DEFINING SUPPLY CHAIN VALUE
AEROSPACE SUMMIT 2015
Agustin Picado, Country Manager UPS Mexico
September, 2015
Index
■
The state of aerospace industry
■ Expectations and trends
■
Defining Supply Chain Value
■
Conclusions
■
Q&A
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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■The state of aerospace industry
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Mexico’s growing Aerospace industry
6th supplier of
aeronautical parts to
the USA, above
Brazil, Italy, Israel
and China
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
3PLs, like UPS, can
work with companies to
determine the best
distribution strategy for
their business and
reduce the need for
large-scale capital
investments.
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Supply Chain Complexity
•
The aerospace supply chain is evolving
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Aerospace industry: Trends & Models
•
 From 4 to 6 million parts
in an aircraft
Traditional A&D MRO Value Structure
Materials
Management
Overhaul
/Teardown
Asset
Management
Work
Execution
 More than 20,000
suppliers
 More than 3 billion parts
procured per year
Manufacturers
Operators
Remanufacturers
Service Providers
Source: IDC Manufacturing Insights, 2014
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
 Information management
spend more than $36B
of coordination waste per
year
Global airline will triple
for 2032
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■Expectations and trends
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Key Barriers to Expanding into Emerging Markets
Internal compliance concerns on adhering
all requirements
Establishing initial operations
Limited resources to pursue new markets (e.g. financial
resources, human capital, infrastructure)
Determining strategically which emerging markets to enter
Keeping up with regulation changes
Finding in-market partners to supply parts / materials or
build or service our products
"We aren´t in the business of
transportation, we´re in the
business of products, that´s
what we want focus."
A&D Company
Generally navigating the regulatory environment
Current economic conditions
Cultural challenges
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Top Drivers for Moving Manufacturing /Service Into
Emerging Markets
Improving service levels by bringing production and / or
service closer to demand
Responding to customer requirements to locate service
facilities within operating countries
Cost benefit of China or other low-cost manufacturing is
no longer compelling
Skills or technology limitations in existing locations
Responding to government or regulatory body
requirements to locate manufacturing within client country
"The cost of having your own
operation there in another
country can exceed the profit,
so you always have to be
careful. It just depends on the
country. We pulled out of
China because of operating
costs ."
A&D Company
Improving control over quality and intelectual property
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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■Defining Supply Chain Value
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Defining Supply Chain Value
A leading Aerospace and Defense manufacturer’s team need real-time analytics on
inventory levels and customer delivery performance. Significant customer penalties can be
incurred if delivery is late. These are the most common KPI´s:
•
Reduce days in inventory
A&D
•
OTD above 99%
with:
•
Avoid use of premium services by executing by plan
 Lost time & resources
•
Reduce customer delivery penalties
•
Reduce inventory write-offs
Manufacturers
 Excess inventory
 Added costs
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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lead
Supply Chain Management (Latest trends)
Emerging markets
 Manage complexity
 Speed
 Reliability
 Quality
 Consultancy
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Supply Chain Optimization
Network
Optimization
MFG
Optimization
DC Layout
Optimization
Supply Chain
Optimization
Inventory
Optimization
Transportation
Optimization
Fleet
Optimization
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Strategic
Operational
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Risk Mitigation & Compliance
Compliance in:
 Transportation
 Warehousing
 Global trade
 Kitting/consolidating
Monitoring
 Reporting
Avoid:
 Penalties
 Unexpected expenses
 Stop operation
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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■Conclusions
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Future Outlook
•
Emerging markets are a promising opportunity
•
Companies need to ensure be agile and optimize their supply chains
•
Manage supply chains to build a level of risk mitigation and resilience
•
Enable rapid response and aligning resources with market demands
•
Need of essential guidance
•
Suppliers with geographic depth of coverage
•
Provide breadth of services across processes
•
Facilitate visibility and relationship management
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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■Questions
Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees or customer, unless expressly authorized by UPS.
© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Thank you