科尔尼供应链

1、Challenges facing the pan-European supply chainDiscussion paperShanghai, December 29th, 2002Executive summaryn Overview: The pan-European supply chain faces four major challenges: Redesign of network, in-versus outsourcing, consolidation of supplier relationships and best practice tenderingn Redesig

2、n of network is driven by forces outside of the supply chain. These external forces could be, e.g., consolidation of manufacturing base or change in service requirementsn In- versus outsourcing: Outsourcing provides strategic advantages, but it does not solve the problemn Consolidation of supplier r

3、elationships: Trust and transparency are key for establishing long-term partnerships with suppliersn Best practice tendering: Insight about key performance drivers of operation will guarantee a successful tendering processn Benefits: Applying best practices to resolve these issues can lead to signif

4、icant competitiveadvantagesA.T. Kearney 70/0026_Dec29/jz 2Four major challenges need to be mastered to establish a pan- European supply chainOverviewCreating a pan-European Supply Chain3.4. Best practiceMain driverDecision- making criteria1. Redesign of network Rationalize European manufacturing loc

5、ations and capacity“Quick Win” versus strategic advantages Radically change service level to strengthen competitiveness2. In-versus outsourcing Consolidate assets and free cash to finance growth Expand management capacity in core business areaConsolidation of supplier relationship Optimally use econ

6、omies of scale for supply chain Reduce in-house administration to manage interface to service providersfor tendering process Ensure transparency and consistency of cost and performance Ensure optimal target setting and performance commitmentBenefitsOne-time benefit versus continuous improvementA.T.

7、Kearney 70/0026_Dec29/jz 3Redesign of networkA.T. Kearney 70/0026_Dec29/jz 4Redesign of networkThree types of replenishment concepts reflect needs of short lead time, optimal factory utilization and high product availabilityType 1: Lead timedrivenMarket managed replenishment (MMR)Type 2: Optimal fac

8、toryutilizationFactory managed replenishment (FMR)Type 3: High product Region managed replenishment (RMR) producesbased on market replenishment plan defines sourcingand monitors inventories defines replenishment plan (control total chain inventory) defines sourcingand monitors inventories defines in

9、ventorylevels and develops sales forecast replenishes markets based on mutually agreed rules producesbased on regional replenishment plan defines inventorylevels and develops sales forecast coordinates all replenishment activitiesFactory .Region .Market .A.T. Kearney 70/0026_Dec29/jz 5Redesign of ne

10、tworkKey drivers for redesigning a network are service requirements, inventory policies, planning basis and shipment characteristicsClient ExampleMid-term planning is based on Shipments are triggered by Shipment quantity according to .Inventory policies at .Agreed service level is . Market level Fac

11、tory level Shipment forecast Order Order quantity 100% mindsetTodayFMR Depot/brand inventory target and lead time Chain level Sales forecast Market demand Replenishment needs and factory optimizationA.T. Kearney 70/0026_Dec29/jz 6Redesign of networkThe ideal physical network consists of one stock le

12、vel between factory and POSTypical SituationScenario 1 “Factory Warehouse”Scenario 2 “Factory and regionalwarehouse”Scenario 3 “Central Warehouse”Scenario 4 “Regional warehouse”FactoryFactoryFactoryFactoryFactoryWarehouseWarehouseWarehouseBufferWarehouse1st level Warehouses1st level WarehousesLocal

13、Warehouses/TP1)Local Warehouses/TP2)Local Warehouses/TPPOS/PORSPOS/PORSPOS/PORSPOS/PORSPOS/PORS2-3 inventory levels1 inventory level2 inventory levels1 inventory level1 inventory levelFactory warehousewith inventoryFactory warehousewith all inventoryFactory warehousewith inventoryBuffer at factory (

