Revitalizing Supply Chain

for XYZ An Automobile

Leader

CONTENTS

Supply Chain Assessment

New Design - Overall benefit
Supply chain blueprint and process flows
Review mechanisms
Implementation requirements from

stakeholders

SUPPLY CHAIN ASSESSMENT METHODOLOGY

SCOR Level 1
Supply Chain
Metrics

Customer Facing

Internal Facing

Supply
Chain
Reliability

Cost

Delivery
Performance

Line Order
Fulfillment

Flexibility
and
responsiven
ess

Perfect Order
Fulfillment
Supply chain
Response time

Production
Flexibility

Total Logistics Cost

Assets

QUANTITATIVE PERFORMANCE ASSESSMENT

SUPPLY CHAIN PRACTICE ASSESSMENT

There is Need for Redesigning the Supply chain

..

CONTENTS

Supply Chain Assessment

New Design - Overall benefit
Supply chain blueprint and process flows
Review mechanisms
Implementation requirements from

stakeholders

THE NEW DESIGN CAN REDUCE LEAD TIMES BY

30-40% AND IMPROVE THE FILL RATES BY 20-30%

d Times can be reduced by 30-40%

Days

Baseline
Baseline performance
performance
New
New design
design performance
performance

Sourcing LT

Dispatch LT
Manf LT

rates will be Improved by 20-30 %

Percent

Line Fill Rate

Perfect Order Fill

rate

resulting
resulting in
in improved
improved
supply
supply chain
chain
performance
performance
Optimal
Optimal design
design
Customer
Customer orientation
orientation
Minimal
Minimal made-tomade-tostock
stock inventory
inventory
points
points

Best-in-class
Best-in-class support
support
processes
processes
Forecasting
Forecasting

Sourcing
Sourcing
Order
Order and
and dispatch
dispatch

THE NEW DESIGN CAN REDUCE INVENTORIES BY

50-60% AND REDUCE POTENTIAL
LOST/DEFERRED SALES BY 9-10%

entories can be reduced by 50-60%

Days of inventory

Raw
material
WIP
Finished
goods

nd lost/deferred sales are not likely

Percent

Lost / deferred sales

at SKU levels in
baseline
Likely lost /
deferred sales in
future

Baseline
Baseline performance
performance
New
New design
design performance
performance

resulting
resulting in
in improved
improved
supply
supply chain
chain
performance
performance
Optimal
Optimal design
design
Customer
Customer orientation
orientation
Minimal
Minimal made-tomade-tostock
stock inventory
inventory
points
points

Best-in-class
Best-in-class support
support
processes
processes
Forecasting
Forecasting

Sourcing
Sourcing
Order
Order and
and dispatch
dispatch

THERE WILL BE OVERALL BUSINESS IMPROVEMENTS

BY REDESIGNING THE SUPPLY CHAIN
Internal Facing
Improvements

Return On
Investment
Inventory
Reduction

IMPROVED BUSINESS

Improved
Margins
Percent

Customer Facing
Improvements

Improved
Sales
Percent
Customer
Satisfaction
Increase in
Sales

CONTENTS

Supply Chain Assessment

New Design - Overall benefit
Supply chain blueprint and process flows
Review mechanisms
Implementation requirements from

stakeholders

SUPPLY CHAIN REDESIGN APPROACH WILL ENSURE

SERVICE LEVELS BY MEETING END-CUSTOMER
BREAK POINTS, AND MINIMIZING INVENTORY AND
DISTRIBUTION COSTS
High level steps to redesign

Understand customer break points for various part categories

Establish target service levels around customer break-points
Design supporting network structure and set inventory and
lead time norms

