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Überleben ist nicht genug… The Anatomy of adaptive manufacturing Neue Sourcing Modelle „Predicting is hard, especially about the future„ Michael Klemen März, 2004 2003 2004 The changing IT industry landscape Predicting is hard, especially about the future... 2000 A long way to go

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slide1

Überleben ist nicht genug…The Anatomy of adaptive manufacturingNeue Sourcing Modelle„Predicting is hard, especially about the future„

Michael Klemen

März, 2004

the changing it industry landscape

2003

2004

The changing IT industry landscape

Predicting is hard, especially about the future...

2000

slide5

United States

Britain

France

Japan

An apartment building was built in a highly desirable area, and there

are people from all over the world that want to move in.

slide6

United States

Britain

France

Japan

As they are moving in, the landlord realizes that each person has appliances with a different type of plug.

slide7

United States

Britain

France

Japan

The landlord tried to solve the problem by installing standard outlets.

slide8

United States

Britain

France

Japan

The tenants said “I don’t care what my landlord wants!”… and refused to use it because each had invested so much in their appliances that they did not want to change.

need for a common infrastructure

United States

Britain

France

Japan

Need For a Common Infrastructure

Apartment owners tried to solve the problem themselves by using an adapter for each of their appliances. This was expensiveand inflexible.

the solution in 2002

United States

Britain

France

Japan

The Solution……. in 2002

Any-to-any Conversion

Better -

Each apartment continues to use their appliances and someone else does the conversionfor them.

Best -

Long term adoption of standard industry wide interfaces.

evolution of supply chain interoperability

Fully integrated and collaborative business process

Future

XML enables computers and applications to be connected

Present

Simple Portals connect people to information

Connectivity

EDImoves simple data

E-mail improves communications between individuals

Value and Structure

Evolution Of Supply Chain Interoperability
  • True collaboration and interoperability are only possible after communication and connectivity foundation has been established.
slide12

connectcollaboratecommunicate

STATUS 2004 :

DIE GESCHICHTE IST GUT...

ES HAT NICHT FUNKTIONIERT

the vision value collaboration networks
The Vision: Value Collaboration Networks

Value

Collaboration

Network

Dynamic

  • ERP, Planning, R&D
  • Integration of the legacy applications
  • Front-End/Back-End integration
  • Customer Relationship Management

Trading

Community

Integration

  • Supply Chain Planning/Mgmnt.
  • Collaborative Design
  • Linkage with Supply Chain partners
  • Trading Communities
  • E-Procurement

Relationship

  • Dynamic Relationships with partners
  • Recombinant Business Relationships
  • Loose Internet Coupling
  • E-Services driven

Enterprise

Integration

Static

# of Participants

single

single

multitude

srm the focus shifts to the ecosystem

2003

  • My Trading Partners
  • Collaboration
  • Inside Out
  • Hub-and-spoke
  • SC integration
  • 2010
  • My Ecosystem
  • Synchronization
  • Outside In
  • Peer-to-Peer
  • Ecosystem synergy
SRM - The Focus Shifts to the Ecosystem
  • 1990
  • My Enterprise
  • Integration
  • Inside
  • Hub
  • Dept. productivity

Source : Gartner Group 2003

rte supply chain processes
Then

Business Logic was managing manufacturing: build, store, sell

Just in time

Just in sequence

Now

Business Logic:

supply side commodizitation

demand side customization

Real time :

Wal-Mart captures precise information and lets P&G figure out what to deliver to each store

RTE Supply Chain Processes

Supply Chain - the biggest operational shift ever

a quick trip to the future rfid
A quick trip to the future: RFID
  • Wal-Mart recently announced that it wants its top 100 suppliers, by 2005, to begin fitting their cases and pallets with radio-frequency-identification (RFID) tags—chips that can automatically transmit to a special scanner all of the information about a container’s contents or about individual products.
key components of the rfid process
Key components of the RFID process

