Supply Chain Management in a multipolar worldtranslogconnect.eu/uploaded/post2013/prof... · Supply...

Supply Chain Management in a

multipolar world

Univ. Prof. Dr. Sebastian Kummer

Head of the Institute of Transport and Logistics,

WU Vienna

Univ. Prof. Dr. Sebastian Kummer

1982-87 Economics Business Adminstration and Philosophy at the at the

University of Tübingen and Cologne,

1987-97 Dissertation (Phd) and Habilitation at Wissenschaftliche

Hochschule für Unternehmensführung Koblenz (WHU)

1996-01 Chair of business administration, esp. Management of transport

companies, Dresden University of Technology

Mail: [email protected]

Tel.: +43 1 31336-4590

Sebastian Kummer is member of several scientific and company boards. He is/has been visiting

professor and lecturer at universities in China (Bejing, Changchun, Chengdu, Tianjin ), Indonesia

(Yogyakarta), Philippines (Manila UP), Vietnam (Hanoi), Russia (Moscow, St Petersburg), Ukraine

(Kiev), Germany (Hamburg, Marburg, Zittau), Austria (Leoben, Krems).

He has published more than 150 publications. He works as a adviser, consultant and

management trainer for companies and government bodies.

Since 2001

Head of the Institute for Transport economics and logistics management, WU-Vienna

Head of the Research Institute for Supply Chain Management, WU-Vienna

Co-Executive Directors of the European section of the MIT Forum Supply Chain Innovation

Copyright 2013 Sebastian Kummer. All rights reserved.PAGE 2

Agenda

Introduction

Development and Challenges of a

multipolar world

How companies (should) act in a

multipolar world

Copyright 2013 Sebastian Kummer. All rights reserved.PAGE 3 2 December 2013

1. Introduction


WU is the leading university of

business and economics in Austria

Founded in 1898

EU’s largest educational institution for business and economics, business law, and social sciences

More than 27,000 students

Faculty of >500 (85 full professors)

12 academic departments, 14 research institutes

Member of CEMS (Community of European Management School)

EQUIS (European Quality Improvement System) accredited

Top rankings in FT Master in Management as well as other national and international rankings

Master SCM worldwide No. 1 at EduniversalRanking

Vienna University of Economics and Business (WU)

Copyright 2013 WU Wien. All rights reserved.PAGE 5

New Campus of WU Vienna

Investment of 500 Mio. €


WU Master SCM is ranked worldwide

No. 1 in the Eduniversal Ranking

1982-87 Economics Business Adminstration and Philosophy at the at the

University of Tübingen and Cologne,

1987-97 Dissertation (Phd) and Habilitation at Wissenschaftliche

Hochschule für Unternehmensführung Koblenz (WHU)

1996-01 Chair of business administration, esp. Management of transport

companies, Dresden University of Technology

Mail: [email protected]

Tel.: +43 1 31336-4590

Since 2001

Head of the Institute for Transport economics and logistics management, WU-Vienna

Head of the Research Institute for Supply Chain Management, WU-Vienna

Co-Executive Directors of the European section of the MIT Forum Supply Chain Innovation


http://www.best-masters.com/ranking-master-supply-chain-and-logistics.html














The Institut of Transport is offering a

broad area of expertise for research

and industry projects

Strategy development:

Development of logistics and supply chain strategies for all industries

Strategy development / strategic realignment for transport and logistics providers

Logistics and supply chain optimization:

Supply chain performance measurement and management

Analysis, modeling and optimization of international supply chains

Transport optimization:

Transport optimization and transportation management for all industries

Optimization of transportation nets for transport and logistics providers

Socioeconomic assessment and evaluation:

Assessment of transportation infrastructure

Evaluation of transport policy measures

Sustainability:

CO2-calculations in transport and logistics

Green logistics concepts and programs


.. The „Kummertabellen“

(Toll calculation sheets)


The „Kummer toll calculation sheets“ and Softeware are widely used to calculate the

toll costs for groupage services and Less than truckload shippments. They are

available for the following countries

Austria GermanyCzech

Repub.

