TheValuePropositionofSupplyChainManagement0Manu-facturerTier2SuppliersTier1SuppliersWholesalerorDistributorRetailerorDealerConsumers“ThePowerofBusinesstoBusinessIntegration〞

BenchmarkingPartners,December1998Costisoneofthemajordriverstoextendthetraditionalenterprise.60%ofvariablecostsofanorganizationaredrivenbydecisionsthatareexternaltotheorganization.1Logisticsexpenseincludes:FinishedGoodsTransportationWarehousingOrderEntry/CustomerServiceAdministrationInventoryCarryingCost@18%—NorthAmericanAnnualTotalLogisticsCostChangeinPercentage—Source: CouncilofLogisticsManagement1997AnnualConferenceProceedings,LogisticsCostsandCustomerServiceLevels(HerbertW.Davis&WilliamH.Drumm)Thepasteffortshavenotbeenwithoutconsiderablerewards.-50%-30%-10%10%30%50%838485868788899091929394959697%ofSales$/CWT$/CWT=Dollarsperhundredweight.2

BestinClassAverage12Source:LogisticsManagement,April1997Yet,supplychaincostreductionstillrepresentsasignificantbusinessopportunity…...SupplyChainSpendasaPercentageofRevenues$34$37$34$20$15$8$4$10$162SizeofGapinBillions3VALUETHEORYholdsthattoincreasethevalueofacompany,youmustincreasecashearningsinexcessofitsfullcostofcapitalinasustainablefashionThesupplychainmustcontinuetodriveshareholdervalue.4RevenueCostsWorkingCapitalFixedCapital—ImpactofSCM—Greatercustomerservice(i.e.,highermarketshare,greatergrossmargins)LowerrawmaterialsandfinishedgoodsinventoryShorter“order-to-cash〞cyclesShareholderValueProfitabilityInvestedCapitalSCMhascontributedtoincreasedshareholdervaluebyimpactingtraditionalvaluelevers.Fewerphysicalassets(i.e.,trucks,warehouses,materialhandlingequipment,etc.)Lowercostofgoodssold,transportation,warehousing,materialhandlinganddistributionmanagementcosts5CostsAssetsCustomer

ServiceStrategicandFinancialImpactTheimprovementofSCMhassignificantstrategicandfinancialimpactsonbottomlineactivities.ShareholderValueCreationCustomerServiceLevelIncreaseSupplyChainVariabilityReductionInventoryReductionCycle-timeCompressionFinancials/Metrics.ROA94%98%In-stockavailabilityLeadtimeAbilitytotailortospecific