Tag

Antenna

Reader

Middleware

Supply chain execution

- Each item has a “tag” attached to it or embedded In it- Transmits identification data to a reader

- Coiled antenna ofreader creates magnetic field with coiled antenna of tag- Waves turns into digital information

  • Transmit data tomiddleware- Associates tag info with product info

- Process information from reader- Filters data- Sends data tobackend servers

- Backend SCE or ERPsystems receives InformationExamples of SCE:- Updates inventory- Notifies shipment arrival- Triggers procurement

rte beyond optimization to synchronization of the extended supply chain
RTE: Beyond Optimization to Synchronization Of the Extended Supply Chain

Extended Supply Chain Synchronization Latency

Increasingly

Synchronized Supply Chain

60 Days in 2002

Point-to-Point Integration

Today’s cycle time

Change:

from periodic to continous

Strategy :

from monthly to rolling

Opportunity:

from windows to keychains

30 Days in 2004

14 Days in 2006

7 Days in 2008

3 Days in 2010

Sameday in 2012

RTE

Simultaneous Decision Support

Across Multiple Enterprises

Seconds

gg srm growth suggestions 2003 2007
GG SRM Growth suggestions 2003-2007

SRM Software Components Forecast (Millions of Dollars)

CAGR (%) 2003 - 2007

2002

2003

2005

2007

2006

2004

New License Revenue

2,238

2,028

2,114

2,258

2,046

2,44

8

3

1

3

-17

-9

Growth (Percent)

Source: Gartner Dataquest (September 2003)

srm areas user adoption 2004 2007
SRM Areas - User adoption 2004-2007

Source : Gartner Group Sept 2003

demand chain management scm crm functional convergence
Demand Chain Management: SCM/CRM Functional Convergence

Convergence

DCM

Demand

SCM

CRM

Products/Capacities

Customer Facing

Supplier Facing

  • Key Intersection Points
    • Promotion Management
    • Integrated Demand Management
    • Configurator/CTP
    • Order Fulfillment
    • Pricing/revenue optimization
    • Service Process Management

Source : Gartner Group 2003

align plm with supply chain processes
Align PLM with Supply Chain Processes

SCM Processes

Make

Service

Source

Plan

Fulfill

Product Related Processes

Describe / negotiate part and service needs

Define logistics of fulfillment

Fulfill parts and service

Dynamic Interchange

Product Data Flow

Product Information Repository

Product Specs.

part data

pricing

lead time

“As Built” BOM

New product Specs.

eBOMS

mBOMs, formulas

CAD models

Technical specs.

Product Configs,

Specify

Design

Produce

Sell /

Grow /

Service

Retire

PLM Purpose

Source : Gartner Group 2003

align engineering centric and operations centric processes
Align engineering-centric and operations-centric processes

ERP II Supported Processes

Plan

Forecast

Produce

Ramp

up

Phase out

Product-Related Processes

Validate Quality, Process, and costs

Produce products, manage inventories

Materials, Resource, and Process Planning

DynamicInterchange

Product Information Repository

Product Data Flow

CAD models

Drawings

Product Configs,

mBOMs

Costs

New product Specs.

“As Built” BOM

FD&T

Routings

ECNs

Config. Rules

lead time

Bills of Material

Special Orders

Specify

Design

Produce

Sell /

Grow /

Service

Retire

PLM Purpose

Source : Gartner Group 2003

2004 down to earth the practical implementation

Forecasts

Supply Chain Planning

Logistics Optimization

Production Planning

Orders & Call-offs

Production

Scheduling

Production

Scheduling

Distribution

Scheduling

Distribution

Scheduling

2004 - down to Earth - the practical implementation

Supply Chain Strategy

multi enterprise scm capabilities
Multi-Enterprise SCM Capabilities

Sell

Make

Store

Buy

Move

Analytical

Multiorganization Supply Chain Measurement

Transactional

Knowledge Repository

Supply Chain Visibility — Monitoring and Alerts – multi-modal, Multienterprise TMS

