Understand the Supply Chain

8/12/2019 Understand the Supply Chain

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Understand the Value Chain,

Understand the Market,Understand the Industry andUnderstand the Customer

David WaltersInstitute of Transport and LogisticsUniversity of Sydney


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AssetsEquity

RevenuesAssets

ProfitRevenues

Productivity

Materials Flows/Time

Profitability

Cash & Transactions Flows/Time

Customer,

Corporate &

Partner Value

Expectations

Information Flows/Time

Stakeholder/Investor Value

The Basis of the Business Model


3/50

Inboundlogistics Operations

Outboundlogistics

Marketingand Sales

Service

Firm Infrastructure

HRM

Technology Development

Procurement

Margin

Value and Cost is Added throughout the Value Chain

Note for Porter this is essentially a cost reduction model

Porters Value

Chain:1985


4/50

The IMS (Intelligent Manufacturing Systems) Vision

Forum 2006 identified four agents of change forNext Generation Manufacturing:

Customised solutions integrating capabilities

through products, services, and information to meetindividual customer requirements.

A lean approach minimising waste and

emphasising resource utilisation

The Competitive Batch of One creating individualsolutions in a cost-effective (and profitable) way;

and

Time instant delivery of service to all customers


5/50

The virtual factory of the future willmanufacture in adaptable value chainnetworks linking medium and large-sized

OEMs with value chain partners andsuppliers of factory equipment/servicesselected according to needs at a given

time. Its composition will not be limited bythe presumption of physical co-location, norby a need to maintain long-term

relationships(Executive Summary, Manufuture-EU, 2006)


6/50

A value chain network based business model

Collaboration

Added Value

Added Value

Interpreneurship:

Integration

and

Coordination

Co-opetitionCo-productivity

Co-creativity

(Demand Management)

(Resource Management)

StakeholderExpectations

StakeholderValue Delivery

Co-destiny

SRM

CRM

DellNikeLeviIkea


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Ecological Concerns

Energy scarcity and pricing concerns Resource conservation management

Accessibility controls on threatened

resources and heritage locations.

SustainabilityConservation of resources (recyclable products EU)

Managed consumption Product-service formats

Applied reverse logistics Mandatory waste recycling

Environmental compliance and stewardship

HR/workplace conditions compliance

Regulation Product codes and labels RFID

Delivery vehicle access (size, hours)

Consolidationdeliveries in large urban areas -

geographic-centric-logistics

Time and size controls on vehicle access

Liberalisation of product service resellers

Taxation on infra-structure use

Economic Change

China, India, Brazil will continue to be

significant in resources consumption

New and large, emerging middle class

aspirations and spending power in the NED

countries June 08

Sep 08 Global loss of confidence in financialsystems accompanied by losses on investment

markets


9/50

Traditional Approaches

Were/Are:

New Approaches Are/Or Are

Becoming

CommandControlVertical/hierarchical structuresSuboptimal productivityReactive market responsesInter-organisational competitionGeneric and mass customisedsolutionsLagged/limited content/expensive

system communicationsRestricted interactionsEntrepreneurship andIntrapreneurship

IntegrationCoordinationHolistic/virtual structuresSuper-optimal productivity*Proactive market responsesInter-organisational collaborationCustomer specific product-servicesolutionsInstantaneous/comprehensive

content/low cost communicationsComprehensive interactionsInterpreneurship*

Super-optimal productivity refers to the ability to couple processes such as design anddevelopment through ICT (information communications technologies) to increase productivityin a time space (24 hours) by operating in a number of global locations linked by ICT.

Interpreneurship refers to the management expertise required to integrate the resources

(assets, processes, and capabilities) of an alliance or partnership comprising a number ofindependent organisations.


