Triple a SCM

7/27/2019 Triple a SCM

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THE TRIPLE A SUPPLY CHAIN---- BY HAU. L. LEE

PRESENTED BYASVINI

SHRADDHA

RUCHA

ABHISHEKA

PALLAVI


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SUPPLY CHAIN

Asupply chainis a system of organizations, people, activities,information, and resources involved in moving a product orservice from supplier to customer. Supply chain activitiestransform natural resources, raw materials, and componentsinto a finished product that is delivered to the end customer.


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OVERVIEW

Traditionally SCM meant only high speed and low cost, but arethey applicable today is a question?? These practices are not enough to sustain in todays competition. Facts show: US Supply Chain grew faster and cheaper between1980-2000 but the sales dropdown was of 30% from 10% earlier But companies like Wal-Mart, Dell and Amazon were not affectedby this. What different did they do???


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According to Lee.

The best supply chain arent just fast and costeffective, they are also:

AGILE ADAPTABLE ALIGNED


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AGILE

It means respond quickly to sudden changesin supply and demand. Handling unexpected situations smoothly andcost-effectively. Recover easily from shocks.


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EXAMPLE

H&M, MANGO AND ZARA


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Dell Computers

Natural calamities always affect the supply chainnetwork. Such calamity(earthquake) in Taiwan delayedvarious shipments. Dell at this time changed its configurations instantly. As a result dell gained a good market share.


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NOKIA V ERICSSON

Plant making RF chips for mobile telephones catchedfire. Nokia managers immediately changed designs and

backup manufacturer. Ericsson started expedition to find a suitablesupplier. At end Nokia stole market share from Ericsson


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Ways to make company Agile

1. Promote the flow of information with suppliers andcustomers.2. Develop collaborative relationship with suppliers3. Design for postponement.4. Built inventory buffers by maintaining a stockpileof inexpensive but key components.5. Have a dependable logistics system or partner6. Draw up contingency plans and develop crisismanagement terms


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ADAPTIBILITY

Ability to adjust to structural shifts in marketdemand or supply and modify them. The best SC identify structural shifts, before theyoccur by capturing the latest data and tracking. It enables a company to evolve overtime as economic

progress, political shifts, demographic trends andtechnological advances reshape markets.


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HP Vs HP

HP PRINTERSMAIN MARKET

(US)

DEMAND IN ASIA AND EUROPE

HQVANCOUVER

BRANCHESSPAIN AND SINGAPORE


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CISCO

Contract Manufactures

Low cost countries

High volume

products

Low cost countries--- core product

Customize in main marketMid value items

Vendors close to main marketHighly

customized, low

volume


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XBOX Vs PLAYSTATION

Microsoft decided to get in video game market----outsourced--- Flextronics. Microsoft gave a deadline ----- Christmas. Flextronics changed it facility location to Mexico andHungary. Successful launch. Sony--- deep discount Flextronics---- shifted to china Finally MS- XBOX engulfed % market share of Play station


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How to make company Adaptable

Monitor economies all over the world to spot newsupply bases and markets Use intermediaries to develop fresh suppliers and

logistics infrastructure. Evaluate the need of ultimate consumer- not justimmediate customers. Create flexible product design. Determine where companys product stand in termsof technology cycles and product life cycles.


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ALIGNMENT

To encourage free flow of information withsuppliers and customers on a regular basis. Companies align the interests of all firms intheir SC with their own. Misalignment can cause havoc.


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HP


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Nonalignment at CISCO

Why did CISCO have to write off $2.25 billion ininventories in 2001?

The main culprit was misalignment of Ciscos

interests with those of its contractmanufacturers.

Contractors accumulated large inventories formonths without factoring in demand for Ciscos

products. Cisco worked closely with vendors to ensure that

the supply chain was agile and adaptable, butoverlooked alignment!


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Making a company Aligned

1. Exchange information and knowledge freely withvendors and customers.2. Lay down roles, tasks and responsibilities clearlyfor suppliers and customers.

3. Equitably share risks, costs and gains ofimprovement initiatives.


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Seven- Eleven Japans Three Aces

AGILITY Designed SC ---- to respond to quick changes

& not on fast and cheap deliveries Investment in real time system Use of Satellite and ISDN connections Penalty on delay of goods Reconfiguring shelves at least 3 times a day


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Adaptability

Concentrates stores in key locationsSuppliers in same region consolidateshipmentsExpanded kinds of vehicles from trucks tomotorcycles, boats & helicoptersEffectiveness of the companys logisticssystem is legendary


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Alignment

The incentives and disincentives are clearbetween partners. Fail to deliver on time pay penalty When carrier delivers goods--- no checking---saves time.


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Documents

Triple a SCM