A GLOBAL AND REGIONAL PERSPECTIVE ON SUPPLY CHAINS

Alan J. Stenger, Ph.D. Ports of Auckland Visiting Professor of Logistics and Supply Chain Management The University of Auckland a.stenger@auckland.ac.nz

Todays Agenda
The Supply Chain (SC) Concept and Principles Past Global SC Trends Future SC Trends and Challenges Globally and Regionally Collaboration and InformationWhat Needs to be Shared and with Whom?
GS1-Connecting the Dots. 22/8/07 Alan J. Stenger--The University of Auckland 2

Supply Chain Management

Take a total systems view of all the activities involved in designing, producing, and delivering a product/service from original raw materials to the ultimate consumer Strategic, but requires great attention to detail

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

Traditional Supply Chain Operation

Raw Material Supplier Manufacturer of Intermediates Manufacturer of Finished Goods Distributor Retailer

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

Supply Chain--Some Coordination

Raw Material Supplier Manufacturer of Intermediates Manufacturer of Finished Goods Distributor

Retailer

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

Supply Chain Coordination--Ideal

Raw Material Supplier

Manufacturer of Intermediates

Manufacturer of Finished Goods

Distributor

Retailer

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

Supply Chain Network

Raw Material Suppliers Manufacturers of Intermediates Manufacturers of Finished Goods Distributors

Retailers

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

Basic Principles of SCM

Total Cost, Total Chain approach, not just our firm Emphasis on integration of both crossfunctional and cross-firm operations via

Collaboration, Coordination, and Communication

Creating opportunities for business growth, not just cost cutting
GS1-Connecting the Dots. 22/8/07 Alan J. Stenger--The University of Auckland 8

Todays Agenda
The Supply Chain (SC) Concept and Principles Past Global SC Trends Future SC Trends and Challenges Globally and Regionally Collaboration and InformationWhat Needs to be Shared and with Whom?
GS1-Connecting the Dots. 22/8/07 Alan J. Stenger--The University of Auckland 9

Past Global Trends

Application of SCM concepts Transportation economics Information and communications technology Rise of emerging economies

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Results of Underlying Trends-Globalisation

Rapidly growing international trade Outsourcing goods and services production to low cost countries Rise of the BRICs (Brazil, Russia, India, China) as both markets and sources of supply and More and more complex supply chains
GS1-Connecting the Dots. 22/8/07 Alan J. Stenger--The University of Auckland 11

World Trade Flows Double, Container Growth Even Faster

Source: Dirk Steenlen, et al., Container Terminal Operation and Operations Researcha Classification and Literature Review, OR Spectrum, Vol. 26, 2004, p. 5

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Complex Supply Chains

Source: Sarah McBride, Kia's Audacious Sorento Plan --- Foreign Parts -- and Some Careful Planning -- Go Into Korean Car Wall Street Journal (Eastern edition), New York, N.Y.: Apr 8, 2003. pg. A.12

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Todays Agenda
The Supply Chain (SC) Concept and Principles Past SC Global Trends Future SC Trends and Challenges Globally and Regionally Collaboration and InformationWhat Needs to be Shared and with Whom?
GS1-Connecting the Dots. 22/8/07 Alan J. Stenger--The University of Auckland 14

The New Supply Chain Challenges

Energy costs and carbon dioxide taxes Locational disadvantages of Australasia Implementing SCM concepts Information issues
Data collection and sharing Product traceability and accountability

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Energy Reduction in Transportation

Answers sound simple, but are complex
Mode shifts Improve utilization of carrying capacity Alternative fuels More fuel-efficient vehicles Relocation of facilities

No silver bullets
Help your carriers and third-party logistics providers (3PLs) by sharing plans and information Redesign supply chains

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Carbon Dioxide Tax

Globally transport produces about 24% of the man-made carbon dioxide emissions and this is growing rapidly* Most of this is due to road transport Same initiatives that reduce fuel consumption will help here Consumers and policy makers need accurate, unbiased information
*Source: The Encyclopaedia of the Earth. http://www.eoearth.org/article/Carbon_dioxide

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Location, Location, Location

Cannot change it Energy and carbon issues only exacerbate it

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Implement SCM Concepts More Broadly

Design out the complexity Use information and data more creatively Better and more complete total systems, total cost analyses Share more information, and COLLABORATE more with key customers and suppliers

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Information Collection & Sharing

Need clean, accurate, timely data Need better data collection, repository systems, and alerting systems to take advantage of new automatic identification technologies Need more inter-firm electronic sharing and communication of both supply chain transactions and plans
GS1-Connecting the Dots. 22/8/07 Alan J. Stenger--The University of Auckland 20

New Premium on Product Traceability, Safety, and Security

Look at the recent product recalls by Mattel This will become a business imperative, not just a nice thing to have Needs to be begun at the source Technology is coming to the aid
Auto-identification (RFID, Bio-markers, etc.) Databases and information repositories Rapid communication of events
GS1-Connecting the Dots. 22/8/07 Alan J. Stenger--The University of Auckland 21

Todays Agenda
The Supply Chain (SC) Concept and Principles Past Global SC Trends Future SC Trends and Challenges Globally and Regionally Collaboration and InformationWhat Needs to be Shared and with Whom?
GS1-Connecting the Dots. 22/8/07 Alan J. Stenger--The University of Auckland 22

We need to get smarter about

The products and services we design The business models we develop The kinds of supply chains we design The ways we manage our supply chains

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Supply Chain Opportunities

Take a total supply chain approach to your business
How can we add value for the customer? Where is it best to add that value? (e.g. ship logs, ship lumber, or ship finished products?) Segment customers and collaborate with those that are best for the business Segment suppliers and collaborate on those that are best for the business SHARE INFORMATION AND PLANS WITH KEY CUSTOMERS, SUPPLIERS, AND 3PLs

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Information Sharing
We can only get the business models and supply chains right if we have good information But process is more important than technology
How is information collected? How can it be accessed? Who can access it? Exception reporting

Its more than just transactions and what, where, when, and why data

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Information sharing
Share the richest information with strategic partnerscustomers, suppliers, and logistics providers Electronically when it is economically and technically feasible Dont wait until the technology is perfect

GS1-Connecting the Dots. 22/8/07

Alan J. Stenger--The University of Auckland

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Australasian Opportunities
Innovate products that dont need so much energy-intensive transportation Emphasize the regions strengths
Environmental soundness Sustainability Traceability

Whatever you do, do a careful TOTAL SYSTEMS, TOTAL COST ANALYSIS before you act!!!
GS1-Connecting the Dots. 22/8/07 Alan J. Stenger--The University of Auckland 27

Todays Agenda
The Supply Chain (SC) Concept and Principles Past Global SC Trends Future SC Trends and Challenges Globally and Regionally Collaboration and InformationWhat Needs to be Shared and with Whom?
GS1-Connecting the Dots. 22/8/07 Alan J. Stenger--The University of Auckland 28

Questions?