Leveraging Supply Chains for Profit - - PowerPoint PPT Presentation

Leveraging Supply Chains for Profit

• www.william.lawrence@uwimona.edu.jm

• 1. What is a supply chain?
• 2. Leveraging supply chains
• 3. Measuring supply chain performance
• 3. Measuring supply chain performance
• 4. Conclusion

• Upstream or

Inbound Logistics

• Downstream or

Outbound Logistics

The network of involved in the provision

• f goods or services from the earliest supplier to the ultimate customer

Supply Chain Categories

• !

Mission Corporate Strategy

The institution of choice in the financial sector providing superior products and services and being a good corporate citizen for the benefit of

• ur customers, shareholders and staff

Retail, Corporate & Commercial, Treasury, Insurance, Mortgage, Wealth (Portfolio of SBUs)

Supply Chains for Strategy Execution

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• Business Strategies

Functional Strategies Performance

Cost Leadership in Retail Banking (SBU) Centralized back office operations, Branch network, e3Business (Supply Chain)

Revenue, ROE, (Throughput Productivity)

• For long3run success, firms must source from, and sell to, multiple

markets under conditions of international competition and rapid developments in ICT that remove restrictions of time and place.

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How should organizations choose and leverage supply chains to increase

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profitability?

• Began operations as Tetley Tea Company in 1967

Tea importation, packaging and distribution Sold to the Mahfood Family in 1996 Exports started late 1990s and was 38% Sales by 2009

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Authorized to sell Tetley brand black and green teas Owns the “Caribbean Dreams” brand of herbal teas Packages teas under private labels for other companies 52 Employees by 2010 Listed on the JSE in 2010

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Source: ITC and LMC International

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Declining Real Price of Tea

(&)&*++,-.)/0.&*1 23

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Suppliers

• Tetley

Tea (UK)

• JSE
• Others

Jamaican Teas:

• Tetley
• Caribbean Dreams
• 18,000 sq. ft. factory
• Over 100 million bags
• f black, green and

herbal tea per annum

Distributors

• Jamaica

(Domestic)

• Other

Caribbean

• USA
• Canada

Retailers & Consumers

• Supermarkets
• Hotels
• Restaurants
• Shops
• e3Tailers
• e3Tailers

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4 !

• 5
• Tetley partnership

√ √ √ √ JSE Public Listing √ √ Bundle tea brands √ √ Use sole distributors √ √ √ e3Commerce √ √ Common strategy √ √ √

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2

• %
• Efficiency

0.15 7 1.05 Responsiveness 6/67 7 0.35 Integration 0.10 8 0.60

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Capacity 0.15 7 1.05 People 0.15 8 1.20 Information 0.10 7 0.70 Inventory 0.20 8 1.60 Capital 0.10 7 0.80 TOTAL 1.00 9/:7

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1 Direct Cost % Revenue 75 / 100 = 75% 90 / 150 = 60% 2 Weight 75 / (75+60) = 60 / (75+60) =

Suppliers Shared

Total Operating

75 / (75+60) = 56% 60 / (75+60) = 44% 3 Operating Expenses $1,000 x 0.56 = $560 $1,000 x 0.44 = $440 4 Throughput Productivity (100375) / 560 = 0.04 (150390) / 440 = 0.14 AA

• Shared

Resources SBU 1 SBU 2

Total Operating Expenses = $1,000 Revenue = $100 Direct Cost = $75 Revenue = $150 Direct Cost = $90

** High scores are good

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2

• %
• Efficiency

6/67 7 0.35 Responsiveness 0.15 8 1.20 Integration 0.10 7 0.50

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Capacity 0.15 8 1.20 People 0.15 8 1.20 Information 0.15 6 0.90 Inventory 3 3 3 Capital 0.25 9 2.25 TOTAL 1.00 9/86

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• 1. Proper supply chain management is crucial for

effective and efficient strategy execution

• 2. Supply chains are leveraged based on (i) fit with

global criteria and (2) alignment and strength

*

global criteria and (2) alignment and strength

• 3. Throughput productivity is the ultimate measure
• f supply chain performance