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Fixed Assets

Tangible

Intangible

NCA

NCA

Fixed Assets

Tangible

Intangible

Market Revenues

Operating Margin

Operating Margin

Additional Revenues from Network SpecialistsKnowledge Management (Enablers)

iMarket characteristics

iDetailed knowledge of supply markets

iProduct & process applications

Technology Management (Enablers)

iICT (Information Communications Technology)

iRate of change of innovation

iTechnology IntegrationiApplication

iTime managementiDistributed manufacturing

Process Management (Enablers)

iScaleiScopeiIntegration

iCoordination iDifferentiation

iSpecialisation

Relationship Management (Enablers)iIntegration/Coordination

iCooperationi Co-creativity

iCo-productivity iCo-opetition

Financial Gearing

High

Financial Gearing Low

Operational Gearing High

Operational Gearing Low

Market Revenues

Cash Flow Management

Operations

Asset management

Strategy opt ions

Structure opt ions

Dell

IKEANikeLi and Fung


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VC

Revenues$

Vol

FC

VC

Revenues$

Vol

B/Even B/Even

VC + FC = TCVC + FC = TC

FC


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Questions

iWhat is the customer value to be delivered?iWhat are the preferred product-service

format alternatives?iWhere is the R&D expertise?iWhat are the assets, processes andcapabilities required for success?iWhat are the investment implications (capital,capacity, forecast utilisation?)iAre they already available?iWho owns them?iWhich of them are core to the market

opportunity?iWhat are the competitive issues?iAre there enablers that are required?iDo complementors exist?

Questions and DecisionsiHow and where and by whom will theproduct be manufactured?iWhat are the product-service production formatalternatives?iWho will deliver the product?iAnd how?iHow will the value be serviced and reinforced?iWhat are the cost profile alternatives?

Design andDevelopment

Procurement

Production

Service

Marketing

Logistics

Effective Value Chain Network Management Thinks the Problems Through

Who "owns and manages"

the processes andactivities is function of

strategic effectiveness

and operational efficiency

Customer and Market ResearchiMarket/segment volumeiCustomer/Market value driver characteristicsiCompetitive productsiCompetitive value delivery systemsiOpportunities for value and revenue enhancement

Complementors

CaterpillarRolls Royce Engines


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A value chain network based business model

Collaboration

Added Value

Added Value

Interpreneurship:

Integration

and

Coordination

Co-opetitionCo-productivity

Co-creativity

(Demand Management)


StakeholderExpectations

StakeholderValue Delivery

Co-destiny

SRM

CRM

DellNikeLeviIkea


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Delivering theValue Proposition

Customer andPartner ValueExpectations:The ValueProposition

Accurate andTimely

Value DeliveryCustomers and

Partners

CustomerRelationshipManagement

Added Value

Resources Decisions

SupplierRelationshipManagement

Added Value

Integration

and

Coordination

Agile

Market

Development

Distribution

Services

Choice

Service Support

Quality

Complexity

Flexibility

Reliability

Innovative

Response time

Capacity

Capability(ies)

Style/Aesthetics

DellIKEA

NikeLi and Fung


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Customer(s)

Coordinator

Fixed value chain networks createstronger supplier/customer

relationships built on long-term

relationships based on an

understanding of mutual

objectives: Automobile industry

(Toyota)

Fixed Value chain

networks:

Automobile Indust ry

Aerospace


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Customer(s)

Coordinator

Involvement in

Competitive Value ChainValue chain networks

Variable

Customer

Expectations

Flexible

Value chain

networks:

Apparel

Industry

Flexible value chain

networks offer variable

responses to meet

changing market

requirements


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Li & Fung Response Management

Integrate and Coord inate:

hAssets, Processes & CapabilitieshOperations Facilities and NetworkshLogistics Services

Customer Marketing and

Customer Services

Complexity

Rapid Time

Response

Quality

Volume

Customer ConceptDesign and Value

Proposition

Li and Fung Response Management Model

(Flexible Network)

7500 Suppliers37 Countries


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ProcurementMarketing and

Selling

Supplier

Relationship

Management

Value

Delivery

Service

Complex Systems the (High Value Low Volume) Business Model

Target Customer Group B2B: Solutions Seekersh

Large enterprisesh

IP basedh

High Value-Low Frequency transactionsIndustry Value Drivers: Knowledge and Relationship ManagementAerospace, Medical/Healthcare equipment and components

