Automotive Best Practices Forum-Supply Chain Manag
Automotive Best Practices Forum Supply Chain Management
Introduction
WELCOME!
Today’s meeting will focus on the results of the Supply Chain Management Assessment, completed by 22 automotive supplier executives and 3 vehicle manufacturer executives.
Table of Contents
Introduction 4 - 13
Supply Chain Management 14 - 21
Definitions and Strategy 22 - 32
Understanding Expectations 33 - 38
Supply Chain Management 39 - 47
Performance Measurement 48 - 55
Technology Solutions 56 - 60
SCM Opportunities 61 - 72
Introduction
Introduction
Define supply chain management and its components
Understand the elements of a supply chain strategy
Position the role of a supply chain executive
Identify the elements of supply chain management
Understand the role of information technology applications
Identify how to utilize performance measures in the supply chain process
Understand how to use best practices and benchmarking in support of supply chain management
Understand role of customers, suppliers, and third parties for collaborative support.
SCM Overview
The integrated supply chain concept has gone through three distinct phases...
SCM Overview
The following represent some of the other initiatives which have either helped develop or have been spawned from the SCM movement
SCM Overview
SCM Overview
A survey conducted on supply chain essentials resulted in a management response from 451 companies in 25 countries
Almost one-third (29%) of the companies surveyed do not involve their suppliers in inventory management
Nearly one-quarter of the companies (22%) do not involve their customers in planning manufacturing requirements
Only 13% rated their ability to communicate with customers on forecasting as strong
SCM Overview
SCM Overview
There are many approaches, concepts, models, and ideologies developed to describe SCM

SCM Overview
SCM Overview
Definition and Strategies
The following model has been developed as a guide for discussing an effective supply chain management solution
Definition and Strategies
Develop a strategic vision aligned with customers
Focus on optimizing the entire supply chain
Identify goals and develop prioritization procedures
Maintain focus on “big-bang” goals but implement in stages
Lead from the top


Definition and Strategies
What is the Supply Chain?
The supply chain is a compilation of activities, functions, and procedures which enable raw materials to be converted into products, delivered and consumed by end users. . .
Definition and Strategies
What is Supply Chain Management (SCM)?
It is the coordination and integration of all these activities...
Definition and Strategies
Supply Chain Management refers to…
Managing the entire supply chain flow from raw material procurement, distribution to manufacturing facilities, processing finished goods, distribution to warehouses worldwide and to end customer.
Successful performance by all organizations and resources in the production and delivery of products and services to customers.
Extending company boundaries to supplier network through information sharing from concept to life of product--making suppliers an integral part of the company.
Use of pro-active material, acquisition planning supported by a tailored and benchmarked supply base.
Logistics includes the processes and activities of …
Materials management such as forecasting, sourcing and purchasing, warehousing distribution and transportation.
Moving goods from supply points through the manufacturing process and to the customer.
Planning, obtaining, producing, and distributing material and products in the correct quantities.
The entire procurement distribution, inventory and warehouse system.
Getting products or services from the supplier to your door.
Definition and Strategies
My Company has a well documented supply chain strategy 3.1
The supply chain strategy is directly linked to the corporate strategy 3.3
Organizational Responsibilities
Title: Director or Vice President
Department: Purchasing or Supply Chain Management
Responsibilities:
Organizational Responsibilities
Level of agreement with regards to supply chain management:
Definitions and Strategies
Develop business unit strategies to support achievement of company objectives.
Appoint a supply chain executive to serve as a natural facilitator and integrator between the divergent needs of sales and manufacturing, quality and price, cost and service, and financial and qualitative measures.
Clearly define supply chain functions, processes, and activities and articulate throughout the organization.
Translate business unit strategies into supply chain strategies with quantifiable goals and objectives.
Identify critical processes essential to the achievement of the business strategy and goals.
Establish action plans detailing the steps required to achieve the goals and objectives.
Definitions and Strategies
Automotive suppliers define supply chain management differently. The activities comprising automotive suppliers’ supply chains also differ dramatically.
The majority of respondents were unsure whether supply chain strategies are aligned with business unit and corporate strategies.
Companies with supply chain strategies place emphasis on performance measurement and supplier and customer facing issues, but little emphasis on defining action plans, budgets, investment requirements, and resources required to implement those plans.
Companies assessed that they were best prepared to respond to global supply chain issues, but less capable of capturing supply chain costs, measuring performance, and selecting and integrating software solutions.

