| Mannheim, 21.09.2004 | |
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Dear Sir or Madam,
Welcome to our third newsletter this year. We are pleased to be able to bring you up to date on current topics of interest relating to our consultancy projects and new customers. The increasing willingness to invest is also revealed in the greater demand for consultancy support e.g. for supply chain management initiatives and in the area of finance and controlling. Our special on the topic “Lean Thinking and SCM” lists new possibilities arising from the combination of the two approaches. In addition to our newsletter, we would also like to draw your attention to our new internet presence which can be found at www.jnm.com. We hope the articles arouse your interest and are happy to answer any questions you may have. Best regards, Dr. Andreas Müller Spokesman of the board of directors, responsible for marketing/public relations |
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j&m supports Siemens AG in an exemplary IT-strategy project
The project run jointly by Siemens’ Corporate Information Office – CIO – and the Automation & Drives – A&D – Division is aimed at installing a rolling IT architecture planning process and harmonising the heterogenic IT architecture for the A&D Division. A further aim is to develop the method and procedures to be used to obtain standard IT architecture planning across the Siemens group. The starting point for the project was the existing IT architecture, which was optimally tuned to the division of business and labour within the A&D Division. The IT structures are now obliged to meet new requirements, however, as a result of the trend towards the globalisation of value chains and the increasingly close international collaboration within Siemens AG. From a technological point of view this means moving from a number of monolithic SAP systems to a service-oriented architecture. Whilst Siemens contributed the reference process model and a generic target architecture to the project, j&m provided extensive knowledge of basic methods relating to IS/IT strategy planning and architecture development. The core of the method used by j&m is the introduction of a conceptual IT architecture level based on enterprise services. These bridge the gap between the business requirements and strategy and the options for designing the IT architecture. Portfolio techniques were used to evaluate the various options and create an optimised target architecture for A&D.  The procedure model and all methods, tools and templates which are developed will be made available to all Siemens divisions step by step, with the objective of establishing a standardised IT architecture planning process throughout the entire Siemens group. If you would like any further information on the contents of this project, Dr. Christoph Kilger, member of the management board at j&m Management Consulting AG, will be happy to help. He can be reached at c.kilger@jnm.de or by telephone on +49 (0) 621 12 47 69 - 0. _________________________________________________________________________________ |
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Grammer AG, with the assistance of j&m Management Consulting AG, converts internal accounting to conform with
IFRS requirements
EU Directive 1606/2002 requires publicy traded companies, with a few exceptions, to prepare and publish their consolidated accounts in accordance with IFRS (International Financial Reporting Standards¹).  Grammer AG (a manufacturer of components and systems for automobile interiors as well as driver and passenger seats) plans to introduce IFRS as the leading standard for preparing consolidated accounts worldwide with effect from 1st January 2005. Grammer AG has commissioned j&m Management Consulting AG with providing assistance in converting accounts to conform with IFRS (detailed conception and subsequent SAP-based implementation). To quote Josef Trettenbach, Head of consolidated accounting at Grammer: “The main reasons we chose to award the project to j&m were as follows:
We shall keep you up to date on this project in future. If you have any questions regarding IFRS, please do not hesitate to contact either Sylvia Rosellen, Manager at j&m Management Consulting AG or Karsten Ötschmann, Partner at j&m Management Consulting AG. You can reach them at the email addresses k.oetschmann@jnm.de and s.rosellen@jnm.de or by telephone on +49 (0) 621 12 47 69 - 0. ¹According to IFRS, the emphasis is on the informative function of accounting (“information relevant for decision-making”), and in particular on information for shareholders which makes a comparison of publicly traded companies possible. _________________________________________________________________________________ |
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SCM Strategy in the Process Industry
A slight upturn in the economy and a number of necessary optimisation processes are leading many companies to start on more new project initiatives after years of stagnation. Whereas several years ago projects were still defined and the necessary budgets made available within a rather tight timeframe, nowadays it is usual for there to be a project evaluation phase. During this phase, the costs and benefits are determined (ROI; j&m business case) and an analysis as to whether the planned project supports the company’s corporate strategy is carried out. It is worthwhile developing an SCM strategy to act as a link between the superordinated corporate strategy and the realisation of an SCM initiative. In the last two months, j&m Management Consulting has worked together with a well-known company from the process industry based in the Rhine-Neckar area to develop an SCM strategy within the framework of a supply chain assessment. As the company divisions differ drastically with respect to their markets, customers and products, the SCM strategy is a universal approach which must also take the necessary individual features into account. SCM Target Model 
Now that the SCM strategy has been developed and the operational goals derived, our customer is able to assess the effectiveness of projects using key performance indicators. In addition, developing the SCM strategy ensures that all projects will in future provide positive support for the corporate strategy. The next milestone: the customer is to implement the new SCM strategy together with j&m by the end of 2005 as part of an SCM initiative. As well as introducing new processes, this will also involve realising organisational changes and implementing SAP APO. If you have any questions relating to SCM strategy, please contact Karsten Brockmann. You can reach him by telephone on +49 (0) 621 12 47 69 - 0 or by email at k.brockmann@jnm.de. _________________________________________________________________________________ |
