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8/8/2019 Supply Chain Organization Design
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CREATING SUPPLY CHAINORGANIZATION&
INTEGRATION WITHCUSTOMERS
MESUT GNEY14/04/2010
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AGENDA
AGENDA
1. BORELK
2. SUPPLY CHAIN ORGANIZATION MODELS
Design Considerations
3. CREATING A SUPPLY CHAIN ORGANIZATION
Basic Principles
Borelik Experience in SCM Organization
4. INTEGRATION WITH CUSTOMERBorelik Experience in Borelik & White Good Customers Integration
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BORELKA General Overview
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Capacity Cold Rolled: 600 ktons Hot Dipped Galvanizing: 800 ktons
Total : 1,4 mtons (prime)
AA JOINTJOINT--VENTURE OF BORUSANVENTURE OF BORUSAN
HOLDINGHOLDING AND ARCELORMITTALAND ARCELORMITTAL
Located 200 km away from Istanbul and20 km away from Bursa
Logistic advantage: Borusan Port
240k m2 total area out of which 118k m2
covered. Domestic and export customers: 120
Number of Employees; 648
~30% market share
2009 turnover 762 MUSD
2010 projection 1,2 BilUSD
BorelikisTurkeys first privateandsecondlargest flatsteel producer.
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BORELK
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Extensively utilizes Lean 6 Sigma & TPM as a Business Management Model
Quality System
The First Company in Turkish Steel Industry to be certified: ISO 14001 in 1998 Environmental Management System
OHSAS 18001 in 2000 Occupational Health and Safety Management System ISO/TS 16949: 2002 and ISO 9001 in September 2003 ISO 10002 in 2007 - Complaints Management System ISO 27001 in 2007 Information Security Management
Awards
2001 EFQM Excellence Model - National Quality Award in Enterprises Category 2006 ISO Environment Award Honorable Mention 2006 2008 JIPM Excellency Award BUSIAD Environment Award in 2009
BORELK
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SUPPLY CHAIN
ORGANIZATION MODELSDesign Considerations
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Traditional supply chain organization:
Functionally oriented
e.g., Logistics (receiving and shipping) and manufacturing
ProcurementCustomer order management groups
Reporting directly to relevant functional heads
e.g., Logistics, Sales, Marketing, etc.
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Traditional Supply Chain Management Organization
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The new supply chain organization:
Core supply chain functions are organized within SCM department and
responsible from development and execution of each of the core Plan, Source,Make, Deliver, and Return processes. (Transitional Models)
Business unit level, end-to-end supply chain function reporting directly to thehead of the business unit
Supply chain management group is responsible for achieving cross-functionaloperational objectives (i.e. inventory days of supply, order-fulfillment leadtime, or customer on-time delivery. )
Supply chain team do have full control over the resources responsible forexecuting the supply chain strategy
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New Appoach in Supply Chain Management Organization
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CREATING A SUPPLY CHAINORGANIZATION
Basic PrinciplesBorelik Experience in SCM Organization
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In todays business climate, adaptability and agility are the keys. Supplychain organization needs to keep up with the changes in the competition.
Achieving a superior design of SCM organization requires a deepunderstanding of
Underlying processes, Critical success factors,
Organizational dynamics
Company strategies are changing more frequently than ever. The
organization should be aligned to support the overall business strategy.
There should be an agreement on what internal core competencies areneeded and cross funtional coordination should be achieved.
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Basic Principles in Creating SCM Organization
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The organization should be capable of executing all required supply chainprocesseswhether through internal capabilities or strategic partnershipswith companies that can provide required competencies.
Metrics are in place to provide objective information about organizationaleffectiveness. Supply chain performance should be evaluated and monitoredcontinuously.
Roles and responsibilities should be redefined by focusing on changed
objectives. New competencies and skills for newly required capabilities shouldbe developed.
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Basic Principles in Creating SCM Organization
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Basic Principles in Creating SCM Organization
Process complexity should be reduced. Lean transformation of supplychain management activities should be facilitated.