Slova-

kiaPoland

Switzer-

landHungary France

European truck toll challenges


Big increase in European truck tolls (germany,

austria, …)

Low predectibility of governmental actions

Development and Challenges of the multipolar world

Reuters - CRB - Future -Index (CCI) – All Commodities


Nothing new in the

world: Globalization?


Globalization is an old phenomenon

Jules Vernes in 80 days around the world

Man comes from Africa and conquers the world

Greek think that the world is a “globe”

Magelan organizes the first circumnavigation

Airplane in 24 hours around the world

Satellites in 90 minutesInformation within a second

Goods were exchanged on the Silk Road

Dschingis Khan from ca. 1160 to 1227

100.000 BC

ancient

1519-1521

19th century

today

Bronze Age420 BC

12th century


The Silk Road

Already in Bronze Age definitely from the 5. century BC (Herodot about 430 BC.). Intermediary system, South route

Bildquelle: http://upload.wikimedia.org/wikipedia/commons/0/00/Seidenstrasse_GMT.jpgPAGE 14

Political and

economic power will

be globally

distributed


1990: economic and political power is

concentrated in the triad economies

PAGE 16 2 December 2013

Now greater dispersal of economic power

as the developing economies contribute an

ever-increasing share of the world’s output

trade and investment


Economic power is becoming more

dispersed

Developed World

Share of global GDP World’s biggest economies

Real GDP at 2005 prices and PPP

Emerging World

202520071990

US

China

India

Japan

Germany

US

Japan

China

Russia

Germany

China

US

India

Japan

Germany

UK

France

Russia

Brazil

Italy

India

France

UK

Italy

Brazil

Russia

UK

Brazil

France

South Korea

CAGR

2005-

2025

Em

erg

ing

5.8

%

0

20

40

60

80

100

120

1980 1990 2005 2015 2025

61%

57%

49%

39%51%

43%39%

61%71%

29%D

eve

lop

ed

2.7

%

Source: EIU Source: EIU

Real GDP at 1996 prices and at PPP, US$ trillion

Source: Accenture (2010)PAGE 18 2 December 2013

The globalization and

diffusion of power is

a huge force in the

battle against poverty


World-wide wealth 2005

miserable

Source: using ideas form Horx (2006)

poverty

wealthy

rich

Bill Gates und

Ingmar Kamprad +

ca. 1000 BillionairesCa. 10 Mio.

Millionaires

Ca. 1,8 Billion

Ca. 830 Mio.

Ca. 3,3 Billion


Many people in Europe are afraid about the globalization challenge

Annual growth of 10 % in the

80th, 90th and beginning of 21th

century now slowing down to 8 %

Huge infrastructure investments

1000 km highways per year

Annual growth of 6 % in the

80th and 90th

Population still growing

Poverty declined from 51 % (1977) to

26 % in (2000)

Huge infrastructure investments

(2000 11 km new highways per year,

2005 11 km per day)


Chinas economic and social

development

0

1000

2000

3000

4000

5000

6000

7000

1971 1980 1990 2000 2010

Per capita income per year (US $)

120 190310

950

4450

2012: 6190

Declining Poverty in China

Number and % of Poor

(und 1,25 US $ per day)

84 %835 Mio.1981

60 %683 Mio.1990

2009

157 Mio.12 %

using FAZ , 24.11.2013, S. 26, sources: Worldbank, Statistisches Jahrbuch ChinaPAGE 22 2 December 2013

World-wide wealth 2030

????

miserable

poverty

wealthy

richCa. 100 Mio.

Millionäre

Ca. 4,4 Mrd.

