Follow the Leaders: Value Chain Study - Australia and New Zealand

In 2003 when IBM last undertook a supply chain management study of this magnitude, the stand-out objective of leading supply chains was to increase profitability &8211; while, at the same time, reducing costs and improving quality. Now, quality is a given. Responsiveness has taken its place in a set of three top objectives &8211; which are common for supply chains across all the geographies surveyed. But there is a difference in emphasis. Supply chains in Australia/New Zealand (ANZ) and Europe are much more focussed on responsiveness. The United States and Japan, meanwhile, have maintained their focus on profitability. In addition, the ANZ supply chain is being tasked with ongoing cost reduction, hence the new supply chain challenge: how to maintain cost control (and profitability) and, at the same time, meet new demands for service and flexibility.

The answer to this challenge is being refined in boardrooms, factories and distribution centres across ANZ. By comparing survey results from ANZ and Europe with those from the United States and Japan, it is clear that responsiveness is leading to an increased focus on:

Customer-driven planning &8211; synchronising supply, managing demand
Effective order fulfilment through realtime order processing and logistics excellence, as measured by the &8220;perfect order&8221;
Correctly identifying customer needs during product development; as well as managing product introduction to deliver the &8220;perfect product launch&8221;
Procurement opportunities through global strategic sourcing and supplier collaboration.

What are the leaders doing?

The top supply chains appear to have a common trait: the ability to respond quickly to shifts in demand with innovative products and services, enabled by
responsive processes and systems. These supply chains are better able to meet cost, responsiveness and profitability objectives, by developing supply chain models that are strategically driven and aligned to their business environment (including products, markets, suppliers and customers). They are also consistently measuring their supply chain performance based on key indicators, such as:

Perfect order attainment
Demand management accuracy
Time-to-market
Cash-to-cash cycle time
Supply chain cost.

Delivering on cost and profitability can be hard. Adding responsiveness may be harder. The chances are that if your company is not already facing these challenges, it will soon. This report presents the supply chain management progress of ANZ respondents as a whole and of the leaders in particular.

IBM Business Consulting Services carried out the 2005 ANZ Value Chain Study in conjunction with Logistics magazine. The study identifies current practices, captures significant trends and establishes operational performance benchmarks in four key areas of supply chain management: supply chain planning, order fulfilment (customer order management and logistics), new product development and procurement.

The study was conducted in November 2005, with survey questionnaires distributed to supply chain executives throughout Australia and New Zealand. It was structured into five separate surveys, one for each of the key supply chain areas, with order fulfilment having two &8211; logistics and customer order management. Each survey included 18 to 27 questions covering business objectives, enabling technologies and current practices, as well as core performance data, such as the level of resourcing, cycle times and efficiency rates. There were a total of 348 survey respondents. The majority of these are in the consumer products and industrial products industries, with some limited representation from distribution and transportation, retail, services, high technology, pharmaceuticals and government.

This major research project was undertaken with support from the IBM Benchmarking Program, the IBM Institute for Business Value and APQC, a thirdparty research organisation. This study aims to provide perspective on where supply chain management is today and the direction in which it is evolving. The ANZ Value Chain Study is part of the global IBM value chain research programme, conducted in the United States, Europe and Japan in 2005. This report places the research findings into an overall context and provides insight into the continuing evolution of supply chain and value chain management principles.

According to the ANZ Value Chain Study, supply chain executives&8217; top three objectives are:

Reduced costs
Improved responsiveness
Increased profitability

These three are the same three objectives of surveyed respondents from the United States, Europe and Japan &8211; however, the relative priority is different. Increased profitability was the top objective for both the United States and Japan and the second priority for Europe. Responsiveness is a higher priority in Europe and ANZ.

To meet these multiple objectives, supply chain leaders understand that supply chain effectiveness must be more than efficiency and low cost. Supply chains are also an important driver of revenue growth and profitability, as well as the primary source of responsiveness &8211; or a lack thereof. Many companies are evolving towards the on demand, customer-driven supply chain. The vision is an integrated end-to-end, customer-driven supply chain &8211; integrated across the business and with key customers, partners, suppliers and service providers. Top-performing supply chain executives are actively adopting leading management practices, such as:

Synchronising supply and demand through planning and forecasting
Coordinating business functions horizontally across the supply chain
Developing mutually beneficial outcomes to strengthen supply chain relationships
Managing supply chain cycles &8211; for example, for planning or for order-to-delivery
Developing variable cost structures as alternatives to fixed costs
Sharing information and risks with partners to reduce overall exposure
Using realtime information to create responsive, customer-driven processes

.
In this ANZ Value Chain Study report, we describe how companies in ANZ are responding to the challenge of cost control and responsiveness in four key supply chain areas. These areas are:

Synchronising supply, managing demand: Customerdriven planning
Effective customer order fulfilment: Perfect order attainment through realtime order processing and logistics excellence
The perfect product launch: Product introduction and lifecycle management
The procurement opportunity: Realising benefits through holistic sourcing.

We also make observations in relation to sustainability, transparency and the importance of data management. Effective data management is a key factor that underpins sustainable supply chain maturity in each of the four key areas.

In the remainder of this report, we examine each of these areas to provide insight into industry developments and leading supply chain practices.

