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• Radically change service level to strengthen competitiveness
Decisionmaking criteria
Creating a pan-European Supply Chain
2. In-versus outsourcing
• Consolidate assets and free cash to finance growth
4. Best practice for tendering process
• Ensure transparency and consistency of cost and performance
• Ensure optimal target setting and performance commitment
Best practice tendering: Insight about key performance drivers of operation will guarantee a successful tendering process
Benefits: Applying best practices to resolve these issues can lead to significant competitive advantages
Redesign of network is driven by forces outside of the supply chain. These external forces could be, e.g., consolidation of manufacturing base or change in service requirements
In- versus outsourcing: Outsourcing provides strategic advantages, but it does not solve the problem
Consolidation of supplier relationships: Trust and transparency are key for establishing long-term partnerships with suppliers
… defines replenishment plan (control total chain
inventory)
Type 2: Optimal factory utilization
Factory managed replenishment (FMR)
… replenishes markets based on mutually agreed rules
Type 1: Lead time driven
Market managed replenishment (MMR)
Factory ... Region ... Market ...
… produces based on market replenishment plan
… defines sourcing and monitors inventories
Challenges facing the pan-European supply chain
Discussion paper
Shanghai, December 29th, 2002
Executive summary
Overview: The pan-European supply chain faces four major challenges: Redesign of network, in-versus outsourcing, consolidation of supplier relationships and best practice tendering
“Quick Win” versus strategic advantages
One-time benefit versus continuous
improvement
Benefits
Redesign of network
Redesign of network
Three types of replenishment concepts reflect needs of short lead time, optimal factory utilization and high product availability
Overview
Four major challenges need to be mastered to establish a panEuropean supply chain1.Βιβλιοθήκη Redesign of network
Main driver
• Rationalize European manufacturing locations and capacity
… defines sourcing and monitors inventories
… defines inventory levels and develops
sales forecast
Type 3: High product Region managed
replenishment (RMR)
• Expand management capacity in core business area
3. Consolidation
of supplier relationship • Optimally use economies of scale for supply chain
• Reduce in-house administration to manage interface to service providers
… produces based on regional replenishment plan
… coordinates all replenishment activities
Decisionmaking criteria
Creating a pan-European Supply Chain
2. In-versus outsourcing
• Consolidate assets and free cash to finance growth
4. Best practice for tendering process
• Ensure transparency and consistency of cost and performance
• Ensure optimal target setting and performance commitment
Best practice tendering: Insight about key performance drivers of operation will guarantee a successful tendering process
Benefits: Applying best practices to resolve these issues can lead to significant competitive advantages
Redesign of network is driven by forces outside of the supply chain. These external forces could be, e.g., consolidation of manufacturing base or change in service requirements
In- versus outsourcing: Outsourcing provides strategic advantages, but it does not solve the problem
Consolidation of supplier relationships: Trust and transparency are key for establishing long-term partnerships with suppliers
… defines replenishment plan (control total chain
inventory)
Type 2: Optimal factory utilization
Factory managed replenishment (FMR)
… replenishes markets based on mutually agreed rules
Type 1: Lead time driven
Market managed replenishment (MMR)
Factory ... Region ... Market ...
… produces based on market replenishment plan
… defines sourcing and monitors inventories
Challenges facing the pan-European supply chain
Discussion paper
Shanghai, December 29th, 2002
Executive summary
Overview: The pan-European supply chain faces four major challenges: Redesign of network, in-versus outsourcing, consolidation of supplier relationships and best practice tendering
“Quick Win” versus strategic advantages
One-time benefit versus continuous
improvement
Benefits
Redesign of network
Redesign of network
Three types of replenishment concepts reflect needs of short lead time, optimal factory utilization and high product availability
Overview
Four major challenges need to be mastered to establish a panEuropean supply chain1.Βιβλιοθήκη Redesign of network
Main driver
• Rationalize European manufacturing locations and capacity
… defines sourcing and monitors inventories
… defines inventory levels and develops
sales forecast
Type 3: High product Region managed
replenishment (RMR)
• Expand management capacity in core business area
3. Consolidation
of supplier relationship • Optimally use economies of scale for supply chain
• Reduce in-house administration to manage interface to service providers
… produces based on regional replenishment plan
… coordinates all replenishment activities