1. Alan Waller - Chairman - Institute of Logistics and Transport - Vice President - Solving International - Visiting Professor - Cranfield School of Management Project Director - European Council on Global Supply Chain Chairman - ELUPEG

3. AGENDA Understanding the business world Understanding the customer Understanding the organisation Understanding the value chain Understanding the individual manager Barriers to success The way ahead

4. Global forces are shaping a radically different competitive environment

5. AGENDA Understanding the business world Understanding the customer Understanding the organisation Understanding the value chain Understanding the individual manager Barriers to success The way ahead

6. A new customer is emerging … Customers want buying to be easier faster cheaper more fun … real value Consumer lifestyles, their resultant expectations and needs, are changing, rapidly. Consumers are taking control and exercising choice in seeking the best combination of value, convenience and customisation on offer driving change, demanding, less tolerant, less time, fewer trips, more sceptical, buyers market, easier, cheaper, faster, meals not ingredients, solutions-based propositions - pressure on manufacturer brands as they will be “baked into” the product average food preparation time 1934 2.5hrs …… 1997 15 mins - for cash-rich, time poor consumers convenience is essential not merely desirable consumer lobby groups have become more vocal and organised - public health, food safety, animal rights, general concern for the future of the planet - public authorities taking a more regulatory & litigious (expensive) approach new rules on packaging and recycling, genetic foods, live animal transport, etc …. Invariably involve extra costs There are decreasingly "typical" consumers. Retail and FMCG businesses will have to deal with ever smaller and better defined segments of their market. The premium on customer knowledge is correspondingly huge. Many FMCG businesses are conceding "ownership" of the consumer to the retailer, as the latter have massive brand presence and are better placed to meet consumer demand for tailored solutions (through loyalty programmes, category management etc).Consumer lifestyles, their resultant expectations and needs, are changing, rapidly. Consumers are taking control and exercising choice in seeking the best combination of value, convenience and customisation on offer driving change, demanding, less tolerant, less time, fewer trips, more sceptical, buyers market, easier, cheaper, faster, meals not ingredients, solutions-based propositions - pressure on manufacturer brands as they will be “baked into” the product average food preparation time 1934 2.5hrs …… 1997 15 mins - for cash-rich, time poor consumers convenience is essential not merely desirable consumer lobby groups have become more vocal and organised - public health, food safety, animal rights, general concern for the future of the planet - public authorities taking a more regulatory & litigious (expensive) approach new rules on packaging and recycling, genetic foods, live animal transport, etc …. Invariably involve extra costs There are decreasingly "typical" consumers. Retail and FMCG businesses will have to deal with ever smaller and better defined segments of their market. The premium on customer knowledge is correspondingly huge. Many FMCG businesses are conceding "ownership" of the consumer to the retailer, as the latter have massive brand presence and are better placed to meet consumer demand for tailored solutions (through loyalty programmes, category management etc).

7. Suppliers will seek solution-based offers … They will focus on providing tomorrow’s customers with solutions shifting from commodity products to differentiated solutions world-class products and world-class service enthusing their customers Reaching out to understand their customers’ customers Suppliers will expect their suppliers to react in the same way

8. AGENDA Understanding the business world Understanding the customer Understanding the organisation Understanding the value chain Understanding the individual manager Barriers to success The way ahead

10. Business pressures in the new millennium The top 5 Globalisation Hypercompetition Focus on core competence Speed of change Stakeholder pressures

11. Globalisation “As the world shrinks, supply chains become longer and more complex” Alan Waller

12. Hypercompetition The customer demands excellence across all competitive dimensions Supply chain performance will make or break the competitive offering Businesses need to excel at designing and executing all key customer-facing business processes throughout the end-to-end value chain

13. Focus on core competence

14. Speed of change - fuelled by technology

15. Stakeholder pressures Customer pressures - attracting and retaining profitable customers Shareholder pressures - competing for funds - not just sales Employee pressures - competing for people - not just markets External pressures - legislation / regulators / environmentalists / public opinion

16. AGENDA Understanding the business world Understanding the customer Understanding the organisation Understanding the value chain Understanding the individual manager Barriers to success The way ahead

17. Developing a strategic supply chain vision The globalised Supply Chain must deliver the required service at the lowest total cost ...

