Supply Chain Dr. Lai Ving Kam , Associate Professor Logistics and - PowerPoint PPT Presentation

Continuous Cost Reduction Resilience in Adaptive Responsive Supply Chain Dr. Lai Ving Kam , Associate Professor Logistics and Supply Chain Management Berjaya University College of Hospitality, Kuala Lumpur, Malaysia Email: lai.vingkam@berjaya.edu.my www.berjaya.edu.my Supply Chain Macro Process T3 Supplier Multi- Echelon T1 Supplier N Supplier Supply Chain T4 Supplier Material Suppliers Component Assembly Manufacturing International Transport Distribution Outbound Transport X-Dock/ Retail DC Sales Channel 48 Client 9 th Global Supply Chain and Logistics Summit 1 16 Nov 2016 www.sclgsummit.org

W her e ar e y ou? Roles of Supply Chain functions :-  Implementing business strategy The four-stage model of Supply Chains contributions  Supporting business strategy Who has the capacity to lead?  Driving business strategy Redefine Industry Stage 4 expectation Give an Operations advantage Increasing Strategic Impacts Clearly the Stage 3 Best in Link strategy The Industry with operations As good as Stage 2 competition Adopt Best Practice Holding the Stage 1 Organization Correct the Back Worst problems 9 Feb 2011 Internally Externally Internally Externally Neutrality Neutrality Supportive Supportive Increasing Operations Capabilities Roles of Supply Chain 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Global Trends Increase in the usages of open standards- Rapid Technological products based technologies rapidly becoming fall in supported by rapid mass market commodity advancing prices products with increasingly shorter multi-technologies lifecycle, interface application technologies Fashionable products  chic appeal and trendy in technology and aesthetic design  combining quick response product introduction capacities with enhanced 9 Feb 2011 product design capabilities to both design fashionable products that capture the latest consumer trends and exploit minimal product launching lead times for better connectivity to match supply with uncertain demand. 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Global Market Changes 6. Products commoditization 1. Products become more fashionable 5. Technology Mutations- Non proprietary towards 2. Products & Technology Open technology & multi technology lifecycle continuously interfacing shortening 4. Constant change of 3. Prices cascading consumer preferences 9 Feb 2011 downward rapidly and continuously 4 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Adaptive Responsive Supply Chain Supply Chain Macro Process T3 Supplier N Supplier Multi- Echelon T1 Supplier Supply Chain T4 Supplier Material Suppliers Component Assembly Manufacturing International Transport Distribution Outbound Transport X-Dock/ Retail DC New Trends: Sales Channel • 5G • 3D Printing 9 Feb 2011 • Robotic / Autonomous Client Vehicles 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Managing Uncertainty in a Industries are facing greater pressures from market volatility with shorter interval of new Supply Chain add-ons product introductions made easy by Connectivity open-technology platform proliferation and greater connectivity of supply chain. Consequently, responsive supply chain needs to Centrality of Connectivity be much more adaptive and agile in sustaining business and market share to be resilience. in Adaptive Responsive Need to looks at the repercussions of rapid Supply Chain product and technology mutations; higher market volatilities, and the criticality of in appropriate systems and methodologies in delivering market resilience and sustainability. Volatile Environment While the rest of world is speeding up, what can you do to catch up or attain the leadership position? 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Extended Product Lifecycle Management What business must do ! Extended Product Sales Sales N Development Add-On product Sales 3 Introduction Introduction ‘n’ Growth Sales 2 Saturation Decline Cannibalization Potential Changing Customer Preference ‘n’ Cost1 Price 2 Price 3 Price1 Cost 2 Market Cost 3 Research Rapid Price N Saturation Sales1 R&D Expansion Changing Cost N Customer Promotion Preference Profit 9 Feb 2011 Profit 1 Source: Lai VK (2015). “Comparative Study on Continuous Cost Reductions between Electronics and Non Electronics sub sectors in” 9 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Dollars