3- Supply Chain Integration Collaboration.ppt

5/19/2018 3- Supply Chain Integration Collaboration.ppt

1/42

Supply Chain Integration and

Collaboration

Dr Carlos Mena


2/42

Agenda

What is Supply Chain Integration?

Why to Integrate?

How to integrate?

What is Supply Chain Collaboration?

Why do we collaborate?

Success factors

Failure factors


3/42

What is Supply Chain

Integration?


4/42

Supply Chain Integration

To establish and sealessly coordinate the

processes for planning! sourcing! anufacturing!

distributing and returning products across the

supply chain"

in a manner that competitors cannot easily

match.


5/42

#urchasing Materials

Control#roduction Sales Distribution

Materials

ManageentManufacturing

ManageentDistribution

STAGE 1 !ASE"I#E

STAGE $ %CTI'#A" I#TEG(ATI'#

STAGE )I#TE(#A" I#TEG(ATI'#

Materials

ManageentManufacturing

Manageent

Distribution

STAGE *E+TE(#A" I#TEG(ATI'#

SuppliersInternal Supply

ChainCustoers

Ste$ens %&'(')


6/42

STAGE , T-E I#TE(#ET E#A!"E S&//"0 C-AI#

STAGE T-E C'2/"E+ AA/TI3E S&//"0 C-AI#

C

SS

S

S

S

S

S

S C

C

C

C

C

S

C

S

S

S

S

S

S

S

S

C

C

C

C

C

S

S

C

C

C


7/42

*d$antages and Disad$antages of

Integration

Ad4antages

+fficiency

,owering in$entory and waste

,ower transaction costs%negotiations and onitoring)

-educed cycle ties and tie toar.et

Shared ris. and in$estent

+ncourage long/ter in$estents

Ipro$ed learning and inforatione0change

*llows synergy to ta.e place

Can increase fle0ibility %short/ter)

isad4antages

Inability to price accurately1ualitati$e atters

+fforts and costs to establish andonitor the relationship

-is. of loosing I#-

-is. of di$ulging sensiti$einforation

#otential opportunis

#otential abuse of power

Can becoe dependent

Can reduce fle0ibility %long/ter)


8/42

Why to Integrate?


9/42

The %orrester E55ect

Simulation Days

OrderorTargetQu

a

0

2000

4000

6000

8000

10000

12000

14000

336 356 376 396 416 436 456 476 496 516 536 556 576 596 616 636 656

Car Build Target Orders to

Supplier A

Productio

Target A

Orders !" A o B Productio

Target B

E%%ECT '% A '#CE '%% STE/ I#C(EASE '% 167 I# .E2A#.

'(.E( 'SCI""ATI'#S .'W# T-E S&//"0 C-AI#

2rder $ariability is aplified up

the supply chain3 upstrea

echelons face higher $ariability4


10/42

The %orrester E55ect

O#er

Orderig

$relia!le%eli#er"

Sa&et"Stoc'

(crease

%e)ad

%istortio

S*ortages

TIME

CA/ACIT0(E8&I(E APPARENT

REAL

Adapted from Houlihan, 1987.


11/42

Coping 9ith the %orrester E55ect

,ead Ties 5uic. -esponse #ush $s4 #ull Strategy Cross Doc.ing

-educe 6ariability and 7ncertainty #oint of Sale %#2S) inforation Sharing inforation 8ear/round low pricing

*lliance 9 #artnership *rrangeents 6endor anaged in$entory 2n/site $endor representati$es


12/42

Arcs o5 Integration

+o(tegratio ,-tesi#e(tegratio,-tesi#e(tegratio

Suppliers .au&acturer Custo)er

+arro/ Arc o& (tegratio

Broad Arco& (tegratio

Source ro*lic* ad est!roo' 2001 Arcs o& (tegratio A iteratioal stud" o& suppl"c*ai strategies 6oural o& Operatios .aage)et ol 19 pp 185200


13/42

Arcs o5 Integration

+oe ,-tesi#e

,-tesi#e

Suppliers Custo)er.au&acturer

(/ard&acig Arc

+oe ,-tesi#e

,-tesi#e


Perip*er"&acig Arc

+oe ,-tesi#e

,-tesi#e


Supplier&acig Arc

+oe ,-tesi#e

,-tesi#e


Custo)er&acig Arc

+oe ,-tesi#

e

,-tesi#

eSuppliers Custo)er.au&acturer

Out/ard&acig Arc

Source ro*lic* ad est!roo' 2001


14/42

Arcs o5 Integration Sample

+oe ,-tesi#e

,-tesi#e


(/ard&acig Arc

+oe ,-tesi#e

,-tesi#e


Perip*er"&acig Arc

+oe ,-tesi#e

,-tesi#e


Supplier&acig Arc

+oe ,-tesi#e

,-tesi#e


Custo)er&acig Arc

+oe ,-tesi#e

,-tesi#e


Out/ard&acig Arc

Source ro*lic* ad est!roo' 2001

44 137

39

29

42


15/42

Arcs o5 Integration Conclusions

2utward/facing Supply Chain strategy is associated with

the largest rates of significant perforance ipro$eents

Manufacturers ay be :eopardising perforance by

continuing to follow the inward/facing strategySupplier/ and custoer/facing strategies gained little ore

than periphery and inward/facing strategies

2$er ;e1uilibriu point ofintegration


16/42

Approaches to Supply Chain

Integration


17/42

2atching Supply Chains 9ith

/roducts

Match Misatch

Misatch Match

,:cie

t

Suppl"C

*ai

;esposi#e

Suppl"C*ai

uctioalProducts

(o#ati#eProducts

Predictable demandLow product variety

Long life-cyclesEg. roceries!

