stefan mittmann, intracom -- tinos, may 2001 1 much every supply chain is not as weak as its weakest...
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Stefan Mittmann, INTRACOM -- Tinos, May 2001
Every Supply Chain is NOT as weak as its weakest Link –
it is MUCHMUCH weaker !
Stefan Mittmann, INTRACOM -- Tinos, May 2001 2
SUPPLY CHAIN MANAGEMENT
The simple mathematical MODEL and ..
.. the complex REALITY of Intracom
Stefan Mittmann, INTRACOM -- Tinos, May 2001 3
‘Handheld Calculator’ Model
• no cost• no training• very true• everybody understands
it
Stefan Mittmann, INTRACOM -- Tinos, May 2001 4
A simple chain with 9 elements
Calculate the total efficiency of this chain
.9 x .9 x .9 x .9 x .9 x .9 x .9 x .9 x .9 = 38.7% !
90% 90% 90% 90% 90% 90% 90% 90% 90%
Stefan Mittmann, INTRACOM -- Tinos, May 2001 5
Chain Efficiency Examples
1. 90 90 90 90 90 90 90 90 90 = 38,7% all 902. 90 90 90 90 90 90 90 90 99 = 42,6% one 99, other 903. 91 91 91 91 91 91 91 91 91 = 42,8% all 914. --- 90 90 90 90 90 90 90 90 = 43,0% one link less5. --- --- 90 90 90 90 90 90 90 = 47,8% two links less
6. 90 95 95 95 95 95 95 95 95 = 59,7% one 90, other 957. 95 95 95 95 95 95 95 95 95 = 63,0% all 958. 95 95 95 95 95 95 95 95 99 = 65,7% one 99, other 959. --- 95 95 95 95 95 95 95 95 = 66,3% less one link
10. 90 99 99 99 99 99 99 99 99 = 83,0% one 90, other 9911. 98 98 98 98 98 98 98 98 98 = 83,4% all 9812. 99 99 99 99 99 99 99 99 99 = 91,4% all 9913. --- 99 99 99 99 99 99 99 99 = 92,3% one link less
Stefan Mittmann, INTRACOM -- Tinos, May 2001 6
Keeping the BALANCE is important
HIGH links can be expensive & rarely increase revenues LOW links dramatically reduce performance
Service Level / Performance
Cost
max
Revenues
Stefan Mittmann, INTRACOM -- Tinos, May 2001 7
The role of our CUSTOMER
The Customer is the FIRST and LAST LinkThe Customer sets the required efficiency level Is the Customer balanced ?
Stefan Mittmann, INTRACOM -- Tinos, May 2001 8
Improving Chain Efficiency
Improve efficiency of ALL links Improve or Replace weakest linkEliminate weakest link / ConsolidateSubcontract / Outsource (Specialist Sub-
Chain)Keep the Balance
Stefan Mittmann, INTRACOM -- Tinos, May 2001 9
Intracom’s Supply Chain Data
20,000+ different items Big range of categoriesBig range of quantities1,200+ SuppliersEurope, USA, Far EastSubcontractors (mechanical parts)
Stefan Mittmann, INTRACOM -- Tinos, May 2001 10
The basic Steps of the Chain
CustomerRequirements
ProductDevelopment
MRP Process
CustomerOrder
Orders toSuppliers
Procurementof Raw
Materials
Manufact/ingof Parts
Shipment ofParts bySupplier
Receiving &Inspection
Manufact/ng& Testing ofEquipment
Shipping toCustomer
StorageSTART
END
CUSTOMER PLANNING / PROCUREMENT MANUFACTURING
Stefan Mittmann, INTRACOM -- Tinos, May 2001 11
Proactive Supply Chain Management
Normal Items (90 % of the parts, require 40% of the management effort
CRITICAL Items (10 % of the parts, require 60% of the management effort
Stefan Mittmann, INTRACOM -- Tinos, May 2001 12
Proactive Supply Chain Management
Project Management Type of Activity Identify Critical PathSet clear PrioritiesEverybody help the weakest link
Stefan Mittmann, INTRACOM -- Tinos, May 2001 13
Proactive Supply Chain Management
All Problems can be solved effectively if properly identified in due time
Reliable flow of up-to-date information
Go to the Source of the info !
Stefan Mittmann, INTRACOM -- Tinos, May 2001 14
A clearer picture …