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单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,2021/2/8,#,Electrolux China,“Network Strategy” Project,Final Report Presentation,Beijing, March 10, 1999,Project Introduction and Background,Customer Survey- Survey Approach- Survey Results- Findings and Opportunities,Logistics Network- EOQ inventory modeling- Logistics network modeling,Recommendations and next steps,Appendices,- Process flow,- Cost analysis,Contents,Major Brands Market Share in 1999,Electrolux Objectives,Reduce working capital,Increase turnover,(through greater product availability),Reduce operating costs,Electrolux China has committed to achieve Best Practice Service and Cost, as basis for rapid business growth,high inventory carrying cost,in-store stock-outs,too many warehouses:,limited inventory and service control: SOP systems and procedures for inventory control are not systematically in place/applied,limited know-how and support,unclear responsibilities and performance criteria,Electroluxs supply chain objectives.,are to improve current performance.,to deliver real bottom line benefits,Electrolux China has identified supply chain improvements as one of its corporate priorities to improve customer satisfaction and cost performance.,Satisfy requirements of target customers (better than competition),Achieve full control of the entire logistics process,Limited visibility and control, appropriate perforrmance criteria not in place,Likely gaps in service satisfaction. Required Service Levels and competitors position are not measured,The overall objective of Electrolux China Network Strategy Project is to optimize the distribution network configuration in terms of:,- Meeting customer service requirements;,- Achieving minimum costs; and,- Controlling the entire outbound logistics process.,Increased Revenue,- Improved product availability and promising capabilities- Scalability to meet future business requirements.- Improved responsiveness to market conditions.- Optimized fill rate capability.- More flexible, responsive delivery options- More value-added services.,Reduced logistics costs,- Improved end to end supply chain visibility- Lower cost-to-serve in transportation and distribution,Improved asset productivity,- Fewer stock locations through rationalization to achieve higher network productivity,Reduced working capital,- Lower LDC stocks through more flow-throughs, smaller more frequent orders, centralized slow movers, better use of supplier stocks etc.,EXPECTED RESULTS,PROJECT OBJECTIVE:,The overall objective of Electrolux Network Strategy Project is to determine the least cost distribution network configuration to satisfy the specific service level requirements of its current and future target customers,Project Objective and Scope,The scope of the Network Strategy Project is to answer the following questions:,What are the customer service requirements which impact channel design, logistic process and infrastructure?,What is the current performance (performance measure and customer satisfaction) of Electrolux in meeting these requirements and what is the GAP versus the competitors as well as against the “Best Practice” achievable in China?,Should Electrolux provide inventory carrying and transportation services to our clients (with appropriate price increase)? What other additional logistic services can provide competitive advantage to Electrolux in the market place?,Should Electrolux change the structure of its distribution channels in China (e.g. sales to retailers, vs to distributors?),Can Electrolux gain by plant direct shipping?,How many distribution centers (DCs) should Electrolux have? How many RDCs and LDCs?,Where should the DCs be located?,Which types/location of customers and which branch should be served by each DC? Which customers should be served directly?,Should all DCs carry all products or should they be specialized by product