energy supply chain development overview - alberta, … · council of supply chain management...
Post on 15-May-2018
217 Views
Preview:
TRANSCRIPT
BWDumsday & Associates Ltd.
1
Energy Supply Chain Development Seminar
Alberta Supply Chain Overview
Government of Alberta
Holiday Inn Express November 29th, 2012
BWDumsday & Associates Ltd.
What is a Supply Chain?
2
Supply chain consists of the flow of products and services from:
Raw Material Suppliers Component and Intermediate Manufacturers End Product Manufacturers/Assemblers Wholesalers and Distributors and Retailers/End Users
Connected by transportation and storage activities
Integrated through information, planning and integration activities
Many large firms are moving away from in-house Vertically Integrated structures to Supply Chain Management
BWDumsday & Associates Ltd.
What is a Supply Chain?
3
Transportation & Storage Activities
Information/Planning/Activity Integration
Raw Material
Suppliers
Intermediate Component
Manufacturers
End-Product Manufacturer (Assembler)
Wholesalers/ Distributors
End-Users (Customers)
Product & Service Flow
Recycling & Returns
BWDumsday & Associates Ltd.
Typical Alberta Supply Chain
4
Typical Alberta supply chain consists of four basic players serving the Oil & Gas sector
Four supply chain participants consist of:
Industrial Distributor Product Assembler Component Manufacturer Material Supplier
Participants can be local, within North America or
Global (also applies to End-Users/Customers)
BWDumsday & Associates Ltd.
Customer and Supplier Relationships
5
Supplier Relationship
Customer Relationship
End-User Demand
Industrial Distributor Assembler Component
Manufacturer Material Supplier
BWDumsday & Associates Ltd.
What is Supply Chain Management?
6
The design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer
Institute for Supply Management
Managing supply and demand, sourcing raw materials and parts, manufacturing and assembly, warehousing and inventory tracking, order entry and order management, distribution across all channels and delivery to the customer
The Supply Chain Council
The planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities…also includes coordination with channel partners, which can be suppliers, intermediaries, third-party service providers and customers
Council of Supply Chain Management Professionals
BWDumsday & Associates Ltd.
What is Supply Chain Management?
7
Old Paradigm:
Firm gained synergy as a vertically integrated business encompassing ownership and coordination of several supply chain activities
Organizational cultures emphasized short-term, company focused performance
BWDumsday & Associates Ltd.
What is Supply Chain Management?
8
New paradigm:
Firm in a SC focuses on area of specialization and enters into voluntary and trust-based relationships with suppliers and customers
All participants in the SC benefit
Boundaries are dynamic and extend from “the firm’s suppliers’ suppliers to its customers’ customers (i.e. 2nd tier suppliers and customers)
SCs now deal with reverse logistics to handle returned products, warranty repairs and recycling
BWDumsday & Associates Ltd.
Importance of Supply Change Management
9
Businesses have discovered value-enhancing and long-term benefits
WHO BENEFITS MOST?
Businesses with:
Large inventories Large number of suppliers Complex products Customers with large purchasing budgets
BUT
ALL BUSINESSES CAN BENEFIT
BWDumsday & Associates Ltd.
Importance of Supply Change Management
10
Firms using Supply Chain Management:
1. Start with key players
2. Move on to other suppliers, customers and shippers
3. Integrate second tier suppliers and customers
REMEMBER: second tier refers to the customer’s customers and the supplier’s suppliers
BWDumsday & Associates Ltd.
Importance of Supply Change Management
11
Cost savings and better coordination of resources are reasons to employ SCM
Reduced Bullwhip Effect – the magnified reduction of safety stock costs based on coordinated planning and sharing of information
Collaborative planning, forecasting and replenishment activities reduce Bullwhip Effect and lead to better:
Customer service Lower inventory costs Improved quality Reduced cycle time Better production methods and Other benefits
BWDumsday & Associates Ltd.
Alberta Supply Change Management Examples
12
Design and Steel Fabrication Facility (Edmonton)
Custom design and welding services
Formed a strategic alliance with a major steel supplier that initially supplied 5% of annual requirements
Using sound supply chain principles, volumes grew to 75% of annual spend of steel bar and plate purchases
During the process, reduced costs by up to 26% on selected materials
Relationship resulted in faster turnover and thus, lower inventory levels to provide higher levels of service
BWDumsday & Associates Ltd.
