Supply Chain Management

Guideline

in Electronics Manufacturing

German Electrical and Electronic Manufacturers’ Association

Impressum

Guideline

Supply Chain Management in Electronics Manufacturing

Published by:

ZVEI - German Electrical and Electronic

Manufacturers’ Association

Electronic Components and Systems Division

PCB and Electronic Systems Division

Lyoner Straße 9

60528 Frankfurt am Main, Germany

Phone: +49 69 6302-267

Fax: +49 69 6302-407

E-mail: [email protected]

www.zvei.org

Responsible: Bernd Künstler, ZVEI

Editorial team:

Hans Ehm, Inneon Technologies

Tom Effert, Leopold Kostal

Daniel Geiger, Siemens

Simon Geisenberger, Osram Opto Semiconductors

Ernst Kastenholz, Zollner

Klaus Neuhaus, Sanmina-SCI

Lars Pötzsch, Harting Electronics

Dirk Rimane, Sasse Elektronik

Manuela Zeppin, Inneon Technologies

Michael Ginap, Avineo

Christian Schober, Schober Unternehmensentwicklung

Editor: Laura Korfmann, Inneon Technologies

And many other representatives of member companies of the ZVEI, whose

names are listed in the Appendix.

Critically reviewed by Alexander Florczak, Robert Bosch, Helmut Heusch-

neider, Continental Automotive, Prof. Dr. Klaus-J. Schmidt and Jörg Kuntz,

AKJ Automotive and Dr.-Ing. Holly Ott, TUM School of Management.

November 2014

While every care has been taken to ensure the accuracy of this document,

particular to the storage, reproduction, distribution and translation of this

publication.

