Hence the ability to ‘fast track’ product development, manufacturing and logistics becomes a key element of competitive strategy. Equally important, however, is the reliability or consistency of that lead time. Currently the following standard barcode symbols, packages of little space, such as syringes, vials, communication subunits, etc. OVERCOMING THE BARRIER S T O SUPPLY CHAIN INTEGRATION 237 Competitive benchmarking might simply be defined as the continuous measurement of the company’s products, services, processes and practices against the standards of best competitors and other companies that are recognised as leaders. With all parties ‘singing from the same song sheet’ a much more rapid response to marketplace changes is achieved with less inventory and lower risks of obsolescence. Figure 10.1 shows the impact on shareholder value of supply chain disruption. Xerox has successfully used this broader perspective on benchmarking as a major element in increasing both quality and productivity. In the conventional organisation the only way to bridge the gap between the logistics lead time (i.e. inform the vendor about the name of the carrier, the loading date and the modes of transport. In fact it can be argued that rather than the conventional ‘one size fits all’ strategy for supply chain design, the need today is for multiple supply chain solutions. Cluster analysis is a computer-based method for looking across a set of data and seeking LOG ISTIC S AND CUSTOMER VALUE 41 to ‘match’ respondents across as many dimensions as possible. Just as powerful an influence on decision making and management horizons is cash flow. A shift of focus For many years Johnstons had been predominantly a menswear business with highly stable products with long life cycles (e.g. Boeing, for example, has used rM technology to manufacture parts for the F18 and other military aircraft. If we deal with the conventional production systems and individual, manufacturing process, we have discontinuous a. of assortment or manufacturing programmes. Do we have procedures for informing customers of potential problems on stock availability or delivery? However, what we are now learning is that there is a dimension to information that enables supply and demand to be matched in multiple markets, often with tailored products, in ever-shorter time-frames. Hence the difficulty of forecasting at the individual variant level and thus the typically large inventories that build up as a result of forecast error. SAB miller and World Wildlife Fund, Water Footprinting: identifying and addressing Water risks in the Value chain, SAB miller, london, 2009. He is a regular contributor to conferences and workshops around the world. The four elements of logistics-derived customer value highlighted later in this chapter are ‘Better, Faster, Cheaper, Closer’ and the criterion for a good logistics vision statement is that it should provide the roadmap for how these four goals are to be achieved. sea and coastal passenger transport - this subclass includes: passenger transport on the high seas and coastal waters, scheduled or unscheduled. Whilst there will always be a case for low-cost country sourcing for many products, it will not universally be the case as the following news item suggests. With estimated economic damage of about US$85 for each ton of carbon dioxide, capping greenhouse gas (GHG) emissions and putting a price tag on them becomes inevitable. The great advances that are being made in introducing ‘quick response’ logistics systems are all based upon information flow from the point of actual demand directly into the supplier’s logistics and replenishment systems. logistics center, such objects constitute the key link, possible automation and computerization of logistics processes. central delivery to a regional distribution centre or local delivery to a supermarket. Over 100 years of experience has provided the company with a deep knowledge of its business and the ability to identify those organisations that have the right capabilities to enhance and sustain the growth and diversity of the network. Similarly, changes in production schedules that aim to improve production efficiency may lead to fluctuations in finished stock availability and thus affect customer service. Further savings were achieved by importing wines into the UK from Australia in bulk and then bottling them in lightweight glass in the UK.12 CrEATIN G A SUSTAINAbLE SUPPLY CHAIN 251 Wal-Mart’s $11 billon ‘green’ savings Wal-mart has pledged to work more closely with suppliers to reduce its environmental impact. destination. Goldratt, E.M., Theory of constraints, North River Press, 1990. This is highlighted in the example shown in Table 9.1. The implications for competitive strategy are profound. transport, attributable to a specific mission, the question should be asked: ‘What costs would we avoid if this customer/ segment/channel were no longer serviced?’ These avoidable costs are the true incremental costs of servicing the customer/segment/channel. O’Marah, K. and Hofman, D., ‘Top 25 supply chains’, Supply Chain Management Review, October 2009. For example, is the level of product variety greater than the customer actually requires? Much later in 1973 Johnstons entered the cashmere knitting industry through a separate factory at Hawick in the Scottish borders. They also recognised that in their new, more fashion-oriented marketplace they needed to introduce more cross-functional approaches to decision making. Take, for example, the current state of the personal computer market. Most of the promotions offer distinct levels of discounts and product benefits. The company’s customer service reps are now forced to sort through more than a thousand promotion codes whilst they’re talking to a potential customer. management along the entire supply chain. A new paradigm of competition is emerging in which the supply chain network increasingly will provide a source of sustainable advantage through enhanced customer value. This point becomes clearer if we expand the ratio as follows: Quality × Service Customer value = –––––––––––––––––– Cost × Time Source: Johansson, H.J., McHugh, P., Pendlebury, A.J. Source: CHRISTOPHER, M., PAYnE, A. define the basic concepts related to international logistics; describe the most frequently used management methods and tools. of customers 12 months ago No. The basic elements of this concept include. CREATIN G T HE RESPONSIVE SUPPLY CHAIN 115 ‘Time to market’ and ‘time to volume’ are powerful metrics employed by companies such as Sony and Canon where short life cycles dictate a focus on rapid response to fast-changing technologies and volatile customer demand. vehicle position and data which allow for: services, in order to reduce the probability of disaster and preventing its effects; quick reaction to unexpected incidents, such as theft or accidents); digital mobile telephony operating at a frequency of 900 MHz.
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