Pet "ood

#ncertain demand.$ig% product variety

S%ort life-cyclesEg. &omputers

"as%ion products

Source is*er . 1997 *at is t*e rig*t suppl" C*ai &or "our Product


18/42

/hysically E55icient 4s. 2ar:et;

(esponsi4e Supply Chains

#hysically +fficient Mar.et -esponsi$e

#riary purpose Supply predictable deandefficiently at the lowest price

-espond 1uic.ly tounpredictable deand

Manufacturing focus High a$erage utilisation Deploy e0cess buffer capacity

In$entory strategy @enerate high turns andiniise in$entory

Deploy buffer stoc.s of partsor finished goods

,ead/tie focus Shorten lead tie as long as itdoesnAt increase cost

In$est aggressi$ely in ways toreduce lead ties

*pproach tochoosing suppliers

Cost and 1uality Speed! fle0ibility and 1uality

#roduct/designstrategy

Ma0iise perforance andiniise cost

7se odular design topostpone differentiation

Source is*er . 1997 *at is t*e rig*t suppl" C*ai &or "our Productea ? Agile ?


19/42

Supply /ositioning

>In order to realise the financial and other benefits

that are a$ailable! copanies need to plan their

supply chain at a strategic le$el4 " * sall

nuber of custoers and suppliers ust beprioritised"

*4T4 Bearny sur$ey %&''! p4 )


20/42

T9o


21/42

Supply /ositioning = ics 2atri@

,+6+-*@+ IT+MS

2btained fro $arious suppliers

-epresent a large share of the product cost

Salls changes in price ha$e a strong effecton the product

Competiti4e !idding

ST-*T+@IC IT+MS

2btained fro one supplier

#roduct for which supply is not guaranteed

-epresent a considerable $alue

/artnership

E2-M*, IT+MS

7sually ha$e a sall $alue per unit

There are any alternati$e suppliers

Systems Contracting

2TT,+E+CB IT+MS

-epresent a relati$ely liited $alue in tersof oney

6ulnerable in regard to their supply

Secure continuity o5 supply

Purc*asi

gi)pacto@acialresults

Suppl" ris'

>o/=ig*

=ig*

>o/

Source ralic P 1983 Purc*asig .ust Beco)e Suppl" .aage)etD =B; SepOct p


22/42

Applying ics 2atri@

8ou are responsible for #urchasing in a copany that anufacturesaeroplanes %li.e oeing or *irbus)4 Decide for each of the followingites whether you thin. it is a le$erage ite! noral ite! strategic iteor bottlenec. ite4

&4 Get engines

4 The nuts! bolts and washers used in asseble %often referred to asfastenersA)

4 Titaniu

;4 T6 screen to be fitted to each seat

J4 Seats for the passengers

4 Stationary to be used by the eployees %paper! pens! files! etc4)


23/42

Applying ics 2atri@

,+6+-*@+ IT+MS ST-*T+@IC IT+MS

E2-M*, IT+MS 2TT,+E+CB IT+MS

Purc*asigi)pacto@

acialresults

Suppl" ris'

>o/

=ig*

=ig*

>o/


24/42

Applying ics 2atri@

,+6+-*@+ IT+MS

Seats %higher cost but relati$elylow technology product withultiple suppliers)

ST-*T+@IC IT+MS

Get engines %$ery high cost andonly suppliers)

E2-M*, IT+MS

T6s! Fasteners K Stationary %low

cost! ultiple suppliers)

2TT,+E+CB IT+MS

Titaniu %has been a world

shortage but low costcopared to Get engine)

Purc*asigi)pacto@

acialresults

Suppl" ris'

>o/

=ig*

=ig*

>o/


25/42

The Sustainable /urchasing

/ort5olio 2atri@

T*r

eattotriple!otto)l

ie

Suppl" ris'

>o/=ig*

=ig*

>o/#*@+,,! M4! W7! L4 K W*SS+-M*E! M4+4!


26/42

Why do 9e

collaborate?


27/42

Why do 9e collaborate?

>It is the long history of humankind (and

animal kind, too) those who learned to

collaborate and improvise most effectivelyhave prevailed

Charles Darwin

N


28/42

Why 9e dont collaborate?

O!e"t to en#oying ourselves, the ne"t greatest

pleasure consists in preventing others from

en#oying themselves, or, more generally, in the

ac$uisition of powerO

-ussell! 4 %&'() OThe -ecrudescence of #uritanisO Sceptical %ssays


29/42


The /risoners ilemma

Two criinals arrested under the suspicion ofha$ing coitted a crie together

The police does not ha$e sufficient proof to ha$e

the con$ictedThe two prisoners are isolated fro each other!and the police $isit each of the and offer a deal

the one 9ho o55ers e4idence against the otherone 9ill be 5reedB


30/42


'ptions

If none accepts the offer both of the will get only a sall

punishent because of lac. of proof

If one of the betrays the other one! the defector will gain

ore! since he is freed3 the silent one will recei$e the fullpunishent

If both betray! both will be punished! but less se$erely than

if they had refused to tal.

The dilea resides in the fact that each prisoner has achoice between two options! but cannot a.e a good

decision without .nowing what the other one will do


31/42



*ction of *

*ction of

Cooperate e5ect

Cooperateoth

gain J

* gains &

Documents

3- Supply Chain Integration Collaboration.ppt