modelo scor para la transformación del negocio · local customers manufacturing facilities ....

© 2010 Supply Chain Council. ALL RIGHTS RESERVED. | 2013 SCC Overview | 1 | 12 February 2013

JOSEPH FRANCIS Director Ejecutivo Supply Chain Council

RENOVACIÓN SCM

Modelo SCOR para la transformación

del negocio


Leveraging SCOR for business transformation

Joseph Francis, Executive Director SCC


Agenda

• Why Supply Chain • Three Keys to Success • Understanding Supply Chain & Finance • The System: SCOR Outline • Supply Chain Council • Benefits of SCOR • Case Studies • Call to Action


A Bit of History: 1930-1950

• Bank Robber “Slick Willie” Sutton

• When asked why he robbed banks, Sutton simply replied

• "Because that's where the money is."


Stock Market Volatility, Oil Prices, Labor, Political Instability, Security

Reducing Total Supply Chain Costs

Supply Chain Resiliency & Sustainability:

Risk Management & Green

Reducing Inventory/ Working Capital/ Asset Management

Competing in a Global Market

Providing Superior & Consistent Customer Service While Increasing

Revenue & Margin

What Keeps You Up at Night?


Supply Chain is Dominant Company Cost Driver

• In 2007, US business logistics costs rose to an all time high of $1.4 trillion (10.1% of US nominal Gross Domestic Product ) 3 and as of 2010-11 have recovered from the recession and are growing fast worldwide

• Supply-chain generally accounts for between 60% and 90% of all company costs1

• A 2% improvement in process efficiency for supply-chain processes has 3000% - 5000% the impact of a 2% improvement in efficiency for… IT… HR… Finance1… Sales…

1 Exclusive of Financial Services companies 2 Source: Hoovers 2006 Financial Data, Supply-Chain Council 2006 SCM Benchmark data on SCM cost for discrete & process industries 3 CSCMP 19th Annual State of the Logistics Industry

Fortune-10 Company Supply-Chain Cost as % of Total Costs 2

GM 94%

Ford 93%

Conoco 90%

Wal-Mart 90%

Chevron 88%

IBM 77%

Exxon 75%

GE 63%

Citi1 0%

AIG1 0%


SCM Value Differential – 2:1 cost advantage

7 SAPICS 2009 - Financial Knobs & Levers with SCOR

Total Supply Chain Management Costs (% of Revenue)

9.2%

12.3%

10.7%10.0%

10.7%

9.1%

6.6%7.4%

4.8%5.5%5.3%

4.2%3.5% 3.6%

5.4%

3.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Automotive Industrial Chemical &Advanced Materials

Computer Consumer Goods Pharmaceutical Semiconductor TelecommunicationsEquipment

Best-in-ClassMedian

Source: PRTM/The Performance Measurement Group

% o

f Rev

enue

Best-in-class Companies’ Outperform Their Median Competitors with a 50% Cost Advantage


THREE KEYS TO SUCCESS


1000 Global SCM Organizations: Themes

Management Upgrade ‘I don’t get no Respect’

Get With the/a System ‘Any Process Will Do’

Managing Complexity: Islands of Profit in Seas of Red Ink


MANAGEMENT UPGRADE

“I DON’T GET NO RESPECT” RODNEY DANGERFIELD


Key 1: Focus on the Team

• Continuous Investment/Upgrade of SCM Skills › APICS/CPIM › PMI › Lean/Six-Sigma › SCOR

• Focus on Talent Development/Talent Management • Frees SCM Management to focus on Business Strategy


Philip Morris International: Asia-Pacific

• Three Years Management Skill Upgrade: › APICS › Lean/Six-Sigma › SCOR

• Most profitable segment of Philip Morris • 99+% DIFOT • Lowest Inventory • SCM Integrated with

Marketing and Business Strategy


GET WITH THE/A SYSTEM

“A BAD PROCESS IS BETTER THAN NO PROCESS” MICHAEL HAMMER


Key 2: System, any System

• Not Standardizing Business Processes, Standardizing Management

• Process over Function • Integration of Strategy, Tactics, Operations • CMMI • Cult of Personality


