Download - Supply chain integration

© Copyright IBM Corporation 2008

A Tale of Ants, Humans and Chaos

Mondher Ben-Hamida, CPIM, CSCPAssociate Partner / Global Electronics SMEIBM GBS Supply Chain Strategy Practice

[email protected]

+1.415.425.7184

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2009 ELECTRONICS INDUSTRY MAP

(PDIF)

Product Lifecycle Product Lifecycle MgmtMgmt

(IS01, SCM) (IS01, SCM)

Product Lifecycle Product Lifecycle MgmtMgmt

(IS01, SCM) (IS01, SCM)

StrategicDrivers

IndustrySolutions(ISA Code)

SolutionOfferings

IndustryFramework

Infrastructure

Reduce Operating / Infrastructure costs Brand and Product Commoditization/ pressure to innovate

Consumer Driven Innovation / strategic selling and sales execution

Globalization andMerger Integration

Tighter integration and partnering industry ecosystem

Supply, Demand & Supply, Demand & Global IntegrationGlobal Integration(IS09, SCM, FMS, (IS09, SCM, FMS,

HCM)HCM)

Supply, Demand & Supply, Demand & Global IntegrationGlobal Integration(IS09, SCM, FMS, (IS09, SCM, FMS,

HCM)HCM)

Electronics MESElectronics MES(IS10, SCM) (IS10, SCM)

Electronics MESElectronics MES(IS10, SCM) (IS10, SCM)

Marketing, Sales & Marketing, Sales & Service Service

TransformationTransformation(IS05, CRM, S&C)(IS05, CRM, S&C)

Marketing, Sales & Marketing, Sales & Service Service

TransformationTransformation(IS05, CRM, S&C)(IS05, CRM, S&C)

• Requirements Management (Telelogic/Rational)

• Product Innovation management/IPD

• Integrated BOM• Embedded

system/Software lifecycle management

• Test outsourcing• Next generation PDM/web-

based and extended PDM • Unified Verification

Management

• Requirements Management (Telelogic/Rational)

• Product Innovation management/IPD

• Integrated BOM• Embedded

system/Software lifecycle management

• Test outsourcing• Next generation PDM/web-

based and extended PDM • Unified Verification

Management

• eGIE/CBM/Shared Service Design

• Global Supply Chain Planning

• Supply Chain Visibility (VMI/CPFR)

• Master Data Mgmt• Supply Chain Mgmt ERP*• Green Supply Chain• Global Financial System

Consolidation• “Solar Fab In A Box”

• eGIE/CBM/Shared Service Design

• Global Supply Chain Planning

• Supply Chain Visibility (VMI/CPFR)

• Master Data Mgmt• Supply Chain Mgmt ERP*• Green Supply Chain• Global Financial System

Consolidation• “Solar Fab In A Box”

• Semiconductor , Flat Panel Display, Solar MES (SIView, LCDView, SolarView)

• Enterprise MES• View Factory

Suite/Manufacturing Process Improvement

• GIView (Globally Integrated View)/Mfg Cockpit

• Semiconductor , Flat Panel Display, Solar MES (SIView, LCDView, SolarView)

• Enterprise MES• View Factory

Suite/Manufacturing Process Improvement

• GIView (Globally Integrated View)/Mfg Cockpit

• Marketing Transformation / Market Planning

• Sales Transformation• Multi-Channel

Management (MCM)• Service Management• Med Device Contract

Sales & Service

• Marketing Transformation / Market Planning

• Sales Transformation• Multi-Channel

Management (MCM)• Service Management• Med Device Contract

Sales & Service

Product Development Integration Framework

Product Development Integration Framework

Supply Chain Visibility / VCC

Supply Chain Visibility / VCC

Manufacturing Integration Framework

(MIF)

Manufacturing Integration Framework

(MIF)

Infrastructure: Infrastructure: servers, storage, communication networks & associated servicesInfrastructure: Infrastructure: servers, storage, communication networks & associated services

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ABOUT THE PRESENTERMondher Ben-Hamida, CPIM, CSCPAssociate Partner / Global Electronics SME

IBM GBS Supply Chain Strategy Practice

EducationEducationEducationEducation1997

1995

Master of Science in Industrial Engineering and Operations Research, University of Minnesota, Minneapolis, MN, USA.

