Вы находитесь на странице: 1из 14

Supply Chain Management:

Processes, Partnerships, Performance

Douglas M. Lambert, Ph.D.


Director, The Global Supply Chain Forum

Supply Chain Management


is the integration of key business processes from end user through original suppliers, that provides products, services, and information that add value for customers and other stakeholders.
[The International Center for Competitive Excellence, 1994] [The Global Supply Chain Forum, 1998]

Supply Chain Management


Integrating and Managing Business Processes Across the Supply Chain
Information Flow
Manufacturer
Tier 2 Supplier Tier 1 Supplier Purchasing Customer Logistics Consumer/ End-User

Product Flow Marketing & Sales


Finance
R&D

Production
Supply Chain Management Processes

CUSTOMER RELATIONSHIP MANAGEMENT SUPPLIER RELATIONSHIP MANAGEMENT CUSTOMER SERVICE MANAGEMENT DEMAND MANAGEMENT ORDER FULFILLMENT

MANUFACTURING FLOW MANAGEMENT


PRODUCT DEVELOPMENT AND COMMERCIALIZATION RETURNS MANAGEMENT

Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 3.

Types of Inter-company Business Process Links


Tier 3 to Initial suppliers Tier 2 Suppliers Tier 1 Suppliers Tier 1 Customers Tier 2 Customers Tier 3 to Consumers/ End-users

1 2 n 1 Initial Suppliers 2 n 1 2 1

1 2 Consumers/End-users n 1

3
2 3 n 1 n n n 3 1 n

1 n 1 2

n
n Focal Company Members of the Focal Companys Supply Chain Non-members of the Focal Companys Supply Chain

Managed Process Links Monitored Process Links


Not-Managed Process Links Non-Member Process Links

Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 207.

Functional Involvement in the Supply Chain Management Processes


Business Functions Business Processes Customer Relationship Management Supplier Relationship Management
Marketing Marketing Plan & Resources
Capabilities Required for Competitive Positioning

Sales

Research & Development

Logistics Logistics Capabilitie s Inbound Material Flow Alignment of Logistics Activities Forecasting

Production Manufacturing Capabilities Integrated Planning Coordinated Execution Manufacturing Capabilities Made-toOrder Production Planning Process Specifications

Purchasing Sourcing Capabilities Supplier Capabilities Priority Assessment Sourcing Capabilities Material Constraints Integrated Supply Material Specifications

Finance Customer Profitability


Total Delivered Cost Cost-toServe Tradeoff Analysis Distribution Cost Manufacturing Cost

Account Management Sales Growth Opportunities


Knowledge of Customer Operations Competing Programs in Customer Space Knowledge of Customer Requirements

Technological Capabilities
Material Specifications

Customer Service Management Demand Management Order Fulfillment Manufacturing Flow Management

Prioritization of Customers Competitors Initiatives


Role of Logistics Service in Marketing Mix
Differentiation Opportunities from Manufacturing Capabilities

Technical Service
Process Requirements Environmental Requirements

Network Design Prioritization Criteria Logistics Requirements


Reverse Logistics

Knowledge of Design for Customer Requirements Manufacturability

Product Development Product/Service Customer and Commercialization Gaps in Market Opportunities Returns Management
Knowledge of Marketing Programs

Product Design Product

R & D Cost

manufacturing Specifications Knowledge Design Information Architecture, Data Base Strategy, Information Visibility Capabilities

Customer

Re-

Material

Revenue & Costs

Information Architecture, Data Base Strategy, Information Visibility


Note: Process sponsorship and ownership must be established to drive the attainment of the supply chain vision and eliminate the functional barriers that artificially separate the process flows.

Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 15.

CUSTOMERS

SUPPLIERS

The Management Components of Supply Chain Management


Structural Management Components
Planning Control Methods

Behavioral Management Components


Management Methods

Power and Leadership

Workflow Structure
Risk and Rewards Organization Structure Knowledge Management Communication Structure Culture and Attitude

Trust and Commitment

Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 236.

Customer Relationship Management (CRM) & Supplier Relationship Management (SRM): The Critical Supply Chain Management Linkages
CRM
Supplier D Manufacturer C

CRM
Wholesaler/ Distributor B

CRM
Retailer/ End User A

SRM
P&L for C as customer Total Cost Report for D as supplier

SRM
P&L for B as customer P&L for C as supplier

SRM
P&L for A as customer
P&L for B as supplier

Revenue - Cost Profit

Cost = Profit

Revenue - Cost Profit

Revenue - Cost Profit

Revenue - Cost Profit

Revenue - Cost Profit

Supply Chain Performance = Increase in Profit for A, B, C, and D

Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 16.

Sysco Sales and Earnings History


Sales
(Billions)

Net Earnings
(Millions)

30

900

FY03 Sales +11.9%; Net Earnings +14.5%


25

800 700

5 Yr. CAGR: Sales = 11.3% Net Earnings 19.1%


20

10 Yr. CAGR: Sales = 10.1% Net Earnings 14.5% 20 Yr. CAGR: Sales = 14.6% Net Earnings 16.0%

600 500 400 300

15

30 Yr. CAGR: Sales = 16.6% Net Earnings 18.1%

10

Sales Net Earnings


5

200 100

* All net earnings data is before accounting changes.


Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 18.

FY70 FY71 FY72 FY73 FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03

How Customer Relationship Management Affects Economic Value Added (EVA)


Customer Relationship Managements Impact
Sales Strengthen relationships with profitable customers Sell higher margin products Gross Margin Profit from Operations Improve share of customer Cost of Goods Sold Improve plant productivity Net Profit

Improve mix ( e. g. align services and cost to serve)


Taxes

Improve targeted marketing efforts

Total Expenses

Improve trade spending


Eliminate or reduce services provided to low-profit customers Optimize physical network/facilities Leverage new and/or alternative distribution channels Reduce customer service and order management costs

Economic Value Added

=
Capital Charge Cost of Capital Total Assets Current Assets Inventory

Reduce human resources costs/improve effectiveness Reduce general overhead/management/administrative costs Improve demand planning Reduce safety stock

+
+
Fixed Assets Other Current Assets

Make to order, mass customization of inventories

Reduce accounts receivable Improve asset utilization and rationalization Improve product development and asset investment Improve investment planning and deployment

Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 19.

Partnership - Definition
A partnership is a tailored business relationship based on mutual trust, openness, shared risk and shared rewards that results in business performance greater than would be achieved by two firms working together in the absence of partnership.

The Global Supply Chain Forum, 2000


Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 20.

Types of Relationships

Partnerships Joint Ventures Vertical Integration

Arms Length

Type I

Type II

Type III

Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 20.

The Partnership Model


Drivers
Compelling reasons to partner Decision to create or adjust partnership

Facilitators
Supportive environmental factors that enhance partnership growth

Drivers set expectations of outcomes

Components
Joint activities and processes that build and sustain the partnership

Feedback to: Outcomes


The extent to which performance meets expectations Components Drivers Facilitators

Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 21.

Supply Chain Management:


Elements and Key Decisions
2) What processes should be linked with each of these key supply chain members?

Supply Chain Management Processes

Supply Chain Management Components

Supply Chain Network Structure

3) What level of integration and management should be applied for each process link?

1) Who are the key supply chain members with whom to link processes?

Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Third Edition, Sarasota, FL: Supply Chain Management Institute, 2008, p. 23.

Questions?