line?,Should Electrolux contract for warehousing services or operate its own DCs?,What impact do different transportation modes have on Electrolux logistics network requirements?,What inventory control procedures (high level) should Electrolux establish in order to satisfy customers, minimize cost and maintain control?,What are the systems and human competencies requirements to achieve these objectives?,In developing the optimum supply chain capability for Electrolux China we are utilizing a three-phased approach to developing and rolling-out the new distribution network - This project covers only Phase I,Overall Approach towards Network Optimization,BuildLogisticsModel,Task 5,AssessAlternatives,Task 6,Conduct ReviewSessions,Task 7,Present Results,Recommen-dations& Implemen-tationAction Plans,Task 8,ConductVisioningSessions,Task 1 a.,InitiateDataCollection,ReviewCurrentOperations,Task 2,Under-stand,Service Require-ments,Task 3,InitiateDetailedProjectPlanning,Task 1,Task 4,Full-Scale Implementation Rollout,Phase I,Phase II,Phase III,Distribution NetworkProcess Design,Distribution Network,Strategy Development,CUSTOMER SURVEY,NETWORK OPTIMIZATION,Project Approach,1,Initiate Detailed Project Planning,1.,a Conduct Visioning Sessions,2,Review Current Operations,2,a. Understand current network setup,2,b. Review current network logistics strategy,2,c. Review current customer service strategy,3,Understand Service Requirements (customer interviews and analysis),3,a. Create customer segmentation frameworks,5,Identify Alternatives,5,a. Perform demand aggregation analysis,6,Assess Alternatives,7,Conduct Review Sessions,8,Present Preliminary Results & Recommendations,Key Activities by Week,(assuming 10 weeks),1,2,3,4,5,6,7,8,9,10,3h,. Analyze customer requirements and assess Electrolux GAP,3,k. Analyze Cost to Serve and Strategic Attractiveness,3,l. Develop Recommended New Service Offerings,3m,. Assess Logistics Warehouse Netwk Strategy Implications,4,Initiate Data Collection,Collect Current Warehouse Network Data,a. Facility Operating Costs,b. Transportation Costs,c. Inventory Costs,d. Demand volumes,3b. Interview Customers in Location 1,3c. Interview Customers in Location 2,3d. Interview Customers in Location 3,3e. Interview Customers in Location 4,3f. Interview Customers in Location 5,3g. Interview Customers in Location 6,5,b. Selection of 5-8 “best options”,Project Workplan,Project Introduction and Background,Customer Survey- Survey Approach- Survey Results- Findings and Opportunities,Logistics Network- EOQ inventory modeling- Logistics network modeling,Recommendations and next steps,Appendices,- Process flow,- Cost analysis,Contents,ThesampleforthecustomersurveytargetedarepresentationofElectroluxscurrentoperationsinChina,anditscurrentandfuturemarket,-,CustomerSamplingMethodology-,Historical Sales,Market,Growth&,Trends,Current LogisticsOperation,Wherewere thehighest demandareas?,Wherearethe customerslocated,whichhassignificantcontribution to Electroluxrevenue?,What arethecurrentcustomertypes?,Wherearethe keyaccount customers?,What is thecurrent sales regions?,Wherewouldbethepotential highgrowth areas forrefrigerators?,What willbethe emerging channelfor white goods?,What aretheservicerequirementsfromtheemergingchannelplayers?,What is thecurrent logistic servicepattern,withregardtothe LDCs,”,” distributionandthe customerswhicharebeingserved?,Interview Areas,Interview Customers,Survey Sample Size and Coverage,Interview Areas,Survey Sample Size and Coverage,Interview Areas,Interview Customers,Survey Sample Size and Coverage,Theprojectteam focusedonobtaining as muchcustomerdatathrough directinterviews.Acustomersurveywas faxed outtobroaden geographiccoverage,-,CustomerSurveyApproach-,FaxOut Survey,Focused on severalAC/Electroluxchosenlocations,Beijing,Tianjin,Shanghai,Guangzhou,Changsha,Chengdu,Shenyang, Shenzhen,CustomerTypes,Distributors:Provincial level,city level,Retailers:Department