Boeing Land Systems

• Loss of Key Government Contract • Refocus on Process, Framework, and Central

“Excellence” driving performance • Keen focus on Supply Chain and KPI’s, not departments

and individuals • Multibillion Dollar Contracts Kept • “Takes over” Struggling Business Units


MANAGING COMPLEXITY WHEN IT COMES TO SUPPLY CHAINS, HAVING TWO IS BETTER THAN

ONE, AND THREE OR MORE MAY BE BEST OF ALL! ISLANDS OF PROFIT IN A SEA OF RED INK BYRNES, J..L..S. SR. LECTURER MIT


Key 3: Differentiated Strategy

Managing Differentiated Strategy? Three Words:

Digital

Virtual

Networked


Dupont

• 7 year process • SCM COI with digital/virtual process and performance

model division by division • Centralized Reporting, Benchmarking, and visibility to

strategic objectives • Gradual rollout of complexity • Vast improvement on Working Capital • Successful refocus on Reliability


SCOR® AND SUPPLY CHAIN FINANCIAL PERFORMANCE


Supply Chain is Directly Connected to Company Value

• Improve customer service and response

• Optimize inventory flow, utilization & productivity

• Best-in-class customer relationships

• Differentiated service capabilities

• Best-in-class strategic supplier partnerships

• Leverage of outsourcing of business processes

• Unique supply chain models

The Supply Chain Impacts . . .

& Shareholder Value

Profit

Capital Efficiency

Value

The Knobs & Levers

Revenue

Expense

Working Capital

Fixed Capital


SCOR KPI’s Help Measure Performance…

& Shareholder Value

Profit

Capital Efficiency

Value

The Knobs & Levers

Revenue

Expense

Working Capital

Fixed Capital

Perfect Order Fulfillment

Order Fulfillment Cycle Time

Supply Chain Flexibility

Supply Chain Adaptability†

Supply Chain Management Cost

Cost of Goods Sold

Cash-to-Cash Cycle Time

Return on Supply Chain Fixed Assets

Return on Working Capital


… And to Diagnose Root Cause Issues

Level-3 Diagnostic Level-2 Diagnostic Level-1 KPI

Delivery Item Accuracy % Orders Delivered in Full

Perfect Order Fulfillment

Delivery Quantity Accuracy

Date Achievement Delivery Performance to Commit Date

Location Achievement

Shipping Documentation Accuracy Accurate

Documentation Billing Documentation Accuracy

% Orders Received Damage-Free

Perfect Condition

Profit

Capital Efficiency

Value

Revenue

Expense

Working Capital

Fixed Capital Example:

How might we analyze improvements in Delivery Accuracy


The Dupont Model

Example: What would be the impact of a strategy to increase delivery reliability?

Net Sales

Accounts Receivable

Other Currents Assets

Inventory Expenses

Inventory

Fixed Expenses

$ 100

$ 60

$ 12

$ 4

$ 16

$ 8

$ 2

$ 18

COGS

Variable Expenses

3 %

2.27

Net Profit Margin

Asset Turnover

divided by

$ 3.00

$ 100

$ 100

$ 44

Net Profit

Sales

Sales

Total Assets

$ 40

$ 34

$ 3

$ 26

$ 18

Gross Profit

Total Expenses

Current Assets

Fixed Assets

Taxes ROA

6.8 % 11

Financial Leverage

74.91 %

Return on net worth

Assumption: Financial Leverage is a company-wide constant = Total Assets / Shareholder Equity


Comparison: SC Change to Sales Change

SC Change -1% Net Sales 100 Gross Profit 40.6 Net Profit 3.76 NPM 3.76% ROA 8.58%