Ca. 400 Mio

Ca. 2,9 Mrd. Source: using ideas

form Horx (2006)


Global SCM challenges

High unprecedented volatility in prices

Increase in risks

Increasing safety and security requirements

Increasing unpairities


The business

environment has

become dynamic and

uncertain

Transport an logistics

markets remain

volatile

Don t claim: act!


Volatility of world economy is

increasing and remains high

Reuters - CRB - Future - Index (CCI) – All Commodities

Thomson Reuters / Jefferies CRB Continuous Commodity Future Index (CCI-Index):

basket of 22 sensitive basic commodities their markets are assumed to be among the

first to react to changes in economic conditionsSource: Thomson Reuters (2010)

1st oil shock2nd oil shock

World economic

crisis

The supply chain is the tip of

the spear confronting

volatility:

Deteriorating demand

Volatile input cost

Unprecedented credit squeeze

Equity market turmoil

…


Price development of charter rates

for Container ships: HARPEX

(Harper Petersen charter rates index)

World financial crisis

http://www.harperpetersen.com/harpex/harpexRH.do?timePeriod=Years10&&dataType=Harpex&floatLeft=N

one&floatRight=None, vom 16.1.2013

World financial

crisis

Overcapacity


http://www.harperpetersen.com/harpex/harpexRH.do?timePeriod=Years10&&dataType=Harpex&floatLeft=None&floatRight=None

http://www.harperpetersen.com/harpex/harpexRH.do?timePeriod=Years10&&dataType=Harpex&floatLeft=None&floatRight=None

Increase of the KPI:

Transportation costs

product price

Development of transportationcosts and product prices

80%

90%

100%

110%

120%

130%

140%

150%

160%

Tra

nsp

ort

ati

on

co

sts

Transportation costs (realistic scenario)

50 % truck 50 % railProduct price trend (slidely negative)

80%

90%

100%

110%

120%

130%

140%

150%

160%

Ind

ex:

Tra

nsp

ort

ati

on

co

sts

fro

m p

rod

uct

pri

ce

Reduction of the KPI:

Transportation costs

product price

2005 2010 2015 2020


Development of transportationcosts: Realistic Scenario (for both transport modes)

Truck

Fuel

Lubricant

Tiers

Repairing

Road pricing

Staff

Fix costs incl. Dev.

Overhead

Reduction of staff costs due to

cheap EU-25 drivers until 2005

than moderate increase

Introduction of road pricing

in all European countries

Railway

Track

Traction (Locomotive)

Energy

Staff

Waggons

Overhead

Shunting

realistic realistic

2010 2015 2020

100 133,8 179,1

100 127,6 162,9

100 115,9 134,4

100 115,9 134,4

100 121,7 148

100 115,9 134,4

100 115,9 134,4

100 110,4 121,9

realistic realistic

2010 2015 2020

100 121,7 148,0

100 105,1 121,8

100 127,6 162,9

100 110,4 128,0

100 115,9 134,4

100 113,1 131,2

100 105,1 121,8

Significant rise of energy costs

Realising of economies of scale

in production of locomotives

Moderate increase in nearly all

other railway cost categories

due to productivity gains (exept

shunting)


Development of transportationcosts: Realistic Scenario

80%

90%

100%

110%

120%

130%

140%

150%

160%

170%

Year

Tra

nsp

ort

ati

on

co

sts

2005 2010 2015 2020

Truck 2005-2010

Rail 2005-2010

Truck realistic

Rail realisticExpected advantage of

a lower increase of

railway costs in

comparison to road

costs, about 16,4 %


But risks are

increasing


C-TPAT

C Customs

T Trade

P Partnership

A Against

T Terrorism


Problem: Transparency for your competitors


The business

environment has

become dynamic and

uncertain

Transport an logistics

markets remain

volatile

Don t claim: act!


How companies act in a multipolar

world


Speed up

globalization


How the iphone conquered the world

July 2007 November 2007 Mid to End 2008 Since 2009


How the iphone conquered the world

The iPhone 5 will debut in 9 countries until September 21:

the U.S., Canada, the U.K., Germany, France, Australia, Japan, Hong

Kong and Singapore.