14、e.g. 2-5 days)Stock at 1st levelStock at 1st level “central” in-market“regional” in- warehousemarket warehouseMarket stockin 1 or 2 stock levels before POS“Parcel Service” from factory warehouseStock at 1st level “regional” warehouseNotes: (1) This level may not exist(2) Local warehouses and/or tran

15、sshipment pointA.T. Kearney 70/0026_Dec29/jz 7Redesign of networkCombined scenarios will balance inventories and transport costsScenario 5“Combinations”FactoryTransshipment POS/PORSPros Low transportation costs Short lead times to POSCons Medium stock planning Medium stock level Medium transportatio

16、n planning 2 handling steps for part of the volume between production and POS1 level Warehouse(s)WarehouseDirect delivery full-truck loadWarehouseDaily replenishment half/full pallets onlyNo storage, buffer onlyPOSTransshipment pointLocal POSCentral Warehouse(s)POSCentral warehouse of A- customersEx

17、ampleA.T. Kearney 70/0026_Dec29/jz 8Redesign of networkThe approach is to identify sequential changes based on the existing model and as is costs112233445As is CostsModeled CostsClient ExampleCurrentNew network volumes .+ new production .+ new network .+ new procurementVolume factorProduction factor

18、Network factorProcurement factorA.T. Kearney 70/0026_Dec29/jz 9In- versus OutsourcingA.T. Kearney 70/0026_Dec29/jz 10In- versus OutsourcingThe ever increasing level of outsourcing reflects concentration on core competenciesSpecialistsManufacturingCompaniesCore CompetencesRespondents That Have Outsou

19、rcedTransportation Internal distribution/warehousing Transportation managementITValue-added activities Order handlingInvoicingInventory managementTotal logisticsChemical Industry45%52%47%511%28%14%0%8%4%2%707Source: A.T. Kearney surveyA.T. Kearney 70/0026_Dec29/jz 11The role of outsourcingCompanies

20、like the cost effects from outsourcing, but fear losing controlReasons for OutcourcingReasons Against OutcourcingReduce costImprove servicequalityIncrease cost variabilityAccess to outsideexpertiseMake cost visible25%90%Chemical companies58%72%55%51%Loss of controlRequired capa- bilities not availab

21、leMore expensive than in-house51%Access to other markets11%Confidentiality/ Intellectual pro- perty protection40%29%26%Source: A.T. Kearney surveyA.T. Kearney 70/0026_Dec29/jz 12The role of outsourcingOutcourcing of transportation and logistics services provides infrastructure advantagesSharing of a

22、ssetsSharing of networksSharing of technologiesInfrastructureRisk and capital sharingAvailabilityControlBenefitsExamples Ships Tanks Terminals Pipelines Truck fleets Terminal density Distribution points Cross-docking points Transportation partners (regions, products, sizes) Service partners Scheduli

23、ng Tracking and tracing Navigation Electronic document exchange/processingA.T. Kearney 70/0026_Dec29/jz 13The role of outsourcingFour key success factors need to be ensured in advance: Never outsource operational problems to service providersKey Success Factors for OutsourcingFeasibility Check avail

24、ability of competent service providers with enough capacity Verify possibility to transfer knowledgeableoperators to 3rd party Set feasible targets for outsourcingDependency Loss of competence and experience acquisition Loss of qualified employees long term Convenience to exchange service providers

25、Limited power to influence service providers if lowvolumeAdministration cost Fine tune interface Install information management Eliminate functional redundancies Reduce multiple stages in value chain Limit transformation cost end ensure benefit trackingManagement/controlling process Share productivi

26、ty gain Maintain and sustain quality and service level Understand and define performance measurements Ensure transparency of key cost/performance data Install performance controlling for service providersA.T. Kearney 70/0026_Dec29/jz 14Consolidation of supplier relationshipsA.T. Kearney 70/0026_Dec2

27、9/jz 15Consolidation of supplier relationshipsThe goal of enhancing supplier relationships is to reduce labor costs, ensure shared resources and improve productivityTargeted savings opportunitiesProductivityimprovement Redesign handling process, implement a new incentive system, etc.Shared resources

