,MP,QA,EN,PP,CM,CS,QA,EN,What are the Major Benefits for Supply Chain Integration?,Improved Customer Service Levels - as the supply chain begins to balance the execution and plannin

19、g requirements, service levels will increase throughout the supply chain with an order fulfillment process that integrates all the customers needs. Detailed Cost - a clear understanding of the cost drivers and their relationships to the overall value added cost picture. Reduced Cycle Times - the abi

20、lity to have the right product, at the right place, at the right time, faster is paramount in a time based competitive market.,Competitors who manage the supply relationship successfully have the opportunity to impact customer value through improved service, delivery, and product quality.,Reduced In

21、ventory - each segment of the supply chain carries inventory (safety stock) to protect against the unknown. As information is shared back through the supply chain, such as point of sale, warehouse issues or time phased replenishment schedules, demand uncertainty is decreased, therefore reducing inve

22、ntory. Faster Market Response - to shifts in demand, enabling an increase in market share and the avoidances,The impact of supply chain integration on ROI,Inventory,Accounts Receivable,Cash,Fixed Assets,Sales Revenue,Costs,+,+,+,Profit,Capital Employed,Customer Service Supply Chain Efficiency Asset

23、Deployment Asset Utilization Asset Deployment Asset Utilization,Return on Investment,Normative Model of Inventory Carrying Cost Methodology,Inventory Carrying Costs,Inventory Risk Costs,Storage Space Costs,Capital Costs,Inventory Service Costs,Inventory Investment,Insurance,Taxes,Plant Warehouses,Pu

24、blic Warehouses,Rented Warehouses,Company-ownedWarehouses,Obsolescence,Damage,Pilferage,Relocation Costs,The impact of supply chain integration on marketing,Brand Values Corporate Image Availability,Customer Service Partnership Quick Response,Flexibility Reduced Asset Base Low Cost Supplier,Market S

25、hare Customer Retention Superior,Customer Franchise,Industry Franchise,Supply Chain Efficiency,Marketing Efficiency,x,x,=,Consider an activity analysis in procurement,Administrative and Operating activities consumed 80% of the resources or dollars, with less than 20% of the resources directed into a

26、reas with the potential for greatest impact.,A Typical Company,100,90,80,70,60,50,40,30,20,10,5 %,15 %,25 %,55 %,40 %,5 %,30 %,25 %,Cost of Activities,Actual Long Term Business Impact,?,Strategic Development Supplier Relations Administrative Operating,!,Non - Value Added Filing$35,000 Data Entry$28,

27、000 Expedite$89,000 Returns$63,000 Correct POs$39,000,The Integrated Supply ChainPerformance Measure Framework,METRIC TYPE,PRIMARY,SECONDARY,(9)Delivery to Commit Date (10)Warranty Costs, Returns and Allowances (11)Customer Inquiry Response Time (12)Source/Make Cycle Time (13)Supply Chain Response T

28、ime (14)Production Plan Achievement (15)Value Added Productivity (16)Forecast Accuracy (17)Inventory Obsolescence (18)Capacity Utilization,(1)Perfect Order Fulfillment (2)Customer Satisfaction (3)Product Quality (4)Order Fulfillment Lead Time (5)Total Supply Chain Costs (6)Cash to Cash Cycle (7)Inve

29、ntory Days of Supply (8)Asset Performance,Customer Satisfaction Time Costs Assets,Symptoms which offer an opportunity forSupply Chain Integration,Customer service levels below industry averages or company requirements Market share losses due to product or service availability Increased material cost

30、s, inventory investments and warehousing capacity not justified by sales Multiple supply streams or networks with long lead times Buying that occurs in many places within the organization,Excessive number of suppliers or transportation,Copyright 1995 KPMG Peat Marwick LLP.,KPMG Procurement Toolkit M

31、ethodology,KPMGs STRATEGIC SOURCING AND PROCUREMENT APPROACH,CROSS-FUNCTIONAL COMMODITY BUYING TEAMS,STRATEGY,PROCESS,EXECUTION,KPMGs PROCUREMENT TOOLKIT,STRATEGY MAPPING,EXTERNAL,INTERNAL ORGANIZATION,MATERIALSMANAGEMENT,SUPPLIER MANAGEMENT,ENABLING TECHNOLOGIES,PERFORMANCE MEASUREMENT,An example o

