Metrics: From Information to Strategy - Boston Strategies

Metrics: From Information to Strategy

January 2007y

This report has been prepared by Boston Strategies International at the request of CLIENT for the purpose of establishing its operating strategies. It may not be appropriate for other purposes or audiences. This report contains forward-looking statements andprojections with respect to anticipated future performance of CLIENT, suppliers, customers, and/or general or specific economic conditions and factors that are based on Boston Strategies International’s analysis of market trends and external data. Forward-lookingstatements and projections are not guarantees of future performance and involve significant business, economic and competitive risks, contingencies and uncertainties, which are difficult to predict. Accordingly, these projections and forward-looking statements maynot be realized and actual results may vary up or down. This report may not be reproduced or distributed without express written approval from Boston Strategies International.

Who We Are

IndustryResearch

Cost and Price Analysis

Supply Chain ConsultingResearch Analysis Consulting

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Explosion of IT Platforms and ConceptsEXCERPT

Rosetta SRMCRM

ASCIIB2BB2CBOI

Chat Client DNS

Domain

Auction XML

BOICADCIOCPCCPPCTO

Domain FTP

Gateway Hypertext Internet

M ltiMedia

WMS ERPData

CTOCTREDI

HTM/HTMLISP

MultiMedia OPAC Packet

Port PPP

APS GPS

ISSKM

MIMEMRPPOP

Protocol Router Server

Signature SPAM

TMSeRFQ

RFID

POPPOS

Point Of SaleROI

XBRL

SPAM TCP

Telnet Trojan Horse

WWW


Data changing our worldEXCERPT

Innovation from outsideCollaborative sellingCollaborative sellingSupply networksStandardized subassembliesStandardized subassemblies

“We’re moving towards a world where operations are networkWe re moving towards a world where operations are network-centric. There used to be vertical silos, [but in the future we’ll]

have horizontal businesses that can integrate with each other.”- Stephen Miles MITStephen Miles, MIT


Revenue value of informationEXCERPT

Delivering Better Service• Matching Organization of Resources to Demandg g• Segmenting and Prioritizing Orders• Customizing product and service deliveryLaunching More New Products Faster• Launching New Products More Frequently• Launching New Products FasterIncreasing Margins: Rapid, Flexible Response• Rapid Response• Postponement• Dynamic Pricing


• Dynamic Pricing

Cost value of informationEXCERPT

Lean manufacturing and lean distributionInventory managementInventory managementSupplier partneringCross-docking and fleet rationalizationCross docking and fleet rationalizationQuality managementE-procurementE-procurement


Core competency drives IT architectureEXCERPT

Competency Customer I ti

Operations Supply Ch i

Marketing / I ti

How Strategy Drives Choice of Metrics

Intimacy Chain InnovationExample Used car

dealershipOutsourced IT services

Oil company IT: Social networking

Time horizon

The moment 3 months 1 year 3-5 years

Metrics Hit rate Balanced Forecast ThoughtMetrics Hit rate Balanced scorecard

Forecast variance

Thought leadership

P/EP/E


1. Convert data to informationEXCERPT

Supply and Demand Imbalance

$2,500

$3,000

$2,000

Millions of US Dollars

$1,5002006 2007 2008 2009 2010 2011 2012

Year

Capacity ($M) Demand ($M)


2. Convert information to strategyEXCERPT

• RationalizationC t li ti f t

Families of Sourcing Strategies

45

Scale

• Centralization of procurement• Group purchasing

• RFx• Global sourcingAuctions

0123

CompetitionIntegration

• Auctions• Payment terms

• E-Procurement• Long-term agreementsS l h i i t ti

Value• Value engineering• Standardization• Spec simplification

• Supply chain integration• Purchasing cards• Portals


Spec simplification

3. Create value above the marketEXCERPT

Value: Lower lifecycle costsIntegration: Reduced transactions costsIntegration: Reduced transactions costsScale: Economies of scaleCompetition: go direct to manufacturersCompetition: go direct to manufacturers

99100

Creating Price Leverage through Sourcing Strategy

9596979899

Price

• Value• Competition• Integration

929394

1 2 3 4 5Time Period

g• Scale


Time Period

Market Term-Adjusted

Global Supply Chain EconomicsBoston Strategies International helps supply chain executives make critical supply chain decisions that involve investment and risk by forecasting the evolution of supply markets and technologies. Our mission is to help our clients develop globally competitive supply networks that maximize Supply Chain Value.™ Our products and services include:

• Industry Research that helps investors and policy makers identify emerging issues that affect their supply chains, and quantify the impact that they will have

• Cost and Price Analysis that helps financial and operational managers plan and budget by providing benchmark, best practice, and forecast data tailored to their companies' supply chains

• Supply Chain Consulting services that help supply chain leaders make high-stakes decisions related to mergers & acquisitions, market entry, capital investments, outsourcing, off-shoring, and make-or-buy

D id J b dj b @b t t t i

Boston, MA, USA445 Washington St

Wellesley, MA 02482 USA

Dubai, UAEExecutive SuiteP.O. Box 121601

Sharjah, United Arab Emirates (U.A.E.)

Shanghai, China31F Jin Mao Tower88 Shi Ji Avenue

Shanghai 200120, China


David Jacoby: [email protected]

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Metrics: From Information to Strategy - Boston Strategies