Guideline

Supply Chain Management

in Electronics Manufacturing

German Electrical and Electronic Manufacturers’ Association

Foreword 8

1 Supply Chain Management –

Definition, Fundamentals, Standards

1.1 Dening supply chain management 10

1.2 SCOR

model 11

1.3 Skilled workforce along the supply chain 12

1.4 Overview of supply chain management standards 13

1.4.1 Selection of different strategies 13

1.4.2 Levels of supply chain design 14

1.4.3 Supply chain controlling KPIs 15

1.4.4 Supply chain interfaces 16

1.4.5 Identication and packaging 16

1.4.6 Supply chain management cost factors 16

1.4.7 Future requirements for standardised and

ad-hoc communication processes 17

2 Robust Supply Chains with High

Responsiveness and Flexibility

2.1 Measuring and increasing exibility 18

2.1.1 Denition of exibility 18

2.1.2 Triggers demanding greater exibility 19

2.1.3 Guideline for measuring and increasing exibility 19

2.2 Measuring and increasing responsiveness 21

2.2.1 Denition of responsiveness 21

2.2.2 Measuring responsiveness 21

2.2.3 Guideline for measuring and increasing

responsiveness 21

2.3 Measuring and increasing forecast accuracy and measuring

and reducing the bullwhip effect 23

2.3.1 Denition of the bullwhip effect 23

2.3.2 Denition of forecast accuracy 25

2.3.3 Measuring forecast accuracy 25

2.3.4 Guideline for measuring and increasing

forecast accuracy 26

2.3.5 Guideline for measuring and reducing the

bullwhip effect 26

2.4 Meaning of a robust supply chain 27

2.5 Denition of a robust supply chain 28

2.6 Development of a robust supply chain 28

2.6.1 Risks to the individual areas 28

2.6.1.1 Design 29

2.6.1.2 Plan 29

Table of Contents

2.6.1.3 Source 30

2.6.1.4 Make 30

2.6.1.5 Deliver 31

2.6.1.6 Tabular risk summary 32

2.6.2 Safeguarding areas against risks 33

2.6.2.1 Design 33

2.6.2.2 Plan 34

2.6.2.3 Source 35

2.6.2.4 Make 37

2.6.2.5 Deliver 41

2.6.3 Organisation 42

2.7 Supply chain checklist/questionnaire 44

2.8 Conclusion to robust supply chains with a high level

responsiveness and exibility 46

3 External Framework Conditions 47

3.1 Export control 47

3.2 Customs law 48

3.2.1 Authorisations and simplied procedures 49

3.2.2 Tariff classication 49

3.2.3 Origin of goods 50

3.2.3.1 Non-preferential origin of goods 50

3.2.3.2 Preferential origin of goods 50

3.2.4 Authorised economic operator (AEO) 51

3.2.5 ATLAS 52

3.2.6 Movement of goods during business travel 53

3.3 Statistics (intrastat/extrastat) 53

3.4 Taxes 54

3.4.1 Recapitulative statements 54

3.4.2 Certicate of entry 55

3.4.3 Special case: chain transactions 56

3.4.3.1 Intra-Community triangular transactions 56

3.4.3.2 Indirect exports 56

3.4.4 Special case: consignment warehouse 57

3.5 Trafc/transport/services 58

3.5.1 Incoterms

3.5.2 Known consignor 59

3.5.3 Cargo securing/lorry 60

3.5.4 Transport of dangerous goods 61

3.5.5 Consular and model rules 61

3.6 Compliance/ethics/environmental protection 62

3.6.1 Social responsibility 62

3.6.1.1 ZVEI Code of Conduct 62

3.6.1.2 United Nations Global Compact 62

3.6.1.3 Conict minerals 63

3.6.2 Directives and regulations of the European Union 63

3.6.2.1 RoHS directive 63

3.6.2.2 ELV Directive 64

3.6.2.3 REACH Regulation 64

3.7 Conclusion on external framework conditions 65

4 Supply Chain Management

Education and Training

4.1 Process-oriented skills management 67

4.2 Hot spots for skills development 69

4.2.1 Enterprise survey as departure point 69

4.2.2 How to use the one-page guides 69

4.2.3 Sales planning and forecasting 71

4.2.4 Customs and international trade 72

4.2.5 Simulation-based optimisation 74

4.2.6 Vendor managed inventory (VMI) 76

4.2.7 EDI classic and WebEDI 78

4.2.8 Tracking and tracing 80

4.2.9 Process organisation 82

4.2.10 Shipment guidelines 84

4.2.11 Consignment 86

4.2.12 Goods labelling 88

4.2.13 Kanban 90

4.3 Education, training and skills development 92

4.3.1 Situation and need for action 92

4.3.2 Training and education pathways 92

4.3.3 Initial vocational training in the dual system 93

4.3.3.1 Room for manoeuvre in general training plans 93

4.3.3.2 Supply chain management content in general

training plans and framework curricula 93

4.3.3.3 Case study: Zollner Elektronik – supply chain

management training scheme 95

4.3.4 Degree courses at institutions of higher learning 96

4.3.4.1 Key courses of study in the supply chain

management area 96

4.3.4.2 Degree programmes offered in logistics 96

4.3.4.3 Analysis of degree course content 96

4.3.4.4 Conclusions for ongoing course development –

more focus on process-orientation 96

4.3.4.5 Implementation of supply chain management

study modules 97

4.3.5 Advanced vocational training 97

4.3.5.1 Key advanced vocational training courses in the

supply chain management area 97

4.3.5.2 Supply chain management – related content in

individual courses of study 97

4.3.5.2.1 Bachelor professional of management for industry 97

4.3.5.2.2 Master professional of technical management (CCI) 98

4.3.5.2.3 Bachelor professional of freight transport and

logistics (CCI) 98

4.3.6 Continued training and education 98

4.3.6.1 Continued education and training opportunities

in the supply chain management area 98

4.3.6.2 Suggestion from an industry perspective:

development of a certicate course in supply

chain management 99

4.3.7 Company training 100

4.3.7.1 Continuing education and training programmes 100

4.3.7.1.1 Case study: company training at Inneon 101

4.3.7.1.2 Case study: company training at Osram Opto

Semiconductors 102

4.3.8 Continued education and training in processes 103

4.4 Conclusion on education and training in supply chain

management 106

5 Appendix 107

5.1 Participating companies and individuals 107

5.2 List of abbreviations 111

5.3 Symbols 117

5.4 Figures 117

5.5 Tables 122

5.6 Bibliography 123

5.7 Customs and foreign trade guide (long version) 125

Foreword

Globalisation creates opportunities for faster

development and production. Thanks to mod-

ern communication devices, these opportu-

nities can now be exploited. The exible use

of global manufacturing capacities, com-

bined with a focus on core competencies, is

key to maintaining a sustained competitive

advantage in today’s business environment.

However, this capability requires increasingly

complex supplier networks, which must be

controlled and optimized to provide reliable,

fast and exible services.

ZVEI members also increasingly recognise the

importance of an optimal organisation of sup-

plier networks. Although this topic is equally

important for all segments of the electron-

ics industry, the initiative to set up a Supply

Chain Management (SCM) working group

and to draft this white paper was originally

launched by the ZVEI Electronic Components

and Systems Division and PCB and Electronics

Systems Division. These companies are located

upstream in the electronics value chain and

thus face higher variability and disruption risk.

As it is difcult to forecast the sales volumes

of end products, the upstream companies are

required to maintain high exibility and fast

reaction times (responsiveness). Additionally,

supplier structures are becoming increasingly

global and increasingly subject to natural dis-

asters, political upheavals and transport risks,

as well as a wide variety of individual trade

and customs regulations.

