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The Leading Edge Group The Supply Chain Experts. Strategic Importance of SCM to Irish Business. The Leading Edge Group. The Leading Edge Group formed in 1995 Bases in Cork and Boston Working in Europe, the UK and the USA Using only experienced practitioners from industry

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the leading edge group the supply chain experts

The Leading Edge GroupThe Supply Chain Experts

Strategic Importance of SCM to Irish Business

the leading edge group
The Leading Edge Group
  • The Leading Edge Group formed in 1995
  • Bases in Cork and Boston
  • Working in Europe, the UK and the USA
  • Using only experienced practitioners from industry
  • Currently 40 people…& growing
  • Centre of Excellence in Manufacturing & Supply Chain Management
  • Leaders in Supply Chain Training and e-learning
the leading edge group3
The Leading Edge Group

Partner with our clients to provide speciality

Manufacturing & Supply Chain Management Solutions through Consulting, Education & Training, Mentoring and Staffing

our clients
Our Clients
  • Main Industries
  • Electronics
  • Pharmaceutical
  • Healthcare
  • Food & Drink
  • Giftware
  • Heavy

*Not Inclusive

challenges for irish industry
Challenges For Irish Industry
  • Very difficult time for the global industry
  • Ireland has performed better than could have been expected
  • Labour intensive manufacturing is difficult to justify due to increased costs
  • IDA want companies to move up the value chain
  • There are some good examples that need to be more widely emulated
comparative labour rates
Comparative Labour Rates

$12 is a useful Labour reference rate:

  • Hourly rate in our Irish facility
  • Daily rate in our Malaysian facility
  • Weekly rate in our Chinese facility

For Irish business ……… we will never be the low cost supplier …. but we do have the opportunity to be the high Value supplier

Becoming the value provider …… particularly by driving improvements in the Supply Chain is a Key Element ……… is a key to survival & success

eastern europe labour rates

€4.96 / hr

Currently 600 USD

€3.28 / hr

Currently 400 USD

€2.50 / hr

Currently 350 USD

Currently 54 USD

€0.33 / hr

Eastern Europe labour rates
moving up the value chain
Moving Up The Value Chain

Design >>>>>>>>>>>>>>Delivery

Value Add

  • Research
  • Design
  • DFM/DFX
  • NPI
  • Localisation
  • Manufacturing
  • Supply Chain Management
  • Customer Response Management
  • Distribution Strategy
  • Mass Customisation
  • Information Integration

‘The greater the curve on either side the greater the value add for the

Plant and a stronger foundation’

21st century competitiveness
21st Century Competitiveness

Rapid New Product

Development

You only

compete

in two

dimensions!

Operational

Excellence

Source: Strategy and the Internet, Michael Porter, HBR, Mar, 2001.

operational excellence in the 21st century
It Used to Be, OE was described as:

Factory Excellence

Competing on COST

With Supply Chains

In a LOCAL Space

Today OE is described as:

Supply Network Integration

Competing on TIME

In a GLOBAL Space

Operational Excellence in the 21st Century

This requires:

LOCAL

Excellence!

This requires:

GLOBAL

Excellence!

different levels of operational excellence
Achieving overall operational excellence, requires examination of all processes at a,

global,

tactical and

integrated level

Supply chain optimsation represents a variety of techniques to get more out of the supply chain

Different levels of Operational Excellence
supply chain optimisation
Need models and techniques to

Evaluate strategy changes

LeadingEdge, business modelling and analysis

Appreciate tactical decisions

Ilog, optimisation products

Integrate whole supply chain

Research at 4C

Supply Chain Optimisation
the leading edge experience
The Leading Edge Experience
  • We are working with a broad spectrum of companies and they are struggling to develop their strategic direction.
  • Some of them have no concept of what moving up the value chain really means.
  • They will have difficulty making the transition.
the leading edge experience15
The Leading Edge Experience
  • Irish based companies are under tremendous pressure on manufacturing costs but in some cases misssing the bigger picture
  • Many are driven by central groups based in Europe and or even in the US
  • Many are supplying into distribution centres without any control over demand/supply management or end customer service levels
the leading edge experience16
The Leading Edge Experience
  • Many companies have little or no contact with the end customer/user of their products or services and as a result do not innovate on behalf of their customer.
  • They do not have ready access to the knowledge that will allow them to move up the value chain.
  • Many companies have not addressed the opportunities with their own supply base on joint cost reduction initiatives, Vendor managed inventory, hubbing etc etc
some real examples
Some Real Examples
  • Low Tech manufacturing company - totally focussed on manufacturing but no control of the remainder of the supply chain
  • Contract manufacturing company - have inherited many bad practices from the OEM facilities they have acquired compounded by a business downturn
  • Bulk Pharmaceutical producer - totally focussed on producing massive batches and pushing them out to Distribution
  • Leading Healthcare producer with only 2 inventory turns per annum
some real examples18
Some Real Examples
  • Auto component manufacturer - no focus on inbound supply base programs such as Vendor Managed Inventory or Hubbing
  • Logistics company - lost their strategic leadership and capability has fallen way behind – Previously a world leader!
  • Leading Clinical Reagent Manufacturer - ideally positioned to replenish direct to point of use but can’t break the internal political log-jam
  • Etc. Etc.
slide20

Supplier Clusters

Reduced Order Lead Times

Supply Chain Management Strategy

Green Isle

Rationalisation of Ingredients

Reverse Auctions

Operational Excellence

Outsource FG Storage

slide21

ERP Integration

Outsource High Volume

Mfg. to China

New Product Introductions

GN Resound

Low Volume Mfg.

Corporate Purchasing

Global Distribution Centre

slide22

Manufacturing

Treasury Management

Contact Centre

Data Centre

Telesales

Logistics Management

Niche PC maker maximising Irish resources to become invaluable core in Apple EMEA operations

slide23

Sole EMEA manufacturing site

for Desktops, notebooks, enterprise

& storage solutions

EMEA Web hosting

& Internet sales

Customer Support

x languages

Lean Manufacturing

<400,000 sq.ft

Manufacturing space

Outsource Kitting

World’s No. 1 PC maker has exploited Ireland’s advantages to remainkey site within Dell Corporation...40% of all ICT Exports from Ireland

slide24

Shared Services

Product Posponement

Collaborative Planning

Operational Excellence

Web Based tools

4TH Party Logistics Services

leading edge view
Leading Edge View
  • There are companies in grave danger and some will inevitably fail.
  • Companies must get much greater control of their full supply chain and not just the manufacturing piece to ensure they have a chance of surviving over the long term.
  • Some good examples of companies who have re-invented themselves but these tend to be the exception.
  • The real trajedy is more will fail due to lack of knowledge and leadership than real competitive threats!
overall situation
Overall Situation
  • Many good examples of companies that are pursuing a definite direction
  • Others are struggling to develop a plan
  • The current climate makes the situation even more difficult and volatile
  • Financial and Human resources are constrained
  • They need more direct intervention to accomplish the transition.
government action
Government Action
  • IDA Strategic Competitiveness Programme (SCP)
  • Grant Rate of 50% for external training / consulting costs up to 50k Euro
  • Substantially deepen or expand an existing function e.g. Supply Chain Management, Manufacturing Excellence etc.
  • EI Competitiveness Fund for SME’s e.g. World Class Logistics, Supplier Development Programs
slide28

The Future

  • Design Centers
  • Research and Development
  • Supply Chain Management
  • Shared Services
  • E-Commerce Enabled Services
  • Automated Production/Logistics/Quality
  • Custom Manufacturing/Partnering