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The Supply Chain Intelligence Company
Using Analytics to Build Solid Supply and Supplier Management Relationships
Keith Peterson, President & CEO | HaloLora Cecere, President & CEO | Supply Chain Insights
Nate Weaver, Senior Director of PreSales Engineering | Halo
Supply Chain Insights LLC Copyright © 2016, p. 3
About Lora Cecere
• Founder of Supply Chain Insights• “LinkedIn Influencer”
• Guest blog for Forbes
• Author of 4 books: Bricks Matter (2012), Shaman’s Journal (2014), Supply Chain Metrics That Matter (2014), Shaman’s Journal (2015)
• Partner at Altimeter Group (leader in open research)• 7 years of Management Experience leading Analyst Teams at Gartner
and AMR Research• 8 years Experience in Marketing and Selling Supply Chain Software at
Descartes Systems Group and Manugistics (now JDA)• 15 Years Leading teams in Manufacturing and Distribution operations for
Clorox, Kraft/General Foods, Nestle/Dreyers Grand Ice Cream and Procter & Gamble.
Contact Information: • Email: [email protected]• Blog: www.supplychainshaman.com (15,000 pageviews/month)• Forbes: www.forbes.com/sites/loracecere• Twitter: twitter.com/lcecere (7,500 followers)• LinkedIn: www.linkedin.com/in/loracecere (90,000 followers)• LinkedIn Influencer: www.linkedin.com/today/author/446631
Pressure Is On!
Supply Chain Insights LLC Copyright © 2016, p. 5
Current State
Supply Chain Insights LLC Copyright © 2016, p. 6
Top Five Elements of Business Pain:Volatility, Alignment, Data, Talent, Visibility
Supply Chain Insights LLC Copyright © 2016, p. 7
Who Has a Supply Chain That Is Working Well?
Supply Chain Insights LLC Copyright © 2016, p. 8
Not as Easy as We Thought….
Supply Chain Insights LLC Copyright © 2016, p. 9
Greater The Number of ERP Instances: The Larger Pain with Data
Differences by Number of Instances
Need for an Analytics Layer
ERP
SRM
APS
PLM
CRM
Operational Investments Workforce ProductivityAnalytics
Supply Chain Insights LLC Copyright © 2016, p. 11
Project Management
Supply Chain Insights LLC Copyright © 2016, p. 12
Growing Talent Gap
Maximizing the Value of Technology Trends
Supply Chain Insights LLC Copyright © 2016, p. 14
Confluence of Technologies
Supply Chain Insights LLC Copyright © 2016, p. 15
Data Strategy for….
Clouds?
Streams?
Lakes?
Supply Chain Insights LLC Copyright © 2016, p. 16
Analytics Maturity
Supply Chain Insights LLC Copyright © 2016, p. 17
Traditional Progressive
Project definition Large projects with known outcomes
Small projects that evolve
Funding Licensed deployments Cloud deployments
Type of data Structured transactional data
Unstructured and structured data
Data characteristics Data with low velocity Data with high velocity
Leadership Led by IT Led by the business
Process focus Inside-out Outside-in
Capabilities Better response Test and learn
Technologies Large, established vendors
Small and evolving technology sources
Shifts
Supply Chain Insights LLC Copyright © 2016, p. 18
Wrap-up
• Adopt new forms of analytics.• Business leaders must own
analytic platforms.• We must learn from the past to
unlearn, and then rethink supply chain processes. The starting point is rewiring our brains.
Effective Supply Chain Management
Focus on the things that matter
Inventory Management
Sales and Operations Planning
Executive and Financial Analytics
What do I know?When did I know it
When should I have known it?What should I know now?
Supply and Supplier
Management
Customer and Channel
Management
Supply and Supplier
Management
What we are• Heterogeneous data from multiple sources• Sit “on top” of enterprise, supplier, customer,
provider systems• Pre-Built Supply Chain templates• Comparisons and “What-Ifs”• Data Cleansing• Easy-to-Change, Configure• Executive/Manager/User-oriented• Rapid Time to Value• Alerting and Collaboration• Mobile
What makes Halo different?
What we are not• An ERP System• A functional process management system• A workflow system• A transaction reporting system
Halo Business Analytics for Supply Chain IntelligenceIncreasing transparency from customers to suppliers⏵ For business users and
data experts alike⏵ Leverage legacy tools and
data - No “rip and replace” ⏵ Non-proprietary platform at
fraction of the cost⏵ Easy to get up and running
– 4 to 6 weeks⏵ Collaborate with external
suppliers and data experts⏵ 252 global customers 96%
retention
About Halo
Manufacturing Retail Food and Beverage
Data driven companies trust their analytics to Halo
The Supply Chain Intelligence Company
Applying Business Analytics to Supplier Development
An Example
⏵ 7–10% average annual improvement in delivery responsiveness
⏵ 10–13% average annual improvements in quality
⏵ 22% lower product development times
The potential of supplier development
“(At GE) Over two years, emergency air shipments fell to nearly zero,
quality defects were almost eliminated, productivity more than doubled, and lost-time accidents
declined by 99 percent without GE expending any capital.”