Customer Oriented ResearchSupplier RD&D

Operationsh Evaluate Strategic & Operational OutsourcinghCustomised solutionshModular/system integrationhProject/Specialist production systemshCollaboration/Cooperation

h Innovative product-serviceshPre-transaction-Transaction-

Post-transaction hProduct-Service- Solution basedhContinuoushCustomised

Customer

Relationship

Management

Serviceand

Production/

Processing

Demand Chain

Analysis:

Customer and

Partner

Expectations:

Value Drivers

Resources

Needs and

InternalAvailability

Product-Service

and Market

Options and

Specifications

Investment

Required

Externally

Available

Research &

Development

Concept Design

and Value

Proposition

LogisticshModular assemblies hMFI MTO DTO hProduct-Service

hShared technology platformshERP MRP JIT EDI RFID hTailored Logistics

Value Chain Organiser Role

(hPartnership IntegrationhControlhCoordination)


(Demand Management)

hRelationship marketinghPartner Collaboration andCooperation


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Target Customer Group B2C: hMass market distributors & consumershPrice-Led satisfactionhLow Value-HighFrequency transactionsIndustry Value Driver: Process Management: Systemised Products & TransactionshFMCG productshApparel hHousehold hardware

Market Potential Oriented

Research (Applied use ofProcess led R&D)

hBrand management

hDistributor relationships

hMedia driven

hGeneric service offer (warranties)

hTransaction based extra packages

Logistics

hCFPRI hGeneric

hEDI RFID GPI hCost-led

Procurement

Marketing and

Selling

Value

Delivery

Customer

Relationship

Management

ServiceProduction/

Processing

Supplier

Relationship

Management

and

Demand Chain

Analysis:

Customer and

Partner

Expectations:

Value Drivers

Resources

Needs and

Internal

Availability

Product-Service

and Market

Options andSpecifications

Investment

Required

Externally

Available

Research &

Development

Concept Design

& Value

Proposition

Operations

h Evaluate Strategic & Operational Outsourcing

hProcess/Flow production systems

hStandard productsiStandardprocesses

hExperience Effect processes


(h

Partnership Integrationh

Controlh

Coordination)

(Resource Management)(Demand Management))

Volume Operations the (High Volume Low Value) Business Model


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The Future Business Environment

Capital shortage but no/low retained earningsIncreasing aversion to risk

Financial gearing declinesReturns spreads will increase

Strategic & Transformational alliances

will increase

Operational gearing declinesFixed Costs/Variable Costs

Regionalisation vs GlobalisationIncreasing use of Network Management

Co-creationCo-productivityCo-opetition

Importance of Emerging EconomiesLabour costs

Specialisation (ICT India)But there are likely to be Politico/EconomicfactorsSustainability and recyclingEnergy availability and the development ofalternative energy sourcesProduct-services become Customer SolutionsProduct-service design becomes focused onwho and where it will be manufactured and how

it will be supportedProduct Life Cycles will be determined byDemand Technology CyclesSustainability and Resource Conservation maybe built into Government contractsCompliance with International work place HR

The Future Business B2B

Regionalisation vs GlobalisationIncreasing use of lean operationstime/cost saving techniques

MRP/DRPJIT/QR logistics/VMIEDI RFID GPICPFR/ECR/ERPDTO/BTO/BFI

Increasing use of NetworkManagement Suppliers &Customers:

Co-creationCo-productivityCo-opetition

The Future Consumer B2C

Conservative in making long termcommitments risk averseValue/Quality/Durability/Price Fit

Value in UseHigh suitability for purposeService supportMass customised

exclusivityVariety/ChoiceRapid service response

Strategic Operations Management

Decisions

Access to resources will bepreferred to Ownership. Theacceptance of leveraged assets willbe commonplaceNetwork Management based uponan understanding of Industry Value

Drivers becomes essential for CAKnowledge managementTechnology managementRelationship managementProcess management

Logistics Futures

The customer centric logisticssystemLife-cycle logisticsNetwork Based logisticsICT-led Interactions to reduceinvestment in fixed and working capital Fourth party logistics

Fifth party logistics Reverse logisticsGreen logisticsLean logistics


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Thank you ......