Executional

Operational

Seller Workbench

Buyer Workbench

Collaborative Supplier Planning and Replenishment

Collaborative Demand Planning and Replenishment

Tactical

Network Design

Strategic

Trend Analysis

Networked Strategic Sourcing

Source : Gartner Group 2003

mckinsey survey germany 2003
McKinsey Survey Germany 2003
  • Survey results reveal some of the chief differences between the best-performing companies and the laggards :
  • Broadly, the logistics costs of the high performers were about 25 percent lower, and they moved goods out of inventory about four times faster.
  • On the service side, they had better quality ratings, as well as delivery times that were almost half those of the laggards.
supply chain business strategy three pillar s for success

Customer Centricity

Even excellence in products & the related buying/order fulfillment will not be sufficient to attract & retain customers in the long run

Collaboration

Faster time-to-market for new product development & order fulfillment is driving the need to collaborate with demand & supply partners

Product/ServicesHybrids

Complementing excellent products with superior value-adding services will make the difference

Supply Chain Business Strategy Three Pillar's for Success

How Companies Interact with

Their Customers

MAXIMUM

CUSTOMER

VALUE

How Companies Fulfill Their Promises

How Companies

Differentiate

Their Offerings

slide37

Automotive SCM example

High Tech SCM example

moving to rte automotive industry example
Moving to RTE - Automotive Industry example

Fleet Car Rental

Customer

Dealer

Wholesalers

CRM / ATP

  • Hot Automotive areas today:
  • Customer Relationship Mangement and Available to promise
  • Demand Planning
  • Demand and Supply Matching
  • Inbound Logistics
  • Manufacturing
  • Outbound Logistic
  • Adaptive IT

Configure

Order

Processing

Sales

Scheduling

Order Bank

Mfg

Scheduling

Order Bank

Marketing

Analysis

DEMAND PLANNING

Dealer

Sales

Analysis

Delivery

Model

Center

Lead

Management

Stock

Inventory

MANUFACTURING

OUTBOUND

LOGISTICS

INBOUND LOGISTICS

ADAPTIVE IT

DEMAND AND SUPPLY MATCHING

Stock

Replenishment

Orders

Product

Definition

Market

Offering

Wholesale

LLP

LLP

Delivery

Model

Center

Late

Configuration

Consolidation

Warehouse

Stock

Inventory

Dealer

Sales

Analysis

Allocation

Added Value

Services

Added Value

Services

Constraints

Management

Capacity

Planning

Material

Forecast

Operating

Plan

2nd Hand

Car Refur-

bishmen

Line Side

Inventory

Magmt

Procurement

Material

Mgmt

Material

releasing

Build

Production

Marketplaces

Portals

Private MP

Covisint

Tier 1

Tier 2

Tier 3

volkswagen today scm is big
Volkswagen Today - SCM is big -
  • Online negotiations 22,000 suppliers participated at various times
    • > 3,190 online negotiations conducted
    • > 36 billion Euro turnover in volume (during contractual period) negotiated (as at Jun 5, 2003)
    • Capacity Management (eCap)> 200 suppliers integrated, among those 60 already migrated to the new eCAP/3 release
    • 4,000 critical parts identified(as at Jun 18, 2003)
  • AMES-T 385 VW suppliers with processual conformity are active
    • 287 of them already implemented "controlled pick up" procedure together with Volkswagen AG plant Wolfsburg, and an additional group of 93 suppliers will start controlled pick up procedure on 18 August 2003
    • Audi AG (plants Ingolstadt and Neckarsulm) will start controlled pick up procedure together with 271 suppliers on 15 September 2003
    • 14 plants of VW Group implemented the process (Volkswagen, Volkswagen Nutzfahrzeuge, Audi, Skoda)
    • 10 VW local hauliers are integrated(as at Aug 8, 2003)
volkswagen today scm is big43
Volkswagen Today - SCM is big -
  • Online catalog631 suppliers linked globally
    • 1.076.737 articles in global catalog
    • 10.896  internal users
    • 2.695 cost centers integrated 
    • 269.730 transactions
    • 85.858.102 €  volume ordered(as at May 31, 2003)
  • Online Inquiries (ESL)> 5,500 suppliers linked
    • > 730,000 inquiries processed(as at Aug 28, 2003)
hp and our supply chains
HP and our supply chains
  • HP more than 100 million consumer customers today
  • We touch45 million consumers every month
  • In 2003 alone:
    • HP sold 53 million products to consumers — not including supplies. (That means that a consumer buys an HP product more than once a second)
    • HP has shelf space in 110,000 retail outlets in 176 countries around the world, in addition to the company's store.
    • In the last 12 months alone, we've sold 43 million printers — more than one of every two printers sold in the world
    • We've sold 8 million PCs
    • Every day more than 167 million pictures are taken using an HP camera
hp ipg go to market

