Adaptive Responsive Supply Chain€¦ · 16 Nov 2016 9th Global Supply Chain and Logistics Summit...
Transcript of Adaptive Responsive Supply Chain€¦ · 16 Nov 2016 9th Global Supply Chain and Logistics Summit...
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org1
Continuous Cost Reduction Resilience in
Adaptive Responsive Supply Chain
Dr. Lai Ving Kam, Associate Professor Logistics and Supply Chain ManagementBerjaya University College of Hospitality, Kuala Lumpur, Malaysia Email: [email protected]
Manufacturing
Distribution
X-Dock/
Retail DC
Sales
Channel
Component Assembly
Material Suppliers
International Transport
Outbound
Transport
Client
T3 Supplier
T1 Supplier
T4 Supplier
N SupplierMulti- EchelonSupply Chain
Supply Chain Macro Process
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16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Stage 1Correct the
Worst problems
Stage 2 Adopt Best
Practice
Stage 3Link strategy
with operations
Stage 4Give an Operations
advantage
InternallyNeutrality
ExternallyNeutrality
InternallySupportive
ExternallySupportive
Increasing Operations Capabilities
RedefineIndustry expectation
Clearly theBest inThe Industry
As good ascompetition
Holding theOrganizationBack
Incr
easi
ng S
trat
egic
Impa
cts
The four-stage model of Supply Chains contributionsRoles of Supply Chain functions :- Implementing business strategy Supporting business strategyDriving business strategy
W her e ar e y ou?
Roles of Supply Chain
Who has the capacity to lead?
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Rapid fall in prices
Technological products rapidly becoming
mass market commodity products with increasingly shorter lifecycle,
Increase in the usages of open standards-based technologies supported by rapid advancing
multi-technologies interface application technologies
Fashionable products
chic appeal and trendy in technology and aesthetic design
combining quick response product introduction capacities with enhanced
product design capabilities to both design fashionable products that
capture the latest consumer trends and exploit minimal product launching
lead times for better connectivity to match supply with uncertain demand.
Global Trends
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
1. Products become more fashionable
2. Products & Technology
lifecycle continuously
shortening
3. Prices cascading
downward rapidly and continuously
4. Constant change of consumer preferences
5. Technology Mutations-Non proprietary towards
Open technology & multi technology
interfacing
6. Products commoditization
4
Global Market Changes
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Manufacturing
Distribution
X-Dock/
Retail DC
Sales
Channel
Component Assembly
Material Suppliers
International Transport
Outbound
Transport
Client
T3 Supplier
T1 Supplier
T4 Supplier
N Supplier Multi- EchelonSupply Chain
Supply Chain Macro Process
Adaptive Responsive Supply Chain
New Trends:• 5G • 3D Printing • Robotic / Autonomous
Vehicles
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
Managing Uncertainty in a
Supply Chain Connectivity
Centrality of Connectivity
in
Adaptive Responsive
Supply Chain
in
Volatile Environment
Industries are facing greater pressures from market volatility with shorter interval of new add-ons product introductions made easy by open-technology platform proliferation and greater connectivity of supply chain.
Consequently, responsive supply chain needs to be much more adaptive and agile in sustaining business and market share to be resilience.
Need to looks at the repercussions of rapid product and technology mutations; higher market volatilities, and the criticality of appropriate systems and methodologies in delivering market resilience and sustainability.
While the rest of world is speeding up, what can you do to catch up or attain the leadership position?
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
DevelopmentIntroduction
Growth
Saturation
Decline
Research
R&D
Promotion
Rapid
Expansion
Market
Saturation
Changing
Customer
Preference
Cost1
Sales1
Profit 1
Add-On product
Introduction ‘n’
ChangingCustomer
Preference ‘n’
Price1
Pote
ntia
l
Cann
ibal
izat
ion
Source: Lai VK (2015). “Comparative Study on Continuous Cost Reductions between Electronics and Non Electronics sub sectors in”
Cost N
Cost 3Cost 2
Extended Product Sales
Price 2 Price 3
Price N
Profit
Sales 2
Sales 3Sales N
What business must do !
