# Presentation: 203507

## Supply Chain - A Strategic Perspective

## Can Supply Chain Save the World?

**Can Supply Chain Save the World?**

**Save it from what?  What’s happening in our World?**
**Technology focused industries moving to large, emerging markets, not focused on retaining business in high-margin, lower volume, aerospace sector**
**Results in limited number of qualified, developed suppliers **
**Industry consolidation continues**
**Long-term viability of domestic supplier capability questioned**
**More technology *****invention***** – product and process – taking place off-shore**
**ITAR restrictions hamper use of foreign suppliers**
**Foreign requirements, product and environmental, different**
**Aerospace electronics requirements continue to veer from commercial**
**Lack of supply chain insight hinders ability to manage risk and ensure performance**
**Who pays for, ensures, effective supply chain management?**
**Who’s making the make/buy and sourcing decisions, and do they represent “best value” to government?**

## Not enough to understand evolving landscape

**Must organize to respond quickly, adapt in this environment**** **
**Issues feel staggering, options seem limited (or limitless) and confusing**
**What requires an immediate reaction? What are appropriate actions?**
**USG and aerospace supply chain are:**
**Recognizing need and market advantage by ensuring access to critical supplied technologies**
**Recognizing SCM as key process/system (are we investing as such?)**
**Reducing supply base, focusing business into fewer, better, more strategically aligned suppliers**
**More focused than ever on sub-tier supply management**
**Contractual management giving way (begrudgingly) to relationship management**
**Struggle for everyone, opportunity for those who can successfully integrate and manage their supply chain**

## Can any - all - SCM save us?

**The discipline of Supply Chain Management is like a giant Chinese menu, filled with options regarding tools, systems, processes, structure, focus, personnel, reporting, contracting, relationship models....**
**The key is to discern which possible elements, working in concert, are best applied for a given agency, business, endeavor, program, and situation**
**Knowing what the options are and how they fit together is essential**
**What is critical?**
**What is superfluous?**
**What is most efficient and cost-effective**
**What produces the lowest total cost and lowest total risk?**
**Effective SCM does not shift risk, it reduces/eliminates risk**
**Effective SCM does not move cost, it removes cost**
**Effective SCM allows for the best entities to produce the best outcomes**
**Effective SCM is objectively measured and managed**

**So what is Supply Chain Management?**

## Evolutionary depiction of Supply Chain Management 

**Evolutionary depiction of Supply Chain Management **

## ‘Know Thyself’

**Good Supply Chain Management begins with organizational self-awareness**
**More about what you do than what’s done to you**
**If you don’t know who you are and what you do, it’s very difficult to know who you need and what you need**
**Your supply chain and supply base are an extension of who you are, in a sense they are *****you***
**Your supply chain extends to the supply base, but its success begins and ends with *****your***** decision making**
**It’s the beginning of successful risk management**
**You can outsource capacity. You can outsource capability. You can out source expertise. Ultimately, you cannot outsource risk.**
**Again, that is you (your success) out there**
**Greater level of risk, greater level of control**
**Difficult to be a visionary**
**Easier to be an “Exceptional Thief”**
**Discipline before tools **
**Know when to invest in collaborative design and mfg tools**
**Learn to saw before you buy a chain saw**

## So who are we? SCM links customer needs with supplier offerings 

## Strategic Supply Management drives tactical ‘drumbeat’

## The Integrated Supply Chain

**Supply Chain Mapping – extended network design, multi-tier sourcing/functionality**
**By supplier, technology**
**How involved do you want to be? Do you really want to manage Tier 2 and Tier 3 suppliers? Do you need to? When, where, why?**
**Discriminating Technologies**
**Supply Chain map of a particular critical supplied technology**
**By data flow and/or function**
**By cash and/or product**
**Objectives of Optimizing the Internal Supply Chain**

_**Building a competitive advantage**_
**Reduced cycle times**
**Part selection time**
**Supplier lead times**
**Lower costs**
**piece parts, assemblies**
**labor **
**part mastering, parts expediting**
**Reduced material waste**
**Strategic vs. Tactical focus **
**Optimized supply base support and flexibility**
**Actual costs easily used in proposal setting**

_**Reducing the risk in executing programs**_
**Reduced program schedule slips**
**Increased on-time delivery performance **
**Increased % of parts received by need date **
**Assured part availability**
**Improved quality of parts, assemblies**
**Reduced level of part obsolescence**
**Improved supplier performance**
**Optimized prioritization of work**
**Improved materiel, supply chain visibility  **
**Access to availability within the supply chain**

## Example of Integrated Supply Chain: Depicts tactical flow with continuous feedback from strategic activities 

**Example of Integrated Supply Chain: Depicts tactical flow with continuous feedback from strategic activities **

- Project future part, technology requirements

**Product Structure,**
**mastered parts, BOM:** Requirements ready to be planned and bought – initiate, drive product structure into MRP

**Parts**
**Management -** Time-phased Material Planning: Quantities, need dates, requisitions

**Supply Mgmt:** Tactical buying, Strategic Supply Mgmt

**Receipt**

**Inspection: **Prioritized, expedited

**Inventory: **Optimized stock** **

**Design in optimized solution:** Identify, use preferred parts (symbols in CAD)

- Update Preferred Parts list over time

- Consolidate forecasted material requirements into RFQs for Purchase Agreements (PAs)

- Establish PAs, negotiating reduced costs and leadtimes, based on forecasted needs

- Focus business into Preferred Suppliers through use of PA process

- Preferred Parts from Preferred Suppliers routed Dock-Stock

- Track supplier trends, reduce obsolescence

- Drive improved supplier performance through supplier report cards, performance reviews

- MRP

- Engineering

- Supply Chain Mgmt

**Mission Assurance**

- ACTS

- PDM

- CAD

- Standardized quality levels

## Examples of Integrated Supply Chain Metrics

## In Conclusion...

**SCM is an increasingly important discipline and provides a broad array of options **
**Understanding and articulating the various aspects is essential to optimum use of SCM**
**Performance begins with a holistic view of the flow of the technologies required, their development and sources, and an analytical approach to defining, developing and improving the supply base**
**Significant advantage to those who can pull this off**
** ****Whether ‘Supply Chain’ can save the world is yet to be determined...**
**... ****but properly employed SCM systems, processes, tools and personnel can dramatically improve an organization’s performance **