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Little or No Predictability and Poor Product Mix
Inventory Used to Cover Problems
Lead Times Limit Flexibility
Current Processes and Structures Inhibit Performance
High raw material Inflexible schedules inventory level High WIP inventory
Long order fill High inventories
times
Promise flexibility
Inflexible
schedules
Complexity
Variability
© 1999 Andersen Consulting
Conflicting Objectives
2
Complexity
Complications in the Electronics Industry
Chronic Capacity Shortages
January
By ToBiblioteka Baidu Davis
© 1999 Andersen Consulting
Early On-time Late
Manufacturing
• Responsiveness • Transportation • Location • Quality
4
Early On-time Late
Customer Deliveries
Real Shortage
Over-Supply
Target Launch
Supply
Actual Launch
Returns/ Cancellations
Time
End of Life
©Andersen Consulting 1998
5
Shortened product life cycle has increased the uncertainty.
Multiple forecasts and unreliable fulfillment today create the bullwhip effect.
Units Per Period
Channel Fill and Phantom Demand
Channel Orders True End Customer Demand
© 1999 Andersen Consulting
8
Conflicting Objectives - Manufacturing
Little’s Law
WIP Cycle Time Variability
Cycle Time
Asset Utilization
Little’s Law Variability
© 1999 Andersen Consulting
1
Resource Investment Asset Productivity Inventory Supplier & Capacity Contracts
What are the characteristics of Supply Chan Management, why is it so hard to manage?
© 1999 Andersen Consulting
3
Complexity in Component / Semiconductor Manufacturing
• Mass customization • Personalization • Product mix effects on capacity • Multiple options • Contracted vs. owned capacity • Combined make-to-forecast and make-to-
Manufacturing Distribution
Sales & Customer Service
Goal:
Lowest purchase price
Highest utilization
Lowest cost
100% customer satisfaction
Behavior: Long lead times Long run lengths
The Characteristics of Supply Chain Management
Complexity, Variability, Conflicting Objectives
The Business Challenges
Level of Service
Cost of Service
Order Response Time Product Availability Lead Time Order Changes Due Date Performance
Variability
Profit
WIP INV
Due Date Performance
Market Risk
© 1999 Andersen Consulting
11
态度决定一切 细节影响成败 谢谢您的关注！
6
Ongoing Usual Usual Usual
End of Life Low Low High
Variability
Natural • Demand • Material supply • Production • Distribution Self-Introduced • Replenishment strategies • Planning processes • Inventory strategies
Ongoing
Ramp-up
End of Life
Role of Inventory Cost of Shortage Cost of Overage
Ramp-up High High Low
By Professor Hau L. Lee, Stanford University
© 1999 Andersen Consulting
order • Inverted BOM • Binning • Multi-stage global production
Uncertainty in the supply chain results in significant variability
• Past Performance • Market Research • Analytical Technique • Incentive Programs
Variability
WIP INV
Due Date Performance
10
Conflicting Objectives - Corporate
Market Share
Order Response Time
Cycle Time
Fil l Rates
Early Warnings
Asset Utilization Little’s Law
© 1999 Andersen Consulting
7
Traditional functional alignments continue to impede Supply Chain Performance.
— Misaligned Functional Goals & Behaviors—
Purchasing
WIP INV
© 1999 Andersen Consulting
9
Conflicting Objectives - Customer
Early Warnings
© 1999 Andersen Consulting
Fill Rates
Order Response Time
Cycle Time
Asset Utilization Little’s Law
• Process Design • Product Design • Capacity • Quality
Under Forecast Over
Customer Demand
Raw Materials
Finished Goods
Early On-time Late
Supplier Performance
? ? ? ? ? ? ? ?
??????? ???????
Little or No Predictability and Poor Product Mix
Inventory Used to Cover Problems
Lead Times Limit Flexibility
Current Processes and Structures Inhibit Performance
High raw material Inflexible schedules inventory level High WIP inventory
Long order fill High inventories
times
Promise flexibility
Inflexible
schedules
Complexity
Variability
© 1999 Andersen Consulting
Conflicting Objectives
2
Complexity
Complications in the Electronics Industry
Chronic Capacity Shortages
January
By ToBiblioteka Baidu Davis
© 1999 Andersen Consulting
Early On-time Late
Manufacturing
• Responsiveness • Transportation • Location • Quality
4
Early On-time Late
Customer Deliveries
Real Shortage
Over-Supply
Target Launch
Supply
Actual Launch
Returns/ Cancellations
Time
End of Life
©Andersen Consulting 1998
5
Shortened product life cycle has increased the uncertainty.
Multiple forecasts and unreliable fulfillment today create the bullwhip effect.
Units Per Period
Channel Fill and Phantom Demand
Channel Orders True End Customer Demand
© 1999 Andersen Consulting
8
Conflicting Objectives - Manufacturing
Little’s Law
WIP Cycle Time Variability
Cycle Time
Asset Utilization
Little’s Law Variability
© 1999 Andersen Consulting
1
Resource Investment Asset Productivity Inventory Supplier & Capacity Contracts
What are the characteristics of Supply Chan Management, why is it so hard to manage?
© 1999 Andersen Consulting
3
Complexity in Component / Semiconductor Manufacturing
• Mass customization • Personalization • Product mix effects on capacity • Multiple options • Contracted vs. owned capacity • Combined make-to-forecast and make-to-
Manufacturing Distribution
Sales & Customer Service
Goal:
Lowest purchase price
Highest utilization
Lowest cost
100% customer satisfaction
Behavior: Long lead times Long run lengths
The Characteristics of Supply Chain Management
Complexity, Variability, Conflicting Objectives
The Business Challenges
Level of Service
Cost of Service
Order Response Time Product Availability Lead Time Order Changes Due Date Performance
Variability
Profit
WIP INV
Due Date Performance
Market Risk
© 1999 Andersen Consulting
11
态度决定一切 细节影响成败 谢谢您的关注！
6
Ongoing Usual Usual Usual
End of Life Low Low High
Variability
Natural • Demand • Material supply • Production • Distribution Self-Introduced • Replenishment strategies • Planning processes • Inventory strategies
Ongoing
Ramp-up
End of Life
Role of Inventory Cost of Shortage Cost of Overage
Ramp-up High High Low
By Professor Hau L. Lee, Stanford University
© 1999 Andersen Consulting
order • Inverted BOM • Binning • Multi-stage global production
Uncertainty in the supply chain results in significant variability
• Past Performance • Market Research • Analytical Technique • Incentive Programs
Variability
WIP INV
Due Date Performance
10
Conflicting Objectives - Corporate
Market Share
Order Response Time
Cycle Time
Fil l Rates
Early Warnings
Asset Utilization Little’s Law
© 1999 Andersen Consulting
7
Traditional functional alignments continue to impede Supply Chain Performance.
— Misaligned Functional Goals & Behaviors—
Purchasing
WIP INV
© 1999 Andersen Consulting
9
Conflicting Objectives - Customer
Early Warnings
© 1999 Andersen Consulting
Fill Rates
Order Response Time
Cycle Time
Asset Utilization Little’s Law
• Process Design • Product Design • Capacity • Quality
Under Forecast Over
Customer Demand
Raw Materials
Finished Goods
Early On-time Late
Supplier Performance