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Stefan Mittmann, INTRACOM -- Tinos, May 2001

Every Supply Chain is NOT as weak as its weakest Link –

it is MUCHMUCH weaker !

Stefan Mittmann, INTRACOM -- Tinos, May 2001 2

SUPPLY CHAIN MANAGEMENT

The simple mathematical MODEL and ..

.. the complex REALITY of Intracom

Stefan Mittmann, INTRACOM -- Tinos, May 2001 3

‘Handheld Calculator’ Model

• no cost• no training• very true• everybody understands

it

Stefan Mittmann, INTRACOM -- Tinos, May 2001 4

A simple chain with 9 elements

Calculate the total efficiency of this chain

.9 x .9 x .9 x .9 x .9 x .9 x .9 x .9 x .9 = 38.7% !

90% 90% 90% 90% 90% 90% 90% 90% 90%

Stefan Mittmann, INTRACOM -- Tinos, May 2001 5

Chain Efficiency Examples

1. 90 90 90 90 90 90 90 90 90 = 38,7% all 902. 90 90 90 90 90 90 90 90 99 = 42,6% one 99, other 903. 91 91 91 91 91 91 91 91 91 = 42,8% all 914. --- 90 90 90 90 90 90 90 90 = 43,0% one link less5. --- --- 90 90 90 90 90 90 90 = 47,8% two links less

6. 90 95 95 95 95 95 95 95 95 = 59,7% one 90, other 957. 95 95 95 95 95 95 95 95 95 = 63,0% all 958. 95 95 95 95 95 95 95 95 99 = 65,7% one 99, other 959. --- 95 95 95 95 95 95 95 95 = 66,3% less one link

10. 90 99 99 99 99 99 99 99 99 = 83,0% one 90, other 9911. 98 98 98 98 98 98 98 98 98 = 83,4% all 9812. 99 99 99 99 99 99 99 99 99 = 91,4% all 9913. --- 99 99 99 99 99 99 99 99 = 92,3% one link less

Stefan Mittmann, INTRACOM -- Tinos, May 2001 6

Keeping the BALANCE is important

HIGH links can be expensive & rarely increase revenues LOW links dramatically reduce performance

Service Level / Performance

Cost

max

Revenues

Stefan Mittmann, INTRACOM -- Tinos, May 2001 7

The role of our CUSTOMER

The Customer is the FIRST and LAST LinkThe Customer sets the required efficiency level Is the Customer balanced ?

Stefan Mittmann, INTRACOM -- Tinos, May 2001 8

Improving Chain Efficiency

Improve efficiency of ALL links Improve or Replace weakest linkEliminate weakest link / ConsolidateSubcontract / Outsource (Specialist Sub-

Chain)Keep the Balance

Stefan Mittmann, INTRACOM -- Tinos, May 2001 9

Intracom’s Supply Chain Data

20,000+ different items Big range of categoriesBig range of quantities1,200+ SuppliersEurope, USA, Far EastSubcontractors (mechanical parts)

Stefan Mittmann, INTRACOM -- Tinos, May 2001 10

The basic Steps of the Chain

CustomerRequirements

ProductDevelopment

MRP Process

CustomerOrder

Orders toSuppliers

Procurementof Raw

Materials

Manufact/ingof Parts

Shipment ofParts bySupplier

Receiving &Inspection

Manufact/ng& Testing ofEquipment

Shipping toCustomer

StorageSTART

END

CUSTOMER PLANNING / PROCUREMENT MANUFACTURING

Stefan Mittmann, INTRACOM -- Tinos, May 2001 11

Proactive Supply Chain Management

Normal Items (90 % of the parts, require 40% of the management effort

CRITICAL Items (10 % of the parts, require 60% of the management effort

Stefan Mittmann, INTRACOM -- Tinos, May 2001 12

Proactive Supply Chain Management

Project Management Type of Activity Identify Critical PathSet clear PrioritiesEverybody help the weakest link

Stefan Mittmann, INTRACOM -- Tinos, May 2001 13

Proactive Supply Chain Management

All Problems can be solved effectively if properly identified in due time

Reliable flow of up-to-date information

Go to the Source of the info !

Stefan Mittmann, INTRACOM -- Tinos, May 2001 14

A clearer picture …