Source: Best Practices in Supplier Relationship Management and Their Early Implementation. Rand Corp (2012).
Supplier Management
Supplier Scorecards have become the Holy Grail of supplier performance measurement, although most companies are less than satisfied with their systems in place to measure supplier performance.
Supply and Supplier Management
• Supply delivery network is fragmented• Data is spread across multiple systems,
difficulty in data integration• Historical data is not trusted, data lacks
credibility• Assessing trends is time consuming• Sharing data with suppliers is not easy• Metrics not strategically aligned with
the business goals• Too complex and difficult
Why is Supplier Management difficult and why does it fail?
• Major supply chain disruptions
• Lost Sales and Revenue
• Delivery problems (late or partial orders)
• Poor quality issues (returns from dissatisfied customers)
• Customer Satisfaction issues(and other issues that damage a company’s brand equity and credibility)
• High Expediting Costs and Penalties
• High Total Acquisition Costs
Failure to Manage Critical Supplier Performance
The Time Value of Supplier Intelligence
TIME“Event Horizon”Product not shippedInventory drops below
min.Order Cancelled
No time to respond
Why didn’t I know?Supplier Information and Metrics not defined
Poor, inaccurate dataData not available to executives from key sources
Supplier Management
Lost RevenueLost MarginHigh Total Acquisition Costs
High expediting costs
E2E Supplier VisibilitySuppliers at risk
Alternative SuppliersStrategic decisions
Standard costs
Solution• Automated Supplier Scorecard, dashboards, and reports to manage your global supplier base• Instant visibility into the metrics that matter (Cost, Delivery, Quality, Risk)• Clarity across the enterprise, purchasing and procurement department, and supplier base• Easily share reports with suppliers (how you measure them and how they can better perform)
Benefits • Improved efficiency and response times (proactive vs. reactive)• Reduce overall inventory and manufacturing downtime caused by shortages• Reduce spend and rush shipment costs (working capital)• Replace underperforming suppliers by understanding alternate suppliers• Clear goals
Halo for Supplier ManagementThe solution and the awesome benefits
Supply and Supplier Management
• How does my supplier base look in terms of performance?
• Which of my suppliers are performing the worst? Whom should I be concerned about?
• What is the performance scorecard of a particular supplier? How are they performing?
• Which suppliers should I consider replacing? Should I split my commodity purchases further to mitigate risk?
• What information do I need for the next QBR and/or negotiation session?
Concerns and problems we address
The road to supply and supplier developmentHow to achieve the best value
#1Know your
supplier
#2Scorecard
every supplier
#3P2P
Model
#4Develop Supplier
Base
#5Integrate
d Partnerin
g
“Golden Record”Master data mgmt.
Distributed reportingSolve supplier deficiencies
Supply sensingCollaboration tools
Payment-Invoice-PurchaseData integration
N-tier developmentSupplier networks
Image adapted from http://www.hicxsolutions.com/blog/compliance/purchasing-fraud-prevention/
Halo for Supplier Management
Your Control Tower for increased visibility, shared information, and better relationships with your suppliers.
Visibility Agility SharingTotal Spend by Supplier
Late Deliveries
Alternate Suppliers
Supplier Risk
Supply Disruptions
Late Shipments, Returns
Increased Demand
Quality Issues/Returns
Delays
Supply and Supplier Management
Cost: 30% (EPPV = 70%, Pay Terms = 30%)Quality: 30% (PPM = 100%)Delivery: 30% (OTD = 75%, Lead Time = 25%)Risk: 10% (SSI = 50%, SER = 50%)Economic Purchase Price Variance: the difference between the previous price paid and its current price, multiplied by the actual number of units purchased
Payment Terms: # of days allowed to pay off the amount due
Defective Parts Per Million: calculated based on the total number defects received versus the total number of items received
On-Time Delivery: Percentage of on-time product deliveries against promise dates under normal operating conditions
Lead Time: Days between order date and delivery date
Supplier Stability Index and Supplier Evaluation Risk: Financial health of your suppliers, who is likely to cease operations and close their doors
Completely configurable based on your needs
Supply and supplier relationshipsHow to achieve the best value?
1. Manage the total business with each supplier
2. Measure and shape supplier performance
3. Involve key suppliers in product
4. Promote dialogue with suppliers
5. Recruit skilled personnel
6. Develop personnel to know suppliers in-depth
Source: Best Practices in Supplier Relationship Management and Their Early Implementation. Rand Corp (2012).
Let’s keep talking
Keith PetersonPresident & CEO
www.slideshare.net/[email protected] |888.300.0219
@Halo_BI