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Managing yourLogistics
Supply Chain
Paul WinklerPaul WinklerIndustry Marketing SpecialistIndustry Marketing Specialist
Consumer Vertical Support GroupConsumer Vertical Support GroupJ.D. EdwardsJ.D. Edwards
Managing yourLogistics
Supply Chain
Paul WinklerPaul WinklerIndustry Marketing SpecialistIndustry Marketing Specialist
Consumer Vertical Support GroupConsumer Vertical Support GroupJ.D. EdwardsJ.D. Edwards
2
Are You Feeling the Squeeze?Are You Feeling the Squeeze?
Earnings per Share (EPS)
Increasing Customer Demands
3
Recent Consumer Packaged Goods HeadlinesRecent Consumer Packaged Goods Headlines
Profits aren’t flowing like they used to at packaged goods Profits aren’t flowing like they used to at packaged goods companies. Can green ketchup and Tuna in a Pouch Save Heinz? - companies. Can green ketchup and Tuna in a Pouch Save Heinz? - Fortune 9/18/00 pg 194Fortune 9/18/00 pg 194
Grupo Bimbo aims to boost Mexican biscuit market share - Grupo Bimbo aims to boost Mexican biscuit market share - Reuters 13 Oct 2000Reuters 13 Oct 2000
““Sustainable high levels of sales and profit growth continued to Sustainable high levels of sales and profit growth continued to elude many grocery manufacturers, retailers and wholesalers and elude many grocery manufacturers, retailers and wholesalers and Wall Street yawned at future projections for growth.”Wall Street yawned at future projections for growth.”
- - Grocery Manufacturers of AmericaGrocery Manufacturers of America
Profits aren’t flowing like they used to at packaged goods Profits aren’t flowing like they used to at packaged goods companies. Can green ketchup and Tuna in a Pouch Save Heinz? - companies. Can green ketchup and Tuna in a Pouch Save Heinz? - Fortune 9/18/00 pg 194Fortune 9/18/00 pg 194
Grupo Bimbo aims to boost Mexican biscuit market share - Grupo Bimbo aims to boost Mexican biscuit market share - Reuters 13 Oct 2000Reuters 13 Oct 2000
““Sustainable high levels of sales and profit growth continued to Sustainable high levels of sales and profit growth continued to elude many grocery manufacturers, retailers and wholesalers and elude many grocery manufacturers, retailers and wholesalers and Wall Street yawned at future projections for growth.”Wall Street yawned at future projections for growth.”
- - Grocery Manufacturers of AmericaGrocery Manufacturers of America
4
So, what to do?So, what to do?
1.1. Supply Chain – EPS Connection Supply Chain – EPS Connection Optimize InternallyOptimize Internally
2.2. Extend the Supply Chain – CollaborationExtend the Supply Chain – Collaboration
3.3. Internet EconomyInternet Economy
4.4. Getting to “E”, studies, pollsGetting to “E”, studies, polls
1.1. Supply Chain – EPS Connection Supply Chain – EPS Connection Optimize InternallyOptimize Internally
2.2. Extend the Supply Chain – CollaborationExtend the Supply Chain – Collaboration
3.3. Internet EconomyInternet Economy
4.4. Getting to “E”, studies, pollsGetting to “E”, studies, polls
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Understand the Supply Chain – Financial Understand the Supply Chain – Financial ConnectionConnection
Executives know that using SCM is a technique Executives know that using SCM is a technique to lower overall operating costs but….it can be to lower overall operating costs but….it can be also used to drive earnings. also used to drive earnings.
Over time, company valuation tends to be Over time, company valuation tends to be driven bydriven by
1.1. Growth Growth 2.2. ProfitabilityProfitability3.3. Capital UtilizationCapital Utilization
Understand the Supply Chain – Financial Understand the Supply Chain – Financial ConnectionConnection
Executives know that using SCM is a technique Executives know that using SCM is a technique to lower overall operating costs but….it can be to lower overall operating costs but….it can be also used to drive earnings. also used to drive earnings.