32、f the structured questions for a High Level Strategy Workshop and Mapping session,STRATEGY,Is the Procurement strategy being integrated across all functional departments involved in the technology, manufacturing, and the supply initiatives of your client?,Does the purchasing organization have an int

33、egrated vision of how they should perform in order to maximize buying effectiveness and to reduce the tendency toward localized optimums?,Does your client have a strategic sourcing plan? If so, is it consistent across all operating divisions to create optimal leverage points?,PROCESS,Has your client

34、 initiated an awareness program designed to identify how suppliers view them as compared to their competitors? Does a client actively pursue strategic supplier alliances to support profitability, technology, and end customer integration initiatives?,Are the purchasing practices consistent,Are the in

35、ternal requirements and specifications of each customer fully understood and supported throughout the supply chain?,KPMGs STRATEGIC SOURCING AND PROCUREMENT APPROACH,STRATEGY,PROCESS,EXECUTION,KPMGs PROCUREMENT TOOLKIT,An example of the structured questions for a High Level Strategy Workshop and Map

36、ping session,EXECUTION,Are the necessary organizational design, tools, technologies, policies and procedures in place to reap the benefits from an enhanced purchasing organization?,What service levels are set? Are these periodically reviewed? What feedback mechanisms exist?,How does a client define

37、“efficient buying?” Is the basis, unit cost by commodity or by division? How good is good at the corporate level versus operating level?,How are cost reduction programs initiated and monitored?,KPMGs STRATEGIC SOURCING AND PROCUREMENT APPROACH,STRATEGY,PROCESS,EXECUTION,KPMGs PROCUREMENT TOOLKIT,An

38、example of the structured questions for a High Level Strategy Workshop and Mapping session,Results of Purchasings Top 100 Companies,Does purchasing make a significant contribution to your companys competitive game plan? YES 92.7% NO 4.8%,Source: Purchasings Top 100 Roster,Where is purchasing missing

39、 opportunities to advance the corporate competitive game plan? - Lack of a comprehensive supply strategy 48.7% - Failure to use organizational buying leverage 20.5% - Coordination with design & mfg. functions 17.9% - Development of technical competencies 15.4%,Areas where procurement heads feel thei

40、r department could do better: - Development of an overall supply strategy,If yes, where does purchasing make its most significant contributions? - Cost control/reduction of purchased goods 68.3% - Control of supplier quality levels 39.0% - Material Mgmt./production coordination 22.0% - Supplier Inte

41、gration 19.5% - Delivery Improvement17.5%,SCI - Service Delivery Model,LEAD GENERATION,EXTERNAL MARKET RECOGNITION,INTERNAL MARKET RECOGNITION,COMPETITIVE ENVIRONMENT,Buyers Suppliers Substitutions New Entrants Cannibalization,Market Segmentation,Support Tools Case Studies Diagnostics Base Presentat

42、ions Internal White Paper Int. & Ext. Client Worksheets Sales Brochure/Literature Workshops (Int. & External),LEAD QUALIFICATION,Target Opportunity Matrix Phone Screen Internal Workshop Qualify Lead Stream Scheduling,SERVICE DELIVERY,Client Contact Pre - Proposal Proposal Engagement Administration,P

43、ERFORMANCE MEASUREMENT,External : CSMP Internal : $,BEST PRACTICES (EXTERNAL),PRTM MSU UOC Industry Sources Purchasing Magazine,BEST PRACTICES (INTERNAL),Benchmarking Engagements Audit Information,SERVICE OFFERINGS,Supply Chain Integration Diagnosis Strategic Sourcing SC Management,If you need more

44、information on Strategic Supply Management, please contact any of the following KPMG Professionals,Paul Forney, Manager 150 West Jefferson, Detroit, Michigan 313-983-0200 Mr. Forney has over 20 years of experience in designing and implementing supply strategies for major industrial and automotive co