Master of Engineering in Industrial Engineering, ENIT, Tunis, Tunisia

LanguagesLanguagesLanguagesLanguages• English• French• Italian• Arabic

FluentFluentFluentFluent

SpecializationSpecializationSpecializationSpecialization• Supply Chain Strategy• Global Issues in SCM• Enterprise Sustainability• Advanced Planning Tools

Experience OverviewExperience OverviewExperience OverviewExperience OverviewMondher is an Associate Partner in the IBM Supply Chain Strategy group. The practice is responsible for providing strategic and operational guidance to senior executives within client organizations. Mondher is an Industrial Engineer and a Global Supply Chain Strategist with over 13 years of global management and manufacturing consulting experience. Primary focus has been the design and implementation of Supply Chain Management strategies and tools, Advanced Planning and Scheduling solutions and Theory-Of-Constraints initiatives. Mondher is a frequent speaker at various supply chain events (APICS, SCC, AMR, etc.) and has published a number of articles on various topics ranging from supply chain strategy to reducing the environmental impact of logistics operations. He is also a co-inventor of a supply chain carbon modeling tool (patent pending). Mondher is a universal citizen and his passion for solving global supply chain problems along with his fluency in 4 languages has led him to operate in four continents

Sample EngagementsSample EngagementsSample EngagementsSample Engagements• Helped one of the world’s largest fabless companies (wireless phone chip segment) define and

implement a comprehensive supply chain collaboration model (VMI, Consignment and Schedule Sharing) with three of its most strategic customers on 3 continents.

• Led a major supply chain strategy definition for one of Europe’s largest industrial conglomerates. Activities included assessing state of current operations model, compiling and documenting appropriate best practices and devising a novel supply chain vision that is customer centric (secured agreement on a new market segmentation) and emphasizes the agreed upon core competency (fulfillment).

• Led a major supply chain strategy redesign effort at McDonald’s. This executive level initiative assessed competitive trends and provided a global vision for the future supply chain integration model along with a ‘playbook’ of practical steps to achieve the vision

• Selected by AMR Research as an SME and voting panelist for the 2007 World’s Top 25 Supply Chains

• Served as the Make Best Practices Lead and co-author of SCOR 7.0

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OBJECTIVES

Briefly discuss the challenges most companies face in optimizing the integration of their global supply chain operationsBriefly discuss the challenges most companies face in optimizing the integration of their global supply chain operations

Provide a critical analysis of the root cause(s) of these challengesProvide a critical analysis of the root cause(s) of these challenges

Provide an Overview of IBM’s Approach and Competitive DifferentiatorsProvide an Overview of IBM’s Approach and Competitive Differentiators

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First off, what is Global SCI and why is it important?

The supply chain needs to be aligned with the market needs

The supply chain needs to be aligned with the market needsComplication # 1Complication # 1Complication # 1Complication # 1

Complication # 2Complication # 2Complication # 2Complication # 2

Global competition is, to a large extent, a competition between supply chain models.

Superior supply chain execution, while not sufficient for business success, is a necessary condition

Complication # 3Complication # 3Complication # 3Complication # 3

Supply chain costs need to be minimized

Supply chain costs need to be minimized

Supply Chain Integration is the act of turning a complex and diverse

network of partners and operations into a functioning ecosystem.

Supply Chain Integration is the act of turning a complex and diverse

network of partners and operations into a functioning ecosystem.

ABC, Inc.

Tier 1

Tier 2

The supply chain needs to be flexible and responsive

The supply chain needs to be flexible and responsive

Need to ensure consistency in design and execution

Need to ensure consistency in design and execution

Outsourcing is a key strategic imperative

Outsourcing is a key strategic imperative

Shrinking control yet ultimate accountability to customers

Shrinking control yet ultimate accountability to customers

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What are the key pain points of our clients?An External View

Make•Make vs. Buy

•Reach of production facilities

•Product mix at each location

Source•Level and scope of collaboration with suppliers

•Global vs. regional sourcing model

Design•Internal vs. external along various dimensions

•Level of integration and upstream design collaboration with suppliers

•How to listen to the needs and wants of a global customer base

Service•Warranty plans and logistics

•Customer service partners

•Reverse logistics

Deliver•3PL/4PL agreements

•Customer segmentation and service agreements

•What to hold and where and how much

Plan

Cu

stom

ers Sid

eC

usto

mers S

ide

• Network Design Decisions

• Centralized vs Decentralized model

• Global demand Planning

• Make vs. Buy

• #, Location and scope of CM partners

• Global Inventory Planning

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What are the key pain points of our clients?An Internal View

Division / BU / GeoDivision / BU / Geo

PeoplePeoplePeoplePeople

ProcessesProcessesProcessesProcesses

SystemsSystemsSystemsSystems

TechnologyTechnologyTechnologyTechnology

MeasuresMeasuresMeasuresMeasures













People

Processes

Systems

Technology

Measures

Lack of true Supply Chain organization

Excessive customization, often for no reason, with limited, if any, synergies between divisions

Too many systems and instances hindering data consolidation and sharingDisparate systems and supporting technologies hinder integration and collaboration

Inconsistent and often conflicting set of measures

Corporate HQCorporate HQCorporate HQCorporate HQ

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Why Is Global Supply Chain Integration a Difficult Task?The Uncanny Resemblance Between Complex Systems And Supply Chains according to Chaos Theory

1. Complex systems consist of a large number of elements.2. The elements have to interact and this interaction must

be dynamic. 3. The Interaction is fairly rich, i.e. any element in the system

influences, and is influenced by, quite a few other ones.