9
Extended Product Lifecycle Management
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
2015 CCR Fig & Table
Development Introduction
GrowthMaturity Decline
Cost
Sales
Profit
ResearchMarket
Saturation Rapid
Expansion
Promotion Changing Customer
Preference
De
velo
pm
en
t
De
velo
pm
en
t
De
velo
pm
en
t
De
velo
pm
en
t
Sale
s
Sale
s
Sale
s
Sale
s
En
d-O
f-Li
ne
En
d-O
f-Li
ne
En
d-O
f-Li
ne
En
d-O
f-Li
ne
1st GenerationProductLifecycle
2nd GenerationProductLifecycle
3rd GenerationProductLifecycle
‘N’ GenerationProductLifecycle
Cost Sales
Profit
Dollars
Dollars
A
B
3 stageLifecycle curve
Standard 5 stage
Lifecycle curve
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Supply Chain Strategy
Facilities
Information Sourcing Pric ing
Trans portation
Supply Chain Structure
Efficiency Responsiveness
Inventory
Logistics Drivers
Cross-Functional Drivers
Adopted from Chopra , M eindl (2007) Supply Chain Management –Strategy, planning & Operations
Co
ntin
uo
us
C
os
t Re
du
ctio
n
fram
ew
ork
COST
CSV, CM , PPM ,PDD, PLM
Ad hoc Reactionaryor
Predetermined process
Supply ChainDecision Framework
Traditional Cost Reduction Processes
Competitive Strategy
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Efficiency Adaptive Responsiveness
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
Core Strategic
Vision (CSV)
Cost
Management
(CM)
Product
Portfolio
Management
(PPM)
Product Design
& Development
(PDD)
Product
Lifecycle
Management
(PLM)
CSV Reliability
CSV Organization Alignment & Communication
CSV Framework platform
CSV Adaptability & Agility
CM Tools & Techniques / Management Control
Critical CM Capability
Cost Reduction Maturity level
CM Agility & Flexibility
PPM Critical Competencies
PPM Strategic Management
Risks & Intelligence
Adaptability & Agility
Product & Technology Strategic Management
Product Platform Design Strategy
Product Cost Optimization
PDD strategic Alliance
Strategic Management & Planning
Aptitude & Capacity
Agility & Flexibility
Product Balancing Out Managemen t
Critical Elements Business
Architecture
component
Th
eo
retica
l fram
ew
ork
Manufacturing
Distribution
X-Dock/
Retail DC
Sales
Channel
Component Assembly
Material Suppliers
International Transport
Outbound
Transport
Client
T2 Supplier
T1 Supplier
T3 Supplier
N Supplier
Adaptive Responsive Supply Chain Macro Process
Source: Lai VK (2015). “Comparative Study on Continuous Cost Reductions between Electronics and Non Electronics sub sectors in Fashionable Products”
Production Management
Critical Elements CapacitiesProductivityAutomation
Agility & Quality
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Adaptive Responsive Supply Chain Framework /Model
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
Continuous Cost Reduction Framework
Continuous
Cost
Reduction
(CCR)
Core Strategic
Vision (CSV)
Cost
Management
(CM)
Product
Portfolio
Management
(PPM)
Product Design
& Development
(PDD)
Product
Lifecycle
Management
(PLM)
CSV Reliability
CSV Organization Alignment & Communication
CSV Framework platform
CSV Adaptability & Agility
CM Tools & Techniques / Management Control
Critical CM Capability
Cost Reduction Maturity level
CM Agility & Flexibility
PPM Critical Competencies
PPM Strategic Management
Risks & Intelligence
Adaptability & Agility
Product & Technology Strategic Management
Product Platform Design Strategy
Product Cost Optimization
PDD strategic Alliance
Strategic Management & Planning
Aptitude & Capacity
Agility & Flexibility
Product Balancing Out Managemen t
Critical Elements CCR Architecture
component
CCR= 0+1CSV+2CM+3PPM+
4PDD+5PLM+.
