1、Achieving Competitive Advantage Through Supply Chain ManagementAdvanced Planning andScheduling SystemsMay 25, 2000Agenda1.The EvolutionoftheSupply Chain2.AdvancedPlanningand SchedulingSystems2.1How TheyWork2.2The VendorsTheSupply Chain encompasses anumber of keybusinessprocessesinvolvedinmanagingthe

2、 flowofmaterials,information, andfundsfrom theinitial supplierstotheultimateconsumer.RetailingDeliveringDistributingProducingSupplying theconcept of supplychainmanagementis relativelysimple.MaterialsInformation & FundsMaterialsInformation & FundsMaterialsInformation & FundsHowever,intherealworld,mul

3、tiplesuppliers,multipleplants, multiple distributionpointsand multiple customerssignificantly complicatematerialand information flows.RetailingDeliveringDistributingProducingSupplying And,giventhatsupplychains cross multiple companies,wallshavebeen builtthat preventfullandtimely information flow.Ret

4、ailingDeliveringDistributingProducingSupplyingBreakingdown these walls andintegratingthesupply chain is critical.However,todate,mostsupplychaininitiativeshavebeen inwardly focused.Only recently,manufacturersarebeginning to embracethe total supplychainasa means to achievingcompetitiveadvantage.Phase1

5、 -ProcessIntegration(e.g.,reengineeringtheorder-to-cashprocess).Phase2- Intra-EnterpriseIntegration(e.g.,salesstrategiescoordinatedwith supplychaincapabilities).Phase3- Inter-EnterpriseIntegration(e.g.,collaborativeforecasting& replenishmentbetweenretailersand suppliers)Stage1:Separatebest of breed

6、applicationsdedicatedtospecificbusinessprocesses (1970s)G/LPayrollA/PPurchaseOrderMgmt.OrderEntryInventoryMgmt.FinancialsManufacturingDistributionEnterprise Resource Planning (ERP)SupplyChainTechnologyhasevolvedover thepast severaldecades.Todays ERPsystems aretransaction-basedapplicationswithlimited

7、 decision-supportcapability.Stage3:Enterprise-wideapplications (earlytomid1990sandstill ongoing)Stage2:Suitesofintegratedapplicationsfor functionalprocesses (1980s)ERP or LegacySystemsDemandPlanningProductionPlanning &SchedulingDistribution/SupplyPlanningTransportationPlanning/ManagementAPSDefinitio

8、nERPorlegacy interfaceddecisionsupporttechnology which usesadvancedalgorithms,(e.g., LPs,IPs,mixed IPs,heuristics,theory-of-constraints,etc.)tomodelsupplychainconstraintsand enableintelligentsupplychainplanning/decisionmaking.APSCharacteristicsAllowscomplexsupplychainrepresentationand rapid SC model

9、 reconfigurationEnables concurrent, dynamicplanning, and“what-if”simulationsusingmemory resident processingPossess scaleableobjectarchitecturescapable of runninglargedata-intensivemodelsAdvancedPlanningandSchedulingSystems (APS) AretheNextStep of theEvolutionfor ProvidingDecisionSupport Capabilities

10、.Asset Intensive Supply ChainSetup/sequence dependenciesCapable to promiseCapacity utilizationBottleneck utilizationMaterial Intensive Supply ChainCapable-to-promise requirementsExcess inventoryObsolescenceChanges to ordersEngineering changeDistribution IntensiveSupply ChainLarge number of SKUsCompl

11、ex distribution/transportation requirementsExcessive inventoryCustomer serviceWhilewetend to drawall supplychainsthe same, there aremany types of supplychains-each withtheirown uniquechallenges.E.g.,Pulp &PaperE.g.,High-TechE.g.,ConsumerProductsHowDoYou KnowIfYou HaveSupply Chain ManagementProblems?