...... Your turn now


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Value Chain Processes

Design and Procurement Manufacturing Marketing Service

Development

IndustryVisionary andCoordinator

BrandManager

ContractManufacturer

ProcessSpecialist

Product-Markets

AutomobilesComputers Dell

Sports equipmentFashion Nike

Consumer durablesPC assembly

Design specialists, R&DBuying consortiaBranded exclusive components IntelNet-based marketingMaintenance services

Positioning Alternatives in the Value Chain

Value Chain

Role(s) Logistics

Complementors

Automobile FinanceTravelComputersHomeownershipHealthcareinsurance


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Individual organisations with specialistassets, processes and capabilities(STRENGTHS) and limitations(WEAKNESSES).no design & development and nomarketing

The incentive to join a value chain andpartner with firms that have specialistprocurement and production and take theOPPORTUNITY to make greater use oftheir distinctive capabilities and to eliminateweaknesses!!!

Production

Service

Customer

Expectations

Value

Delivery

Integrating into an Industry Value Chain

Resources

Assets

Processes

Capabilities

Procurement

Haier


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Value

Chain

Positioning (1)

Processes

DistinctiveCapability(ies)

Capabilities

Assets

Current/DesiredPositioning

hAdvantage?hNecessity?hDisadvantage?

RiskProfile(s)


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Value

Chain

Positioning (2)

Profitability

Customer

ValueExpectations

Return onInvestment

Productivity

ShareholderValue

Expectations

Supplier/PartnerValue

Expectations

Cash Flow


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Customer and Stakeholder

Partner Value Drivers

Research, Design andDevelopment

Procurement and Production

Marketing and SalesOperations

Distribution Services andAdministration

Customer ServicesManagement

Value Delivery

Demand ChainAnalysis

ResponseManagement

Value ChainNetwork

Management

Vertical Networks

Horizontal Networks

The evolving value

chain network

Co-

productivityCollaboration

Competition

Co-opetitionValue Proposition Options


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Value Migration in the Pharmaceutical Industry: Share of Value and Investment Emphasis

An increase in the serv ice expectations

of healthcare specialists has resulted on

a number of service specialists in the

value chain

Marketing activities

have attracted anincreased share of

added value due to the

development of co-

opetition (firms using

each others sales &

promotional assets for

non-competitive

products

Collaborative procurementand manufacturing has

incr eased the added-value

content of thereby shifting

the focus of the progressi ve

pharmas down stream

withi n the value chain. Share

of added-value is captured

by M&A activities and

alliances. Specialists

manufacture both generic

and patented drugs

Low ROI on R&D has

encouraged many companies

to work with Bio-techs on

research and development

Procurement

Research, Design &Development

Marketing

Supply Relationships Management

Production Service

Customer &Partner

Expectations

ValueDelivery

Customer Relationships Management

Customer &Partner

Expectations

Supply RelationshipsManagement

Production Marketing

Service

ValueDelivery

Customer RelationshipsManagement

Research,Design &Development

Procurement


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33/50

Procurement Marketing

and Selling

ValueDelivery

Service

Logisticsh System platformsh BFI BTO DTO h Genericservice

hERPMRPJIT hCost-ledQR

Semi-Complex Systems the (Medium Value Medium Volume) Business Model

Customer Segment Oriented Research

Demand ChainAnalysis:

Customer and

Partner

Expectations:

Value Drivers

ResourcesNeeds

andInternal

Availability

Product-Service and

Market Optionsand

Specifications

Investment

Required

ExternallyAvailable

Research &Development

Operationsh Identify low cost/tax locations suitablefor operationshIndustry and product range standardparts modules & componentshIndustry/Group purchasinghMass customisationhShared product

platformshStandard components

hSegment focusedhBrand managementhDistributor relationshipshMedia driven


Serviceand

Production/Processing

Product-ServiceConceptDesign &

ValueProposition


Value Chain Organiser Role(hPartnership IntegrationhControlhCoordination)