ESV

HP IPG go to market

CHANNEL DISTRIBUTION MODEL

Consumer

Commercial

Enterprise

Global

Home

SOHO

Small

Medium

Large

CRs

Retail

Traditional

VARs

Distributor/ Wholesaler

Consumer Business

Support

Commercial Business Support

HP

PDE / PSDE

hp ipg sc operations
HP IPG SC Operations:

Key chain supply chain collaboration

external

internal

BU

CM

source

BU

tier 1

suppliers

eHub

design

logistics

forecast

inventory

BU

tier 2

suppliers

procurement

BU

logistics

providers

hp ipg it architecture

B2B only

trading partners

B2B only

trading partners

SAP (R/3,APO)

B2B + web browser

trading partners

B2B + web browser

trading partners

Nexus (Baan)

HPS (PeopleSoft)

Web browser only

trading Partners

web browser only

trading partners

Other (Legacy)

EDI + web browser

trading partners

EDI + web browser

trading partners

HP IPG IT Architecture

Multiple

“on ramps”

ERP-neutral

Trading Partners

HP Entities

Information &

Analytics

Inventory

Collaboration

Inventory

Collaboration/

Dynamic

Repl

On line

Inventory

SAP (r/3, apo)

Outsourced

XML hub

outsourced

xml hub

Buy/Sell

Buy/Sell

Nexus (Baan)

e-Sourcing,

Auctions &

Disposition

Auction

Order &

Forecast

Collaboration

Sourcing

keychain

webservers

KeyChain

webservers

hps (PeopleSoft)

Outsourced

EDI hub

outsourced

EDI hub

other (Legacy)

Enterprise Integration Services

Leverages HP’s

integration backbone

e-Service provider(s)

XML

hp ipg sc operations business landscape
HP IPG SC Operations: Business Landscape

Region: EMEA

Segments: Commercial & Consumer Hardware, Supplies

Products: - 15 Product-Lines - 3500 SKUs, 7500 components

Manufacturing/ - 7 Manufacturing/Product Completion Sites

Product Completion: - 57 Production/Product Completion Lines - 3 Regional Warehouses - Build to Stock, Build to Order, Dock Localiza

Shipment Volume : - 85 Million Inkjet-Cartridges/year - 20 Million Toner-Cartridges/year - 15 Million Consumer products/year - 4 Million Commercial products/year

Trucks : - 200 trucks per day

Revenue : - 8 Billion USD

supplier relationships conceptual components
Supplier relationships - conceptual components
  • Supplier relationships a comprehensive process through:
    • Engineering function
    • Sourcing
    • Procurement
    • Payment

of product life cycle management.