Seamless information flow structure should be developed in order tomake the whole SCM organization to reach required information.
In re-organization it should be keep in mind thatThere is no unique and universal definition for the supply chain
organization
There is no one-size-fits-all approach for crafting that organization.
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B Organization Early 2004
GeneralManager
SalesMarketing
Customer relationship
Purchasing&
PlanningTechnical Finance
&IT
A team was
established to
review the
organization
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Borelik SCM Re-organization - Before
Before:
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Reasons forre-structuringoftheorganization:
Boreliks vision: Create value to our shareholders by being the pioneer inindustrial partnership with the first class steel users
Increase in the scale of Borelik by the completion of the capacity extensioninvestment
Potential threads of the competitors & market conditions Customers rigorous expectations for delivery performance & stock levels.
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Borelik SCM Re-organization - After
After: GeneralManager
Supply ChainManagement
CommercialTechnical Finance
&IT
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CommercialDepartment:
Margin concentration Deals with the customers, signs the contracts and performs collection Deals with the suppliers, signs the contracts Marketing and CTR
Supply Chain Department:
Working capital concentration Improving on-time delivery performance
Follow up the contracts with suppliers Planning of the production lines Follow up the contract with clients
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Borelik SCM Re-organization - New organization
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To create planning and scheduling solutions are based on the principles of
constraint management and simultaneously consider demand, capacity and
material to generate production plans that can be fine tuned towards specific
business objectives:
maximum capacity utilization
minimum quantity of stocks, inventory lowest cycle times, just-in-time
production and delivery
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New Supply Chain ManagementDepartmentsobjectiveswereclearlydefinedandallignedwiththeoverallbusinessstrategyofthecompany
Borelik SCM Re-organization What has changed?
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Production Planning&Scheduling Determines the maximum capacity offer per period and product Ensures the balance charges/capacity Programs the tools by respecting the constraints in order to optimize
time Controls metal flows in the plant
Raw Material and Sales Planning Order / Capacity Management Raw material avalibility Confirms delivery terms
Follows the evolution of the orders throughout the production &Capacity
Informs the network on the follow-up of the orders General customer contacts (visits) Raw material tracking
Rolesandresponsibilitieswerere-defined
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Borelik SCM Re-organization What has changed?
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Cross-FunctionalCoordinationwas providedwithintheorganization
Core supply chain processes such as demand/order management, customer
service targeting, production scheduling, and distribution network
configuration require an end-to-end perspective that cuts across sales,
marketing, and operations.
Power of the functions (sales)
Lack of flexibility (production)
Commercial environment
Power of the individuals Argues between staffs
Rather, these activities require the input and feedback of other functions within
the company, as well as suppliers and customers.19
Borelik SCM Re-organization What has changed?
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Improvement projectsweredonetosimplifythe Supply Chainmanagementactivitiesandtoimprovethecustomersatisfactionbytaking VOC intoaccount.
Order and order change management
Intelligent order acceptance
Implement coil flow management & production monitoring system
Raw material management; Current sigma level 1,63 Target %30improvement
Seamlessinformation flowstructurewerereinforcedand
new ERP systemwasadapted.
i.e., SAP ERP, MES, BI and company specific Decision Support &Sheduling tools
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Borelik SCM Re-organization What has changed?
