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Core competence thinking in supply chains

Core competence thinking in supply chains. The Eighth Cardinal Sin. Outsourcing a core competence (Cox, A). None Core Today Core Tomorrow. Core Today None Core Tomorrow. None – Core. Core Today. Successful Outsourcing Examples. Unilever IBM global procure-to-pay service

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Core competence thinking in supply chains

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  1. Core competence thinking in supply chains (c) Neil Fuller 2013

  2. The Eighth Cardinal Sin Outsourcing a core competence (Cox, A) (c) Neil Fuller 2013

  3. (c) Neil Fuller 2013

  4. (c) Neil Fuller 2013

  5. (c) Neil Fuller 2013

  6. None Core Today Core Tomorrow (c) Neil Fuller 2013

  7. Core Today None Core Tomorrow (c) Neil Fuller 2013

  8. None – Core (c) Neil Fuller 2013

  9. Core Today (c) Neil Fuller 2013

  10. Successful Outsourcing Examples (c) Neil Fuller 2013 Unilever IBM global procure-to-pay service Jaguar Land Rover DHL NHS DHL -NHS Supply Chain Motorola Flextronics

  11. (c) Neil Fuller 2013

  12. Outsourcing failures (c) Neil Fuller 2013 G4S unable to supply 8000 contracted staff for Olympics games security – taxpayer picked up the bill £70 million Boeing NHS Npfit £7.6 bn overrun HMRC’s tax Credits, £1.4 bn in overpayments written off.

  13. Outsourcing Failures (c) Neil Fuller 2013 Sainsbury’s “Business Transformation Programme” – the new system couldn’t track stock - cost £500m Carthage’s First Punic war Hanno the Great outsourced soldiering but a contract dispute resulted. Hamilcar Barca settled out of court.

  14. Risks of Offshore Outsourcing Also dangers from Supply Chain Complexity (c) Neil Fuller 2013 Reputational risk 2. Underestimating the Total Acquisition Cost of the transaction

  15. (c) Neil Fuller 2013

  16. (c) Neil Fuller 2013

  17. (c) Neil Fuller 2013

  18. Reputational Risk Microsoft Zara Walmart Counterfeiting Risk – quality affects reputation. (c) Neil Fuller 2013 Threats of mass suicide Slave labourers freed 100 young women burned to death

  19. True Cost (c) Neil Fuller 2013 • Prof K.W.Platts (University of Cambridge) • Widespread failure to identify all of the associated costs • Research shows that companies underestimate the non price costs of sourcing in China (and Far East) by about 30% • Worst case total cost four time the quoted price. • Underestimating warehousing, storage and inspection and quality costs.

  20. (7)Steps to improved outsourcing (DR IlanOshri) (c) Neil Fuller 2013 • Understand the outsource motive and the resources available, identity overall goals and take a systematic approach. • Avoid bandwagoning and outsourcing problems rather than solving them • Avoid sourcing models that are beyond the firm’s capability to manage • Draft SLA’s on the basis of benchmarks that lead to competitive advantage (KSF’s).

  21. The Relationship Between Supply Chain Risks (Christopher, M et al. 2010) Supply Risk Process Risk Demand Risk Control Risk Environmental Risk (c) Neil Fuller 2013

  22. The Future (c) Neil Fuller 2013 When it is done well it clearly brings many advantages Globalisation has become a permanent feature of trade and offshore outsourcing will continue As organisations learn from their experiences they will become more cautious and will attempt to avoid the pitfalls and make more measured decisions. There is evidence of a trend towards insourcing (reshoring) with fewer but improved and more rationale outsourcing decisions.

  23. Successful Outsourcing (c) Neil Fuller 2013

  24. Thank you for listening Any Questions? (c) Neil Fuller 2013

  25. Definition White and James (1993) “a contractual relationship between an external vendor and an enterprise in which the vendor assumes responsibility for one or more business functions of the enterprise (c) Neil Fuller 2013

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