Introduction Maturity Decline Growth Development Cost Standard Sales 5 stage Research Promotion A Rapid Market Changing Customer Expansion Saturation Lifecycle curve Preference Profit Dollars Developmen t Development End-Of-Line Development Development Sales End-Of-Line End-Of-Line Sales Sales End-Of-Line Sales 3 stage Lifecycle curve B Cost Sales 9 Feb 2011 Profit 1 st Generation 2nd Generation 3rd Generation ‘N’ Generation Product Product Product Product Lifecycle Lifecycle Lifecycle Lifecycle 2015 CCR Fig & Table 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Traditional Cost Reduction Processes Competitive Strategy Ad hoc Reactionary Supply Chain or Supply Chain Strategy Decision Framework Predetermined process Continuous Cos t Reduction framework Supply Chain Structure Efficiency Responsiveness Logistics Drivers Facilities Inventory Trans portation COST Information Sourcing Pricing 9 Feb 2011 CSV, CM, PPM,PDD, PL M Cross-Functional Drivers ement – Strategy Adopted from Chopra , M eindl (200 7) Supply Chain M anag , plan ning & Operations 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Responsiveness Efficiency Adaptive 9 Feb 2011 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Adaptive Responsive Supply Chain Framework /Mod el Business Critical Elements Production Architecture Management CSV Reliability Capacities component Critical Elements Productivity CSV Organization Alignment & Communication Core Strategic Automation CSV Framework platform Vision (CSV ) Agility & Quality CSV Adaptability & Agility T2 Supplier CM Tools & Techniques / T1 Supplier N Supplier Cost Management Control Theoretical framework T3 Supplier Critical CM Capability Management Material Suppliers Cost Reduction Maturity level (CM) Component Assembly CM Agility & Flexibility Manufacturing Product International Transport PPM Critical Competencies Distribution Portfolio PPM Strategic Management Management Risks & Intelligence Outbound (PPM) Transport Adaptability & Agility X-Dock/ Retail DC Product & Technology Strategic Product Design Sales Management Channel & Development Product Platform Design Strategy (PDD ) Product Cost Optimization PDD strategic Alliance Product Client Adaptive Responsive Strategic Management & Planning Lifecycle Supply Chain Macro Process Aptitude & Capacity Management Agility & Flexibility (PLM ) 20 Source: Lai VK (2015). “Comparative Study on Continuous Cost Reductions between Product Balancing Out Managemen t Electronics and Non Electronics sub sectors in Fashionable Products” 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Continuous Cost Reduction Framework CCR Independent Critical Elements Architecture Variable CSV Reliability component CSV Organization Alignment & Communication Core Strategic CSV Framework platform Vision (CSV ) CSV Adaptability & Agility CM Tools & Techniques / Management Control Cost Theoretical framework CCR is the Management Critical CM Capability Continuous (CM) Cost Reduction Maturity level sum of Cost CM Agility & Flexibility product of Product Reduction PPM Critical Competencies Portfolio CSV, CM, PPM Strategic Management (CCR ) Management Risks & Intelligence PPM, PDD, (PPM) Adaptability & Agility PLM Product & Technology Strategic Product Design Management Dependent & Development Product Platform Design Strategy Variable (PDD ) Product Cost Optimization PDD strategic Alliance Product Strategic Management & Planning Lifecycle C CR=  0 +  1 CSV+  2 CM+  3 PPM+ Aptitude & Capacity Management  4 PDD+  5 PLM+  . Agility & Flexibility (PLM ) Product Balancing Out Managemen t Ref: Researcher’s own analysis 9 th Global Supply Chain and Logistics Summit 16 Nov 2016 www.sclgsummit.org

Competitive Strategy What we need ? Centrality of Continuous Cost Reduction Predetermined in Adaptive Responsive and adaptive Supply Chain processes ? Supply Chain Structure Efficiency Responsiveness Cross – architectural Component Drivers Continuous Cost Reduction framework Core Strategic Vision Cost Product Facilities Cor Management Lifecycle Management Product Product Design and Portfolio Development Management 9 th Global Supply Chain and Logistics Summit Dr. VK Lai Associate Professor - India Supply Chain Summit 19- 13 16 Nov 2016 www.sclgsummit.org Source: Lai VK (2015). “Comparative Study on Continuous Cost Reductions between Electronics and Non Electronics sub sectors i n F ashionable Products” 20, May 2016