CCR is the sum of
product of CSV, CM,
PPM, PDD, PLM
Theo
retical framew
ork
Dependent Variable
Independent Variable
Ref: Researcher’s own analysis
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
Competitive Strategy
Facilities
Supply Chain Structure
Efficiency Responsiveness
Cor
Co
nti
nu
ou
s C
ost
Red
uct
ion
fra
mew
ork
Cro
ss –
arch
ite
ctu
ral C
om
po
ne
nt
Dri
vers
Product Portfolio
Management
Product Design and
Development
Core Strategic Vision
Cost Management
Product Lifecycle
Management
Centrality of Continuous Cost Reduction
in Adaptive ResponsiveSupply Chain
Source: Lai VK (2015). “Comparative Study on Continuous Cost Reductions between Electronics and Non Electronics sub sectors in Fashionable Products”
Predeterminedand adaptive processes ?
What we need ?
13Dr. VK Lai Associate Professor - India Supply Chain Summit 19-20, May 2016
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Product Portfolio Management
Product Design and Development
Core Strategic Vision
Cost ManagementProduct Lifecycle
Management
A-RSC
Platform
design
A-RSC
prediction
Strengths
Isolated /
Stand Alone
A-RSC
predictor
Contribution of
Critical element
Guiding
Principle
--identify
-Assess
--appraise
--associate
Develop
A-RSC
framework
Formulate
A-RSC system
and process
Ref: Lai VK’s own analysis
Adaptive Responsive Supply Chain Framework
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
Product Portfolio Management
Product Design and Development
Core Strategic Vision
Cost ManagementProduct Lifecycle
Management
Adaptive Responsive
Supply Chain
ConsumerRetailerDistributorManufacturerSupplier
Guides and Directs -Integrate-cooperateCoordinate
Phenomenon Observed in Supply Chain
Orde
r Size
Time
Customer
Demand
Retailer OrdersDistributor Orders
Production Plan
Distributor Order
Production Plan
Customer Demand
Retailer Order
Bullwhip Effect
Adaptive Responsive Supply
Chain
Deterministic Business strategies
Technology & Product
Strategies
Product Strategies &
Policies
Cost-price relationship Management
Competitiveness•Sustainability•Responsiveness•Cost Efficiencies•Robustness •Agility•Flexibility•Survival•Quality
Sustainable Profits
Uncertainty / Volatility
Structured A-RSC Framework
Dr. VK Lai Associate Professor - India Supply Chain Summit 19-20, May 2016
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Product Portfolio Management
Product Design and Development
Core Strategic Vision
Cost ManagementProduct Lifecycle
Management
Adaptive Responsive
Supply Chain
ConsumerRetailerDistributorManufacturerSupplier
Adaptiveness
Supply Chain
Efficiency Responsive
Technology
Product
Market
Production
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Centrality of Connectivityin Adaptive Responsive Supply Chain
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Accelerated Flying Wild Geese Industries Migration
Japan 1950s
Korea
TaiwanHong Kong
Mid 1950sg
Malaysia Singapore
1960s
China
Thailand
PhilippinesIndonesia Vietnam
Rest of ASEAN 1990s
India
USA
Europe 1980s
Africa2014-5
?South America 2025
China Manufacturing 2025
Germany Manufacturing
4.04.0
ASEAN Reintegration
USA Re-shoring
Africa2020
How about these ? One Belt One Road
Japan?
Central Asia
EasternEurope
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Reactive
Move from Reactive to Adaptive
Logistics
Costs
Agile
manufacturing
Logistics
Connectivity
Responsive
marketing
system / process
Supply Chain
ManagementCustomer
satisfaction
Intelligence
Efficiency
Logistics
Management
Adaptive
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Basic Requirements for a Adaptive Responsive Supply Chain
1. Working and updated sustainable Core Strategic Vision (CSV) to guide and direct the business, technology and product strategies
2. Supply Chain efficiency is insufficient,
adaptive responsive and scalability are equally critical
3. Develop and maintain strategic business partnership with all stakeholders.
4. Must be agile and proactive. Not ad hoc
reactionary programme
A-RSC
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
The Adaptive Responsive Enterprise
Ability to react on real time changes to sustain flexible market demand profitably
Create insights based on complete and timely
information and intelligence throughout the
value chain.
Agile and Rapid respond to changing market,
business, and supply and demand conditions.