4. Firstly, the interactions are non-linear. 5. The interactions usually have a fairly short range, i.e.

information is received primarily from immediate neighbours.

6. There are loops in the interaction.7. Complex systems are usually open systems, i.e. they interact

with their environment.

8. Complex system operate under conditions far from equilibrium.

9. Complex systems have a history. Not only do they evolve through time, but their past is co-responsible for their present behaviour.

10.Each element in the system is ignorant of the behaviour of the system as a whole.

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Root Cause # 1The Gap Between Business Needs And Business Models

Phase 1Phase 1Phase 1Phase 1 Phase 2Phase 2Phase 2Phase 2 Phase 3Phase 3Phase 3Phase 3

Business creation and local market

establishment

Business creation and local market

establishment

Aggressive Global Growth

Aggressive Global Growth

SaturationSaturation

Reputation Matters Growth Matters Execution Matters

Suitability of Supply Chain Models and ToolsSuitability of Supply Chain Models and Tools LowHigh

Elapsed Time / Supply Chain Planning ComplexityElapsed Time / Supply Chain Planning Complexity HighLow

ABC, Inc.

Tier 1

Tier 2ABC, Inc.

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Root Cause # 2 – The Challenge Of Internal Integration“Tell Me How You’ll Measure Me, And I’ll Tell You How I’ll Behave”

Corporate HQCorporate HQCorporate HQCorporate HQ

LowHigh

HighLow

CEOCEOCEOCEO

CSO*CSO*CSO*CSO*

(*) – Global Chief Supply Chain Officer

EMEA DivisionEMEA DivisionEMEA DivisionEMEA Division

CEOCEOCEOCEO

CSO*CSO*CSO*CSO*

BU XYZBU XYZBU XYZBU XYZ

CEOCEOCEOCEO

CSO*CSO*CSO*CSO*

A desire to grow rapidly (Phase 2) provided divisions with a great deal of independence

which led to the proliferation of overly localized supply chain

processes and solutions

A desire to grow rapidly (Phase 2) provided divisions with a great deal of independence

which led to the proliferation of overly localized supply chain

processes and solutions

While the division-level supply chain officer might listen to the corporate-level officer, his/her performance/bonus is decided

by the Division/BU head

While the division-level supply chain officer might listen to the corporate-level officer, his/her performance/bonus is decided

by the Division/BU head

The tendency to promote local performance has greatly

diminished the scope and impact of corporate supply

chain officers

The tendency to promote local performance has greatly

diminished the scope and impact of corporate supply

chain officers

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Root Cause # 3 – The Challenge Of External IntegrationIntegration is about Collaboration; However, Are We Wired For It?

The Idea: Unlike ants and bees, humans aren't hard-wired for cooperation; we tend to act out of self-interest. That inclination repeatedly draws us into "social dilemmas" where, in an attempt to gain more for ourselves, we ultimately fare worse than we would have by cooperating.

The evidence: The trick is to establish an agreement where everyone's self-interest is best served by cooperating. That means removing incentives to violate the agreement.

The Conclusion: Businesses are nothing but federations of human beings. We think we’re different and unique and we behave in ways that protect and promote that uniqueness. We need to overcome some innate apprehensions to build a winning value proposition for key supply chain partners

http://www.newsweek.com/id/170380 11

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Root Cause # 4 – The Issue of Asymmetric BenefitsWhat’s in it for me?

Many Supply Chain Integration Efforts failed because the incentives were not properly defined and established

Many Supply Chain Integration Efforts failed because the incentives were not properly defined and established

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Lessons Learned and Tools to Leverage

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Our Approach – A High Level Overview

Electronics Industry – Globally Integrated EnterpriseElectronics Industry – Globally Integrated EnterpriseElectronics Industry – Globally Integrated EnterpriseElectronics Industry – Globally Integrated Enterprise

Supply, Demand & Global IntegrationSupply, Demand & Global IntegrationSupply, Demand & Global IntegrationSupply, Demand & Global Integration

eGIE / CBM / Shared Service DesigneGIE / CBM / Shared Service Design

Global Supply Chain PlanningGlobal Supply Chain Planning

Supply Chain Visibility (VMI/CPFR)Supply Chain Visibility (VMI/CPFR)

Master Data MgmtMaster Data Mgmt

Supply Chain Mgmt ERPSupply Chain Mgmt ERP

Green Supply Chain (enabling IBM’s Smarter Planet)Green Supply Chain (enabling IBM’s Smarter Planet)