28、 Share handling resources (labor, forklifts, etc.) and stocking capacity with other warehouse operations in surrounding area to compensate for business fluctuationsLabor cost reduction Adapt compensation of current staff to market level Limit overtime by introducing flex-timeA.T. Kearney 70/0026_Dec

29、29/jz 16Consolidation of supplier relationshipsEstablishing mutually beneficial and long-term partnerships calls for trust and transparencyn Open bookn Fair profit marginn Activity- and cost-based charge with performance target (ABC)n Flexibility (shared resources)n Continuous improvementA.T. Kearne

30、y 70/0026_Dec29/jz 17Consolidation of supplier relationshipsAn uniform and consistent methodology is a must to consolidate pan-European supplier basesExample WarehousingCost Breakdown of Four Categories (in % of Total Cost)Total US$ mil.4.23.11.31.08142415215212044HighUKA14,000220,000Manual Moderate

31、Management fees Variable handlingFixed operating costsFixed storageCompetition for warehousingin location CountryDefining CriteriaWarehouse capacity/pallet Pallet throughputManual or automatedwarehouseAmount of extra handlingLowFranceB19,500220,000Automated LowModerateBelgiumC7,50075,000Manual HighH

32、ighSwedenManualModerateDA.T. Kearney 70/0026_Dec29/jz 18Best practice for tendering processA.T. Kearney 70/0026_Dec29/jz 19Best practiceImprovement opportunities can be realized by initiating a series of actionsn Planning improvements:Example: warehousing Reduce overtime by matching staffing with ac

33、tivities (e.g. standard weekend staffing) Renegotiate requirements and charges for additional activities Ensure visibility of inbound shipments to contract warehousesn Improvements in productivity by unbundling variable handling rates, identifying barriers to efficiency, and attempting to reduce imp

34、act where possiblen Reduction in operator profits - margins are hidden in numerous charges - once unbundled, a fair return can be negotiatedA.T. Kearney 70/0026_Dec29/jz 20Best practiceThe savings estimate for warehousing is based on a review of each single warehouseExample of a pan-European Warehou

35、sing Network: Total Cost US$/ Plt-throughputTotal Cost US$/plt40IrelandBelgiumN. IrlandItalyUK1FranceUK 3UK 4UK 2SpainFinlandDenmarkSweden35302520151050050100150200250300350Size of warehouse in 000 plt-throughput p.a.A.T. Kearney 70/0026_Dec29/jz 21Best practice“Should costs” are estimated by conduc

36、ting a detailed review of each contract, activity and invoice practiceExample of a pan-European Warehousing Network: Variable Cost US$/ Plt-throughputIrelandBelgiumN. IrelandFranceUK 2UK 3UK 4DenmarkShould cost areaItalySweden30252015UK 110500102030405060708090100% of mixed case handlingA.T. Kearney

37、 70/0026_Dec29/jz 22BenefitsA.T. Kearney 70/0026_Dec29/jz 23BenefitsSavings of more than 10% can be realized by establishing a pan- European supply chainA.T. Kearney project experience23104%Network savings4-5% Procurement savings7-13%4DeliveryTrucking179%33%11%100%43%16%43%19%95%-96%37%20%582%-89%33

38、%-34%18%-19%3rd party warehousesPlant warehousing Administration15%15%5%19%16%6%19%16%6%20%12%-13%6%14%-17%12%-13%6%CurrentNew volume (Base)+ new production+ new network+ procurementSavings relative to base0(-4%)+4-5%11-18%A.T. Kearney 70/0026_Dec29/jz 24Warehouse consolidation is a key driver to reduce inventoriesBenefitsDeliverabilityOct. 95 = ca. 50%July 96 = ca. 91%Aug. 96 = ca. 94%Sept. 96 = ca. 92%Sept. 97 = ca. 97%Client example: computer/ electr