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RECRUIT POWERFUL STAFF
BE PATIENT BE DESIROUS
BE COMPULSIVE
BE INSISTENT
CONVERT ORGANIZATION TO TEAM
CREATE SUPPORTERS BE PROACTIVE INSTEAD OF DEFENSIVE
Supply chain organizational design can have a direct impact on a companysability to optimize material and information flows and do a better job ofmeeting customer needs, all with significant impact to both top and bottomlines:
Executive Team
Held together bya shared view of
the strategy
CIO
SMO
CFO
CEO
MKTG
OPS
R&D
HRO
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Borelik SCM Re-organization - Suggestions
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Inordertobalance
Voiceof Customer(VOC) & VoiceofBusiness (VOB)
Takecareofboth Industrial Needsand Commercial Envorienment
WORK MORE CLOSER AS UNIQUE TEAM
TECHNICAL; COMMERCIAL; FINANCE; SUPPLY CHAIN;HUMAN RESOURCES
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Borelik SCM Re-organization - Suggestions
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INTEGRATION WITHCUSTOMERBorelik & White Good Customers
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Understand betterUnderstand betterActAct
betterbetter
ServeServe
betterbetter
VOCVOC
ManegementManegement
Continuous and systematic VoC Collection
(Understand better)(Understand better)
Continuous and systematic VoC Collection
(Understand better)(Understand better)
Continuous improvement according to VoCs
(Act better)(Act better)
Continuous improvement according to VoCs
(Act better)(Act better)
Serving according to customer expectations
(Serve better)(Serve better)
Serving according to customer expectations
(Serve better)(Serve better)
Voice of Customer - VOC
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Industrial Partnership Customers
Projects dedicated to increase our integration in supply chain of white
goods customers have been implemented to ensure long term
Business :
% 100 supply with negative stock in sheets
Daily/Shiftly delivery in sheets
Integration with Kerim elik (SSC)
Order management & Follow up improvement
IT & ERP Integration
Customer Intergration Projects - Overview
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Objective:
Integration of BORELK and WHITE GOOD PRODUCERs SupplyChain in order to provide continuous, lean and low cost flow ofsheet metals to the customer via KERM ELK (Steel Service
Center).
Scope:
Order Management, Stock Management, Dispatching
Borelik- WhiteGood Customers SCM Integration
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Material Flow Diagram
BORELK
Gemlik
KERM ELK
Tuzla/Bursa
WHITE GOOD
PRODUCER
CR COIL CR SHEETHR COIL
PACKAGING MATERIAL
Borelik- White Good Customers SCM Integration
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Stock Management & Order Processing Principles
Borelik- White Good Customers SCM Integration
600 ton1200 ton 1200 ton 600 ton 600 ton
ARELKKONSNYE
STOK
HAFTA1 HAFTA2 HAFTA3 HAFTA4 HAFTA5 HAFTA6 HAFTA7
B HAMMADDE
K BOY KESMEGR
K DLME GRB ARA HAT
B Raw MaterialB WIP
Negative
Stock
Week1 Week2 Week3 Week4 Week5 Week6 Week7
K Slitting
LineK Slitting
Line
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White Good Producer
BORELK
Daily Sheet Requirements
Daily Consumption Rates
Monthly Coil Demand Forecast
Daily Stock-Order Information
KERM ELK
Daily Sheet Requirement Program
Monthly Sheet Demand Projections
Dispatch Information
Raw material Requirement & Production
Status
BorcelikWeb
Information Flow Structure
EDI
ERP - SAP
Borelik- White Good Customers SCM Integration
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EXAMPLE - B-WG ORDER PROCESSING &
STOCKING PRINCIPLES
LATE DAY1 DAY2 DAY3 DAY4 DAY5 DAY6
ALLOWANCE FOR SUPPLY: 3 DAYS
DAY4 DAY5 DAY6
WEEK3WG SHEET
PROGRAM
WEEK1WEEK2
WG CONSUMPTION
CONSTANT
2 WEEKS 1 WEEK 1 WEEK 2 WEEKS
1000 TON 500 TON 500 TON 1000 TON
WG WEEKL CONS MPTION : ~500
RAW MATERIAL SEMI-PRODUCTCSL/CIL+CTL
ENTRANCEBSH READY MATERIAL
READY MATERIAL TOTAL STOCK CAPACITY = 1000 ton
Borelik- White Good Customers SCM Integration
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B-WG SCM INTEGRATION PROCESS
DIAGRAM
Borelik- White Good Customers SCM Integration
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