Global Financial System ConsolidationGlobal Financial System Consolidation

“Solar Fab In A Box”“Solar Fab In A Box”

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Build the Right Model Build the Right Model Build the Right Model Build the Right Model Define the End State Define the End State Define the End State Define the End State

Consulting Guideline # 1

Ensure that the Supply Chain Strategy is Aligned with the Corporate Strategy

Ensure that the Supply Chain Strategy is Aligned with the Corporate Strategy

Core CapabilitiesCore CapabilitiesCore CapabilitiesCore Capabilities

Core CompetencyCore CompetencyCore CompetencyCore Competency

Extended Extended Capability Capability 11






Customer Customer Stream Stream AA

Customer Customer Stream Stream AA

Customer Customer Stream Stream BB

Customer Customer Stream Stream BB

Customer Customer Stream Stream CC

Customer Customer Stream Stream CC

Supporting ProcessesSupporting ProcessesSupporting ProcessesSupporting Processes

High

LowTime to Accomplishment

Val

ue C

hain

Tot

al P

erfo

rman

ce

High

Today

““Incremental” ApproachIncremental” Approach

““Vision / Backward”Vision / Backward”ApproachApproach

World Class Performance

Hurdle

IdealState

The End State Supply Chain vision should be

aligned with the corporate strategy and goals

The End State Supply Chain vision should be

aligned with the corporate strategy and goals

The supply chain working model needs to be built

with as much commonality as possible.

The supply chain working model needs to be built

with as much commonality as possible.

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Consulting Guideline # 2

Define the Right Levers for a Globally Integrated Supply Chain ModelDefine the Right Levers for a Globally Integrated Supply Chain Model

Company ABCCompany ABCCompany ABCCompany ABC





Measures / ReportingMeasures / ReportingMeasures / ReportingMeasures / Reporting

Most companies’ (and their consultants!) reflex is to consolidate their supply chain supporting systems (e.g. reducing # of SAP instances, etc.)

Always start with these dimensions taking into account

the company structure and working model

For instance:•Does the company want to have a global fulfillment model (e.g. ship from anywhere to anywhere) or prefer to have regional fulfillment centers isolated from each other•Do the various business units (or geo’s) compete for the same resources?

For instance:•Does the company want to have a global fulfillment model (e.g. ship from anywhere to anywhere) or prefer to have regional fulfillment centers isolated from each other•Do the various business units (or geo’s) compete for the same resources?

Global Supply Chain Integration is, above all, about integrating data feeds to provide a holistic view of the system performance. The choice of a centralized or distributed SC infrastructure should not be driven by technology but rather by real business needs

Global Supply Chain Integration is, above all, about integrating data feeds to provide a holistic view of the system performance. The choice of a centralized or distributed SC infrastructure should not be driven by technology but rather by real business needs

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CASE STUDY – A GLOBAL HIGH TECH COMPANY

GTMGTM GTMGTM GTMGTM GTMGTM GTMGTM

ESBESB

End-StateEnd-State•Consolidated Supply Chain systems onto single

backbone•Integrated “Best of Breed” solutions•Established hubs for business intelligence

SCSC


ESBESB

HubHub

HubHub

HubHub

Initial StepsInitial Steps•Establish Enterprise Service Bus (ESB)•Implement virtual information hubs

SCSC SCSC SCSCSCSC SCSC

SCSC SCSC SCSC SCSC SCSC


Current StateCurrent State•Multiple systems with point-to-point interfaces•Poor visibility across supply chain

HubHub

HubHub

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Why Is IBM Uniquely Positioned To Help With Global SCI? The Three Dimensions Of Our Offering

By leveraging innovative ideas from our research division and proven best practices from our internal supply chain group, we are uniquely positioned to help our clients improve

their supply chain strategy and operations

Advisory ServicesAdvisory Services ResearchResearchInternal Supply ChainInternal Supply Chain

Supply Chain Strategy Practice

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Why Is IBM Uniquely Positioned To Help With Global SCI? A Rich Portfolio of Tools to lead the Field of Supply Chain Analytics and Enable Smart Design Decisions

(1) – ‘Recent Acquisitions’ refer only to ILOG and Cognos(2) – ILOG can be seen as the Intel Inside of most SCM/APS Solutions

(1)

Some of our Existing Assets

SCPMSCPM(Supply Chain

Process Modeler and Simulator)

SCPMSCPM(Supply Chain

Process Modeler and Simulator)

SNOWSNOW(Supply Chain

Network Optimization Workbench)

SNOWSNOW(Supply Chain

Network Optimization Workbench)

WSPWSP(Warehouse Site

Planner)

WSPWSP(Warehouse Site

Planner)

VCCVCC(Virtual Command

Center)

VCCVCC(Virtual Command

Center)

Recent IBM AcquisitionsRecent IBM Acquisitions

(2)

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Download - Supply chain integration

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