Alberta Supply Change Management Examples
13
Custom Metal Fabrication (Red Deer)
Service oil & gas, agriculture and mining industries
Has a secondary business to supply steel to other small manufacturers that are unable to attract interest from major suppliers
Worked with their major supplier to increase delivery cycle but this increased their responsiveness
Transportation costs increased only modestly but average inventory levels declined
Cut their lead time in half by ordering less but more frequently
Cash flow increased for all participants
Expanded customer base
BWDumsday & Associates Ltd.
Alberta Supply Change Management Examples
14
Manufacturer of Oilfield Equipment (Calgary)
Primarily focused on the oil & gas sector
Supply chain collaborative innovation program enabled them to build strong relationships with major suppliers
Relationships allowed for:
Better balancing of inventory levels Faster and more reliable supply Managed variability in time of high demand
Reduced overall operating costs
Allowed them to re-focus their Lean efforts
BWDumsday & Associates Ltd.
Alberta Supply Change Management Examples
15
Manufacturer of Valves (Edmonton)
Prime focus is on the oil & gas sector
Supply chain collaborative innovation program allowed them to establish a strong alliance with a supplier based in Ohio
New supplier:
Offered improved technology and allowed replacement of a Texas-based supplier
Allowed dramatically reduced inventory levels/improved cash flow
Facilitated transport in flow
Ultimately moved a portion of annual purchases to local foundry
Operated at 1/3 less inventory than under Texas-based supply
BWDumsday & Associates Ltd.
Supply Chain Collaborative Innovation Program
16
Overview
All about building relationships with suppliers and customers to enhance performance of supply chain
“Hands-on” and practical
Based on “Best Practices” of organizations such as Cisco, Proctor & Gamble, Toyota, Honda and others
Content contains some of the secrets that these organizations have used to achieve great results in:
Reducing costs Improving on time delivery/Reducing lead time and inventories Increasing cash flow/Improving profitability Creating more innovation and a greater competitive advantage
BWDumsday & Associates Ltd.
Supply Chain Collaborative Innovation Program
17
Two Phases
Phase 1: Discovery process of why participants can benefit from collaboration along their supply chain and how to begin the process
One-day working session, using simulations to demonstrate the power of Lean supply chain processes
Phase 2: Takes participants through the process of learning “Best Practices” of how to do it
Day and a half session followed by a half-day for participants to develop a 120-day Action Plan to ensure process moves forward
ALL FOUR ALBERTA SUPPLY CHAINS PARTICIPATED IN
AND BENEFITED FROM THE PROGRAM
BWDumsday & Associates Ltd.
Current Trends in Supply Chain Management
18
Expanding the Supply Chain
Businesses are expanding partnerships and building facilities in foreign markets
Expansion involves:
Breadth – foreign manufacturing, office and retail sites, foreign suppliers and customers
Depth – second and third tier suppliers and customers
BWDumsday & Associates Ltd.
Current Trends in Supply Chain Management
19
Increasing Supply Chain Responsiveness
Firms increasingly need to be more flexible and responsive to customer needs
Supply chains need to benchmark industry performance/meet and improve on a continuous basis
Responsiveness improvement will come from more effective/faster product and service delivery systems
BWDumsday & Associates Ltd.
Current Trends in Supply Chain Management
20
Purchasing
Long-term supplier relationships
Supplier management – improve performance through:
Supplier evaluation (determining supplier capabilities)
Supplier certification (third-party or internal certification to assure product quality and service requirements)
Strategic partnerships – successful and trusting relationships with top-performing suppliers
BWDumsday & Associates Ltd.
Current Trends in Supply Chain Management
21
Operations
Demand management – match demand to available capacity
Linking buyers and suppliers via MRP and ERP systems
Use JIT to improve “pull” of materials to reduce inventory levels
Employ TQM to improve quality compliance among suppliers
BWDumsday & Associates Ltd.
Current Trends in Supply Chain Management
22
Logistics
Transportation Management – trade-off decisions between cost and timing of delivery/customer service via trucks, rail, water and air
Customer Relationship Management – strategies to ensure deliveries, resolve complaints, improve communications and determine service requirements
Network Design – creating distribution networks based on trade-off decisions between cost and sophistication of the distribution system
BWDumsday & Associates Ltd.
Current Trends in Supply Chain Management
23
Integration
Supply Chain Process Integration:
When supply chain participants work for common goal
Requires intra-firm functional integration Based on efforts to change attitudes and
adversarial relationships
Supply Chain Performance Measurement – crucial for firms to know if procedures are working
top related