Intelligence
Adaptive Respond
Supply Chain
Strategies
Extended Supply Chain
Market Intimacy
A-RSC
43
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011MARKET Rapid Change: consumer preference
Increased product configurations
Shortening product lifecycle
Service bundled with products
COMPETITION Technology / Product innovation
Process / Service innovation
Commoditization
Price cascading
TECHNOLOGY Proliferation of Open Standard technology
Multi-technology interfacing technologies advancement
Incoming 5G Mobile and cloud computing platforms
Continuous and disruptive process and product innovation
ECONOMY Trend toward regionalization
Global slow down
Shrinking margins
Shrinking consumption
GOVERNMENT REGULATIONS Environmental control
Legal compliance / polarized
Trade policies
Competitive Industry standards
Adaptability in a Responsive Supply Chain is the key to
succeed in today’s volatile business environment
Forces Driving AdaptabilityA-RSC
44
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Adaptability in a Responsive Supply Chain is the key to succeed in today’s volatile business environment
Rapid Change Is Constant In Current World!
You have to be ready for the unexpected often disruptive !
Supply Chain
Responsive Efficiency
Adaptive
A-RSC
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16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Managing the Supply Chain - Conflicting Goals
Efficiency Responsive
Supply Chain
Adaptive
As low cost as possible
Satisfy customer at all cost
Balancing between low cost andmaking customer happy
profitably
A-RSC
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Managing the Supply Chain - Conflicting Goals
Efficiency Responsive
Supply Chain
Adaptive
As low cost as possible
Satisfy customer at all cost
Balancing between low cost and making customer happy profitably
Higher cost
Low Responsiveness
X
XIs this your current situation?
A-RSC
47
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Managing the Supply Chain - Conflicting Goals
Efficiency Responsive
Supply Chain
Adaptive
Very low cost
High customer satisfaction
Balancing between low cost andmaking customer happy
profitably
Higher
Higher
Most Optimum Position !48
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
1
Supply
Management
Networks/
Ecosystem
Extended
Enterprise
Total
Enterprise
Broader Definition of Supply Chains that create value
Components, Products
And Services
Function
performance
Discrete
Capabilities for
Value creation
New Business
Opportunities
Value Chain
Leverage
Strategies
Fig 3.1 Creating More Value and Dimension of innovation & Supply Chains
Developing SC Strategy
In support of Innovation
Create the most value for the enterprise by
leveraging external resources and capabilities
through supply chain optimization
Incremental RadicalNew to enterprises New to the worldDoing what we do better
Innovation
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Old & New R&D Models
Closed innovation
Firms select desired technologies Firms perform R&D in house Firms put technologies in products Product revenues fund additional R&D Globalization (1): adjusting products to markets
Open innovation
Strategic R&D – integral to business strategy Technology acquisition (licensing,
corporate venturing, alliances) Externalization of R&D
(outsourcing, firms research institute, university centres of excellence)
Globalization (2): tapping global talent pools
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Volatility in Supply and Demand
Pressures to deliver “More with Less”
Talents availability, skill gaps
•Risk management•Scenario planning
•Continuous Efficiency focus •Balance customization vs. consolidation
•Selective automation•Capability development•Better work environment
The constants Imperatives
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
Global Supply Chain Risk Increasing
Beginning of the CHANGE to new world order
Global Supply chain risk especially in Asia Pacific continued to rise due toworsening economic conditions in China, USA, Europe, and rest of world.
Donald Trump President Elect. gives more uncertainty to world trade for next6-12 months.
China One Belt One Road (OBOR) and Asian Infrastructure Investment Bankcreate more superior connectivity to the world.
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
9 Feb 2011
China’s One Belt One RoadChina Supply Chain Connectivity Strategies
"Just waiting for higher Chinese wages to push jobs
their way is a recipe for failure,”
16 Nov 2016 9th Global Supply Chain and Logistics Summit www.sclgsummit.org
Presentation Title
Presented by:
Continuous Cost Reduction Resilience in Adaptive
Responsive Supply Chain
Dr. Lai Ving Kam, Associate Professor –Logistics and Supply Chain ManagementBerjaya University College of Hospitality, Kuala Lumpur, Malaysia Email: [email protected]