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CE DELIVER MAKE SOURCE DELIVER DELIVER MAKE SOURCE SOURCE ECR Some quoted benefits ?Cisco, Intel, TNT, Kodak, Nestle, PG: ?Cost savings: ?75% reduction in errors” ?12,000 engineers saved” ?45% inventory reductions” ?Growth opportunities: ?40% more orders in same time” ?1 week product development cycle reduction” ?reduce product lead times by 5070%” ?order cycle times cut from 68 weeks to 13 weeks Source: Logicon 2023 One way of looking at DELIVER Ways of working Process Infrastructure ?Synchronised Production ?CRP ?Optimum Inventory ?CRP ?SOP ?MPS ?MRP ?WPS ?SMI ?RDS ?Inventory planning ?WMS ?VMI ?CPFR ?Demand Planning ?EDI ?XML ?Inventory target models ?EDI ?XML ?EFT ?APS (SAP APO) and ERP (BPCS) ?Reliable operations, pallets ?KPIs Ingredients packaging suppliers Manufacturer production lines Manufacturer distribution center Retail store (shelf + back room) Retailer distribution center Consumers Different categories, different demand strategies 050100150200250V M I f or S ta b l e of f ta k e C P F R / V M I f or P r om ot i on sC P F R / V M I f or S e a s on a l C P F R f or R a n d omC P F R f or N P D s DELIVER focus ?Outsourcing warehouses ?Inventory target planning ?VMI Outsourcing ?Third party logistics providers have ability to accelerate and drive change ?Focus It is their core business ?Resources Availability of “resource pool” ?Expertise Core petency ?Experience Did it before ?Funds Willingness to invest Supply chain outsourcing criteria for choosing Unique nessSymbo ls? C ompan y p lanes? “p et” p roj ec tsCr iti c als? Produ ct in n ov ation? Re tailer loy alty cards? Proc ess improvement sAn cien t E mpire s? Payrol l? Traditiona l audi tOp er ati onalNece ss iti es? Log istics? Purc hasin g? SalesValue Supply chain outsourcing actions for choosing Unique nessSymbo ls? Di scardCr iti c als? Nurture? Strat egic alli anc esAn cien t E mpire s? OutsourceOp er atio nalNece ss iti es? Nurture or Outsource? Be caref ulValue Supply Chain outsourcing ?Advantages ?Allows you to concentrate on core petencies ?Allows experts to manage and develop processes, technology and people ?accelerate change ?Allows experts to leverage synergies within their industry ?Provides improved customer service ?Free up/generate capital ?Disadvantages ?handover can be mismanaged ?potential for culture clash ?unlikely to save you money in the shortterm ?potential for ?us and them? Outsourcing the milestones Determine strategy Learn from previous experiences Select partner Project kickoff Team plan Communicate Negotiate details Transfer operations Transfer people Manage performance Outsourcing lessons learnt ?Partnership essential ?Communicate at all levels ? HR Issues by far the most ?Contract issues Outsourcing partnership ?DO ?encourage an open environment, sharing risks and rewards ?understand YOUR performance BEFORE you hand over ?continue to measure cost, se