Read the complete whitepaper

Source : IBM

Follow the Leaders: Value Chain Study - Australia and New Zealand

In 2003 when IBM last undertook a supply chain management study of this magnitude, the stand-out objective of leading supply chains was to increase profitability &8211; while, at the same time, reducing costs and improving quality. Now, quality is a given. Responsiveness has taken its place in a set of three top objectives &8211; which are common for supply chains across all the geographies surveyed. But there is a difference in emphasis. Supply chains in Australia/New Zealand (ANZ) and Europe are much more focussed on responsiveness. The United States and Japan, meanwhile, have maintained their focus on profitability. In addition, the ANZ supply chain is being tasked with ongoing cost reduction, hence the new supply chain challenge: how to maintain cost control (and profitability) and, at the same time, meet new demands for service and flexibility.

The answer to this challenge is being refined in boardrooms, factories and distribution centres across ANZ. By comparing survey results from ANZ and Europe with those from the United States and Japan, it is clear that responsiveness is leading to an increased focus on:

Customer-driven planning &8211; synchronising supply, managing demand
Effective order fulfilment through realtime order processing and logistics excellence, as measured by the &8220;perfect order&8221;
Correctly identifying customer needs during product development; as well as managing product introduction to deliver the &8220;perfect product launch&8221;
Procurement opportunities through global strategic sourcing and supplier collaboration.

What are the leaders doing?

The top supply chains appear to have a common trait: the ability to respond quickly to shifts in demand with innovative products and services, enabled by
responsive processes and systems. These supply chains are better able to meet cost, responsiveness and profitability objectives, by developing supply chain models that are strategically driven and aligned to their business environment (including products, markets, suppliers and customers). They are also consistently measuring their supply chain performance based on key indicators, such as:

Perfect order attainment
Demand management accuracy
Time-to-market
Cash-to-cash cycle time
Supply chain cost.

Delivering on cost and profitability can be hard. Adding responsiveness may be harder. The chances are that if your company is not already facing these challenges, it will soon. This report presents the supply chain management progress of ANZ respondents as a whole and of the leaders in particular.

IBM Business Consulting Services carried out the 2005 ANZ Value Chain Study in conjunction with Logistics magazine. The study identifies current practices, captures significant trends and establishes operational performance benchmarks in four key areas of supply chain management: supply chain planning, order fulfilment (customer order management and logistics), new product development and procurement.

The study was conducted in November 2005, with survey questionnaires distributed to supply chain executives throughout Australia and New Zealand. It was structured into five separate surveys, one for each of the key supply chain areas, with order fulfilment having two &8211; logistics and customer order management. Each survey included 18 to 27 questions covering business objectives, enabling technologies and current practices, as well as core performance data, such as the level of resourcing, cycle times and efficiency rates. There were a total of 348 survey respondents. The majority of these are in the consumer products and industrial products industries, with some limited representation from distribution and transportation, retail, services, high technology, pharmaceuticals and government.

This major research project was undertaken with support from the IBM Benchmarking Program, the IBM Institute for Business Value and APQC, a thirdparty research organisation. This study aims to provide perspective on where supply chain management is today and the direction in which it is evolving. The ANZ Value Chain Study is part of the global IBM value chain research programme, conducted in the United States, Europe and Japan in 2005. This report places the research findings into an overall context and provides insight into the continuing evolution of supply chain and value chain management principles.

According to the ANZ Value Chain Study, supply chain executives&8217; top three objectives are:

Reduced costs
Improved responsiveness
Increased profitability

These three are the same three objectives of surveyed respondents from the United States, Europe and Japan &8211; however, the relative priority is different. Increased profitability was the top objective for both the United States and Japan and the second priority for Europe. Responsiveness is a higher priority in Europe and ANZ.

To meet these multiple objectives, supply chain leaders understand that supply chain effectiveness must be more than efficiency and low cost. Supply chains are also an important driver of revenue growth and profitability, as well as the primary source of responsiveness &8211; or a lack thereof. Many companies are evolving towards the on demand, customer-driven supply chain. The vision is an integrated end-to-end, customer-driven supply chain &8211; integrated across the business and with key customers, partners, suppliers and service providers. Top-performing supply chain executives are actively adopting leading management practices, such as:

Synchronising supply and demand through planning and forecasting
Coordinating business functions horizontally across the supply chain
Developing mutually beneficial outcomes to strengthen supply chain relationships
Managing supply chain cycles &8211; for example, for planning or for order-to-delivery
Developing variable cost structures as alternatives to fixed costs
Sharing information and risks with partners to reduce overall exposure
Using realtime information to create responsive, customer-driven processes

.
In this ANZ Value Chain Study report, we describe how companies in ANZ are responding to the challenge of cost control and responsiveness in four key supply chain areas. These areas are:

Synchronising supply, managing demand: Customerdriven planning
Effective customer order fulfilment: Perfect order attainment through realtime order processing and logistics excellence
The perfect product launch: Product introduction and lifecycle management
The procurement opportunity: Realising benefits through holistic sourcing.

We also make observations in relation to sustainability, transparency and the importance of data management. Effective data management is a key factor that underpins sustainable supply chain maturity in each of the four key areas.

In the remainder of this report, we examine each of these areas to provide insight into industry developments and leading supply chain practices.

Read the complete whitepaper

Source : IBM