COGS 59.4 Total

Expenses 33.84 Sales 100 Asset

Turnover 2.28 Leverage 11 Vairable

Expenses 11.88 Taxes 3 Sales 100 Return 94.34% Fixed

Expenses 18 Current Assets 25.84

Total Assets 43.84

Inventory Expenses 3.96 Fixed Assets 18 Inventory 15.84

AR 8 Other Assets 2

Sales Change 3%

Net Sales 103.3 Gross Profit 41.32 Net

Profit 3.825 NPM 3.70% ROA 8.54%

COGS 61.98 Total

Expenses 34.396 Sales 103.3 Asset

Turnover 2.30 Leverage 11 Vairable

Expenses 12.396 Taxes 3.099 Sales 103.3 Return 93.93% Fixed

Expenses 18 Current Assets 26.792

Total Assets 44.792

Inventory Expenses 4 Fixed Assets 18 Inventory 16.528

AR 8.264 Other Assets 2

In this model, every 1% of Supply Chain Cost Reduction is equivalent to a more than 3% increase in sales. A 10% supply chain reduction is equivalent to a more than 40% increase in sales staff.


Practice Maturity and Supply Chain Performance

Early Stage Mature

© Copyright 2006 The Performance Measurement Group, LLC, a PRTM Company

Discrete supply chain processes and data flows well documented and understood

Resources managed at department level and performance measured at functional level

Stage 2: Internal Integration

Stage 1: Functional Focus

Company-wide process and data model continuously measured at the company, process, and diagnostic levels

Resources managed at both functional and cross-functional levels

Strategic partners throughout the global supply chain collaborate to:

• Identify joint business objectives and action plans

• Enforce common processes and data sharing

• Define, monitor, and react to performance metrics

IT and eBusiness solutions enable a collaborative supply chain strategy that:

• Aligns participating companies’ business objectives and associated processes

• Results in real-time planning, decision- making, and execution of supply chain responses to customer requirements

Stage 3: External Integration

Stage 4: Cross-Enterprise Collaboration

50 Companies 50 Companies

PRTM analyzed data from about 100 companies that submitted practice maturity and quantitative performance data


Stage of maturity correlates with performance, profitability, and sales growth

Local Customers

Manufacturing Facilities

Customer Service and Warehousing

Suppliers

Analysis Results:

Mature companies have a 1–2% advantage in Total Supply Chain Management Costs (as % of total revenue)

Mature companies have 10% higher Unit Forecast Accuracy

Mature companies have a 10% advantage in Delivery Performance to Commit Date

Mature companies have a 30% advantage in Upside Production Flexibility

Mature companies have 4.5% lower COGS (as a % of total revenue)

Mature companies demonstrated a 4.8% year over year net decrease in COGS

Supply Chain

Note: Results based on performance data from discrete companies which included: Consumer Goods, Electronic Equipment, Industrial, Telecom, Computers, and Aerospace & Defense.


SCOR®


It’s a FAN!

It’s a WALL!

It’s a ROPE!

It’s a TREE!

It’s a SNAKE!

It’s a SPEAR

!

Supply Chain/Service Chain


About SCOR – A Process Framework

• Process frameworks deliver the known concepts of business process reengineering, benchmarking, best practices and organizational design in a cross-functional framework: › Standard processes; Plan, Source, Make, Deliver, .. › Standard metrics: Perfect Order Fulfillment, Cash-to-Cash Cycle Time,

Total Cost to Serve,.. › Standard practices: EDI, CPFR, S&OP, Cross-Training, .. › Standard job skills: Lean, Accounting, Solicitation, ..

• Pre-defined relationships between metrics, processes, practices and

skills

29


About SCOR – A Process Framework

• Combining 4 techniques into a single integrated approach

Business Process Re-engineering

Performance Benchmarking

Best Practices Analysis

Organizational Design

Capture the ‘as-is’ business activity and design the future ‘to-be’ state

Quantify relative performance of similar supply chains and establish internal targets

Identify practices and software solutions that result in significantly better performance

Assess skills and performance needs and align staff and staffing needs to internal targets

Process Reference Framework Processes Performance

(metrics) Practices People

(skills)

30


About SCOR – Supply Chain

• Viewing a company as processes (domains)

Custom

er processes Supp

lier p

roce

sses

Product/Portfolio Management

Supply Chain

SCOR ®

Product Design

DCOR™

Sales & Support

CCOR™

Custom

er processes Supp

lier p

roce

sses

Product & Portfolio Management

Supply Chain

SCOR ®

Product &

Process Design DCOR™

Sales & Support

CCOR™

31


About SCOR – Supply Chain

• SCOR defines supply chain as:

“ The processes that plan and execute the acquisition of materials, transformation of materials in sellable products, delivery and return of products and services in support of customer orders ”

Whether from Cow to Cone, Crude to Car or from Rock to Ring, SCOR is not limited by organizational boundaries SCOR can be applied to supply chains in any industry and to any organization in the chain

32

Supplier Customer Suppliers’ Supplier

Source

Internal or External Your Organization

Return Deliver Make Source

Return

Plan Deliver

Return Source Return

Make Source Return

Plan Deliver

Return

Deliver Make

Plan

Return Return

Customers’ Customer

Enable

Internal or External

Enable Enable


M4SC – Management For Supply Chain

Supply Chain Resources Feedback

Drives Supply Chain Process Feedback

Drives

Business Strategy

Supply Chain Network Feedback

Drives Supply Chain Strategy

Drives

Feedback

Using SCOR to Segment business into supply chains, determine performance

Using SCOR to Optimize network for strategic performance requirements

Using SCOR to Manage processes towards strategic network goals

Using SCOR to continuously align resources to meet process goals


How Many Supply Chains?

• We use a tool called the Supply Chain Definition Matrix to define the supply-chains within an enterprise

• Column Generation: › The columns in the matrix are

focused on demand e.g. channels or segments or customers

• Row Generation: › The rows in the matrix are

focused on supply e.g. business lines or products or locations or suppliers

Region 1 Region 2

Segment A

Segment B

Segment C

Segment D

Group 1 X X X

Group 2 X

Group 3 X

Group 4 X X X


• We use a tool called the Supply Chain Strategy Matrix to Identify priority strategic features or attributes of supply-chains.

• Each supply chain strategy is indicated by a collection of ranked features: Reliability On time? Complete? Undamaged?

Responsiveness From Customer Request to final acceptance Flexibility How long to scale up? How expensive to scale down?

Cost Cost of Processes? Cost of Goods Sold? Assets Working Capital? Return on Investments?

What’s Your Strategy?


Supply Chain Strategy in 5 Minutes

Build Strategy Model Lifecycle Likely Priority

Buy 1. Assets 2. Cost

Make ETO 1. Reliability 2. Response

BTO 1. Assets 2. Reliability

BTS Start 1. Flexibility 2. Response

Middle 1. Cost 2. Reliability

Commodity 1. Cost 2. Assets

EOL 1. Assets 2. Cost


Cus

tom

er

Inte

rnal

Strategic Attributes & Metrics: Level 1 KPI’s

Attribute Strategic metric

Cus

tom

er

Reliability RL.1.1 Perfect Order Fulfillment

Responsiveness RS.1.1 Order Fulfillment Cycle Time

Agility AG.1.1 Upside Supply Chain Flexibility

AG.1.2 Supply Chain Upside Adaptability

AG.1.3 Supply Chain Downside Adaptability

AG.1.4 Overall Value at Risk (VaR)

Inte

rnal

Cost CO.1.1 Supply Chain Management Cost

CO.1.2 Cost of Goods Sold

Assets AM.1.1 Cash-to-Cash Cycle Time

AM.1.2 Return on Supply Chain Fixed Assets

AM.1.3 Return on Working Capital


Cascading Metrics Architecture

Supply-Chain SCORcard S/A/P Level-1 Metric Level-2 Metric Level-3 Metric Summary

Exte

rnal

Reliability S Perfect Order Fulfillment Perfect Order Fulfilment

Reliability % Orders Delivered in Full % Orders Delivered in Full

Reliability Delivery Item Accuracy Delivery Item Accuracy

Reliability Delivery Quantity Accuracy Delivery Quantity Accuracy

Reliability Delivery Performance to Commit Date

Delivery Performance to Commit Date

Reliability Date Achievement Date Achievement

Reliability Location Achievement Location Achievement

Reliability Accurate Documentation Accurate Documentation

Reliability

Shipping Documentation Accuracy

Shipping Documentation Accuracy

Reliability

Billing Documentation Accuracy

Billing Documentation Accuracy

Reliability Perfect Condition Perfect Condition

Reliability




• Used for choosing target performance • Critical to understand Performance in a particular

Demographic • Can be “internal” (competing against other supply

chains in same company) • Aligns Strategy, Performance, and Performance Goals

Where Are Your Goals?

