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Overall productivity 10 16% Lower . costs 25 50% Improved capacity 10 20% Source:AMR PRTM Breakthrough areas: ? Integrated Demand and Supply Planning ? New business models and portfolios of best relationships ? Strategic Sourcing and eProcurement ? eCustomer linked to Demand Chain 13 169。 1999 Andersen Consulting InterCompany Supply Chain Practices All the Time Not at All Lower Higher Lower Higher Lower Higher Lower Higher Lower Higher Lower Higher Lower Higher Supplier Owned Or Managed Inventory Third Party Logistics (Warehousing) Third Party Logistics (Transportation) Third Party Logistics (Information Management) Electronic Information Systems to Manage Channel Fill Rates and Replenishment Customer Access to Internal Systems to Track Order Configure to Order Strategy 5 4 3 2 1 0 Lower Performers Higher Performers Source: Manufacturing Manager Responses (4/2/97 data) The material contained in this presentation is confidential and proprietary to Andersen Consulting. 4C15 Higher performing global electronics panies integrate more extensively across the supply chain. 11 169。 Source Strategic Supply Chain Alignment, 1998 500% Above Average 3000% Above Average 250% Above Average Industry leaders have demonstrated the significant value that successful supply chains can create. Point of Sale Data and Flow Through Distribution “ Retail Direct” Strategy Investment in Distribution Network 9 169。 1999 Andersen Consulting 35 34 78 66 0 10 20 30 40 50 60 70 80 90 100 1996 1997 Days of Supply 94 94 71 81 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1996 1997 Total Days of Supply OnTime Delivery Performance Best Median . Dept. of Commerce estimates that manufacturers have cut inventories by 9% in the 1990’s saving about $82 Billion [Fortune 3/3/97]. Best in Class panies enjoy significant advantage over their petitors. 1997 PRTM Study 8 169。 1999 Andersen Consulting Costs Assets Customer Service Strategic and Financial Impact The improvement of SCM has significant strategic and financial impacts on bottom line activities. Shareholder Value Creation Customer Service Level Increase Supply Chain Variability Reduction Inventory Reduction Cycletime Compression Financials / Metrics. ROA 94% 98% ? Instock availability ? Lead time ? Ability to tailor to specific customer needs ? Fixed ? Purchase Cost ? Variable Manufacturing ? Trans/Distribution