Design key supply chain processes forecasting, sourcing,

order processing and dispatch

Outline KPIs organizational and IT support requirements

Develop supply chain transition plan

DESIGN IS BASED ON CUSTOMER BREAK-POINTS AND

IS SUPPORTED BY DETAILS OF ALL 4 KEY PROCESSES
Begin with
the
customer

Understand
customer
segments

Identify
breakpoints for
each segment

Develop the
solution

and define the

details

Ordering and
Dispatch
Develop
overall
supply
chain
blueprint

Forecasti
ng
Production
planning
Sourcin
g

IN THE END-STATE, IT-ENABLED SYSTEMS WILL

MANAGE INFORMATION FLOWS ACROSS THE SUPPLY
CHAIN
Marketing
Suppliers

Dealers

Production
XYZ

Information
systems
Key
informati
on

Enterprise
Resource
Planning

Supplier
Relationship
Management

Purchase orders
Order status

Master Demand

Schedule (MDS)
Master Production
Schedule (MPS)
Manufacturing
Resource Planning
(MRP)

Web-enabled
field input
system

Field inputs for order

enquiry status
Dispatch plan

THE NEWLY DESIGNED SUPPLY CHAIN PROCESSES WILL

ADDRESS ROOT CAUSES OF KEY CURRENT PROBLEMS
Area

Root causes

How addressed in new design

Forecast

Weak processes
Inadequate scope
Poor measurement

Standard tool and process

Direct linkage to sourcing plan
Clearly defined KPIs

Weak processes

Clearly defined process

Supplier agreements on lead times and

accuracy

Sourcing
accuracy

Large lead time

delivery dates

variability

Order

Inadequate norms

processing
accuracy

Delays in part

New norms to satisfy breakpoints

Stronger sourcing process due to
tighter monitoring of supplier
performance

availability

Dispatch

Variations in shipment

accuracy

processing time
Processing delays at
transporters

Standard dispatch rules

Dispatch plan prepared
Transportation service level
agreement

NEW PERFORMANCE MANAGEMENT SYSTEM

A balanced scorecard
should include all
relevant categories to
measure business
performance
Financi
al

Operatio
nal

Custom
errelated

People
related

FEATURES OF GOOD
SCORECARDS
Specific performance
measures / metrics

Pick a few metrics grouped into

categories (e.g. financial,
operational, etc.)
Align selection with corporate
objectives
Focus measures on past, present
Targets
and future
Set targets
for both
short
and
Give
important
metrics
higher
long-term
weight
Establish realistic base targets
and clearly articulate stretch
targets
Make stretch uncomfortably
aggressive but not
unreasonable
Ensure targets of individual units

CONTENTS

Supply Chain Assessment

New Design - Overall benefit
Supply chain blueprint and process flows
Review mechanisms
Implementation requirements from

stakeholders

2 CATEGORIES OF REVIEWS TO MONITOR ONGOING

PROGRESS AND TO DRIVE DESIGN IMPROVEMENT
Category
Category 1
1
Implementation
Implementation review
review

Objectives
Objectives

Category
Category 2
2
Design
Design review
review

Review progress against Improve design

targets set for Key
Performance Indicators
(KPIs)

Provide support for

elements to meet bestin-class performance

Implement new tools

debottlenecking
implementation

Approve minor changes

in design

Timing
Timing

Regular frequency
Weekly with process
owners
Monthly with functional
heads
Quarterly with Steering

Significant changes in
conditions
(customers/competitors)

New systems within

plant (e.g., lean
manufacturing)

CONTENTS

Supply Chain Assessment

New Design - Overall benefit
Supply chain blueprint and process flows
Review mechanisms
Implementation requirements from

stakeholders

CIL WILL NEED TO UNDERTAKE SEVERAL CHANGES TO

ENSURE SUCCESSFUL RESULTS FROM THE SUPPLY
CHAIN INITIATIVES
Near-term
changes

Type of
change /
actions

Organizational

Action
required
by

Dealerships
Marketing
Manufacturing

realignment

Policy development
IT actions

Long-term
changes

Organizational
redesign (crossfunctional)

Leadership Team

WHY ZENSAR

Supply chain redesign at

ABC

Supply chain revitalization at DEF

PROJECT ESTIMATES

PROJECT ESTIMATES - TIMELINE

PROJECT ESTIMATES - FINANCIALS