Attribute SAP Metric (level 1) You Parity Adv Superior Gap

Reliability S Perfect Order Fulfillment 95% 92% 95% 98% 3%

Response A Order Fulfillment Cycle Time 14 days 8 days 6 days 4 days 8 Days

Flexibility P Ups. Supply Chain Flexibility 62 days 80 days 60 days 40 days 0

Cost P Supply Chain Mgmt Cost 12.2% 10.8% 10.4% 10.2% 1.4%

Assets A Cash-to-Cash Cycle Time 35 days 45 days 33 days 20 days 2 Days


Gulf Region Network


Where are the Problems?

D1.3 Reserve Inv.

Calculate Date

mp3

HQ

m

p3 F

acto

ry

Reta

il, in

c.

D2.2 Receive, Enter, Validate Order

D2.3 Reserve Inv.

Calculate Date

S1.1 Schedule Prod.

Deliveries

Customer P.O. Delivery Commit

S2.1 Schedule Prod.

Deliveries

D1.2 Receive, Enter, Validate Order

Inter-Company P.O.

C.O. = Customer Order, Inv. = Inventory, P.O. = Purchase Order, Prod. = Product

C.O. C.O.


Lean, Six-Sigma, Constraints All Techniques combined

0

5

10

15

20

25

30

35

Sched Delivery Receive Product Verify Product Transfer Product Payment

sS1.1 sS1.2 sS1.3 sS1.4 sS1.5

Idle Time

Transact Time

Transact Time

Idle Time

Transact per Hour FTE Rework/Da

y PCE Yield Waste

sS1.1 Sched Delivery 5 5 3 0.5 5 50.00% 79.17% 20.83% sS1.2 Receive Product 5 1 5 0.5 3 83.33% 92.50% 7.50% sS1.3 Verify Product 1 5 5 0.5 1 16.67% 97.50% 2.50% sS1.4 Transfer Product 15 15 2 1 1 50.00% 93.75% 6.25% sS1.5 Payment 1 2 5 0.25 1 33.33% 97.50% 2.50%


From Reactive to Proactive

• Accelerates change • Focuses on Real Issues • Creates Valuable Change • SCOR binds

› Strategy › Network › Process › Resource


SUPPLY CHAIN COUNCIL, INC.


About Supply Chain Council

• Formed in 1996 to create and evolve a standard industry process reference model for supply chain for the benefit of helping companies rapidly and dramatically improve supply chain operations

• SCC has established the supply chain world’s most widely accepted framework – the SCOR® process reference model – for evaluating and comparing supply chain activities and their performance

• SCC continually advances its tools and educates members about how companies are capitalizing on those tools

› With membership open to all interested organizations

› Global presence, volunteer driven

• Offering public and in-house trainings and certification


Industry Membership Scope

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SCOR-P Certification

• The Council has focused on establishing verifiable levels of competency with SCOR as a key goal to improve SCOR implementations and disseminate SCOR knowledge

• Intended for All SCC Membership • Based on Testing Only

› 2-Hour 60 questions › All questions multiple-choice

• Candidates: › Must have completed current SCOR Framework and

Implementation classes › Cost of testing embedded in Framework/Implementation classes


SCOR-S Certification

• Target › Under-graduate

students/programs › Addition to existing SCM

program › International program – roll out

to be determined › Academic year 2010/2011

• Eligibility

› SCC members only › Existing SCM program › Existing documented process

and facility

• Process › University joins program,

forecasts number of students to enroll

› SCC provides student registration

› Lecture by SCC certified instructor @ university (comparable to Framework training)

› SCOR-S exam – computer based, school procotred

› SCC grades results, certifies students


Benchmarking

Boeing - SCOR Executive Overview


Value1

• Improvement of operating results of an average of 3% in the initial SCOR implementation phase by means of cost reduction and improvement in customer services

