Creating Supply Chain Flexibility

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Driving Supply Chain Flexibility
Creating Supply Chain Flexibility Chris
Armbruster mail_at_chrisarmbruster.com
_at_CAArmbruster 224.430.2046
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SUPPLY CHAIN
TRENDS REQUIRE
FLEXIBILITY

• Modern supply chain trends can introduce
  inefficiencies
• Additional trading partners increase latency
• Global supply chains increase complexity
• Redundant judgments exacerbate demand uncertainty

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WASTE
Is NeverTolerated
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THE CHOICE IS OURS
or
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• The quest for certainty blocks the search for
  meaning. Uncertainty is the very condition to
  impel man to unfold his powers.
• --Erich Fromm

UNCERTAINTY
Its the Driving Force Behind Flexibility
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It is commonly known that signals degrade as
demand propagates up the supply chain.
Ultimate Customer
Foundry
Chip Maker
EMS

• DEMAND UNCERTAINTY

• It Can Be Measured and Mitigated

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Ultimate Customer
Chip Maker
Foundry
EMS
Net Effect
Amplification
Interference
Latency



Uncertain Demand
Changes in demand can become exaggerated.
Noise can superimpose onto the demand signal.
Demand can become out of phase or shift in time.
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Visibility and CollaborationImprove the Demand
Signal
FLEXIBILITY
Must Do the Rest
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SPEED


Make FlexibleSupply Chains
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BUSINESS INTELLIGENCE
Potential Waiting To Be Tapped

• Notwithstanding its fickle nature, uncertainty
  can be understood, characterized, bounded and
  modeled.

• The data exists, but must be mined for meaningful
  information.

• Business intelligence is a key input to
  developing a relevant fulfillment strategy.

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SPEED
It Is All About Aligning Windows
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Strategy
STRATEGY
Start with the customer, of course.
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CASE STUDY
Semiconductor Manufacturer
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SUPPLY CHAIN
Package Assembly Test
Wafer Fabrication
Circuit Assembly
Weeks
Hours
Days
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Helps Manage Uncertainty
BUSINESS INTELLIGENCE
Error
Error
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Works Hand-in-Hand with Visibility Collaboration
-Error
Error
Visibility Collaboration
Flexibility
FLEXIBILITY
Error
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DEMAND PROFILING
In this case, customers are somewhat certain
about their demand over a quarter, but beyond the
current week they are not sure when in the
quarter it will materialize.
Demand Certainty
Probability
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Certainty Window
Time(Weeks)
Y4
Y3
Y2
Y1
Y0
Speed Aligns Windows
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FAST PLANNING LOGISTICSCOMPLIMENT LEAN
FACTORIES
24 Hour Planning Cycle
JIT Fulfillment Delivery
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SUPPLY CHAIN
FLEXIBILITY STRATEGY
Customer RequirementsFlexibility,
Responsiveness, Security
Business IntelligenceDemand Profiling Leading
Indicators
SpeedLean Manufacturing Logistics
Supply Chain Architecture Insource Assembly
Test Outsource Wafer Fabrication
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Integrated Strategy Delivers
Build to Forecast
Automation and eBusiness
Super Fast Cycle Times
48 Hour 3PL Partnership
Multiple MfgLocations
JIT
Receipt of Customer Order
Order ProcessandPlanning
Wafer Fab
Buffers for Flexibility, Response andSecurity
Package Assembly and Test
Pick and Pack
Ship
Product on Customer Dock
Buffers for Flexibility, Response andSecurity
Buffers for Flexibility, Response and Security
LeanMfg
Demand Collaboration
Supply Collaboration
DailyPlanning
MAXIMUM PERFORMANCE
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BENEFITS REALIZED
100
10
Shipping Performance to Customer Request Date
Inventory Velocity (Turns)
90
9.5
80
9
70
8.5
60
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Shipping Performance
Inventory Turns
50
7.5
40
7
30
6.5
20
6
10
5.5
0
5
Year 1
Year 4
Year 2
Year 3
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Organizations fall short of their potential by
accident, but they become world-class on
purpose.
Chris Armbruster mail_at_chrisarmbruster.com
_at_CAArmbruster www.chrisarmbruster.com
224.430.2046