18. Economies of scope in technology and innovation ...In automotive production resource sharing has already happened

19. Drivers of the 21st Century Supply Chain

20. “How do we deliver distinctive value and differentiated service to local customers whilst at the same time exploiting opportunities from a globalised view of supply chain?” How do we align the whole enterprise - people, processes,operations, technology, suppliers , other business partners - around a programme of progressive strategic change“?” “How do we futureproof, and build agility, into our supply chain operations in response to the pace of external change and ever increasing pressures from shareholders and competitors?”

21. Twelve Imperatives for Outstanding Supply Chain Performance

22. Managing at (or beyond) the pace of change Some key messages which emerge…. “Board level leadership is essential for success” “Agility to respond to changing market circumstances is key for survival… and can be a competitive weapon in its own right” “Don’t get locked in by assets, partnerships, people or systems” “Strategic change must be built into the ‘everyday job’ “ “Achieving agility should be seen as an investment, and therefore may require short term sacrifices” “The old model of strategy, design and implement is dead… the future model will be vision led… with continuous implementation, continuous benefits, “proving by doing” and pro-active adaptation of strategy”

23. The benefits – some recent experience

25. Outsourcing in the supply chain continues to grow reflecting focus on core competencies

26. Supply chain outsourcing requirements in the new millennium The top 5 help with developing strategic supply chain vision help with implementing supply chain vision access to economies of scale access to skills and competence access to technology and innovation

27. Drivers of Collaboration Between Supply Chain Players

30. Collaboration - putting technology into perspective

32. The Present – A Case StudyShow me the network! John DoranLogistics Director (until 30/9/03) Sony Europe – EMCS(Engineering, Manufacture & Customer Service)

33. Sony Europe EMCS logistics Current situation Direct control and influence Consumer electronics 3PL / 4PL Games – Playstation REE (Recording, Energy, Europe) BPE (Broadcast & Profesional Europe)

34. Current network locations

35. Network locations 2003/2004

36. Sony Europe EMCS logistics Warehousing mostly internal some outside Transport Very fragmented 125 companies 25 relationships with Deutsche Post 200+ accounts with DHL Project to rationalise

37. Who Can Satisfy Sony Requirements ? European One Stop Shop Channel Geography Relationship management Uniform standards Service KPI’s Tariffs Partnership Share risk & benefits Build long term Flexibility Allow our business to change Manage resource up & down Share risk Innovate What value to do you add? Why should I choose TNT above Versteijnen Transport?

38. How to move forward Improving European Transport/Logistics – Catalysts for Change Initiative Source Ranking Collaboration 1 Shippers 2= LSPs 2= E-Freight Exchanges 4 E-Marketplaces 5 Technology Providers 6 Capital Providers 7 Consultants 8 Source-European Survey Alan Waller 2001-2002

49. Collaboration-Conclusions The most important core skill for the future will be the ability to develop and sustain effective partnerships between providers, shippers, customers, business partners and with competitors This skill is probably the one shortest in supply at this point in time There is now an appetite for collaboration that is essential to drive forward improvement in Supply Chain Performance

50. AGENDA Understanding the business world Understanding the customer Understanding the organisation Understanding the value chain Understanding the individual manager Barriers to success The way ahead

51. Impact on the manager in the supply chain

52. AGENDA Understanding the business world Understanding the customer Understanding the organisation Understanding the value chain Understanding the individual manager Barriers to success The way ahead

53. Bridging the Implementation Gap

54. People and information are the critical ingredients and information depends on people

55. New mindsets and management behaviours are required

56. Leveraging Technology – the key issues “The technology is now available to do whatever we want in the supply chain ---- ---- the problem is that either it is not mature enough to be used or we are not mature enough to use it” Source – Discussions groups Logicon Interactive 2001 , 2002 & 2003

57. AGENDA Understanding the business world Understanding the customer Understanding the organisation Understanding the value chain Understanding the individual manager Barriers to success The way ahead

58. The Way Ahead Stand back and take a careful look at where you sit in your supply chain Decide the critical elements of the proposition to the end customer and how the total supply chain needs to help deliver this Decide what your critical focus needs to be and which other supply chain players are critical to your success Decide who you are going to partner with and how you will do it Get your own house in order and then reach out to your supply chain partners Develop strategy, processes, and connectivity Start small and use trials to “prove by doing” Agree up front how to share the investment and benefits Ensure that technology and systems are backed up by cross business processes, new people skills, and a partnership culture across the organisations

59. The Business shape of the future

60. The Manager of the future

61. The way ahead - for your organisation – and for you GET T-SHAPED !

62. For further information contact Professor Alan Waller Solving International email: alanw@solvinginternational.com Mobile:+44(0)7802 170507