Supply Chain Exam 2

SCOR - Plan

Demand and supply planning including balancing resources with requirements establishing/communicating plans for the supply chain

Designing and Implementing a Successful CRM Program

Determine what problems the CRM program is intended to solve Develop the CRM plan Seek Employee Buy-In

Supply Chain Perspective: Supplier Partnerships

Have a few capable and reliable suppliers cultivate long term relationships

SCOR - Make

Make-to-stock, make-to-order, and engineer-to-order production execution including scheduling production activities, producing, testing, packaging, staging, and releasing product for delivery, finalizing engineering for engineer- to-order products, managing work-in-process, equipment, facilities, and the production network.

Perfection: Quality at the source

Mistake proofing Statistical process control Empower employees

Challenges of measuring supply chain performance

Multiple decision makers Power distribution Members may have different competitive strategies Members may participate in other supply chains Silo mentality (lack of supply chain perspective)

CRM Plan

Objectives Fit Options Requirements

Functions of Performance Measurement

Communication Evaluation Improvement and Control

Pull System

Product is pulled through based on actual demand

% breakdown of Successful CRM programs

50% people 30% process 20% technology

CRM

A core business strategy for managing and optimizing all customer interactions across and organization's traditional and electronic interfaces.

What is SCOR?

A framework, language, and set of performance measures for companies seeking to improve Supply Chain performance Typically used to benchmark performance against other firms that use the SCOR model

What is lean?

A philosophy and set of techniques to achieve high-volume flexible processes with minimal waste

Benefits of a balanced scorecard

Align objectives consolidated look

Characteristics of a World Class Performance Measurement Systems

Align with strategy Easy to capture, implement, and understand Linked to areas that are important to customers Flexible

Balanced Scorecard

An approach to performance measurement aimed at aligning an organization's performance measures with its strategic plans and goals.

ERP Package Options

Best of Breed Modules + Middleware Piecemeal - a few modules at a time Full package from a single provider

Goals of a successfully CRM program

Bring value to customers Increase sales Develop relationships with customers Make customers feel valued Provide additional services that add value and create customer satisfaction

Issues with traditional approaches to measuring performance

Can measure the symptom and not the root cause

Reading the Tea Leaves at Tea and More

Can only purchase twice a year Long lead times (3months) Info lag due to production facility and HQ separation cant accommodate immediate customer needs sales people cant afford gas and thus lose customers sales people are independent and don't work for TAM

World Class Performance Measures must be

Consistent with strategy Linked to areas that are important to customers

Why does CRM fail?

Delegating CRM to 3rd parties or IT departments Focusing on collecting data, analytics and designing databases

Balanced Score card 4 perspectives

Financial perspective Internal business process perspective Customer perspective Learning & growth perspective

Traditional approaches to measurement

Financial statistics Productivity and utilization Performance standards and variances

Lean Principles

Flow Pull Perfection Waste elimination

Things to consider when purchasing a CRM package

Hardware/software requirements and networking capability Data capacity and number of users Security Reporting capability Ease of use and flexibility After sales support Cost

edaixi (eWash): Digital Transformation of Laundry Services

Heavily relied on 3rd parties Used in house and e-stewards for logistics lacked the abilities offline stores had issues stemming from 3rd parties included quality and brand promotion threat of new entrants coming

Developing World-Class Performance Measures

Identify strategic objectives Develop understanding of each functional area's requirements for achieving the strategic objectives Design performance measures for each function that track each required capability VALIDATE, DEPLOY, REVIST periodically

Trends in CRM

Increased focus on data security Continued use of social media Cloud-based systems

Lean Implementation and Supply Chain Development at Oak Hills

Inefficient and obstructive facility layout Old, worn down, time consuming machinery Poor demand forecasting and frequent disruptive rush orders Ineffective quality control Low employee morale Lack of vendor management

Importance of ERP

Integrates the internal business activities of an organization by allowing it to operate under same information system Provides a mechanism for sharing information with supply chain members

Why SCOR is beneficial?

It is useful because it provides a common language for companies who subscribe to it so that they can directly compare their process activities and performance.

Why is CRM so important right now?

Lower brand loyalty More options (competition)

SCOR - Deliver

Order, warehouse, transportation, and installation management for stocked, make-to-order, and engineer-to-order product including all order man- agement steps from order inquiries and quotes to routing shipments and select- ing carriers, warehouse management from receiving and picking to loading and shipping product, invoicing customer, managing finished product inventories, and import/export requirements.

