Leveraging Supply Chains for Profit - PowerPoint PPT Presentation

Leveraging Supply Chains for Profit ���������������� www.william.lawrence@uwimona.edu.jm �

�������� 1. What is a supply chain? 2. Leveraging supply chains 3. Measuring supply chain performance 3. Measuring supply chain performance 4. Conclusion �

����������������������� ��������� Upstream or ��������� Inbound Logistics ����������� ����������� ������ ������ ����� Downstream or ������������� �������� Outbound Logistics ������� ��������� The network of ����������������������������� involved in the provision of goods or services from the earliest supplier to the ultimate customer ��

Supply Chain Categories ���������� ��������� ����� ��������� ������ ��������� �������� ���������������� �������������! �

Supply Chains for Strategy Execution � "#$���%"�&�'���$ � The institution of choice in the financial sector providing superior products and services and Mission being a good corporate citizen for the benefit of our customers, shareholders and staff Corporate Strategy Retail, Corporate & Commercial, Treasury, Insurance, Mortgage, Wealth (Portfolio of SBUs) Business Strategies Cost Leadership in Retail Banking (SBU) Functional Strategies Centralized back office operations, Branch network, e3Business (Supply Chain) Performance Revenue, ROE, (Throughput Productivity) �

������������������������������ For long3run success, firms must source from, and sell to, multiple markets under conditions of international competition and rapid developments in ICT that remove restrictions of time and place.

!���"������� How should organizations choose and leverage supply chains to increase profitability? #

���������������������������� � Began operations as Tetley Tea Company in 1967 � Tea importation, packaging and distribution � Sold to the Mahfood Family in 1996 � Exports started late 1990s and was 38% Sales by 2009 � Authorized to sell Tetley brand black and green teas � Owns the “Caribbean Dreams” brand of herbal teas � Packages teas under private labels for other companies � 52 Employees by 2010 � Listed on the JSE in 2010 $ ������%�&'(��������)�������*�*

����+�'�����������������+��,�-����+ Source: ITC and LMC International .

Declining Real Price of Tea ����(�&����������)�����������������������&���������*++,������-���.������)������������������/�0.��������&�*1� 2�����3 �*

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������ ����!����"�#$��� Suppliers Distributors Retailers & Jamaican Teas: Consumers • Tetley • Jamaica • Tetley (Domestic) Tea (UK) • Caribbean Dreams • Supermarkets • Other • JSE • 18,000 sq. ft. factory • Hotels Caribbean • Over 100 million bags • Others • Restaurants • USA of black, green and • Shops • Canada herbal tea per annum • e3Tailers • e3Tailers ��

&'(/��0���1������������������� ����������4�������� �!���� ��������� 5������ ��������� Tetley partnership √ √ √ √ JSE Public Listing √ √ Bundle tea brands √ √ Use sole distributors √ √ √ e3Commerce √ √ Common strategy √ √ √ �� ����������������������%�23�'�-��*�*

(�4��������&'(/��������������� "�#�"��*6 2��������� ����-� %�������� ����-��������� Efficiency 0.15 7 1.05 Responsiveness 6/67 7 0.35 Integration 0.10 8 0.60 Capacity 0.15 7 1.05 People 0.15 8 1.20 Information 0.10 7 0.70 Inventory 0.20 8 1.60 Capital 0.10 7 0.80 TOTAL 1.00 9/:7 ��

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&���������%� ��������"�'��$�����% ��( �� ���������#-����-����&����������� �-�����%������������������������� ���� ����* ����@ Suppliers 1 Direct Cost 75 / 100 90 / 150 % Revenue = 75% = 60% 2 Weight 75 / (75+60) = 75 / (75+60) = 60 / (75+60) = 60 / (75+60) = Total Operating Total Operating Shared Shared 56% 44% Expenses Resources = $1,000 3 Operating $1,000 x 0.56 $1,000 x 0.44 Expenses = $560 = $440 4 Throughput SBU 1 (100375) / 560 = (150390) / 440 SBU 2 Productivity 0.04 = 0.14 AA Revenue = $150 Revenue = $100 Direct Cost = $90 Direct Cost = $75 ** High scores are good �

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������������+���������������������� "�#�"��*6 2��������� ����-� %�������� ����-��������� Efficiency 6/67 7 0.35 Responsiveness 0.15 8 1.20 Integration 0.10 7 0.50 Capacity 0.15 8 1.20 People 0.15 8 1.20 Information 0.15 6 0.90 Inventory 3 3 3 Capital 0.25 9 2.25 TOTAL 1.00 9/86 �$

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���������� 1. Proper supply chain management is crucial for effective and efficient strategy execution 2. Supply chains are leveraged based on (i) fit with global criteria and (2) alignment and strength global criteria and (2) alignment and strength 3. Throughput productivity is the ultimate measure of supply chain performance �*