Since these challenges must be addressed

by people, organisations, processes and IT

systems, the availability of experienced and

skilled staff is one of the key success factors of

an optimised supply chain.

With this in mind, the ZVEI working group

‘Supply Chain Management in Electronics

Manufacturing’ was constituted in April 2013

to collaborate in providing recommendations

for companies that help them to better under-

stand value networks, determine their ideal

design and prepare them for future chal-

lenges. This paper focuses on the availability

of electronics components in the supply chain

for high value products such as vehicles, air-

planes, machines, industrial goods, process

systems, power plants, hospitals, medical

products, etc. In addition to the primacy of

availability, it also discusses aspects of supply

chain efciency.

The ndings have been summarised in this

industry recommendation, which in addition

to sharing expert knowledge, also suggests

courses of action and provides checklists and

best practices.

The paper examines the following topics:

• Supply chain management – denition,

fundamentals, standards

• Robust supply chains with high responsive-

ness and exibility

• External framework conditions

• Supply chain management training pro-

grammes

This white paper does not claim to be exhaus-

tive, but offers useful reference and guidance.

Every company has its own size, focus and

position and thus different levels of maturity

in supply chain management. This white paper

is based on the knowledge and expertise of

more than 80 supply chain experts from dif-

ferent companies and thus provides a sound

knowledge base for all industries with a spe-

cial focus on the electronics industry.

Since supply chains are also subject to con-

stant change and adaptation processes, this

document reects the current status of the

aggregated view of the participating compa-

nies. More information on updates, new docu-

ments and upcoming events can be found on

the ZVEI website. Moreover, discussion groups

and working group meetings encourage the

exchange of knowledge and experience.

We wish our readers much success in design-

ing and optimising their supply chain pro-

cesses and hope this paper provides useful

support.

Editorial team

Frankfurt am Main, November 2014

1 Supply Chain Management –

 Denition,Fundamentals,Standards

This chapter rst claries the denition of

supply chain management and discusses the

fundamentals of the SCOR

model, as well the

requirements for skilled staff. Finally an over-

view of supply chain management standards

is provided.

1.1 Deningsupplychainmanagement

The term ‘supply chain’ refers to a network

of organisations involved in generating value

for the end customer in the form of products

and services via upstream or downstream

links in different processes and activities.

an industrial enterprise, the delivery of input

materials marks the starting point of a supply

chain, while the supply of nished material to

the customer marks the ending point.

Business processes are becoming increasingly

complex as a result of growing market globali-

sation. Additionally, to save costs and increase

responsiveness, companies are under constant

pressure to optimise their production and sup-

ply chains.

With competition becoming increasingly

erce, price, quality and functionality are

no longer the sole key deciding factors for

a purchase decision. Flexibility, speed and

customer satisfaction have also become top

priorities. This can be achieved by improving

the service and customising products to meet

specic requirements. The success factor time

1 Christopher, 1998

(meaning to be fast) describes the necessary

adaptation of companies to changing compe-

tition and market conditions.

In short, the demands placed on companies

and supply chain management have multi-

plied, necessitating greater exibility within

the supply chain,

and companies that fail to

adapt in time to the changing conditions face

substantial disadvantages in terms of prota-

bility and long-term competitiveness.

2 Blecker and Kaluza, 2000

3 Beckmann, 2004

DELIVER

RETURN

RETURN RETURN

SOURCEDELIVER

PLAN

MAKE

PLANPLAN

RETURN

RETURNRETURN

MAKE

DELIVER

SOURCE

RETURN

MAKE

Supplier

Internal or External

Customer

Internal or External

Customers'

Customer

Suppliers'

Supplier

SOURCE

DELIVER

SOURCE

RETURN

Your Organisation

Figure 1: Supply chains extend from the supplier’s supplier to the customer’s customer (SCOR

model) (Copyright Osram OS)

Figure 2: Development and importance of strategic success factors

(based on Blecker and Kaluza, 2000) (Copyright ZVEI)

now

before

Service

Costs

Quality

Individualisation Functionality

Time

„The supply chains of best practice compa-

nies are nearly twice as fast as the average!“

(Prof. Dr. Wildemann)

1.2 SCOR

model

This recommendation (Supply Chain Manage-

ment in Electronics Manufacturing) is based

on the current 2012 version 11.0 of the

SCOR

model that was rst developed and

published by the APICS Supply Chain Council

(APICS SCC), a global non-prot organisation,

in 1996, and has been continuously revised

since. The Supply Chain Operations Refer-

ence model (SCOR

) is a management tool to

assess and analyse supply chain performance.

SCOR

represents a global standard in sup-

ply chain management by providing a unique

framework that determines and links perfor-

mance metrics, processes, best practices and

people’s skills into a unied structure.