store,home appliancestore,chainstore,KeyAccounts:International chain stores,Broadgeographic coverage to includeareaswheredirect interviewscouldnot be conducted,Stillaimedtoachieve representative sampling of distributorsandretailers,DirectInterviews,Intotal,81customersurvey questionnaires werecollected representinga broad cross sectionofElectroluxcustomers,-,CustomerSurveyBreakdown -,Distributors,Retailers,KeyAccounts,Provincial Level,7,28,International ChainStore,City Level,12,13,3,Department Store,Home Appliance,MultipleFormat,10,ChainStore,7,Total,81,SubTotal,19,59,3,SuperMarket,1,-,CustomerSurveyBreakdown -,Regions,NC,EC,GZ,West,Central,CS,NE,Interviewed,Survey,2,12,1,9,5,7,4,4,10,7,6,0,6,8,Total,41,40,Total,6,22,8,15,5,13,12,81, andalso Electrolux,smarkets,Changsha,Beijing,Shenyang,Shanghai,Chengdu,Guangzhou,Qingdao,Suzhou,Tianjin,Dalian,Kunming,NC,NE,Central,EC,GZ,w,CS,ProjectIntroductionandBackground,CustomerSurvey-SurveyApproach-SurveyResults-FindingsandOpportunities,LogisticsNetwork-EOQinventorymodeling-Logisticsnetworkmodeling,Recommendationsandnextsteps,Appendices,-Processflow,-Costanalysis,Contents,8.,AreyoubeingservedbyElectroluxdirectly?,Yes,No,Allresponseswereinthe,“,“Yes,”,”category,Question8,Whywerenon-ElectroluxCustomersnotcoveredbythesurvey?,Duetonew surveyregulationswhichwere recently released (Dec. 1999) by theStateStatisticalBureau(SSB), acompanymust obtainpermission andapprovalforall marketsurveys conducted(thisapprovalcoverssurvey scope,approachandalsoa reviewandapprovalofthe surveyresults by theSSBbefore theyare released clients).,Theobstacles putinplacebytheregulations(e.g.applyingfor permission, havinga surveyreviewedandapproved, etc.) could haveaddedseveralweekstotheprojectcommencementdateandadditionaltime beforetheresultscanbereleased.Atthis stage,wearenot aware of anycompanieswhichhavesoughtand gainedapproval(including Gallup).,Thekey problemisthatthesurvey reformshaving onlyrecentlybeenimplementedandthe local branches of theSSBare still establishingtheadministrativesystem to dealwithit.Therefore,the most,”,”practical”approachfor conductingthe projectsurvey given thecurrent environmentalconstraintswas to cover onlyour existing customerssinceitwasunlikelythatthey would reportthesurvey to theSSB.,Electrolux Customer,9.,Salesrevenue growthinthenext1-2years,60%,Response:33%30%19%3%12%,Question9,Comments,Themajorityofrespondentswerepositiveintheirsalesoutlook bothfor their sales overall(rangingfromrefrigerators to generalhomeappliances)aswell as specificallyforElectroluxproducts.Typically, growthinsalesofElectrolux products responsesrangedinthe 10 to 30%band.,Guangzhou, WesternChina, EasternChina, North Easternand theNorthChinaregions wereanticipatedtoexperiencethegreatestsalesgrowth in thenext twoyears.Changsha andtheCentralregions areanticipatedtohave .And customerswhoisthe newentryinto themarketexpect highergrowthratethan theothers,Note:Datalimitation since responseswere tailored based on thepositionoftheperson interviewed (i.e. ageneralmanager of adistributorwouldhavea broaderviewofsalesgrowthtothatofa sales manageronlyinvolvedinthesalesofElectroluxproducts).,SalesRevenue Growth,10.,What arethekey brandsofrefrigeratorinyourcurrent business andwhat is theproportion of these brand sales representinyour total refrigeratorsales?Who selldirectly? Whosuppliesyoudirectly?,Question10,RefrigeratorSales,Brand Name,Electrolux,Haier,Rong,sheng,Xinfei,Meiling,Changling,Percentage of Total Sales (%),Purchase Directly from Vendor by Retailer,Goods Shipped Directly from Vendor to Retailer,Days Inventory,Siemens,D,R,60%,21%,D,R,23%,27%,D,R,19%,14%,D,R,17%,13%,D,R,9%,9%,D,R,6%,8%,D,R,8%,17%,92%,91%,84%,86%,86%,95%,91%,91%,94%,83%,72%,92%,86%,92%,17,15,N/A,N/A,15,N/A,N/A,D,R,D,R,D,R,D,R,D,R,D,R,D,R,12,18,16,16,16,19,17,Comments,8 outofthe26customers whodistribute Electroluxrefrigeratorsonly sellElectroluxproducts.,Over 90%ofthecustomers purchase directly