Target Customer Group B2C: Seeking Cost-Efficient ExclusivityhLooking for quasi-customisation at moderate prices hPrice-exclusivity satisfactionhModerate value-low frequency transactionshConsumer durablesIndustry Value Drivers: Process and Relationship ManagementMotor automotive and consumer durables


34/50

Leveraged technology using expertisegained from another industry sectorenables Bishops Technology GroupSydney to manufacture dedicatedproduction equipment for automotivemanufacturers

ValueExpectations ValueDelivery

Process Management Options(Organisation Structure)Decisions)

Products based on standard modulesreduces inventory holding and orderlead times providing a 5/10 orderresponse time in comparison withcompetitors 4 weeks or more. Codancommunications equipment supplier,Adelaide

Based on: Roberts P (2006) LocalFactories are Holden their own,

Australian Financial Review, 19 April

R&D led customised manufacturingthat requires extensive knowledgeIP inputs provides customers withmarket exclusivity/differentiation

without extensive R&D expenditureBosch Melbourne

Building robust, reliablemachines for series production(continuous high volumeoutput) is the next stepBishops Technology Group

Superior quality of systems andmanagement (flexibility and complexity)has resulted in negotiated supplier lead

times of 2 weeks and order responsetimes for customers of 4 weeks. GPCElectronics, Sydney

Examples of Aust ralian companies have adapted to the value chain network approach

Victoria Carpets have invested $40 million toensure they are competitive with smallerproduction run sizes allowing the Company torespond to customer expectations for shorterlead times on small volume orders.

Robins and Sons (a womensfashion shoes producer) operates acellular, manufacturing system witha mobile multi-skilled labour forcethat enables the organisation to

meet a two week lead time asopposed to the six months that istypical from off-shore suppliers


35/50

Response

Management

Product-service

specification

and design

Customer

Services

Management

Value

Delivery:

Distribution

Marketing and Sales

Operations

Distributor & CustomerRelationship

Management

Customer

Value Drivers

Target

Customer/

Market

Demand

Chain

Analysis

Value

Proposition

Value Delivery

Considerations

& Implications

Service

Delivery &

Management

Market

Opportunity

Analysis

Product-Service

Profile

Product/Service

CharacteristicsMarket Entry

Network

Market Management

Networks

Demand

Chain

Management

Procurement,

Production Management

& Inventory Management

SupplierRelationship

Management


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37/50

t

Identify Value

Expectations

Communicate

the Value

Create

the Value

Service the

Value

Deliver

the Value

Produce the Value

Adding Value to

Customers

Innovative Products &Service

Value Proposition

Customisation

Use existing & provenproprietary components

"Design" servicesupport concurrentlywith product design

Quality

Build-to-OrderModular construction

Standard components

Increase customerperformance

Service Information

Location Availability

Information

Product Platforms

Orderresponse time

Flexibleresponse

Reliability

Influence operatingcosts

Order response time

Flexibleresponse

Product-ServiceAvailability

Time-to MarketResponse

Production

Service

Marketing

Logistics

t

w

8

3

3

38

3

3

Identifying the Customer Facing Processes that Create Added Value

Procurement


38/50

Current perspectives on the evergreen topic theproduct life cycle are of interest. The product life

cycle is but one concept that has been debated bymarketing theorists for some time. Its value is `thatit provides insights into a product's competitivedynamics


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Sales

Time

Demand technology life cycle

Demand life cycle

A technology dr iven PLC

Organisational

Product Life

Cycles


40/50

Sales

Time

Demand life cycle

Demand technology life cycles

Investment decisions in the PLC

Innovators

Imitators

OrganisationalProduct Life Cycles

Imitators


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Sales

Time

Demand technology life cycle

Demand life cycle

Imitator individual product life cycleshProduct enhancementhProcess technology developmentshCost decreases

Product Life Cycles and Technology Li fe Cycles

Innovator product life cycleshNew technologieshProduct innovationhNew product applicationshProcess innovation


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Competitive InnovationAdvantage

Competitive Market CoverageAdvantage

Competitive Brand Strength

Advantage

Competitive Process/Cost leadershipAdvantage

Demand Life Cycle

DemandTechnology LifeCycles

Time

Suggested by: Lindgren M and H Banhold,(2003) Scenario Planning, Palgrave Macmillan,Basingstoke, UK

Sales

?