Source : Gartner Group Sept 2003

supplier relationships conceptual components52
Supplier relationships - conceptual components
  • Product life cycle management (PLM)
    • Collaborative design
    • White boarding
    • Bill of material development
    • Part directories
  • Sourcing (strategic sourcing)
    • Strategy development
    • Spend analysis
    • Supply and market discovery
    • Requisition specification and negotiation
    • Bid analysis
    • Award and contract
  • Procurement and purchasing
    • Master blanket release
    • Receipt and ASN
    • Order management

Source : Gartner Group Sept 2003

supplier relationships conceptual components53
Supplier relationships - conceptual components
  • Contract management
    • Invoice variance
    • Document management
    • Compliance management
    • Collaborative contract development
  • Financials
    • Project accounting
    • Accounts payable
    • General ledger
    • Encumbrance
    • Compliance
    • Reporting
  • Maintenance and asset management
    • Work orders, bill of material and fleet management
    • Inventory management/tool cribs
  • Marketplaces
    • Web services

Source : Gartner Group Sept 2003

firms will improve processes at 3 levels
Firms Will Improve Processes At 3 Levels

Benefits

Hands-free decision-making &

Optimize

automated resource allocation

Level

Joint decision-making

and

of

Manage

process synchronization

investment

Better visibility

Monitor

into shared processes

keyfactor trust
Keyfactor Trust

Trusting Relationship

Confidence

Competence

Integrity

Commitment

Transparency

  • Dependability
  • Predictability
  • Certainty
  • Consistency
  • Fairness
  • Sense of equality
  • Objective
  • Congruency
  • Fit between
  • perception & reality
  • No hidden agendas
  • Mutuality
  • Win- win
  • Shared benefit
  • Reciprocity
slide56

A long way to go

but think about…

adaptive enterprise

Business

Information technology

Adaptive Enterprise
  • The ultimate state of fitness: Business and IT synchronized to capitalize on change
hp adaptive enterprise design principles
HP Adaptive Enterprise Design Principles

simplification

  • Reduce number of elements
  • Eliminate customization
  • Automate change

+

standardization

  • Use standard technologies and interfaces
  • Adopt common enterprise architecture
  • Implement standard processes
  • Applied consistently across:
    • Business processes
    • Applications
    • Infrastructure

+

modularity

  • Break down monolithic structures
  • Create reusable components
  • Implement logical architectures

+

integration

  • Link business and IT
  • Connect applications and business processes within and outside the enterprise
measure and assess business agility
Measure and assess business agility

Assess IT’s ability to respond to business change

ProfileExamine IT strengths, weaknesses and overall ability

to enable business agility

Prioritize Identify critical priorities for agility impact and investment optimization based on client priorities

Prescribe Recommend adaptive IT approaches and investments that address the critical priorities

time

The length of time it takes to make a change

range

The breadth of change the company is able to handle

ease

The level of effort, cost, and risk required to introduce and support change

slide60

HP’s Darwin Reference ArchitectureElements of an adaptive architecture

Automated intelligent management

Dynamic resource optimization

Continuous secure operation

Business processes

EXTEND & LINK

Suppliers

Employees

Customers

Applications

ERP

Collaboration

Publishing

CRM

ARCHITECT & INTEGRATE

MANAGE & CONTROL

assess, advise, act

MEASURE & ASSESStime, range, ease

Infrastructure

Infrastructureservices

Security

services

Registry

services

Web

services

Grid

services

Virtualized resources

Virtualization

Sourcing

Sharing

Pooling

Resources

Servers

Storage

Clients

Printers

Network

Content

Environment

the path to an adaptive enterprise
The path to an adaptive enterprise

It’s the ultimate state of fitness in a world where every business decision triggers an IT event.

Business

  • Measure, assess and maintain a dynamic link between business and IT
  • Architect and integrate heterogeneous IT environments
  • Manage and control business processes, applications and the IT environment
  • Extend and link business processes and applications horizontally – from suppliers through to customers
  • Delivers business and technology innovation for today and tomorrow

Information technology

food for thought
Food for thought

NEUGIERIG SEIN !

slide65

Thank You

questions ?