customerneedsFixedPurchaseCostVariableManufacturingTrans/DistributionObsolescence/MarkdownAdministrative/TransactionManufacturingDistributionCentersInventory6BestinClasscompaniesenjoysignificantadvantageovertheircompetitors.TotalSupply-ChainMgmt.Cost“Foracompanywithannualsalesof$2billionanda60%costofsales,thedifferencebetweenbeingatthemedianintermsofperformanceandbeinginthetop20%is$176millioninworkingcapital.〞7.06.30%2%4%6%8%10%12%14%19961997RevenueBestMedian37318702040608010012019961997CalendarDaysCash-to-CashCycleTime13.111.61051997PRTMStudy735347866010203040506070809010019961997DaysofSupply949471810%10%20%30%40%50%60%70%80%90%100%19961997TotalDaysofSupplyOn-TimeDeliveryPerformanceBestMedianU.S.Dept.ofCommerceestimatesthatmanufacturershavecutinventoriesby9%inthe1990’ssavingabout$82Billion[Fortune3/3/97].BestinClasscompaniesenjoysignificantadvantageovertheircompetitors.1997PRTMStudy8Forperiod1988-1996;SourceStrategicSupplyChainAlignment,1998500%AboveAverage3000%AboveAverage250%AboveAverageIndustryleadershavedemonstratedthesignificantvaluethatsuccessfulsupplychainscancreate.PointofSaleDataandFlowThroughDistribution“RetailDirect〞StrategyInvestmentinDistributionNetwork9InventoryTurns50timesperyearThe1997AndersenConsultingGlobalElectronicsStudy(GES)showedthattotalinventoryintheU.S.technologyindustrysupplychainwasaround$0.5-1.5trillionandturnedlessthan10timesperyear.SupplyChainOpportunitiesforEHTIndustryStill,therearepotentialInventoryReductionOpportunities10-30%Inter-enterprisePostponement10-30%Intra-enterprisePostponement40-65%Direct-to-CustomerSales10-25%Joint(Collaborative)PlanningSource:AC-Stanford-Northwestern’sCDDNStudy,also1996U.S.Censusdata10-Inter-CompanySupplyChainPractices-AlltheTimeNotatAllLowerHigherLowerHigherLowerHigherLowerHigherLowerHigherLowerHigherLowerHigherSupplierOwnedOrManagedInventoryThirdPartyLogistics(Warehousing)ThirdPartyLogistics(Transportation)ThirdPartyLogistics(InformationManagement)ElectronicInformationSystemstoManageChannelFillRatesandReplenishmentCustomerAccesstoInternalSystemstoTrackOrderConfiguretoOrderStrategy543210LowerPerformersHigherPerformersSource:ManufacturingManagerResponses(4/2/97data)ThematerialcontainedinthispresentationisconfidentialandproprietarytoAndersenConsulting.4C-15Higherperformingglobalelectronicscompaniesintegratemoreextensivelyacrossthesupplychain.11Substantialvaluecreationhasbeenidentifiedforcomputersupplychain.AndersenConsulting’sCDDNStudy-BenefitsSummary-SuppliersSemic.StorageAssemblersDistributorsRetailersInv.MarginValue-- -- 10%-70% 10%-100% ---- -- .7%-4.7% .5%-4.9% ---- -- $70-$470M $10-$102M --Inv.MarginValueInv.MarginValue-- -- 10%-70% 10%-100% --5.3% 2.0% 2.2% -- --$69M $18M $145M -- --Compressed

SupplyChainCollaborativePlanningDesignforResponsiveness10%-25%10%-25%10%-25%10%-25%10%-25%.6%-1.4%.6%-.7%.7%-1.8%.5%-1.2%.7%-1.6%$9-$23M$4-$9M$70-$181M$10-$26M$26-$64M12Supplychainbreakthroughhasrealizedinsignificantbenefits.TypicalLevelsofSupplyChainBenefits:Benchmark Improvement

Deliveryperformance 16-28%Inventoryreduction 25-60%Fulfilmentcycletime 30-50%Forecastaccuracy 25-80%Overallproductivity 10-16%LowerS.C.costs 25-50%Improvedcapacity 10-20%Source:AMR&PRTMBreakthroughareas:IntegratedDemandandSupplyPlanningNewbusinessmodelsandportfoliosofbestrelationshipsStrategicSourcingandeProcurementeCustomerlinkedtoDemandChain13Whichshouldcomefirst?SCMorERP?CustomerValueSupplychainplanningERPGlobalfinancialsLowHighTickettoEntryLow-HangingFruitHardNuttoCrackNarcissisticTimetoProduceNetValueWarehousemgmt.ShortLongSource:

Gartner

Group,1998

SCM ERPROI(times) 5to15 1.5to2Payback in 2to3Period months yearsAchievinginternalefficienciesisimportant,however,theexternalintegrationcanmakethedifferencebetweenmarketleadershipandfailure.Highreturnsfromexternalintegrationcanbeachievedevenwheninternalintegrationisnotverysophisticated.Itisn’tnecessarytowaituntilyourinternalintegrationeffortsarecompletetobeginexternalintegrationinitiatives.(KenRoss,ExtricitySoftware,Inc.)14供給鏈管理的價值15制造商第二層供給商第一層供給商批發商或分銷商零售商或經銷商顧客“ThePowerofBusinesstoBusinessIntegration〞