• Increase in profitability (between 2x and 6x) with regards to project investments costs within first 12 months of implementation

• Reduction in IT costs through minimizing system customization and making better use of standard functionality

• Continuous actualization of process change portfolio by continuous conversion of Supply Chain improvements with the objective of increasing annual profits by 1% to 3%


1Poluha (2007) Application of the SCOR Model in Supply Chain Management New York, USA


Typical Potential Improvements1

Area Improvement Raw materials purchase cost 25%

Cost of Distribution 35% Total resource deployed 50%

Manufacturing space 50% Investment in Tooling 50%

Order cycle time 60% New product development cycle 60%

Inventory 70% Paperwork and Documentation 80%

Quality Defects 100%


1Hughes & Michels (1998) Transform your supply chain. Releasing value in business. London, UK


Comparative Data1

Improvement Area Range Delivery performance 16% - 28%

Inventory Cost Reduction 25% - 60% Reduction in order fulfillment cycle

time 30% - 50%

Improvement to forecast accuracy 25% - 80%

Increase in overall productivity 10% - 16% Lower supply chain costs 25% - 50% Improvement of fill rates 20% - 30%

Improved capacity realization 10% - 20%


1Stephens (2000) 1997 Comparative Study Pittsburg, USA


SCM Asset Returns: Superior Valuation


SCOR®: CASE IN POINT


ADVA Optical Networking

• The Challenge • €370.2M Revenue Enterprise1 • Rapid growth in demand for storage, voice &

data transport • Focus on capturing this growth while

maintaining profitability • Needed to identify inventory drivers and

optimize inventory levels to enable ADVA to reach inventory reduction targets whilst improving customer satisfaction in Order Fulfillment Cycle Time (OFCT) and On-time Delivery (OTD)

• Created a transformation plan that would allow ADVA to proactively plan, drive and manage the inventory levels and better achieve the balance of cost and service

• The Solution • Using SCOR, ADVA identified performance

gaps in key metrics between current and required to reach parity status

• Also using SCOR, identified process disconnects, drivers of inventory and projects required for improvement

• Grouped and prioritized proposed projects based on potential impact and amount of effort/risk

• Agreed to project list including: › New S&OP Process › Supplier scorecards and quarterly

business reviews with suppliers, › Information transparency and others

• Benefits Achieved • Gross inventory reduced from €59 million to

€38 million in 10 months • Inventory days of supply reduced 47% from

initial scorecard 1Hoovers.com


Core Value1

• Improvement of operating results of an average of 3% in the initial SCOR implementation phase by means of cost reduction and improvement in customer services

• Increase in profitability (between 2x and 6x) with regards to project investments costs within first 12 months of implementation

• Reduction in IT costs through minimizing system customization and making better use of standard functionality

• Continuous actualization of process change portfolio by continuous conversion of Supply Chain improvements with the objective of increasing annual profits by 1% to 3%

1Poluha (2007) Application of the SCOR Model in Supply Chain Management New York, USA


Douglas Pharmaceuticals Limited

• The Challenge • Significant growth from 2003 to 2007

› 300% increase in new product development › 122% growth in production volume › 61% growth in employees

• Created the “perfect storm” of supply chain issues

• Converted to new ERP in August 2006 • “Burning Platform”:

› Customer DIFOT (Export) Down to 20% › Product Lead Times Up to 8 months › New Product Introduction Lead Times Up to 9

months › Stock Turns Down to 2.1x › YTD Sales Down 30%

• Available Spare Capacity Unknown • Customer complaints impact new licensing

opportunities and future earnings growth • Impact on 2007/8 earnings and shareholder

value: › EBIT (15.9%) › Enterprise Value ($25.2M)

• The Solution • “Turning point” for organization – DIY not

always best • Board mandated review at its April 2007

meeting • Process established to evaluate options • SCE program initiated using SCOR • 17 week SCE program between May and

September 2007


Douglas Pharmaceuticals Limited – continued

• The Solution • Benchmarking and Defect Analysis:

› Established emphasis on reliability and supply chain cost

› Confirmed size and relative importance of current performance gaps

› Provided early direction on root causes › Generated basis for calculating

opportunity cost › Created immediate visibility over

supply chain performance › Built confidence to move onto Phase

Two • 24 problem areas impacting reliability

and COG • Portfolio of 50 improvements

addressed key problem areas • “Drive Chain” now forms basis of an

enterprise wide transformation program

• Benefits Achieved Metric Improvement

Sales per employee

20%

COGS % 10%

Inventory days of supply

20%

Cash to cash cycle (days)

15%

Shareholder returns

$4.1 million IRR 300% EV Uplift= $12.1m


Typical Potential Improvements1

Area Improvement

Raw materials purchase cost 25%

Cost of Distribution 35%

Total resource deployed 50%

Manufacturing space 50%

Investment in Tooling 50%

Order cycle time 60%

New product development cycle 60%

Inventory 70%

Paperwork and Documentation 80%

Quality Defects 100%

1Hughes & Michels (1998) Transform your supply chain. Releasing value in business. London, UK


SAAB AB

• Challenge • US$3.1B Aerospace Technology

Enterprise1 • Three strategic business segments:

aeronautics, defense and security solutions, systems and products

• Challenged to execute profitable and customer adapted logistics intensive businesses

› The degree of coordination of logistics operations highly impact Saabs cost level for logistics

› Coordination enables CEL processes to ensure delivery to customers demands

• Needed to build competitive operations, planning, logistics, and support

• To do so, wanted to move to a full lifecycle-based support concept

• The Saab Common Solution • One backbone system (today based

on ERP and/or Best of Breed) • Cross-functional collaboration and

common trust • Increased Interoperability • Align SCM Strategy with Corporate

Strategy • Key Enablers

› Common Supply Chain Frameworks and Roadmaps

› Standardization › Codification › Information Systems

1Hoovers.com


SAAB Coordinated Effective Logistics (CEL)

• Solution • Step by step approach - no “big bang” • Multiple supply chains and methods • Lack of structured methods and processes • Knowledge tied to individuals • Lack of information sharing

• Use of the SCOR model › Common definitions and process mapping › Sustainable and structured methodology

being used as framework for realization of all logistics and SCM activities within Project CEL throughout all of its phases; from cradle to the grave

• Project management • Change management • Engineering technique

• Benefits Achieved • Creating a Saab Common Logistics and

Supply Chain Management Framework › Delivering incremental capabilities › Using SCOR Methodology, Processes

and Metrics hierarchy • Initial business cases have identified

savings of 73 FTEs and a total of US$15M


SASOL Supply Chain Optimization

• The Challenge • US$16B annual South African Petrochemical

Concern 1 • Embarked on Supply Chain Optimization to

identify synergies and improvement opportunities across multiple business units

• Complex changing political environment and introduction of substantial Managerial class without deep experience

• The Solution • The SASOL Supply Chain Optimization Journey • Awareness – identified SCOR as a tool (2004) • Embarked on SCOR pilot project – tackling

problem area to show benefits and understand process

• First in-house project (to build internal success) • Approval for permanent Center of Excellence

(CoE) competency • Prioritization of supply chain projects (project

demand exceeds supply) • Project 2, 3, 4…..X • Embraced “The SCOR Way” (2007)

• Benefits Achieved • Ongoing CoE for supply chain optimization • Sample project generated IRR of 139% over

the project lifetime • Estimated US$1B cost improvements over 3

year period

1Hoovers.com


Even More Companies

$200M Cost Improvements Single Division

US$2.3B Savings supported with Merger

$5B Working Capital

$66M Revenue/Inventory

€2M Improvements Single Division (Peroxides)


CALL TO ACTION


Successful Exploitation of SCC

• Training the Champions › Develop fundamental support capability

• Train the Team › Transform a business segment; develop internal case for change

• Train the Company › Implement the “System” For SCM

• Develop Certification Program • Get involved in research programs as company maturity

grows • Ask questions


Thanks!

[email protected] www.supply-chain.org

mailto:[email protected]�

modelo scor para la transformación del negocio · local customers manufacturing facilities ....

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