43/50

ProcurementMarketing and

Selling

Supplier

Relationship

Management

Value

Delivery

Service

Complex Systems the (High Value Low Volume) Business Model

Target Customer Group B2B: Solutions SeekershLarge enterpriseshIP based hHigh Value-Low Frequency transactions

Industry Value Drivers: Knowledge and Relationship ManagementAerospace, Medical/Healthcare equipment and components

Customer Oriented ResearchSupplier RD&D

Operationsh Evaluate Strategic & Operational Outsourcing

hCustomised solutionshModular/system integrationhProject/Specialist production systemshCollaboration/Cooperation

h Innovative product-serviceshPre-transaction-Transaction-

Post-transaction hProduct-Service- Solution basedhContinuoushCustomised

Customer

Relationship

Management

Serviceand


Demand Chain

Analysis:

Customer and

Partner

Expectations:

Value Drivers

Resources

Needs and

Internal

Availability

Product-Service

and Market


Investment

Required

Externally

Available

Research &

Development

Concept Design

and Value

Proposition

LogisticshModular assemblies hMFI MTO DTO hProduct-Service

hShared technology platformshERP MRP JIT EDI RFID hTailored Logistics


(hPartnership IntegrationhControlhCoordination)


(Demand Management)

hRelationship marketinghPartner Collaboration andCooperation


44/50

Target Customer Group B2C: hMass market distributors & consumershPrice-Led satisfactionhLow Value-HighFrequency transactionsIndustry Value Driver: Process Management: Systemised Products & TransactionshFMCG productshApparel hHousehold hardware

Market Potential Oriented

Research (Applied use ofProcess led R&D)

hBrand management

hDistributor relationships

hMedia driven

hGeneric service offer (warranties)

hTransaction based extra packages

Logistics

hCFPRI hGeneric

hEDI RFID GPI

hCost-led

Procurement

Marketing andSelling

Value

Delivery

Customer

Relationship

Management

ServiceProduction/

Processing

Supplier

Relationship

Management

and

Demand Chain

Analysis:

Customer and

Partner

Expectations:

Value Drivers

Resources

Needs and

Internal

Availability

Product-Serviceand Market


Investment

Required

Externally

Available

Research &

Development

Concept Design

& Value

Proposition

Operations

h Evaluate Strategic & Operational Outsourcing

hProcess/Flow production systems

hStandard productsiStandardprocesses

hExperience Effect processes


(Resource Management)(Demand Management))

Volume Operations the (High Volume Low Value) Business Model


45/50

Procurement Marketing

and Selling

ValueDelivery

Service

Logisticsh System platformsh BFI BTO DTO h Genericservice

hERPMRPJIT hCost-ledQR

Semi-Complex Systems the (Medium Value Medium Volume) Business Model

Customer Segment Oriented Research

Demand ChainAnalysis:

Customer and

Partner

Expectations:

Value Drivers

ResourcesNeeds

andInternal

Availability

Product-Service and

Market Optionsand

Specifications

Investment

Required

ExternallyAvailable

Research &Development

OperationsiIdentify low cost/tax locations suitable

for operationshIndustry and product range standardparts modules & componentshIndustry/Group purchasinghMass customisationhShared product

platformshStandard components

hSegment focusedhBrand managementhDistributor relationshipshMedia driven


Serviceand


Product-ServiceConceptDesign &

ValueProposition



Target Customer Group B2C: Seeking Cost-Efficient ExclusivityhLooking for quasi-customisation at moderate prices hPrice-exclusivity satisfactionhModerate value-low frequency transactionshConsumer durablesIndustry Value Drivers: Process and Relationship ManagementMotor automotive and consumer durables