fromElectroluxandare alsodirectlyserved by Electrolux,Foreign players, suchasCarrefour,ItoYokado,keep lowinventorylevels,typicallylessthan 5days.,Incontrast,the averageinventory level forlocalplayers variesfrom 7to30days.CustomersinCSandNEholdinghigherinventory level thanotherregions,Electrolux haslowerinventorylevelthanthecompetitorsatits retailer shop, buthashigher inventorylevelatitsdistributorsites,Legend,D:Distributor,R:Retailer,11.,Pleasespecifytheamount of therefrigeratorsalesin1999,Question11,Comments,WholesaleRetail,Average Volume19994,752units,4,640 units,MarketShare(%)28%24%,RefrigeratorSales,Note:Theseresultsareonlyforhighlevelreference,(1)Except 8out of 19 distributorswhoare purelydoingdistributionsalesand 36%ofretailerswho onlyhaveretailsales, therest areallcarryonmultiplerolesinbothdistributionand retailsales.,(2)The distributionsalesisquitelowbecausesurveyincludesanumberofnew distributors,and thesalesnumberisalsoskewedbyretailers whohave weakdistribution sales.,(3)The retailsalesnumberisskewed by acouple of retailerswhoseretailsalesisevenhigherthanmost of distributorssalesduringayear,(4)The marketshareofretailerslookshigher since thedata is skewedbysome dominant local retailchainsand dominant retailersincountylevelcities.,12.,Doyouexperiencethesalesfluctuationindifferent months?,Yes, thefluctuationisasfollows,No,Peak monthsare_,Sales _units/month,Normalmonths are_,Sales _units/month,Lowmonths are_,Sales_units/month,Question12,SurveyResults,Comments,92%,ofrespondentsconfirmedthe seasonal natureoftheirsales,Theperiod justpriortoChineseNewYearandthe summermonthsare thetwopeakseasons withsalesvolumesaround80% higherthan transitionalperiods.,The2-3 monthsafterChinese NewYear andNovemberarethe lowseasonmonths withaveragesalesvolume26% lower thantransitional periods.,May, Octoberand December arethetransitional month fromnormal seasontopeak season.,Peak seasons,Average Sales,(Units/month),Months,Transitionalperiod(s),Lowseasons,January (pre-ChineseNewYear),June to September,May, October, December,FebruarytoApril(postNewYear),November,849,472,351,Season,SalesFluctuation,Ordering,Ordering -Table A,Ordering Service Importance and CustomerSatisfaction,Product,Availability,Ability to,Respond to,Urgent Orders,Order,Frequency,Minimum,Order Size,1.4,1.3,1.2,1.1,Ordering,1.,Items,No.,Satisfaction,(Electrolux),Importance,4.1,4,2,1,3,5,4.1,4,2,1,3,5,3.6,4,2,1,3,5,Satisfaction,Generally,3.9,4,2,1,3,5,4.1,4,2,1,3,5,4.3,4,2,1,3,5,4.6,4,2,1,3,5,4.6,4,2,1,3,5,4.0,4,2,1,3,5,3.5,3.5,4,2,1,3,5,3.7,4,2,1,3,5,3.7,4,2,1,3,5,3.6,4,2,1,3,5,3.8,4,2,1,3,5,4,2,1,3,5,a,Rate from Electrolux Sales Managers,Rate from Electrolux customers,A,3.7,4.9,3.8,3.3,4.4,1.9,4.0,3.8,Ordering- Table A,“,Ability to RespondtoUrgent Orders”, and,“,“ProductAvailability,”,” rankedthemostimportantfactorsfrom thesurvey,Thoughaboveaverage,the customer satisfactionrate towardsElectroluxs abilitytorespondtourgentorders scoredrelatively thelowestamongall thefactors.Customers frommostoftheregions,suchasCarrefourBeijing,Guangzhou DepartmentStorecomplainedthat there is no differentiationinresponselevelsbetweenthenormal ordersandurgent orders,Theoverallcustomersatisfactoryratetowards Electrolux,sorderingservice level is particularlylowinthe Guangdongregion,Most of theretailersshowed lackofunderstandingforminimumorderquantityandorderfrequency as theyare presentlyorderingbasedondemandand paymentcredit,andregard minimumorderquantityas lessimportant in affectingtheirbusinessrevenues.Several customersindicated,“,“1,”,” as desiredminimumordersize,OrderingService Importanceand Customer Satisfaction,Ordering- Comments,OrderingService -Best,OrderingService -CompetitorFeedbackfrom Surveys,Ordering- Competitor,1.,Minimum Order Size,BestWorst,Electrolux4 (2-EC),Haier33 (2-W),Siemens3 (2-W),Xinfei2,Best-,Overall,Electrolux doeshavethemostanswers forbest,butthe responseswere quite spreadoutgeographically.Electrolux