On September 28, the iPhone 5 will roll out in 22 additional countries:

Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, Hungary,

Ireland, Italy, Liechtenstein, Lithuania, Luxembourg, Netherlands, New

Zealand, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden

and Switzerland.

The iPhone 5 will be available in a total of 100 countries by December

Apple plans to sell 10 million iPhone until end of September and sold 4

million of the iPhone 4S in its first three days of availability.


http://appleinsider.com/articles/12/09/04/iphone_5_sales_could_reach_10_million_this_quarter.html

http://appleinsider.com/articles/11/10/17/sales_of_apples_iphone_4s_top_four_million_in_first_weekend.html

http://appleinsider.com/articles/11/10/17/sales_of_apples_iphone_4s_top_four_million_in_first_weekend.html

Increase scale,

Increased global

market power,

global assets and

global employment


Grohe´s global and flexible manufac-turing footprint with streamlined production across all products

PAGE 40 2 December 2013Source: Schachner (2013)

GROHE Group’s global manufacturing footprint and manufacturing base –clear specialization of each plant

PAGE 41 2 December 2013Source: Schachner (2013)

Stretch - Companies supply chains need

to grow

Maker Mover Integrator

Home Market

Near Shore

Off Shore

• Materials

requirements

• Sourcing &

procurement

• Inbound logistics

• Demand & forecasting

• Inventory management

& replenishment

• Order management &

distribution

• Channel control

• Customer care

• Network optimization

• Make-buy decisions

• Home geography

• Home customer/ product

clusters

• Adjacent geographies to

home

• Home or diversified

customer/product clusters

• Distant geographies to

home

• Diversified customer/

product clusters

Continental

Enterprises

International

Enterprises

Domestic

Manufacturing

Enterprises

• Capacity &

production planning

• Factory scheduling &

productivity

• Quality assurance

Geographical

presence

Functional

reach

The most

demanding Stretch

challenge – grow

both dimensions at

once

Source: Accenture (2010)PAGE 42 2 December 2013

Supply Chain

Segmentation:

From “one size fits all”

to differentiated

solutions


Complexity - How to align supply chains

with customer needs

Source: Living Supply Chains, John Gattorna, FT Prentice Hall 2006 and accenture 2010

Your customers won’t be satisfied until you run 3 or 4 different

combinations, all at once

Relationship with customer

Predictability of demand

“Continuous

Replenishment”

“Lean”

Loose

TightHigh Low

Managed through close

collaboration with

customers.

Focus on maintaining

customer relationships

Price sensitive, with

largely predictable

demand.

Focus on efficiency

Unforecastable - respond

opportunistically. Focus

on providing creative

solutions for premium

price

Many unforeseen

demands needing more

resources to satisfy.

Focus on the service-

cost equation

“Fully Flexible”

“Agile”

The Four Generic Supply Chain Types


The idea of the Customer Interaction Modell (CIM) is that customers get the type of interaction they require and are willing to pay for


Source: BASF (2011)

BASF has defined 6 Customer Interaction Models (CIM) which cater to distinct customer needs


Source: BASF (2011)

Through the Customer Inter-action Portal (CIP) Customer Interaction Models get real


Source: BASF (2011)

Customer Segmentation: Translating Market Segmentation to BRM


Source: BASF (2011)

Business Rules Management is transparent through dashboard reporting


Source: BASF (2011)

Use powerful tools to

optimizes global

Supply Chains


Use powerful tools to Map transport flows and to plot SC Structure as well as transport flows (SCNO)

Geographic

Information systemsGraph models


Use unbalanced

transport flows in

Global Supply Chain

Strategies


Model to analyze transport flows


Analyzing European transport flows


Thank YouVielen DankDěkujiĎakujemDziekujeKöszönömMultumescHvala

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