Over time, company valuation tends to be Over time, company valuation tends to be driven bydriven by
1.1. Growth Growth 2.2. ProfitabilityProfitability3.3. Capital UtilizationCapital Utilization
How can you relieve the pressure?How can you relieve the pressure?
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Supply Chain’s Potential Impact on Stock of Companies Supply Chain’s Potential Impact on Stock of Companies
Revenue +1% = Stock Price +5%Revenue +1% = Stock Price +5%
Operating Unit Expenses -1%= Stock price Operating Unit Expenses -1%= Stock price +6% +6%
Inventory Turns +20% = Stock Price +6%Inventory Turns +20% = Stock Price +6%
Day’s Sales Outstanding -5% = Stock Price Day’s Sales Outstanding -5% = Stock Price +5% +5%
Fixed Asset Utilization +5% = Stock Price Fixed Asset Utilization +5% = Stock Price +3%+3%
Revenue +1% = Stock Price +5%Revenue +1% = Stock Price +5%
Operating Unit Expenses -1%= Stock price Operating Unit Expenses -1%= Stock price +6% +6%
Inventory Turns +20% = Stock Price +6%Inventory Turns +20% = Stock Price +6%
Day’s Sales Outstanding -5% = Stock Price Day’s Sales Outstanding -5% = Stock Price +5% +5%
Fixed Asset Utilization +5% = Stock Price Fixed Asset Utilization +5% = Stock Price +3%+3%
Average Company on S&P Industrials per S. Timme – Finlistics Solutions
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J.D. Edwards Value Performance AnalysisJ.D. Edwards Value Performance Analysis
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Yesterday’s Business Model: The Introverted OrganizationYesterday’s Business Model: The Introverted Organization
Shop FloorShop Floor
InventoryInventory
ERPERP
DistributionDistribution
FinanceFinance
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Today’s Business Model:The Extroverted EnterpriseToday’s Business Model:The Extroverted Enterprise
OutsourcersOutsourcers
CollaborationCollaboration
SuppliersSuppliers
VendorsVendorsCustomersCustomers
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Increasing Competitive AdvantageIncreasing Competitive Advantage
CollaborationCollaboration
Val
ue
Val
ue
Telephone
Fax
Telephone
Fax
EDI
Forecasting
EDI
Forecasting
SelfService
VMI
Procure-ment
SelfService
VMI
Procure-ment
Supply Chain
Planning
Design
3PL
ContractMFG.
Supply Chain
Planning
Design
3PL
ContractMFG.
DigitalMarket-places
DigitalMarket-places
Source: Gartner Group
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Consumer Supply Chains -TodayConsumer Supply Chains -Today
SupplierSupplier
RetailerRetailer
ConsumerConsumer
ManufacturerManufacturer DistributorDistributor BrokerBroker
Linear, sequential processing - each entity is limited by the entity before it with regard to knowledge of what is really going
on!
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J. D. Edwards Consumer E-Solutions - VisionJ. D. Edwards Consumer E-Solutions - Vision
Every participant in the Value Chain has a view of the Consumer!“Consumer Centric world”
Distributor
Supplier
Manufacturer
RetailerBroker
Consumer
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“New Economy” = Changes“New Economy” = Changes
New business processesNew business processes Trading communitiesTrading communities Inter-enterprise Inter-enterprise
collaborationcollaboration Personalized response Personalized response
and speedand speed
New business processesNew business processes Trading communitiesTrading communities Inter-enterprise Inter-enterprise
collaborationcollaboration Personalized response Personalized response
and speedand speed
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The New Bottom LineThe New Bottom Line
The new economy opportunity is enormousThe new economy opportunity is enormous Participation in trading communities a Participation in trading communities a
requirement?requirement? New technology foundation to support New technology foundation to support
collaborative business processes requiredcollaborative business processes required Speed Speed
The new economy opportunity is enormousThe new economy opportunity is enormous Participation in trading communities a Participation in trading communities a
requirement?requirement? New technology foundation to support New technology foundation to support