46/50

Volume

Customised-Led Offer

Product-Service-MarketStrategy Options

Price-Led Options

High Impact on Competitive Advantage

Position: Invest for as long as the capabilitycan be forecast to maintain the advantage

Low Impact on Competitive Advantage

Position: Outsource the capability at acost that ensures continuity of supply

Value Proposition (2)(Value-in-Use Characteristics)

Value Propositionbased on SelectiveCustomisation offers

Non-Price BasedDifferentiation

CustomisedProduct-Services

Mass Customised

Product-Services

Price-BasedDifferentiationCommodity

Product-Services

Complex Systems(Customised)

Semi-ComplexSystems

Product-ServiceCharacteristics

Matching Processes and Product -Service-Markets

Customer Value Drivers

Asset managementTime managementPerformanceCost managementInformation

Risk management

Volume OperationsUncomplicated Systems

Value Proposition (1)(Value-in-Use Characteristics)


47/50

Service

SRM Responses

CRM Responses

Value

Delivery

Consumer andCustomer/PartnerExpectations:Identify the

Value Drivers

COMPANY OPERATIONAL VALUE PRODUCTION FOCUS

Value Chain Planning & Control : Strategy Partnership Management Company Operations

Value Delivery Implementation

Identify the Value Create the Value Produce the Value Communicate the Value Deliver the Value Service the Value

PARTNERSHIP MANAGEMENT PROCESSValue

Delivery


Value Drivers

Design &Development

Procurement

Manufacturing

Marketing

Distributionand

Logistics

Service

ValueDelivery


Value Drivers STRATEGIC VALUE PLANNING FOCUS


48/50

Products Serviced

hNetworkshRouters, Switches, HubshSNA & IP NetworkinghInternet SoftwarehServers

iDesktoph

PCshNotebookshPrintershScreens

hSpecialist HardwarehLottery terminalshDigital PhotographichLegacy printershSpecialist hardware

hConsumer ProductshPlasma screens

hMulti Media PCshSet tops

Service Offer

iField SupportiOEM Vendor supportiOutsourcing Prime ContractorsiSystem Integrators

iCorporates with Direct Multi-SourceStrategies

iDepot RepairsiSupport Field ActivitiesiReturn to Depot ServiceiProduct Customisation & ReworkingiHigh Value Component RepairsiWarranties

iLogistics SupportiAsset Managementi

Service Parts Procurement andi Inventory ManagementiProject StagingiWarranty Repair Management

Design &Development

Procurement

Manufacturing

Marketing

Distributionand

Logistics

Service

ValueDelivery


Value Drivers STRATEGIC VALUE PLANNING FOCUS

Service Structure

iField SupportiEmbedded in customer organisationsiProject Teams/Roll OutsiTask Specific Field Teamsi

General Desktop SupportiAgency Network

iDepot RepairshNational Repair CentrehBranch OfficeshCustomer On sitehAgency Network

iLogistics SupporthCentral Logistics & WarehousehBranch Logistics SupporthAgent Logistics Management

For Example: The

Service Company within

the Value Chain: Role

and Tasks.

Customer and Consumer Expectations

Value Delivery


49/50

Mature and Developing Value Chains

It is suggested that value chains evolve over time.Much like products and markets they exhibit specificcharacteristics during their development cycle


50/50

A mature value chain is one in which the partners or stakeholders have a clear

view of their roles and responsibilities within the value chain. Typically theyidentify one or two processes that match their core resources (assets, processesand/or capabilities) and identify partner organisations with complementary coreresources.

Both Value Chain Partners (VCP) and Value Chain Customers (VCC) valueobjectives are met consistently, suggesting continuity and stability of membership.

Entry and Exit is stable.

Partnerships have optimal membership numbers.

VCP s have well defined roles and tasks that reflect their expertise and that areperformed to uniform satisfaction.

They are considered to be industry specialists.

Typically VCP focus on a limited range of processes

Documents

Understand the Supply Chain