12、CustomerService Concerns- Customer complaints, lossofshare, delivery problems,customersurprisesMaterialsManagementDifficulties- Highinventory buffers/obsolescence,high transportation costs,suppliershortages, lostpurchasingdiscountsManufacturing ProcessProblems- Productioninefficiencies, overcapacity

13、,undercapacity,costgrowthPlanningDifficulties- Inaccurateforecasts,high stockouts,growingoverheadcostsObsoleteTechnology- Incompatiblesystems linkages,inaccurate/inaccessibleinformationRevenue Cycle Concerns- Lengthytimetomarket, longordercycle, distributiondelays, conflicting channeldemandsVendorMa

14、nagementProblems- Poorresponselevels,lostgrowth,lackofcommitmentTheImportanceofSupplyChainManagementHasIncreased SignificantlyOverthePastFewYears.Past (1995-1998)Present(1999)Future(2000+)% Survey Respondents RatingSupply Chain Critical to SuccessSupply Chain Management isIncreasingly Important25%70

15、%91%TheResponse:Approximately 60%ofManufacturers CurrentlyHave aMajorSupply Chain InitiativeUnderway.However,42%are “l(fā)ess thansatisfied”with theoutcome of their previous improvement efforts.% Survey RespondentsMajor Supply Chain Improvementsare Underway or PlannedWithin 2 YearsAlready doneWithin 3-5

16、 years10%2%6%Within 199913%Currently Underway59%No Plans10%Ability to RespondAbility to Predict12-18 MonthsSupplyPlanDemandPlanSupplyChainDesignStrategicPlanIncreasing TimeIncreasing Detail of DataTodayTransportationPlanProductionPlanExcess InventoryMissed OrdersAsthePaceofBusinessContinuestoIncreas

17、e, aKey ChallengeforTodaysSupplyChainManagersIstoMakeGood Business Decisions,UsingAll theInformationThat Is Available,Within aShortTimePeriod.TheSupply Planning (SP)DistributionPlanningMasterPlanningFactory Planning &Scheduling InventoryPlanningDPSP- InventoryPlanningInventoryPlanningGoal:Determineo

18、ptimalinventorylevels andlocationtoprotect desiredcustomerservicegoalsTradeoffbetweeninventoryand servicenot understoodLimited abilitytoknowhowmuchinventory, whenand whereInabilitytoplanata sufficientlevelofdetailInabilitytoquantifythe impactofdemandand supplyvariabilityChallenges Distribution Plann

19、ing Master Planning Factory Planning & Scheduling Inventory PlanningDPSPMasterPlanningMasterPlanningGoal:Globallyoptimizeproduction planconsideringtradeoffs of availablecapacity,materials,costs,timeLack of visibilityDisjointed planningInabilitytoreconcile demandpriorities withsupply constraintsInabi

20、litytogloballyoptimizeproductionplan considering multiple constraintsPlanningdoesnt supportcorporate objectivesChallengesDistributionPlanningMasterPlanningFactory Planning &Scheduling InventoryPlanningDPSPFactory Planning &SchedulingFP& SchedulingGoal:Optimal executionoftheMaster Plantominimizecost

21、andimprove qualityoftheplanMaterialandcapacityconstraintsnot consideredsimultaneouslyInaccurate representation of realworldconstraintsSlow,inabilitytoreactLack of problemvisibilityPoor delivery datequotinginbuildtoorderChallenges Distribution Planning Master Planning Factory Planning & Scheduling In

22、ventory PlanningDPSP- DistributionPlanningDistributionPlanningGoal:Optimallypositioninganddeployinginventory to achievedesiredcustomerserviceStore& DC replenishmenthandledindependentlyLimited abilitytoprioritize demandPredetermined (akainflexible)distributingrulesInventorydistributedinadvanceofactua

23、lsalesChallengesDistributionPlanningMasterPlanningFactory Planning &Scheduling InventoryPlanningDPCustomerBenefitsGrowth:IncreaserevenuesIncreasedmargin performanceFinancialPerformance:Reduced inventorycostsandobsolescenceOptimal useofavailablecapacityand inventoryReduced procurement expensethrougha