45、mpanies. He has extensive experience managing supply strategy development linking all aspects from product design to product delivery.,Mike Fath, Principal1900 East Ninth Street, Cleveland, Ohio 44114 216-696-9100 Mr. Fath is responsible for leading KPMGs Supply Chain Integration practice. He has ov

46、er 15 years of experience in consulting to manufacturing and general management. He has been responsible for developing effective solutions to client business problems in the areas of strategic supply management, customer service, operations management, and information technology.,Allyn Armstrong, M

47、anagerTwo Nationwide Plaza, Columbus, Ohio 614-249-2300 Mr. Armstrong has over 10 years experience assisting companies in the areas of supply chain integration, business process reengineering, performance improvement and operations management. He is experienced in integrated information and manufact

48、uring systems, activity based costing, strategic sourcing, supply management, performance measurement, and statistical business modeling.,Copyright 1995 KPMG Peat Marwick LLP.,Supply Management integrates all cross functional elements of a customer service focused organization,Integrated Supply Mana

49、gement,Demand Forecasting and Production Planning,Order Processing,Warehousing,Transportation,Packaging and Material Handling,Inventory Management and Control,Customer Service,Purchasing,Copyright 1995 KPMG Peat Marwick LLP.,The focus of the supply management is customer satisfaction,The set of acti

50、vities required to support this ideal outcome is a surprisingly complex process.,The goal of the supply management is to ensure that the right goods are delivered.,To the right place To the right customer At the right time In the right quantity In the right condition At the right price,Copyright 199

51、5 KPMG Peat Marwick LLP.,Additional insights into potential best in breed practices which support strategic supply management,Coordinating cross functional commodity teams to meet temporary needs or company strategies Evaluating vendor capabilities including quality, capacity and lot size capability

52、 Determining inbound transportation sources and quality metrics Performing make/buy analysis for fleet usage Providing inventory planning and management (MRP, DRP etc.) Integrating production scheduling with supplier and customer schedules Coordinating and managing supplier strategies (JIT, JIT II),

53、Developing direct product profitability type analysis with vendors, carriers, and production Identifying outsourcing opportunities for materials and services including parts production, packaging, distribution, marketing functions and customer service activities Managing supplier/buyer relationships

54、 including financial agreements, production, delivery scheduling and product engineering etc. Increased use of systems has allowed supply management to concentrate on value added activities, rather than functional requirements.,Cash to Cash Cycle Impact of Procurement and the Relationship to Total C

55、ost,Material and Component Inventories,Finished Goods Inventory,Work-in-Progress,Transportation,Procurement of Materials and Components,Receipt of Payment from the Customer,Direction of increased COST,Direction of increased VALUE,Theoretical Path,Actual Path,Theoretical,Actual,Throughput Efficiency

56、=,X 100,The Process Cycle (Administrative Time),Process, Pick and Dispatch customer order,Unknown,Minimum 63 Days,3 Days,26 Weeks Cumulative,3 Days,10 Days,Review stock, prepare & send replenishment order,Process distribution order, validate & assign to schedule,Review stock, prepare & send replenis

57、hment order,Process regional DC order, validate & assign to schedule,20 Days,10 Days,Forecast requirements & prepare schedule,20 Days,Prepare orders to suppliers,20 Days,Supplier schedule,Production schedule,The Process Cycle,Final Payment,4 Weeks,4 Weeks,4 Weeks,4 Weeks,6 Weeks,5 Weeks,1 Week,Raw M

58、aterials Procurement,Raw Materials Storage,Factory WIP,Finished Goods Storage,Transportation,Delivery,Local Depot,6 Weeks,37 Weeks Cumulative,The Supply Chain,The Supply Chain (Total Throughput Time),3 Weeks,Regional Storage,Throughput & The Process Cycle,Process, Pick and Dispatch customer order,Unknown,Minimum 63 Days,3 Days,26 Weeks Cumulative,3 Days,10 Days,Review stock, prepare & send replenishment order,Process distribution order, validate & assign to schedule,Review stock, prepare & send replenishment order,Pr