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CEMS – Universität
zu KölnOF- GLOBAL
Sommersemester
2003
CONFIGURATION
AND COORDINATION
SUPPLY NETWORKS
Seminar für Allgemeine Betriebswirtschaftslehre, Betriebswirtschaftliche Planung und Logistik
Direktor: Prof. Dr. Werner Delfmann
CONFIGURATION AND COORDINATION
OF GLOBAL SUPPLY NETWORKS
ANNA KUBASIEWICZ, MICHAEL BUSIA,
MARTIN STEFAN, MARTIN FEIX, GABRIEL RÜECK
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
1. GLOBALISATION + SUPPLY CHAIN
CONFIGURATION
2. GLOBAL SUPPLY
CHAIN MANAGEMENT
COORDINATION
3. SPECULATION AND POSTPONEMENT
4. REAL EXAMPLES OF S/P-STRATEGIES
5. OUTLOOK
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
GLOBAL SUPPLY CHAIN
SUPPLY CHAIN
set of three or more entities directly involved in the upstream and
downstream flows of products, services, finances and/or information
from a source to a customer
INTRODUCTION
CONFIGURATION
COORDINATION
MICRO LEVEL
MACRO LEVEL
internal flow of the processes of
product design, procurement,
production, demand management
and distribution
network of organizations,
partners, customers and
suppliers
P/S-STRATEGIES
EXAMPLES
OUTLOOK
AIMS OF ESTABLISHMENT AND MANAGEMENT:
Cost reduction
Increased customer value
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
DRIVERS OF SUPPLY CHAIN GLOBALISATION
GOVERNMENT
REGULATIONS
INTRODUCTION
CONFIGURATION
COORDINATION
economies of scale and scope
liberalization of international
trade
setting up common technical
standards
P/S-STRATEGIES
EXAMPLES
OUTLOOK
COST DRIVERS
COMPETITION
differences in country costs
and global sourcing
opportunities
DRIVERS OF
SUPPLY
CHAIN
GLOBALISATION
grow in exports and imports
timely logistics as main
competitive advantage
interdependencies of country
activities
decline in transport and
communication costs
MARKET FORCES
homogenization of customer
needs
internationalisation of distribution
channels
globally transferable marketing
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
GLOBAL SUPPLY CHAIN MANAGEMENT AS...
COMPLEXITY MANAGEMENT
market
complexities
INTRODUCTION
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
production
complexities
logistics
complexities
Presence
of local
partners
Infrastructure
Time and distance
advantages
Structure of the distribution channels
in the market
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
GLOBAL SUPPLY CHAIN MANAGEMENT AS...
COMPLEXITY MANAGEMENT
production
complexities
INTRODUCTION
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
logistics
complexities
market
complexities
Tariff
and nontariff barriers
Exchange rates
OUTLOOK
Differences in product
requirements
Consumer tastes and the
nature of market segmentation
Quality and quantity of labor force
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
GLOBAL SUPPLY CHAIN MANAGEMENT AS...
COMPLEXITY MANAGEMENT
logistics
complexities
INTRODUCTION
CONFIGURATION
COORDINATION
P/S-STRATEGIES
market
complexities
production
complexities
Lead
times
EXAMPLES
OUTLOOK
Product variety
Length of production runs
Length of supply networks
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
WHAT IS A GSC-MANAGEMENT?
INTRODUCTION
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
COORDINATION
Managing strategies
Making structure work
and achieve goals
GLOBAL SUPPLY
CHAIN MANAGEMENT
CONFIGURATION
Member identification
Geographic structure
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
GSC-CONFIGURATION - MEMBERS IDENTIFICATION
UPSTREAM
INTRODUCTION
DOWNSTREAM
ASSIGNING A
LEADER
DEFINING
MANAGED
LINKAGES
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
DEFINING
MONITORED
LINKS
CHOOSING NONMANAGED LINKS
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
SCM – CONFIGURATION – ANALYSING FACTORS
INTRODUCTION
CONFIGURATION
COORDINATION
P/S-STRATEGIES
GEOGRAPHICAL
FACTORS
EXAMPLES
OUTLOOK
ANALYSING
FACTORS
ECONOMIC
FACTORS
POLITICAL
FACTORS
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
GEOGRAPHIC LOCATION STRATEGIES
(A) Globally Concentrated
Production
(B) Host-market Production
INTRODUCTION
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
(C) Product Specialization
for a Global or
(D) Transnational Vertical Integration
Regional Market
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
POLITICAL FACTORS STRATEGIES
Tariff Barriers
Adequacy of Infrastructures
INTRODUCTION
CONFIGURATION
COORDINATION
Limits on Natural Resource Extractions
P/S-STRATEGIES
EXAMPLES
Labor Costs
OUTLOOK
Currency Fluctuations $ → €→£→¥
Host Government Pressures
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
ECONOMIC FACTORS
INTRODUCTION
ECONOMIES OF SCALE
– Maximization at all points on the SC
– Entrance into new markets
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
ECONOMIES OF SCOPE
– Differentiation of products at one facility
ECONOMIES OF SPECIALISATION
– Focus on the production of one product
– Customer oriented
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
LSP´S ROLE IN CONFIGURATION
LSP’s
INTRODUCTION
Increase
Flexibilities
Increase
Quality
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
Core
Competencies
Reduce
Assets
Reuse
Technology
Reduce
Cost
Free
Management
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
PREREQUISITES FOR EFFECTIVE COORDINATION
INTRODUCTION
•
Mutual trust and commitment of all participants
•
Common vision
•
Leadership
•
Mutual sharing of information
•
Firm base
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
COMPETITIVE ADVANTAGE
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
CONCEPT OF SPECULATION AND POSTPONEMENT
POSTPONEMENT AND SPECULATION strategies
INTRODUCTION
CONFIGURATION
They offer opportunities to achieve delivery of products in a
COORDINATION
timely and cost effective
P/S-STRATEGIES
manner
EXAMPLES
OUTLOOK
They reflect the specific configuration and coordination
of a supply network.
