B. Mktg. 880 Spring 1999
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Transcript of B. Mktg. 880 Spring 1999
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B. Mktg. 880
Spring 1999
“Perspective 2000
and Beyond”
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The Enterprise Stakes
What would happen to the future of your firm if a competitor could:– deliver an equivalent value faster or more consistently to
your customer– provide the same level of service with half of your inventory– provide the same level of service with a significantly lower
asset investment– reduce transaction cost by 50% or more– provide customize product, shipments and transactions and
turn on a dime– develop an off-shore partner that can provide equivalent
value at 60% of your cost
What if your competitor could do all of these things???
368
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Factors that will Affect the Growth and
Development of Logistics
34%
21%
12%
9%
8%
6%Senior mgmt.Recognition
Customer service
Globalization
Cost/Financial impact
Supply chain mgmt
Information tech
Source: 1998 OSU Career Patterns 244
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Challenges for the 21st Century
Challenge No. 1:
Identifying, monitoring & responding
to rapidly changing customer
value requirements.
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70
50
30
12.5
0
10
20
30
40
50
60
70
80
1996 1998 2000 2002
Best Practices in SCM and Logistics:Customize an Approach for Each Key Account
(median percentage)
Source: 1998 OSU Career Patterns 206
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8075
50
20
0
10
20
30
40
50
60
70
80
90
1996 1998 2000 2002
Best Practices in SCM and Logistics:EDI with all Key Accounts
(median percentage)
Source: 1998 OSU Career Patterns 207
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• Identifying value
• Monitoring value
• Responding to value
• Implement key partner strategy
• Move closer to demand point
• Agile mfg., product design & devel., process, custom.
Implications Actions
Customer Value
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Challenge No. 2:
Develop new supply chain global metrics
reflecting shared vision & values between
customer, supplier, & third party.
Challenges for the 21st Century
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50
40
22.5
10
0
10
20
30
40
50
60
1996 1998 2000 2002
Best Practices in SCM and Logistics:Co-design of Products with Key Suppliers
(median percentage)
Source: 1998 OSU Career Patterns 203
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• Importance of metrics
• Broaden view of metrics
• Expand customer value
• Develop SC metrics
• To develop macro metrics
• To the balanced scorecard
Implications Actions
Share Supply Chain Vision/ Values/ Metrics
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Challenge No. 3:
Develop the capability to collaborate in
forecasting, value metrics & other
value creating operational activities
Challenges for the 21st Century
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65
50
32.5
20
0
10
20
30
40
50
60
70
1996 1998 2000 2002
Best Practices in SCM and Logistics:Strategic Partnership with Key Customers
(median percentage)
Source: 1998 OSU Career Patterns 201
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75
60
40
20
0
10
20
30
40
50
60
70
80
1996 1998 2000 2002
Best Practices in SCM and Logistics:Strategic Partnership with Key Suppliers
(median percentage)
Source: 1998 OSU Career Patterns 200
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5050
30
10
0
10
20
30
40
50
60
1996 1998 2000 2002
Best Practices in SCM and Logistics:Strategic Partnership with Key 3rd Party Providers
(median percentage)
Source: 1998 OSU Career Patterns 202
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• Develop focused cost
• SC anticipation
• Postponement strategy
• Shared visions/ values
• Implement ABC or related
• Collaborative forecasting
full pipeline visibility
• To demand visibility
• To strategic partnership
with key SC partners
Implications Actions
Supply Chain Collaboration
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Challenge No. 4:
Create a business process which
leverages EDI/Internet & related
technology to reduce transaction
costs & increase information/
inventory velocity.
Challenges for the 21st Century
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0 0
10
20
60
50
30
10
0
10
20
30
40
50
60
70
1996 1998 2000 2002
EDI Internet
Percentage of Domestic Customer Orders which are
Transmitted via Electronic Commerce
(median percentage)
Source: 1998 OSU Career Patterns 214
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0 0
10
20
70
50
20
50
10
20
30
40
50
60
70
80
1996 1998 2000 2002
EDI Internet
Percentage of Total Orders to Vendors which are
Transmitted via Electronic Commerce
(median percentage)
Source: 1998 OSU Career Patterns 213
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• Transactional Relationships
• Manufacturing cost
• Inventory Level
• To contractual relationships
• To total cost to serve
• Inventory Velocity
Implications Actions
Leverage Information
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Challenge No. 5:
Find new organizational alternatives &
learning tools that mirror the results
of supply chain wide
process reengineering.
Challenges for the 21st Century
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70
60
50
22.5
0
10
20
30
40
50
60
70
80
1996 1998 2000 2002
Best Practices in SCM and Logistics:Cross Functional Teams
(median percentage)
Source: 1998 OSU Career Patterns 205
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• From traditional c/c vertical organization
• From traditional learning media & methods
• To strategies for horizontal SC management
• To new & efficient learning delivery systems
Implications Actions
Organizational Alignment
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Challenge No. 6:
Create a corporate environment where
change management is a positive
value & “thinking out of the box”
is an accepted option.
Challenges for the 21st Century
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• From risk adverse
decision making
• From traditional
logistics processes
• From long term
resource allocation
• To entrepreneurial
decision making
• To new processes
for delivery value
• To long run
resource utilization
Implications Actions
Vision
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New Metrics for the 21st Century
Today 21st Century
Functional Costs Total Costs
Cycle Time Time Definite
Inventory Level Inventory Velocity
Turnover Cash to Cash Cycle
Domestic Global
Firm Metrics Shared SC Metrics853
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Principles of SCM
1. Engineer by account demand visibility as close to source of demand as possible
2. Allow SCM to manage (and intervene) in inventory flows the can’t see and don’t own
3. Develop collaborative vision, metric, & processes with key accounts
4. Develop costing systems that reflect
horizontal S.C. processes
870
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Principles of SCM(continued)
5. Think “horizontally” rather than “vertically.”
6. Reduce transaction cost by trading information technology for transaction processing
7. Align the firms internal & external business processes to focus on “customer value” delivery
8. Utilize information technology as a learning/ teaching medium for all supply chain partners
871