supply chain integration, resilience and sustainability - addressing the big picture using scc...
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© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 1 | 13 May 2012
Supply Chain Integration, Resilience
and Sustainability – Addressing the
Big Picture using SCC Models
Michael D‘heur, shared.value.chain
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 2 | 13 May 2012
The Last Five Years Have Been a Roller-Coaster
Ride for Many Supply Chain ManagersE
cono
mic
cyc
les What’s
next?
Flexible Global Supply Chain Required
Increase capacity at all
cost
Grinding the supply chain to almost full
stop
Adding capacity, but more wisely
A new hype –hit by disaster
Party time: “Growth,
growth, growth”
Hangover time:“Cash is king”
Getting optimistic: “Release all brakes”
Raising the bar: “Outgrow market and competitors”
Management Push
Supply Chain Response
Earthquake, Tsunami,
Fukushima
“Lehman Brothers”
Most likely:“Why can’t we get
there faster?”
2008 2009 2010 2011 2012
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 3 | 13 May 2012
The ‘New Normal’ – Managing With Only Two
Constants: Change & Acceleration
• Fossil Fuels
• Rare Earths
• Fertile Farmland
• Freshwater
• Volatility of
Demand / Supply
• New markets
• Changing
demographics
• Interdependencies
• Disruption risks
• Stability of supply
networks
• Record Profits
• Societal Issues
• Compliance
Supply Chain Challenges Accelerators
“What is the right approach to
cope?”
Market Volatility Natural resources
Profit vs. PurposeGlobal Value Chain
x
Man made disasters
Natural disasters
Key Question
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 4 | 13 May 2012
Flexible and Fast Value Chain Structures Require a
Cross-Enterprise Perspective
Focus on the Total Value Chain
Integration
Topics to Address
Resilience
Sustainability
• Internal integration across departments
• Integration of Customers, Suppliers & 3rd Parties
• Sharing of risks & opportunities• Faster Launch Management
• End-to-End Transparency and Response Capability
• Proactive Risk Management and Supply Assurance
• Lean Footprint Design
• Reconceive energy and material use, logistics, sourcing practices
• Focus on shared value creation• Total Lifecyle Responsibility
The Extended Enterprise
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 5 | 13 May 2012
5
Sup
plie
r pr
oces
ses
Product DesignDCOR™
Custom
er processes
Supply Chain SCOR ®
Sales & SupportCCOR™
Product Management
SCOR is an Integral Part of a Larger Toolkit Integrating an Extended Value Chain
An invaluable source of knowledge, frameworks, metr ics and benchmarks – Eventually enabling your teams to make progress
based on a common language and facts (instead of em otions)
The SCC Toolkit
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 6 | 13 May 2012
Research
Supply Chain Strategy Customer StrategyProduct Strategy
Plan
Source Make Deliver
Performance Management
Business Strategy
People, Processes, Enablers
R&D SCM Sales
Technical Architecture (Applications, Systems, Data)
DCOR (L1-L3) SCOR (L1-L3) CCOR (L1-L3)
Operations Strategy
Consistent Breakdown (Internally and Externally)
Design
Integrate
Amend
Relate
Sell
Price
Assist
The Translation of Strategy Into Action is Critical
for Success – Internally & Externally
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 7 | 13 May 2012
L
-7
L1 Strategic
L2 Operations Strategy
L3 Process Architecture
• Corporate Supply Chain Requirements – provides language that can translate strategic goals into an understandable operations talk
• Very critical to define specific supply chain configurations and segmentation approaches
• Important to describe performance expectations
• The critical link between process and system architecture
• Important to clarify roles & responsibilities (Accountability!!)
SC Operating Model
How SCOR helpsIntegrating the Enterprise
• Supply chain segmentation• Manufacturing strategies,• Replenishment models, • Inventory deployment
• Service level, flexibility, costs, working capital
• Performance objectives for the end-to-end SC
• Business-IT requirements mapping
• Application, Data and Infrastructure architecture
• Accountability for processes
• Service Level Agreements
• Prepared escalation paths
• Defining performance expectation
• Partnership objectives & operating mode
The Complexity of Integrating the Enterprise can
be Solved using SCOR as Common Language
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 8 | 13 May 2012
-8
How SCOR helpsResilience & Risk Management
Since SCOR Version 9, Supply Chain Risks
Management is an Integral Part of the Model
SCOR Elements
Application
Benefits
• Enabler process – Manage Risk of Plan, Source, Make, Deliver, Return processes
• EP.9, ES.9, EM.9, ED.9, ER.9
• Provides framework for setting up risk management approach
• Regular review of internal & external risks - SCOR as common language
• Ideally tied into an organizations ‘sense and respond’ capabilities
• Formal, Visible, Quantifiable, Coordinated - Integral in SC Design
• Avoid/minimize costs, mitigate supply chain disruptions by managing risk proactively (based on known metrics)
“Material Price Volatility”
“Business Continuity”
“Market Volatility”
“Supplier Default Risk”
“Societal Risks”
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 9 | 13 May 2012
Moving beyond ‘Green’ – SCOR provides the Inroads
to Turn Sustainability into a Business Opportunity
SCOR Elements
How SCOR helps
Application
Benefits
• Green SCOR processes to cover environmental practice and performance
• Carbon, Air, Liquid, Solid Waste
• Look at Supply Chain Flexibility and Sustainability as an opportunity (and as two sides of the same coin)
• Environmental metrics, less waste, greenhouse gases etc.
• Future will be around creating shared value creation across the entire chain
Sustainability
Economic Value CreationTime-to-Market, Lead Times, SC Cost, Working Capital,
Delivery Service
Green Products, Human Rights, Labor,Environmental, Anti-Corruption, Empowerment
Societal Value Creation
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 10 | 13 May 2012
The SCC Toolkit is Mature – Future Editions Needs
to Cover a Total Value Chain Perspective
2000 2003 2006 2009 2012
My prediction:Through continuous extension and improvement by the community of
practitioners…
… the SCC Toolkit will become the standard to describe and manage Total Value Chain Architectures
SC
OR
8.0
DC
OR
1.0
CC
OR
1.0
SC
OR
10.0
SC
OR
1.0
1997 …
SC
OR
9.0
DC
OR
2.0
SC
OR
7.0
SC
OR
11.0
SCOR Release Timeline SCOR in 2015
SCC Assets:• Common Language• Global Scope• Cross Industry• Driven by Practitioners,
Consultants, Academia, Analysts
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 11 | 13 May 2012
Please share your companies experience in
tackling supply chain challenges
What challenges have you faced when
improving your supply chain? What helped you
to be successful?
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 12 | 13 May 2012
Applying the SCC Toolkit - Think Big, Include
Partners and be Bold
(1) Approach value chain integration always with the ‚bigpicture‘ in mind – no company can do it alone anymore
(2) Use SCC toolkit (SCOR, DCOR, CCOR) as commonlanguage, but be willing to adapt to your companiesspecific language
(3) Involve customers and partners early on in the process(4) While implementing the model, be ready to adapt your
design to what really works(5) Get involved in develop SCOR further – it is your model
© 2012 Supply Chain Council. ALL RIGHTS RESERVED. | Supply Chain Integration, Resilience and Sust ainability | Slide 13 | 13 May 2012
Thank you for your attention – I appreciate your
feedback and comments
shared.value.chain Management Consultants
Delivering Economic and Societal Value
Mühlfeldweg 25 / D-85748 Garching (Munich)Tel. +49 89 323 86 766 / Mobile +49 170 768 58 [email protected]
Diplom-KaufmannMichael D‘heur
Founder & Managing Director
shared.value.chainManagement Consultants