Sustaining market through supply chain

Sustaining Market Growth & Leadership Sustaining Market Growth & Leadership Through Supply Chain ExcellenceThrough Supply Chain Excellence

Ramlee Ibrahim, Ph.DDirektur Utama

PT Putra Primia Consulting

Business StrategyBusiness Strategy

Michael Treacy & Fred Wiersema’s Michael Treacy & Fred Wiersema’s Discipline of Market LeadersDiscipline of Market Leaders• Operational ExcellenceOperational Excellence• Product LeadershipProduct Leadership• Customer IntimacyCustomer Intimacy

Supply Chain Strategy Is A Critical Dimension Of Business Strategy

Business Strategy

When & Why We’ll Win

Choosing where tocompete, how to makeshareholder returns,and on what basis towin over competitors

Operational Strategy

How We’ll Win

Finding new and effective

ways to structure business

operations and business

economics to achievecompetitive advantage

OperationsExecuting To Win

Organizing, managing,

and executing tocreate and deliver

value to customersand shareholders

Breakthroughs in Supply Chain Strategy Breakthroughs in Supply Chain Strategy Can Come From Several SourcesCan Come From Several Sources

… Big Winners Use Them All!

1. Since 1995, which grew faster? Intel or inflation?

2. After spending $100 billion on acquisitions were AT&T’s revenues (a) higher? (b) about the same? or (c) lower?

3. In 1997 P&G CEO declared they’d double the business in 7 years. Based on actual growth rates, how many more years do they have to go? 2 years, 12 years or 25 years?

4. IBM has grown service revenues at double digit rates. True or False?

Growth - A Short Quiz

Could My Business Grow At Double-Digit Could My Business Grow At Double-Digit Rates?Rates?

Most companies only see barriers to growth

• We couldn’t afford the cash costs for that kind of growth

SCOR IndexThis chart tracks the value of an aggregate 70 company SCC members from

2003 on

The Five Core PrinciplesThe Five Core Principles

SupplySupplyChainChain

ExcellenceExcellence

External

Internal

CustomerCustomerRequirementsRequirements

View Your Supply Chain

As a Strategic

Asset

1Develop end-

to-end process

architecture

2

Design Your Organization

for Performance

3Develop the

Right Collaborative

Model

4

Use Metrics to Drive

Business Success

5

Supply Chain As a Strategic AssetSupply Chain As a Strategic Asset

Business Business StrategyStrategy

Customer Service & Support Strategy

Sales & Marketing Strategy

Supply Chain Strategy

IT & Business Infrastructure Strategy

Technology & Product Development Strategy

Where you must be best Where you can settle for being competitive

The Basis of CompetitionThe Basis of Competition

The Basis of CompetitionThe Basis of Competition

• Spanish clothing retailer, a division of Inditex

• Present in 63 countries with a network of 997 stores

• National borders are no impediment to sharing a single fashion culture”

• A supply chain that defies conventional wisdom

Supply Chain As A Strategic Asset Supply Chain As A Strategic Asset Example Example

“A customer thinks, ‘this greenshirt fits me, and there is one onthe rack. If I don't buy it now, I'll

lose my chance.’”Harvard Business School

Working Knowledge, February 2005

How Zara Uses Its Supply Chain As A How Zara Uses Its Supply Chain As A Strategic AssetStrategic Asset

On-goingOn-going 10- 15 days10- 15 days

Market research Manufacturing

Design creationDistribution tostores

FeedbackFrom stores




External

Internal



As a Strategic

Asset

1Develop end-

to-end process

architecture

2


for Performance

3Develop the

Right Collaborative

Model

4


Business Success

5

• Description of each supply chain process

• Interaction between these and other core processes

• Required applications

• SCOR Model– http://www.supply-chain.org

Develop An End-to End Process Develop An End-to End Process ArchitectureArchitecture

• “The earth’s biggest selection”

• Millions of products

• Delivered as efficiently as possible

Case Example - AmazonCase Example - Amazon

Common, robust processes

Proactive shipment notification

24/7 order status

Link to carrier’s website

Amazon’s Supply Chain Architecture

Items available

in millions

Stocked by Amazon

Distributors

Partner companies

Exact delivery

dateBIC

Estimateddelivery date

BIC

BIC




External

Internal



As a Strategic

Asset

1Develop end-

to-end process

architecture

2


for Performance

3Develop the

Right Collaborative

Model

4


Business Success

5

Design Your Organization For Design Your Organization For PerformancePerformance

• Identify imperatives• Quantify the benefits of

an upgraded SC organization

• Develop a roadmap• Redefine all core

supply chain processes• Specify skills required• Initiate restructuring

Organizational Design ExampleOrganizational Design Example




External

Internal



As a Strategic

Asset

1Develop end-

to-end process

architecture

2


for Performance

3Develop the

Right Collaborative

Model

4


Business Success

5

The Collaborative SpectrumThe Collaborative Spectrum

Extensive Collaboration

Limited Collaboration

Many Relationships Few Relationships

Low Return

Not Viable

Transactional Collaboration

Cooperative Collaboration

Coordinated Collaboration

Synchronized Collaboration

• Master internal collaboration first

• Segment partners

• Ensure each partner has a stake in the outcome

• Trust your partners (but have a contingency plan)

• Set clear expectations

• Use technology as required

Collaboration DriversCollaboration Drivers




External

Internal



As a Strategic

Asset

1Develop end-

to-end process

architecture

2


for Performance

3Develop the

Right Collaborative

Model

4


Business Success

5

Use Metrics To Drive SuccessUse Metrics To Drive Success

Why use metrics?• To gauge the

health of your supply chain

• To drive desired behaviors

SCOR MetricsSCOR Metrics

SCOR Metrics & BenchmarkingSCOR Metrics & Benchmarking

Lets you choose your strategy Advantage Parity Superior

Prioritizes investments Where do improvements

have the greatest impact?

Why Is Supply Chain Change So Tough ?

It is management’s responsibility to address the Bear in the room. Frequently we don’t want to do the tough things; we want a simple solution that doesn’t require a complete commitment. SCM won’t succeed without a complete commitment.

Edgar, something is going on here? I haven’t seen the Bear!!!

Thank [email protected]

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