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1、Achieving Competitive Advantage Through Supply Chain Management Advanced Planning and Scheduling Systems May 25, 2000,Agenda,1. The Evolution of the Supply Chain 2. Advanced Planning and Scheduling Systems 2.1 How They Work 2.2 The Vendors,The Supply Chain encompasses a number of key business proces
2、ses involved in managing the flow of materials, information, and funds from the initial suppliers to the ultimate consumer., the concept of supply chain management is relatively simple.,However, in the real world, multiple suppliers, multiple plants, multiple distribution points and multiple custome
3、rs significantly complicate material and information flows., And, given that supply chains cross multiple companies, walls have been built that prevent full and timely information flow.,Breaking down these walls and integrating the supply chain is critical. However, to date, most supply chain initia
4、tives have been inwardly focused. Only recently, manufacturers are beginning to embrace the total supply chain as a means to achieving competitive advantage.,Phase 1 - Process Integration (e.g., reengineering the order-to-cash process). Phase 2 - Intra-Enterprise Integration (e.g., sales strategies
5、coordinated with supply chain capabilities). Phase 3 - Inter-Enterprise Integration (e.g., collaborative forecasting & replenishment between retailers and suppliers),Stage 1: Separate best of breed applications dedicated to specific business processes (1970s),Enterprise Resource Planning (ERP),Suppl
6、y Chain Technology has evolved over the past several decades.,Todays ERP systems are transaction-based applications with limited decision-support capability.,Stage 3: Enterprise-wide applications (early to mid 1990s and still ongoing),Stage 2: Suites of integrated applications for functional process
7、es (1980s),APS Definition ERP or legacy interfaced decision support technology which uses advanced algorithms, (e.g., LPs, IPs, mixed IPs, heuristics, theory-of-constraints, etc.) to model supply chain constraints and enable intelligent supply chain planning/decision making. APS Characteristics Allo
8、ws complex supply chain representation and rapid SC model reconfiguration Enables concurrent, dynamic planning, and “what-if” simulations using memory resident processing Possess scaleable object architectures capable of running large data-intensive models,Advanced Planning and Scheduling Systems (A
9、PS) Are the Next Step of the Evolution for Providing Decision Support Capabilities.,While we tend to draw all supply chains the same, there are many types of supply chains - each with their own unique challenges.,E.g., Pulp & Paper,E.g., High-Tech,E.g., Consumer Products,How Do You Know If You Have
10、Supply Chain Management Problems?,Customer Service Concerns - Customer complaints, loss of share, delivery problems, customer surprises Materials Management Difficulties - High inventory buffers/obsolescence, high transportation costs, supplier shortages, lost purchasing discounts Manufacturing Proc
11、ess Problems - Production inefficiencies, overcapacity, undercapacity, cost growth Planning Difficulties - Inaccurate forecasts, high stockouts, growing overhead costs Obsolete Technology - Incompatible systems linkages, inaccurate/inaccessible information Revenue Cycle Concerns - Lengthy time to ma
12、rket, long order cycle, distribution delays, conflicting channel demands Vendor Management Problems - Poor response levels, lost growth, lack of commitment,The Importance of Supply Chain Management Has Increased Significantly Over the Past Few Years.,The Response: Approximately 60% of Manufacturers
13、Currently Have a Major Supply Chain Initiative Underway.,However, 42% are “less than satisfied” with the outcome of their previous improvement efforts.,As the Pace of Business Continues to Increase, a Key Challenge for Todays Supply Chain Managers Is to Make Good Business Decisions, Using All the In
14、formation That Is Available, Within a Short Time Period.,The Supply Planning (SP),Distribution Planning,Master Planning,Factory Planning & Scheduling,Inventory Planning,SP - Inventory Planning,Inventory Planning Goal: Determine optimal inventory levels and location to protect desired customer servic
15、e goals,Trade off between inventory and service not understood Limited ability to know how much inventory, when and where Inability to plan at a sufficient level of detail Inability to quantify the impact of demand and supply variability,Challenges,SP Master Planning,Master Planning Goal: Globally o
16、ptimize production plan considering tradeoffs of available capacity, materials, costs, time,Lack of visibility Disjointed planning Inability to reconcile demand priorities with supply constraints Inability to globally optimize production plan considering multiple constraints Planning doesnt support
17、corporate objectives,Challenges,Distribution Planning,Master Planning,Factory Planning & Scheduling,Inventory Planning,SP Factory Planning & Scheduling,FP & Scheduling Goal: Optimal execution of the Master Plan to minimize cost and improve quality of the plan,Material and capacity constraints not co
18、nsidered simultaneously Inaccurate representation of real world constraints Slow, inability to react Lack of problem visibility Poor delivery date quoting in build to order,Challenges,SP - Distribution Planning,Distribution Planning Goal: Optimally positioning and deploying inventory to achieve desi