24、ccurateorderingImprovedCustomerServiceAndifyou do theaboveincreasedstockpriceSelectedAPSImplementations by IndustryAerospaceBell HelicopterU.S. NavyAutomotiveFordGMVolvoChemicalOccidental ChemicalNovartisMacMillanBloedelConsumerGoods(Durable)BakerFurnitureBlack& DeckerBoseHermanMillerConsumerGoods(N

25、on-Durable)3MAult FoodsConsumerGoods(Non-Durable)Coca ColaE&JGaloFritoLayHigh Tech3COMDellDigitalGatewaySiemensIndustrialCaseCaterpillarMercury MarineMedicalJohnson &JohnsonBristol-MeyersSquibbMetalsTimkenThereAreaNumberofAPS Vendors.AccordingtotheGartnerGroup,i2Technologies andManugisticsArethe Lea

26、dersToday.Deloittecurrentlyhas established APSrelationships withi2,Manugistics,SynQuestandParagon.D&ThasERP partnershipswithPeopleSoft, JDENumetrix,BaanandSAP.Source:GartnerGroup(03/26/99)Note fromS:TheTablewasdeletedduetocopyrightsconstraints.Refer to theGartner Group database in Sfor currentinform

27、ation.1999 EstimatedTotalSCMMarket ShareSource: BenchmarkingPartners,Inc.1999 Estimated% Share of MarketLeaders By VerticalSource: BenchmarkingPartnersInc.1999 Estimated% GrowthbyVertical1998-1999Source: BenchmarkingPartnersInc.1999 Assessmentinthe Consumer Packaged Goods IndustrySource: Benchmarkin

28、gPartnersInc.AppendixDemandPlanKEYCONCEPTSTrulyincorporatesknowledge fromvariouslevelswithin andoutside theorganizationProactivelycontrol eventsandreduce variationsindemand forecastingSupportstop-down,bottom-up andhybridplanningapproachesMulti-dimensional,enterprisedemandplanningthatintegrates syste

29、ms, processesandpeople at multiple levelsINPUTConsidersstrategic goals,inter/intra-company objectivesand constrainedsupplyinformationtoconstructrealistic demandplanConsidersexternaleconomicand events(promotions,pricingchanges,etc.)Multiplescenariocomparisonsandwhat-ifanalysisfacilitate appropriateus

30、estoadd valueOUTPUTIdentifies opportunities, formulatesstrategies,translatesthemintoaction plans andactualexecution steps,andanalyzesresultsProducesrealisticforecastthatdrivesinventory,financialandoperational plansReduces supplychaininventoryand costsSupplyPlanKEYCONCEPTSFacilitatesthedesign of opti

31、maldistribution networks,production plans,sourcingdecisions, andinventorylevelsHelpsdeterminethe mostprofitablesupplychainstrategyfor end-to-endorderfulfillmentReal time, enterprisewideandcrossenterprisevisibility andoptimizationofconstraintsReliablereal-timemarket,product andcustomer-allocatedcapab

32、le-to-promise andduedatequotingINPUTConsidersconstraintsthroughoutthesupply chain at agreatlevelofdetail,enablingrapidwhat-if simulationsOUTPUTManufacturing,distributionand sourcing networkoptimization:improvecustomer responsiveness andreducecostsatthe sametimeIncreasedabilitytofocusonhigh-value str

33、ategy decisionsthat drivetactical andoperationalactivities,andresponsivenesstochangesinbusinessenvironmentShorter order fulfillment cycle timeLowerinventoriesOptimizedassetutilizationProduction PlanKEYCONCEPTSProducesoptimizedand feasible finiteproduction schedule based onconsiderationofdynamicconstraintsINPUTWhat-if analysisATPbasedonup-to-datematerialandcapacityconstraintsFast re-planning of orderstoaccommodatedemandvolatilityOUTPUTResourceoptimizationUtilizationimprovesby10to50%Inventoryreducedupto75%OrderLead Times:10to6