Organizational Responsibilities
Suppliers supply chain executives roles and responsibilities vary, as does the level and department within the organization.
Suppliers feel that senior executives may only partially understand the complexities of optimizing supply chain performance and are willing to make the required investments necessary to achieve optimal performance.
Understanding Expectations
Understand customers and segment based upon needs and preferences
Analyze cost of service by customer
Develop a channel strategy to target and serve different segments
Understanding Expectations
Understanding Expectations
Understanding Expectations
Understanding Expectations
Understanding Expectations
Ensure that the management control structure facilitates cross-functional support and communication within the organization.
Actively solicit input from internal stakeholders at tactical, operational, and strategic levels within the organization.
Establish mechanisms or forums for exchanging supply chain information with suppliers and customers.
Refine management style to ensure strong trust and communication with supply chain partners.

Supply Chain Management
Key Practices Suppliers Customers
Willingness to share knowledge 3.1 3.3
Inter-enterprise knowledge and skills are valued 3.1 3.1
Committed to pursuing higher levels of performance 3.1 3.8
End-consumer focused 2.9 4.1
Inter-consumer focused 2.7 3.0
Willingness to share risk 2.7 2.6
Embrace electronic commerce 2.7 3.8
Transaction systems support collaborative processes 2.5 3.1
Collaborative use of decision support tools 2.3 2.6


Supply Chain Management
Customize your supply chain structure to focus on targeted customer segments
Identify constraints using cross-functional teams
Quantify leverage points in sourcing, manufacturing and distribution
Utilize vendor/customer alliances across the chain
Supply Chain Management
Organizational Responsibilities
Supply Chain Management
Supply Chain Management
Supply Chain Management
Currently Planned Importance
Used
Suppliers 68% 23% 4.6
Consultants 45% 0% 3.8
Customers 41% 23% 4.3
Third Party Service Providers 32% 14% 3.6
Software Vendors 32% 18% 3.7
Distributors 18% 18% 3.1
Professional Associations 9% 5% 3.2
Trade Associations 5% 5% 3.5

Supply Chain Management
Utilize external resources on an as-needed basis to fulfill supply chain resource and skill deficiencies.
Establish criteria for selecting and measuring supply chain partner performance.
Retain those functions or processes that give the company a competitive advantage; outsource processes where the company lags in expertise of efficiency.
Develop an outsourcing strategy that reflects the corporate vision.
Work with trusted outsourcers, yet clearly communicate expectations in original contracts.
Define requirements and expectations in terms of outcomes, not tasks or activities.
Link outsourcer compensation to outsourcer performance.
Integrate third-party outsourcing goals, objectives and resource requirements into the supply chain strategic plan.
Supply Chain Management
The list of activities included in the definitions of supply chain are broader than the scope of the supply chain executive’s responsibilities.
Supply chain responsibilities are shared in most organizations. Most notably, supply chain executives are not responsible for manufacturing and customer-facing sales activities.
Companies with shared responsibilities for supply chain management require flexible organizational structures to facilitate communication among supply chain executives to foster optimization of the total supply chain.
On a limited basis, suppliers are looking to their own suppliers, customers and other third parties to help fill resource and skill deficiencies.
Third party relationships are expected to grow as the outsourcing trend increases.
Performance Measurement
Develop key performance measurers which span the entire supply chain (including vendors & customers)
Use balanced measures
Utilize exception reporting to monitor results
Measure & reward change behaviors
Performance Measurement
Poor Quality










Performance Measurement
Performance Measurement
Level of Performance Satisfaction
Performance Measurement
Performance Measurement
Barriers that prevent companies from achieving desired level of supply chain performance:

Performance Measurement
Adopt enterprise-wide performance measures that provide indicators of whether the supply chain is performing according to its strategic intent.
Derive performance measures from the mission statement.
Establish measures that balance quality, cost and time across the organization, its processes and its people.
Performance Measurement
Previously:
Supply chain was not elevated in importance and visibility.
Senior executives were not aware of the advantages to be gained by effective supply chain management.
Today:
OEMs and suppliers are identifying similar barriers to achieving a desired level of supply chain performance.
They have executive support and attention but are lacking the resources, skills and systems required to achieve targeted levels of performance.
Suppliers have implemented performance measurement programs but generally lack confidence in the program’s overall level of performance.
The lack of integrated or automated systems to capture performance-related data and the availability of accurate and timely data are primary contributors.
OEM’s are more satisfied with the overall performance of their supply chains than suppliers and rate overall supply chain performance significantly higher than suppliers.
Technology Solutions
Develop an integrated IT system to support strategic objectives across the entire supply chain - at all levels
Require easy to understand actionable reports
Develop an IT system with multi-level capabilities:
Short-term: transaction processing
Mid-term: planning and decision support
Long-term: strategic modeling & scenario planning

Technology Solutions
Currently
Used Planned Proprietary Packaged
Electronic Data Interchange 82% 14% 23% 77%
Bar Coding Technologies 73% 14% 38% 62%
Warehouse Management System 59% 5% 37% 63%
Advance Planning & Scheduling 50% 5% 50% 50%
Enterprise Resource Planning 41% 27% 20% 80%
Transportation Mgt. System 41% 5% 60% 40%
Manufacturing & Distribution 32% 9% 56% 44%
Facilities Network Modeling

Knowledge Management Systems 23% 5% 100% 0%
E-Commerce 14% 18% 33% 67%

Technology Solutions
Applications Solution Providers
Enterprise Resource Planning BaaN, Oracle, Glovia, SAP, QAD , JD Edwards, John Brown
Advance Planning & Scheduling CAN, Future 3, Numetrix, ASI, QAD, Genzlinger
Warehouse Management System CABOSS, McHugh, ROI, Genzlinger, AS/400
Bar Coding Technologies Internedal, UDC Code39, ASI, Symbol, Future 3,
Genzlinger, John Brown,Variety, BCI
Transportation Mgt. System UTS, Link, Outsourced to CTI
Electronic Data Interchange Sterling Commerce, Trans Net, GEIS, Future 3, QAD,
Trading Partner, ANSI EDIFACT
Manufacturing & Distribution QAD, AS/400, Proprietary Facilities Network Modeling
Knowledge Management Systems Lotus Notes, ONIS, Data Warehouse
E-Commerce Net Software, Sterling Commerce
Technology Solutions
Develop integrated systems and technologies plans on a corporate/enterprisewide level to define current and future needs.
Use plans to plan, prioritize, budget and allocate resources for software purchases and systems upgrades.
Information systems plans:
Define the functional capabilities of the software acquisition or upgrade
Identify critical integration points and compatibility issues
Identify resource requirements and deficiencies
Technology Solutions
There is no common information systems platform among automotive suppliers.
No product emerges as the leader among automotive suppliers.
False assumptions regarding capabilities and functional support provided by supply chain applications.
Indicates clear need for integrated supply chain systems strategies and plans.
Internal and external integration of supply chain information systems will continue to be a top issue unless e-business solutions can be devised to reduce the cost, complexities and time to implement integrated systems solutions.
SCM Opportunities
SCM Opportunities
SCM Opportunities
SCM Opportunities
SCM Opportunities
SCM Opportunities
SCM Opportunities
SCM Opportunities
SCM Opportunities
SCM Opportunities

SCM Opportunities
SCM Overview
Conclusions
Supply chain strategy must be integrated with the overall company vision and strategy. Departmental goals and objectives must align with and support the supply chain strategy.
The supply chain executive must have ultimate responsibility for the process pipeline including the defined elements of the supply chain.
Information technology applications are enablers. Business processes must be defined, optimized, and efficient, in order for technology benefits to be realized.
Identify and utilize performance measures for the supply chain process as a whole, not just the functional elements. Optimizing local operations lead to overall inefficiencies.
Best practices and benchmarking are important elements of establishing effective supply chain management. However, each must be evaluated with regards to each suppliers unique business environment.
Supply chain and and information technology skills are in high demand and short supply in the market. Look to partner with customers, suppliers, and other third parties for collaborative support.


Automotive Best Practices Forum-Supply Chain Manag