19、red customer service,Store & DC replenishment handled independently Limited ability to prioritize demand Predetermined (aka inflexible) distributing rules Inventory distributed in advance of actual sales,Challenges,Distribution Planning,Master Planning,Factory Planning & Scheduling,Inventory Plannin
20、g,Customer Benefits,Growth: Increase revenues Increased margin performance Financial Performance: Reduced inventory costs and obsolescence Optimal use of available capacity and inventory Reduced procurement expense through accurate ordering Improved Customer Service And if you do the aboveincreased
21、stock price,Selected APS Implementations by Industry,Aerospace Bell Helicopter U.S. Navy Automotive Ford GM Volvo Chemical Occidental Chemical Novartis MacMillan Bloedel Consumer Goods (Durable) Baker Furniture Black & Decker Bose Herman Miller Consumer Goods (Non-Durable) 3M Ault Foods,Consumer Goo
22、ds (Non-Durable) Coca Cola E&J Galo Frito Lay High Tech 3COM Dell Digital Gateway Siemens Industrial Case Caterpillar Mercury Marine Medical Johnson & Johnson Bristol-Meyers Squibb Metals Timken,There Are a Number of APS Vendors. According to the Gartner Group, i2 Technologies and Manugistics Are th
23、e Leaders Today.,Deloitte currently has established APS relationships with i2, Manugistics, SynQuest and Paragon. D&T has ERP partnerships with PeopleSoft, JDE Numetrix, Baan and SAP.,Source: Gartner Group (03/26/99),Note from S: The Table was deleted due to copyrights constraints. Refer to the Gart
24、ner Group database in S for current information.,1999 Estimated Total SCM Market Share,Source: Benchmarking Partners, Inc.,1999 Estimated % Share of Market Leaders By Vertical,Source: Benchmarking Partners Inc.,1999 Estimated % Growth by Vertical 1998-1999,Source: Benchmarking Partners Inc.,1999 Ass
25、essment in the Consumer Packaged Goods Industry,Source: Benchmarking Partners Inc.,Appendix,Demand Plan,KEY CONCEPTS Truly incorporates knowledge from various levels within and outside the organization Proactively control events and reduce variations in demand forecasting Supports top-down, bottom-u
26、p and hybrid planning approaches Multi-dimensional, enterprise demand planning that integrates systems, processes and people at multiple levels INPUT Considers strategic goals, inter/intra-company objectives and constrained supply information to construct realistic demand plan Considers external eco
27、nomic and events (promotions, pricing changes, etc.) Multiple scenario comparisons and what-if analysis facilitate appropriate uses to add value OUTPUT Identifies opportunities, formulates strategies, translates them into action plans and actual execution steps, and analyzes results Produces realist
28、ic forecast that drives inventory, financial and operational plans Reduces supply chain inventory and costs,Supply Plan,KEY CONCEPTS Facilitates the design of optimal distribution networks, production plans, sourcing decisions, and inventory levels Helps determine the most profitable supply chain st
29、rategy for end-to-end order fulfillment Real time, enterprise wide and cross enterprise visibility and optimization of constraints Reliable real-time market, product and customer-allocated capable-to-promise and due date quoting INPUT Considers constraints throughout the supply chain at a great leve
30、l of detail, enabling rapid what-if simulations OUTPUT Manufacturing, distribution and sourcing network optimization: improve customer responsiveness and reduce costs at the same time Increased ability to focus on high-value strategy decisions that drive tactical and operational activities, and resp
31、onsiveness to changes in business environment Shorter order fulfillment cycle time Lower inventories Optimized asset utilization,Production Plan,KEY CONCEPTS Produces optimized and feasible finite production schedule based on consideration of dynamic constraints INPUT What-if analysis ATP based on u
32、p-to-date material and capacity constraints Fast re-planning of orders to accommodate demand volatility OUTPUT Resource optimization Utilization improves by 10 to 50% Inventory reduced up to 75% Order Lead Times: 10 to 60% reduction Delivery Performance: 25 to 50% improvement Order Fill Rates: 50 to
33、 90% improvement Reduced planning cycle time from weeks to hours,Transportation Plan,KEY CONCEPTS Determines the optimal quantities of products allocated to each distribution warehouse Determines the most economical means of transporting inbound, outbound and inter-company products while meeting ser
34、vice goals INPUT Adjusts to requirements for promotions, unanticipated demand Simultaneously plans for transportation, factory and warehouse sourcing, manufacturing and purchasing OUTPUT Attains optimal, least cost solution for material flow Generates feasible and customer centric enterprise distrib
35、ution plan Achieves close communication with trading partners on shipment and availability changes Feasible enterprise-wide transportation plan Real-time in-transit visibility,1999 Assessment in the High Tech & Consumer Electronics Industry,Source: Benchmarking Partners Inc.,1999 Assessment in the Industrial Discrete Manufacturing Industry,Source: Benchmarking Partners Inc.,1999 Assessment in the Automotive Industry,Source: Benchmarking Partners Inc.,1999 Assessment in the Oil & Gas and Commodity Chemicals Industry,Source: Benchmarking Partners Inc.,