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j&m – competence partner at SCM World
The SCM World is to be held this year for the second time. After the great success in 2003 with over 240 people attending, we expect the conference to have an even greater response this year. The SCM World 2004 once more offers companies an excellent platform to benefit from the experience of others and exchange ideas and opinions. Close collaboration between companies is vital in view of the current economic situation. As cooperation between manufacturers and suppliers based on partnership and trust has a positive effect on the entire value chain, “collaborative network management” is an important component of Supply Chain Management. The SCM World 2004 is to be held in Stuttgart-Ludwigsburg on 24th and 25th November. Solutions from the process industry (chemicals, pharmaceuticals and foodstuffs), the high-tech industry and the automotive industry are to be presented. Participants will be able to gather information regarding innovations in procurement and logistics management based on numerous practical examples. Over the two days of the conference, a total of 4 key note speeches and 18 specialist presentations are to be given. The companies which are giving a presentation this year include Bayer AG, DaimlerChrysler AG, Hella KGaA Hueck & Co., Merckle Ratiopharm GmbH and Siemens AG. As was the case last year, the conference is to be accompanied by an exhibition. This allows the participants to discuss possible scenarios directly with solution providers. If you would like any further information please request the official invitation and registration documents by email from Nicola Birken at n.birken@jnm.de. You can also receive information by telephone on +49 (0) 621 12 47 69 - 0. _________________________________________________________________________________ |
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Lean Thinking and SCM
The application of Supply Chain Management concepts has developed into a lasting trend in the processing industry and commerce. Lean Thinking has its roots in Toyota’s production system, and since the 1950’s Toyota has worked consistently and persistently to perfect this method and expand it to cover more and more divisions within the company. Companies such as Pratt & Whitney, Alcoa and Porsche are further examples of companies where the lean approach is successfully applied. What is the difference between SCM and Lean Thinking? Common to both approaches is regarding the value chain in its entirety and gearing the chain to ensure that customer needs are met as well and as efficiently as possible. SCM places a major focus on determining all boundary conditions (capacity, availability of material, throughput times) and on the deterministic planning for meeting requirements via the supply chain. The structure of the supply chain and the boundary conditions for the value creation processes are essentially taken as they stand. So-called advanced planning systems such as, e.g. SAP APO, create viable plans as to how the existing supply chain may be operated as effectively as possible. In industrial practice, SCM is restricted to the optimal operating of existing structures and concentrates less on optimising the structure itself. Lean Thinking questions and optimises existing structures. The basic principle is the avoidance of muda. Muda is the Japanese word for waste, i.e. all activities which use resources but which do not create any value for the customer, for example “mistakes which require rectification, production of items no one wants [...]; processing steps which aren’t actually needed, movement of employees and transport of goods from one place to another without any purpose”¹ When the lean approach is applied, the value chain is reorganised in such a manner that only those process steps which actually generate value for the customer are left. The focus is on “[...] the product and its needs, rather than the organization or the equipment, so that all the activities needed to design, order, and provide a product occur in continuous flow.”¹ The third stage of a lean transformation involves the consistent application of the pull principle: the customer puts in a request for products before they are produced and conversely only the exact quantity required by the customer is then produced. This leads to the creation of self-controlling, optimised feedback loops which produce more value for the customers with less muda. 
The main difference between Lean Thinking and SCM lies in the willingness of the lean approach to constantly question the structure of the value chains and adjust it to meet the products’ needs, whilst most of those who use SCM in industry today attempt to operate existing structures as well and as effectively as possible, without making any fundamental changes to them. However, the SCM principle was originally broader in scope, namely “as the task of integrating organizational units along a supply chain and coordinating material, information and financial flows in order to fulfil (ultimate) customer demands with the aim of improving competitiveness of a supply chain as a whole”.² This definition of supply chain management clearly incorporates the lean approach, even if SCM projects rarely take lean considerations into account in practice. j&m Lean SCM combines Lean Thinking with SCM. On the basis of our many years of SCM experience encompassing more than 50 SCM projects which have been successfully carried out in Europe, j&m has designed a consultancy approach which combines the successful lean approach with the SCM philosophy. The j&m Lean SCM Approach introduces companies to j&m’s integrated Lean Thinking and SCM philosophy. We accompany and support you during the transformation to a Lean Supply Chain – from initial organisation to processes and then on to IT. The author of this article is Dr. Christoph Kilger, member of the management board at j&m Management Consulting AG. If you would like any further information please contact c.kilger@jnm.de or by telephone on +49 (0) 621 12 47 69 - 0. ¹James P. Womack, Daniel T. Jones: Lean Thinking, Campus Publishers, Frankfurt a. M., 2004 ²Hartmut Stadtler, Christoph Kilger, Eds.: Supply Chain Management and Advanced Planning, 3rd edition, Springer Publishers, Heidelberg, 2004 |
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