appearstobeslightlystrongerinEasternChina,whileSiemensappears to be slightly stronger in WesternChina.,Worst-,Haierclearly hasthemostmentionsanditappearstobeweakest in theWest.,Data-,Data is scatteredacrossanswers.Minimumordersizeis1,butitisverymuch dependentonwhothe customer is.Similarly fortheworse,2.OrderFrequency,BestWorst,Haier22,Electrolux2,Best &Worse-,Scatteredresultsacrossseveralplayers withnoclearindicationofbest players,Slim leads by Haier andElectrolux bothrated2mentionsinthebestcategory.,Interestingnote,isthat Haier,s responsesinECratesitasthebestbyonedistributorwhileitisthe worse by theretailer,Data -,Nospecifics,3.,Ability to respondtoUrgent Orders,BestWorst,Electrolux3,Haier42 (2-EC),Samsung32,Xinfei2,Rongsheng2,Best -,Haierhasthe mostmentionswith4 (whicharespread throughoutChina).Electroluxnext has3 mentions butallfocusedonEC(2retailers, 1distributor).Samsungalso appearsmoderatelybetterwith3 mentions overall, 2beinginEC.,Worse-,Most of theworsecase mentions werefairly distributed withthe exceptionofHaierwhichhad2mentionsinEC.,4.ProductAvailability,BestWorst,Electrolux2,Haier3(2-SC)7(4-EC,),Xinfei2(2-EC),Siemens4(2-CS)Rongsheng2,Best -,Moderatefeedbackwith bestfor Electrolux, Haier andXinfei.HaierappearsslightlystrongerforproductavailabilityinSCwhileXinfei is stronger in EC.,Worst-,Haierappears to havethe worse problems withproductavailability, particularlyinEC.Siemensalsoappears to havesomeproblems(focusingonCS).,Data -,Only severalpieces of datagivenfor best(rangesfrom 70 to 100%),13.,What is youcurrent order transmissionmode,Fax,Telephone,Email,Other_,Ordering- Question 13,OrderTransmissionMode,SurveyResult,Comments,Many customershave apreferenceforutilizing “interactive”(i.e.telephoneorface to face) ordering modes so thattheycanget aclearideaofproduct availability,Currently, no respondents usee-mailtoplaceorders.Presumablythis is becauseofthe lowlevelofITinfrastructureinChinaand thatvendorshave notdevelopedthistype of service.CustomersinGuangzhou regionaremoreopen to adopting newtechnologiesthanthoseintheNorthChinaand Centralareas.,Customersand sales staff indicatedproblemswith currentorderprocessingrelated to theheavily manualwork processinvolved,multiplehand-offs(betweenElectroluxlogisticsand sales depts)andproblemswithoutdatedinventoryinformationonproductavailabilityinLDC.,14.,What is theorderfulfillmentperformanceofElectrolux?,Orderfulfill rate_88%,Back order rate_8%,Orderunfulfilledrate_4%,SurveyResults,Comments,Theaverageorderfill rateis88%,therateofback order is 8%,andthe unfulfilled rateis4%.,CSregionhas thehighest order fulfillrateat92%, enhanced by itscloseproximitytothe manufacturingbase.,SincetheLDCsinNEregionusuallyhave large inventoryanduse LDCstoservealmost allthecustomers,theorderfulfillrate is alsoveryhigh.,Theorderfulfillrate in GZ region(Guangdong,Fujian, Guangxi) ranks thelowestat73%,duetothelack of effectiveandefficient communicationonbothlocalinventoryleveland inventorylevelinRDC.,Orderfulfillmentperformanceisrelatively betterinbigcities.Almostall theresponsesfromShanghaisaid thefulfill rateis100%.,Keyaccounts, suchasCarrefour experienced higherrate of backorders duringtheweekendwhen Electroluxhas no persontake careoflogistics service, andtheyusually keeplowerinventory level,(SalesManagersinbothGuangzhouand Shenzhen wereconcerned about thelack of availableandtimely inventoryinformationintheRDC,sincethey could onlyreceivetheinformationonamonthly basis).,OrderFulfillment,Ordering- Question 14,Electrolux Stockouts- Frequency,Ordering- Question 15,15.,Howoftendoyou experiencestockoutofElectroluxproducts?(frequencyandthe numberofunits),SurveyResult,Comments,Respondentsindicatedthatmost stockoutsoccurduringpromotionalperiodsandnew productlaunch.,Outof16responses whoregistered stock out,3aredistributors,9 areretailers, and4 aremultipleretailformats,Generallyspeaking, customersexperiencedstockoutrangin
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