BenchmarkingPartners,December1998本錢是擴展傳統企業的主要推動力之一.機構的60%可變本錢由機構對外的決策所支配16后勤開銷包括:產成品運輸倉庫費定貨手續/ 客戶效勞管理倉儲本錢 @18%—北美每年總的后勤本錢變化百分比—Source: CouncilofLogisticsManagement1997AnnualConferenceProceedings,LogisticsCostsandCustomerServiceLevels(HerbertW.Davis&WilliamH.Drumm)過去的努力不是沒有回報-50%-30%-10%10%30%50%838485868788899091929394959697%ofSales$/CWT$/CWT=Dollarsperhundredweight.17

最好

平均12Source:LogisticsManagement,April1997然而,供給鏈本錢降低仍存在巨大的商業時機...供給鏈消耗占銷售收入的百分比$34$37$34$20$15$8$4$10$162SizeofGapinBillions18價值理論為了讓企業增值，必須以能夠持續經營的方式將收入提高到超過總本錢供給鏈一定會推動股東的利益.19收入本錢營運資本固定資本—SCM的影響—更強大的客戶效勞(如，更高的市場份額,更多的毛利)更低的原料及產成品的庫存更短的“定單變現〞周期股東價值收益性投資資本SCM通過對傳統價值杠桿的影響，為增加股東的價值做出奉獻更少的實物資產(如,卡車,倉庫,原料處理設備,等)更低的商品銷售、運輸、倉儲、材料處理及分銷管理本錢20本錢資產客戶效勞戰略及財務的影響

SCM改善對有戰略及財務具有巨大影響創造股東價值客戶效勞水平提高供給鏈變動性降低庫存減少周期壓縮財務衡量ROA94%98%現貨供給能力交付周期根據客戶特殊要求定制的能力固定采購本錢可變制造本錢運輸/發行本錢無形磨損費/減價管理/交易本錢制造行業的資產分銷中心庫存21最好的公司得益于巨大的競爭優勢.總供給鏈管理本錢“對于年銷售收入為20億及60%的銷售本錢的企業，中等層次的企業與前20%的企業之間的運營資本的差異為1.76億美圓。7.06.30%2%4%6%8%10%12%14%19961997收入最好中等37318702040608010012019961997天數現金周轉周期13.111.61051997PRTMStudy2235347866010203040506070809010019961997供應天數949471810%10%20%30%40%50%60%70%80%90%100%19961997總供給天數按時供貨最好中等美國商業部門估計，制造業在20世紀90年代降低了9%的庫存，節省了820億美圓[財富3/3/97].最好的公司得益于巨大的競爭優勢.1997PRTMStudy23Forperiod1988-1996;SourceStrategicSupplyChainAlignment,1998高于平均水平500%高于平均水平3000%高于平均水平250%行業巨頭證明供給鏈的成功帶來的巨大價值貫穿整個銷售過程的銷售信息及流程“直銷策略〞分銷網絡的投資24庫存周轉率為50次/年1997安達信全球電子行業研究顯示，美國科技企業供給鏈的總庫存約為$0.5-1.5萬億，并且庫存周轉率低于10次/年對于高科技電子行業的供給鏈盡管如此，仍存在減少庫存的潛力10-30%企業內部的延遲10-30%企業外部的延遲40-65%直銷10-25%協同方案Source:AC-Stanford-Northwestern’sCDDNStudy,also1996U.S.Censusdata25-企業內部供給鏈實踐-總是根本不差好差好差好差好差好差好差好供應商擁有或管理庫存第三方后勤(倉儲)第三方后勤(運輸)第三方后勤(信息管理)電子信息系統管理渠道供應與補充客戶訪問內部系統跟蹤定單制訂定貨策略543210差好Source:ManufacturingManagerResponses(4/2/97data)ThematerialcontainedinthispresentationisconfidentialandproprietarytoAndersenConsulting.4C-15優秀的全球化電子公司廣泛地整合供給鏈26計算機行業的價值鏈創造了價值.AndersenConsulting’sCDDNStudy-受益情況-