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The Supply Chain Leadership Forum 2011: Walt Disney World® Resort, Lake Buena Vista, FL
Supply Chain Planning in AsiaGene Tyndall, EVP, Tompkins Associates& Steve Ganster, EVP, Tompkins Associates
2Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
• Primary objective of supply chain planning in Asia• Planning top priorities• S&OP process challenges• Sourcing and distributing in Asia• Move, store and fulfillment in Asia• Planning for risk management• Other needs for supply chain planning for Asia• Discussion
Session Scope
This Session Will Focus On:
3Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
Primary Objective of Supply Chain Planning in Asia• Synchronizing product supply with demand
Primary Objective
PLAN BUY MAKE MOVEDELIVER
& SELL
Business Strategy and Goals
Operations and Technology Management
….SUPPLIERS
TOMERS
Financial Management
Performance Management (Metrics and Reports)
CUSTOMERS
STORE
Information FlowCash FlowWork Flow
Material Flow
4Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
Top Priorities• Establish how inventories will be created• Establish the network infrastructure of facilities and
flows• Plan for supply chain risks
Planning Top Priorities
5Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
• Cultural differences• Communication• Greater variability in
processes• Decision-making
complexity
S&OP Process
Challenges of Conducting an Effective S&OP Process in Asia
6Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
Unique challenges posed by sourcing and/or distributing in Asia• Variability in lead times• Supply chain delays and disruptions• Cost overruns• Supplier performance• Item visibility
Sourcing and Distributing in Asia
Yet this is Critical for Optimizing Efficiency and Logistics.
7Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
• Supply chain complexity and length• Infrastructure issues such as ongoing work on roads
and rail and airport facilities• Sheer size and magnitude of population centers• Continuous change• Capacity issues
Move, Store and Fulfillment in Asia
Planning for Move, Store and Fulfill in Asia
8Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
Planning for Move, Store and Fulfill in Asia• Distribution network must balance costs
Move, Store and Fulfillment in Asia
Total Logistics Cost
Transportation Cost
Total D
elivered
Costs
Number of Facilities
DC Operating Cost
Sweet Spot: Optimal Logistics Cost and Service Mix
Gross Margin
Maximum Profit
Sweet Spot: Optimal Margin and Service Mix
Inventory Cost
9Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
Planning for Move, Store and Fulfill in Asia• Integrated to the network design is what are the
requirements for each facility
Move, Store and Fulfillment in Asia
– Availability of land– Transportation infrastructure– Incentives– Capabilities of people,
processes and technology
10Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
Move, Store and Fulfillment in Asia
ProcessTechnology
People
Products
Facilities:DCs, Hubs,
etc
SupplierFlows
ProductionCapacity &
Flows
CustomerDemand &
Flows
InventoryPolicies
Taxes
GlobalTrade Laws
& RulesBusinessStrategy
CompetitorStrategies
Network Modeling &Optimization
Facility, Inventory& Transportation
Optimization
TransportationFlows &
Cost
11Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
Planning for Move, Store and Fulfill in Asia• An important factor that is often overlooked is Tax-
Effective Supply Chain Management• There are multiple categories of tax obligations
Facility Location, Selling of Products and Flow of Goods All Impact Corporate Taxes, as Well as
Management of Currencies
Move, Store and Fulfillment in Asia
– Income tax– Sales tax– Real estate tax– Customs
12Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
Planning for Risk Management• Supply chain flow disruptions• Financial or currency variations• Security, theft and counterfeiting
Risk Management
Plans for business continuity are necessary in Asia, as they are globally.
13Copyright © 2011 Tompkins Supply Chain Consortium. All rights reserved. www.supplychainconsortium.com
Other Needs• Setting targets for operating margins, inventory turns
and other KPIs• Special events• New products• Planning tools capabilities
Supply Chain Planning for Asia
Planning is the Critical Integrator for Asian Supply Chains
The Supply Chain Leadership Forum 2011: Walt Disney World® Resort, Lake Buena Vista, FL
Discussion