The Seven Deadly Wastes

Overproducing Overprocessing Waiting Excess Inventory Excess movement Scrap and Rework Transportation

The Supply Chain Operations Reference Model (SCOR) Categories

Plan Source Make Deliver Return Enable

Best of Breed Modules + Middleware Pros and Cons

Pro: Cheaper and more customized Con: compatibility issues and can take longer to get to market

Piecemeal pros and cons

Pro: go slowly and evaluate each module as you go and lower capital cost Con: not fully integrated initially

SCOR - Enable

Processes that support the design and management of the planning and execution processes of supply chains.

What lean can do

Reduces inventory which in turn exposes risks that can then be identified and fixed (ship and water example)

SCOR - Return

Returns of purchased materials to suppliers and receipt of finished goods returns from customers including authorizing and scheduling returns, receiving, verifying, and disposition of defective or excess products, return replacement or credit, and managing return inventories.

Seven Rs of Good Customer Service

Right Product Right Quantity Right Condition Right Place Right Time Right Customer Right Price/Cost

Lean Manufacturing: Scheduling production lead time batch size inspection layout empowerment inventory turns flexibility costs

Scheduling - pull production - customer order lead time - short batch size - small inspection - 100% at source by workers layout - product flow empowerment - high inventory turns - 10+ flexibility - high costs - lower and decreasing

Traditional manufacturing: Scheduling production lead time batch size inspection layout empowerment inventory turns flexibility costs

Scheduling - push to forecast production - to stock lead time - long batch size - large batch and queue inspection - sampling by inspectors layout - functional empowerment - low inventory turns - <7 flexibility - low costs - high and rising

Key components of CRM

Segmenting Customers Predicting Customer Behavior Determining Customer Value Personalizing Customer Communications Automating the Sales Force Managing Customer Service Capabilities

SCOR-based benchmarking used to:

Set reasonable performance goals based on the SCOR model Calculate performance gaps against a global database Develop company-specific roadmaps for supply chain competitive success

Advantages of ERP

Single database and common software infrastructure Real time information Supply chain visibility

SCOR - Source

Sourcing stocked, make-to-order, and engineer-to-order products including scheduling deliveries, receiving, verifying, and transferring product, authorizing supplier payments, identifying and selecting suppliers, assessing supplier performance, managing incoming inventory and supplier agreements.

Perfection: reduction of variability

Standardize work Perform preventive maintenance Safety capacity

Example of a World Class Performance Measurement Systems

Strategy = Quality measure - defects and customer satisfaction OR Strategy = cost measure - cost

Disadvantages of ERP

Substantial capital investment (in some cases) System complexity Need to reengineer business processes

ERP Implementation Requirements

The user's business processes must conform to the approaches used in the software logic Accurate inputs Training and support

Reasons ERP Implementations Fail

Top management commitment resources training communication business process reengineering

Typical Supply Chain Performance Metrics

Total Supply Chain Costs Cash-to-Cash Cycle Time Production Flexibility Perfect Order Fulfillment Environmental Performance

What is ERP?

Umbrella system that ties together a variety of specialized systems.

7 sins of CRM

Viewing it solely as technology lack of customer centric POV Not understanding CLV Insufficent top management support Failing to reengineer business processes Underestimating the challenges of integrating various sources of data Underestimating the challenge of fostering change

Perfection: Employee Involvement and Continuous Improvement

Worker suggestions from all levels Establish a culture of continuous improvement (kaizen) Cross train workers to provide flexibility

Flow: Cellular Layout

Workstations are located next to one another and laid out sequentially to facilitate a smooth flow of material with minimal transport or delay Each cell is focused on a narrow range of products and contains all of the resources required for these products

Lean is not...

a batch and queue system

Poka Yoke

a technique used to prevent mistakes

Cash-to-Cash Cycle Time

average number of days between paying for raw materials and getting paid for product

SC Production Flexibility

average time for a supply chain member to provide an unplanned, sustainable 20% increase in production

Customer Life time Value

avg annual profits X NPV of future profits

Perfect Order Fulfillment

percentage of orders among supply chain members that arrive on time and damage free

Kaizen Events

short-term, cross-functional focused, intense process improvement

Total SC Management Costs

the costs to process orders, purchase materials, purchase energy, comply with environmental regulations, manage inventories and returns, and manage supply chain finance, planning, and information systems.

Environmental Performance

the percentage of supply chain trading partners that have become ISO 14000 certified the percentage of supply chain trading partners that have created a director of environmental sustainability the average percentage of environmental goals met

How are abnormalities signaled?

via an andon board