collaborative business processes requiredcollaborative business processes required Speed Speed
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A CPG Perspective on the InternetA CPG Perspective on the Internet
Consumer Goods Technology MagazineConsumer Goods Technology Magazine5 Most Important Market Forces : 20005 Most Important Market Forces : 2000
1.1. Pressure to reduce overall supply chain costs 47%Pressure to reduce overall supply chain costs 47%2.2. Pressure to compress total market cycle 40%Pressure to compress total market cycle 40%3.3. Greater buyer concentration & power 26%Greater buyer concentration & power 26%4.4. Pressure to collaborate more effectively with Pressure to collaborate more effectively with
partners 25%partners 25%5.5. Movement toward a more global marketplace 21%Movement toward a more global marketplace 21%6.6. Transform into an e-business (#8) 18%Transform into an e-business (#8) 18%
Consumer Goods Technology MagazineConsumer Goods Technology Magazine5 Most Important Market Forces : 20005 Most Important Market Forces : 2000
1.1. Pressure to reduce overall supply chain costs 47%Pressure to reduce overall supply chain costs 47%2.2. Pressure to compress total market cycle 40%Pressure to compress total market cycle 40%3.3. Greater buyer concentration & power 26%Greater buyer concentration & power 26%4.4. Pressure to collaborate more effectively with Pressure to collaborate more effectively with
partners 25%partners 25%5.5. Movement toward a more global marketplace 21%Movement toward a more global marketplace 21%6.6. Transform into an e-business (#8) 18%Transform into an e-business (#8) 18%
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A CPG Perspective on the InternetA CPG Perspective on the Internet
Consumer Goods Technology MagazineConsumer Goods Technology Magazine
First 5 Focus Area in E-MarketplacesFirst 5 Focus Area in E-Marketplaces
1.1. MRO (maint,repair,office)/indirect e-MRO (maint,repair,office)/indirect e-procurement 28.2%procurement 28.2%
2.2. Transportation 26.9% Transportation 26.9%
3.3. Company’s Own Exchange 21.4%Company’s Own Exchange 21.4%
4.4. Supplier Vertical (e-chemicals etc.) 20.5%Supplier Vertical (e-chemicals etc.) 20.5%
5.5. Data Synchronization 20.5%Data Synchronization 20.5%
Consumer Goods Technology MagazineConsumer Goods Technology Magazine
First 5 Focus Area in E-MarketplacesFirst 5 Focus Area in E-Marketplaces
1.1. MRO (maint,repair,office)/indirect e-MRO (maint,repair,office)/indirect e-procurement 28.2%procurement 28.2%
2.2. Transportation 26.9% Transportation 26.9%
3.3. Company’s Own Exchange 21.4%Company’s Own Exchange 21.4%
4.4. Supplier Vertical (e-chemicals etc.) 20.5%Supplier Vertical (e-chemicals etc.) 20.5%
5.5. Data Synchronization 20.5%Data Synchronization 20.5%
17
A CPG Perspective on the InternetA CPG Perspective on the Internet
Grocery manufacturers of America SurveyGrocery manufacturers of America Survey
Motivation to Increase e—business budgetsMotivation to Increase e—business budgets
1.1. Increase efficiencies with trading partners 71%Increase efficiencies with trading partners 71%
2.2. Improve internal efficiencies 67%Improve internal efficiencies 67%
3.3. Build brand awareness 64%Build brand awareness 64%
4.4. Increase sales with trading partners 60%Increase sales with trading partners 60%
5.5. Increase Customer Relationship Management Increase Customer Relationship Management 60%60%
6.6. Protect market share 57%Protect market share 57%
Grocery manufacturers of America SurveyGrocery manufacturers of America Survey
Motivation to Increase e—business budgetsMotivation to Increase e—business budgets
1.1. Increase efficiencies with trading partners 71%Increase efficiencies with trading partners 71%
2.2. Improve internal efficiencies 67%Improve internal efficiencies 67%
3.3. Build brand awareness 64%Build brand awareness 64%
4.4. Increase sales with trading partners 60%Increase sales with trading partners 60%
5.5. Increase Customer Relationship Management Increase Customer Relationship Management 60%60%
6.6. Protect market share 57%Protect market share 57%
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One Last WordOne Last Word
Old Economy versus New Old Economy versus New EconomyEconomy
Old Economy versus New Old Economy versus New EconomyEconomy
