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
Relationship
Strategy
Sourcing
Decision
Strategy
Withdrawal Strategy
International
Analysis
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
Motivation
CONTINGENT
VARIABLES
Infrastructure
Technology
SCENARIO
Size
Competition
Customers
PLANNING
Supply Chain
Strategies
Supply Chain
Integration
Mechanisms
FACTORS AFFECTING SUPPLY CHAIN STRATEGY
Survey Scope
Sector
Co
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
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
 Strategy
 Team Working
 Waste Reduction
 Procurement
All Marked Out of Five
4.5
4.4
4.3
4.1
4.0
Importance of Issues - Medium
 Supply chain management
 Time to Market
 MRP
 Financial management
 Supplier development
R & D
 JIT
3.5
3.5
3.5
3.5
3.5
3.5
3.5
Importance of Issues - Low
 E-Commerce
 New technology
 Customer management
 Kaizan
 Benchmarking
 IIP
2.5
2.5
2.5
2.5
2.5
2.5
Those with the lowest Priority are things to do with
INNOVATION!!
SMEs Perceived Priorities of their Customer’s
Requirements
High
 Quality
 Pricing
 Product Reliability
 Service Reliability
 Capability to Support
Low
 Time to Market
 E- Commerce
 R&D
 Purchasing Expertise
 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
National
Assembly Wales
£262 m
Further
Education
£78m
Higher
Education
£207m
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
information helps
enterprises to plan
ahead and be more
competitive
Information
• Demand forecasts
• Customer delivery
requirements
• Inputs’ supply markets
• Supply chain services
Financial • Planning & acquisition of
physical assets
and
Physical • Cash flow impact and
Assets
financial risks in the supply
chain
Enterprise
Management:
• Planning
• Executing
• Monitoring
Human
Resources
• Securing & developing
SCM expertise
• Supplier development
programs
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.