Current Priorities for Supply

Chain Development.

 Professor Michael Quayle

 Robert Bosch Chair in Purchasing & Supply
Chain Management
 and Director of the University of Glamorgan
Business School
My objectives today

 Need for a Welsh supply chain

 Research outcomes
 Public & private sector actions
Supply Chain Strategies
Product/Service Sourcing
Strategies

Organisations Total Cost

of Ownership

Country Logistics
Strategies
 Sourcing Entry Strategy

Supplier Sourcing International

Relationship Decision Analysis
Strategy Strategy

Withdrawal Strategy
Drive for competitiveness

 Instability
 Globalisation
 Product/service improvement
 Cost reduction
 Risk exposure
Global Supply Chains

 Uncertainty exists at every echelon

 Inherently complex
 Information flows are vital
 Building supplier relationships are vital
 Organisational systems to deal are crucial
CRITICAL FACTORS

 Strategic approach needed

 Resource demands
 Specification driven
 Power relationships
 Logistics & Supply Chain Management
The Business Squeeze
 economic disincentives - the customer supply
chain cost reduction motive
 desire to become “e”-active
 technology difficulties
 real training/skills needed
 Planet
Public
Sector
Culture Globalisation

Leadership Industry
CONTINGENT
Size
Motivation
VARIABLES
Competition
Infrastructure
Customers
Technology SCENARIO
PLANNING

Supply Chain
Supply Chain
Integration
Strategies
Mechanisms

FACTORS AFFECTING SUPPLY CHAIN STRATEGY

Survey Scope
Sector Percentage No. of Companies

Manufacturing 32 154

High Tech 22 106

Electrical & Engineering 18 87

Packaging & Distribution 10 49

Finance associated 7 34

Service/Utility 6 28

Construction 3 14

Agriculture 1 8

Co
RESPONSE RATE

 Circa 60% response rate

 288 companies
 Statistically significant (the norm 22%)
 Remarkable response rate particularly from
SME’s
Importance of Issues - High
 Leadership 4.5
 Strategy 4.4
 Team Working 4.3
 Waste Reduction 4.1
 Procurement 4.0

All Marked Out of Five

Importance of Issues - Medium
 Supply chain management 3.5
 Time to Market 3.5
 MRP 3.5
 Financial management 3.5
 Supplier development 3.5
R & D 3.5
 JIT 3.5
Importance of Issues - Low
 E-Commerce 2.5
 New technology 2.5
 Customer management 2.5
 Kaizan 2.5
 Benchmarking 2.5
 IIP 2.5
Those with the lowest Priority are things to do with

INNOVATION!!
 SMEs Perceived Priorities of their Customer’s
Requirements
 High  Low
 Quality  Time to Market
 Pricing  E- Commerce
 Product Reliability  R&D
 Service Reliability  Purchasing Expertise
 Capability to Support  Value Analysis
 Value Engineering
Long Term Success

 The BFO
 Depends on successful suppliers
 Depends on customer satisfaction
 The ENTIRE supply chain must be successful.
 Capturing Value

A supply chain approach to developing national

export development strategies
STRATEGY

 It’s the creation of a unique and value position

involving a different set of activities
DISTINCTIVE VALUE CHAIN
Strategic Positioning
THE VALUE PROPOSITION
 Needs to be different from the competition to
create competitive advantage.

 If the value proposition is not different, you are

probably simply in the business of doing things
better ie. operationally effective and do NOT
have a strategy
The value proposition for Wales.
• Trade strategy-makers are preoccupied with export
promotion and market access
• Economic development depends on export delivery
performance, fulfilment and supply chain capabilities

The Issue :
• How to convince strategy-makers to pay equal
attention to border-in and border-out supply chain
support.

• Find a mechanism for devising appropriate policies

 Welsh Public Sector Procurement Expenditure

Health Service
£841 m
(Drugs: £322m
Other: £519m)
Local
Government
£1,321m

Assembly
Sponsored
Public Bodies
£293m

Further Higher
National
Education Education
Assembly Wales
£78m £207m
£262 m
Total £3,002 million
 What can government and business leaders do?

 Employ a value-chain approach to trade sector trade strategy

development
 Support the removal of technical obstacles and alignment of activities for
efficient export operations
 Motivate business owners to value professionals and raise skills to
international working standards
 Support independent professional knowledge and skills development
institutions
 Encourage sharing of information about target markets consumer
standards,working, financing and legal practices

ITC
Improved Financial • Planning & acquisition of
and physical assets
information helps Physical • Cash flow impact and financial
enterprises to plan Assets risks in the supply chain
ahead and be more
competitive Enterprise

Human
Information Resources
Management:
• Planning
• Demand forecasts • Executing • Securing & developing
• Customer delivery • Monitoring SCM expertise
requirements • Supplier development
• Inputs’ supply markets programs
• Supply chain services Networks
and
Relation- • Strategic supply chain
ships
alliances
 Strategy makers should focus on delivery
performance and the supply chain structure in
equal measures to market access and export
promotion
A BFO
 Purchasers will need help to source locally
 SME’s will need help to break into supply chains
 Purchasers & SME’s need to bury their
prejudices
 The various agencies in Wales must work
together & be coherent in their approach
Supply Chain Management

 It’s about people, expertise and performance

 Not just about process.

 And Finally ………..
There is a need to recognise the reality of relationships
within supply chain management-it’s a RISK and a
REVENUE
Sharing Relationship.