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
SPECULATION AND POSTPONEMENT IN THE SUPPLY CHAIN
ORDER PENETRATION POINTS
INTRODUCTION
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
Engineering/
purchasing
Heavy
manufacturing
Reactive
Postponement
Light
manufacturing/
assembly
Logistics/
distribution
CUSTOMER
Anticipative
Speculation
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
GENERIC SUPPLY CHAIN P/S-STRATEGIES
Logistics
INTRODUCTION
SPECULATION
POSTPONEMENT
CONFIGURATION
Decentralized
inventories
Centralized
inventories
The full speculation
strategy
The logistics
postponement
strategy
The manufacturing
postponement
Make to order
strategy
The full
postponement
strategy
COORDINATION
P/S-STRATEGIES
SPECULATION
EXAMPLES
Make to
inventory
OUTLOOK
Manufacturing
POSTPONEMENT
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
P/S-STRATEGIES – ADVANTAGES AND DISADVANTAGES
Logistics
INTRODUCTION
SPECULATION
POSTPONEMENT
SPECULATION
•Low production costs
•High inventory costs
•Low distribution costs
•High customer service
•Low production costs
•Low/mid. Inventory
costs
•High distribution costs
•Low/mid. Customer
service
POSTPONEMENT
•Mid./high production
costs
•Mid./high inventory
costs
•Low distribution costs
•Mid./high customer
service
•Mid./high production
costs
•Low inventory costs
•High distribution costs
•Low customer service
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
Manufacturing
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
DETERMINANTS OF A P/S-STRATEGY
Product Determinants
INTRODUCTION
life cycle, value density, design characteristics
CONFIGURATION
COORDINATION
Market and Demand
P/S-STRATEGIES
EXAMPLES
relative time delivery, uncertainty of demand
OUTLOOK
Manufacturing and Logistics System
constraints
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
REAL EXAMPLES
Real examples of application of various P/S strategies
Xerox
Bang&Olufsen
Deskjet-Plus
Copiers
High-end
televisions and
stereo systems
Production
Postponement
Full
Speculation
Full
Postponement
Hewlett-Packard
INTRODUCTION
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
REAL EXAMPLES
INTRODUCTION
Solectron &
Flextronics
CONFIGURATION
COORDINATION
EMS / CM
Dell
Toyota
Computers
Cars
P/S-STRATEGIES
EXAMPLES
OUTLOOK
Economies of Scale
Full
Postponement
keiretsu (系列)
and
kaizen (改善)
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
REAL EXAMPLES (SOLECTRON & FLEXTRONICS)
INTRODUCTION
CONFIGURATION
OEMs
Component
Suppliers
COORDINATION
P/S-STRATEGIES
Customer
Electronics
Manufacturing Service
EXAMPLES
OUTLOOK
Design Labs without
manufacturing
• OEMs outsource missing capacity or inadequate SCNs
• EMS/CM has established supply chain for components
• EMS/CM manufactures near target markets
• EMS/CM attract design labs without manufacturing
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
REAL EXAMPLES (DELL)
• full postponement strategy
• web-based order triggers assembly
• customer demand known
Dell
INTRODUCTION
• customer demand can be influenced
CONFIGURATION
COORDINATION
P/S-STRATEGIES
EXAMPLES
OUTLOOK
Supplier
Customer
• limited number of basic components
• hundreds of possible configurations
• e-commerce in downstream and
upstream
• only material for next 2h of assembly
• only 5d of inventory
• credit card payment = no bad debts
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
REAL EXAMPLES (TOYOTA)
INTRODUCTION
CONFIGURATION
COORDINATION
Toyota
P/S-STRATEGIES
系列
EXAMPLES
OUTLOOK
Tier 2
Suppliers
Tier 1
Suppliers
系列
• keiretsu involves coherent price setting, cost control and
profit sharing
• kaizen means ”to strive for improvement”, common efforts to
yield higher quality and improve production processes
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
DISCUSSION
OUTLOOK
Globalization is a trend into the future→→It’s unavoidable
INTRODUCTION
CONFIGURATION
SCM must become more sophisticated due to the
expanding complexities & competitiveness
COORDINATION
P/S-STRATEGIES
EXAMPLES
Companies must be willing to share risk and visions with the
partners of the SC
OUTLOOK
Strategic alliances within the GSC can play a major role in
gaining competitive advantages
GSCM is a dynamic process with continuous monitoring and
adjustments geared toward changing environments
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CONFIGURATION AND COORDINATION OF GLOBAL SUPPLY NETWORKS
DISCUSSION
Is it possible to standardize applications of SC
strategies within various industries?
Is it possible the future will hold only one supply
chain for each specific sector?
Which problems arise from more disperse
geographically spaced supply chains?
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