Stages of supply chain excellence
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Transcript of Stages of supply chain excellence
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGES OF SUPPLY CHAIN EXCELLENCEBuilding of bridges between current and desired performance
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
Dimensions / Critical Success Factors
1. CUSTOMER SERVICE
MANAGEMENT
2. STRATEGIC BUSINESS PLANNING
3. SUPPLY INTEGRATED
TO S&OP
4. WORKPLACE CULTURE &
LEADERSHIP
5. RELATIONSHIPS WITH SUPPLIERS
& SERVICE PROVIDERS
6. INFORMATION CAPABILITIES
7. FORECASTING
& DEMAND PLANNING
8. KPI MANAGEMENT
& MEASUREMEN
T
9. IMPROVEMENT FOCUS WITHIN
BUSINESS
10. INNOVATION
11. ORGANISATIO
NAL STRUCTURE
13. ELECTRONIC COMMERCE
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Handle each transaction seperately
Oil the squeaky wheel
Adhoc operational focus
1. CUSTOMER SERVICE MANAGEMENT
STAGE 2
All customers treated same
Focus on internally set goals
Limited service level appreciation
STAGE 3
Strategic customer get special treatment
Order, line, unit service level and customer’s first request understood
STAGE 4
Segmented customer service plans based on updated customer policy
Customers choose service level and pay
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Fragmented ad hoc informal planning
Removed from operations
2. STRATEGIC BUSINESS PLANNING
STAGE 2
Done infrequently but provides some Supply Chain direction
Functional scope
One year horizon
STAGE 3
Limited functional supply chain scope
1-3 year horizon
Formal process
Major decisions tested against plan
STAGE 4
Integrated SC Plans drive decisions and actions
Includes suppliers and customers
1-5 year horizon
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Focus on today and each transaction
No idata integrity
3. SUPPLY INTEGRATED TO S&OP
STAGE 2
Period (e.g. monthly)
Budget period based
Not Senior Management driven
No S&OP KPIs
STAGE 3
Annual deployment
Long lead time issues planned separately
Senior management driven & KPIs drive actions
STAGE 4
Rolling periods
Structured & Formal
Synchronized across and down business
Includes capacity planning 1 to 2 years out.
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Employees Vs Management
4. WORKPLACE CULTURE & LEADERSHIP
STAGE 2
Limited employee involvement & consultation
Management sees people as important but not vital
STAGE 3
Consultation but no real involvement in decision making
Understand culture
Some management by fact
STAGE 4
Management by fact, empowered high performance teams.
Shared goals & reward.
Sharing of valuable data given
KPIs aligned to goals
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Unmanaged
Crisis Driven
Adverserial
Cost Only
5. RELATIONSHIPS WITH SUPPLIERS & SERVICE PROVIDERS
STAGE 2
Price driven
Multiple sources
Competitive bid oriented
STAGE 3
Some strategic Alliances
LIfe cycle costing considered
Evaluation tools used
Some information sharing with suppliers & customers
STAGE 4
Supply & demand aligned strategically
Partnering joint planning & improvement programs
Long term relationships
Partner electronically linkedStrong collaboration
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Transaction Focus
Limited Data
No Analysis Capability
6. INFORMATION CAPABILITIES
STAGE 2
Report Period’s Financial Results
Fragmented Data
Limited Extraction & Analysis Capability
STAGE 3
Useful data
Capability to drill down
Analysis capability
STAGE 4
Real time, visible data across business
Electronically connected to other SCs
Flexible extraction and analysis
People trained to use it
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Gut Feel Or Naive Approach
Informal Forecast Of Little Use
Budget Cycle
7. FORECASTING & DEMAND PLANNING
STAGE 2
Some Forecasting
No Ownership
No Integration
Quarterly Cycle
STAGE 3
Some integration
Some analysis from forecast
Clear ownership
Limited focus on outcome
STAGE 4
Single universally used forecastOne version of the truth
Detailed analysis and accuracy
Appropriate techniques for SKU groups
Part of overall planning
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Financial Focus Only, Mostly Budget
Complaints Driven
No Data Available
8. KPI MANAGEMENT & MEASUREMENT
STAGE 2
Mostly Financial
Some Operational
Functional Focus
Some Data Available But Not Driving Business
STAGE 3
Cross functional, balanced KPIs
Service vs key customer requirements & cost KPIs
Longer range actual targets
STAGE 4
Balanced cross functional scorecard
Integrated across and down the business in real time to enable decision making
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Quick Fix ‘Stop The Bleeding’
Crisis Management
No Improvement Focus
9. IMPROVEMENT FOCUS WITHIN BUSINESS
STAGE 2
Cost Reduction
No Strategic Focus
No Alignment Across Business
Competitive KPI Benchmarking
STAGE 3
Seeking breakthrough change
Re-engineering
Structured approach
Some process focus
STAGE 4
Continuous improvement towards goals
process driven benchmarking
Projects aligned across business
Business is outcome driven
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Products do not match capability
Support required for successful introduction
10. INNOVATION (INCLUDING PRODUCT DEVELOPMENT & SERVICES
STAGE 2
R&D Activities
Problems In Manufacturing *Marketing
Long Lead Times
STAGE 3
R&D seen as driver but other functions not involved
No commitment
STAGE 4
Formal cross functional innovation driven by internal & customer research
Short development lead times
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
No Method To Determining Structure
Ad Hoc Changes
No alignemnt of roles & responsibilities
11. ORGANIZATIONAL STRUCTURE, ROLES & RESPONSIBILITIES
STAGE 2
Some Functional Planning Used
Limited Alignement Of Roles & Responsibilities
STAGE 3
Some cross functional planning used to determine structure
Consideration of external supply chain & customer
Alignemnt of roles & responsibilities
STAGE 4
Structure determined & implemented according to cross functional business requirements.
Alignment of roles & responsibilities
Customer included in analysis
S TA G E S O F S U P P LY C H A I N E X C E L L E N C E
STAGE 1
Limited Ecommerce
No Strategy & Deployment
12. ELECTRONIC COMMERCE (INCLUDES EDI)
STAGE 2
In Some Parts Of The Business
No Formal Overall Planning & Analysis Of Ecommerce Strategy
STAGE 3
Strategic Planning For Deployment Based On CBA
Ecommerce in many parts of the business
STAGE 4
Integrated strategy & deployment
Enables real time & management by exception
Cross functional processes are E enabled