The

SCOR

model can be used to describe the

value chains from the supplier’s supplier to

the customer’s customer and is organised

around the six primary management pro-

cesses – Plan, Source, Make, Deliver, Return

and Enable.

4 APICS Supply Chain Council (SCC), 2014

Figure 3 and Figure 4: Supply chain impact

(Copyright Figure 3 Wildemann, Copyright Figure 4 Cohen and Roussel, 2013)

Figure 5: Processes within the SCOR

model (Copyright ZVEI)

Plan Plan Plan

Source Source

Source

Make

Make MakeDeliver Deliver

Deliver

Return

Enable Enable

Enable

Supplier

Company

Customer

Companies that use

their supply chains

strategically realize

better business

results than their

competitors

Sales growth

Proﬁtability

Nett asset turns

Percentage of industry average

50 60 70 80 90 100 110 120 130 140 150

BICCs

Non-BICCs

BICCs

Non-BICCs

BICCs

Non-BICCs

The impact of supply chain

management stems from the

creation of transparency along

the entire value chain and the

consequent avoidance of informa-

tion asymmetries.

Delivery reliability + 40%

Capacity utilisation + 10%

Delivery time - 30%

CT (production) - 10%

Inventories - 20%

Management expenditure - 15%

Purchasing costs - 20%

Sales costs - 15%

Production costs - 5%

These companies

also achieve better

supply chain perfor-

mance

Delivery performance to commit date (%)

Total supply chain management costs (% of industry TSCMC)

Cash-to-cash cycle time (days)

0 20 40 60 80 100

50 60 70 80 90 100 110

0 20 40 60 80 100

BICCs

Non-BICCs

BICCs

Non-BICCs

BICCs

Non-BICCs

The Plan process links demand and supply

activities and coordinates all other processes

within one value-added level or across com-

panies. For example, the Plan instance coor-

dinates scheduling activities of procurement

(Source), manufacturing (Make) or sales order

fulllment (Deliver) and thus ensures smooth

collaboration within a company or along the

entire supply chain.

The Source process combines all activi-

ties related to the procurement of materials

required to meet planned or actual demand. It

also includes operational activities regarding

suppliers and material inspection.

Make refers to the actual manufacturing pro-

cess, i. e. all processes required to manufac-

ture a nished end product from the materials

provided by Source. This also includes repairs

or services.

Transport management and storage of the

nished products are assigned to the Deliver

process, which also covers the receipt of orders

and receivables management.

Teh Return process is the interface to the sup-

plier and refers to the returning of goods or

information.

In addition to the material ow from the

supplier to the customer, the SCOR

model

includes an order and the value ow running

in the opposite direction, as well as non-direc-

tional information ows.

Enable processes are not directly assigned to

an instance, but provide the basis (i. e. ena-

ble) the processes Source, Make, Deliver, Plan

and Return. This includes the necessary regu-

latory body, guidelines and conditions such as

performance measurement, risk management,

master data management, human resource

decisions or network planning.

1.3 Skilled workforce along the supply

chain

Supply chain experts and managers should be

capable of understanding and managing sys-

tem and methods knowledge, actual produc-

tion processes as well as material and infor-

mation ows.

This capability requires emotional and social

moderating as well as communication skills,

in addition to problem solving skills, such as

analytic abilities. In other words, supply chain

experts and supply chain managers must be

generalists in their eld of knowledge.

Figure 6: The supply chain is about processes (according to SCOR

) relating to material, information and value ows.

(Copyright Inneon Technologies)

Information Flow

Material Flow

Value Flow

Source Make Deliver

Plan

ReturnReturn

Boxes

Bytes

Bucks

Supply Chain generalists need to be familiar

with the actual situation and processes along

the supply chain and understand the methods,

organisational forms and tools to be used. A

basic understanding of controlling, business

economics and IT systems, e. g. in ERP (Enter-

prise Resource Planning), APS (Advanced

Planning System), EDI (Electronic Data Inter-

change) and MES (Manufacturing Execution

System) is required.

To ensure the supply of logistics specialists, it

is recommended that external networks be set

up and expanded, collaboration with universi-

ties and associations fostered, and discussions

with educational facilities started concerning

training and study contents. The following list

provides an overview of frequently used meth-

ods to contact potential job applicants:

• awarding project assignments and intern-

ships to potential applicants,

• offering Bachelor’s and Master’s disserta-

tions as well as doctoral theses to students

• employing working students,

• recruiting graduates of logistics and supply

chain studies,

• offering dual track studies to retain stu-

dents in the long term,

• providing on-the-job in-house training and

qualication measures.

Large companies often design their own quali-

cation programmes to introduce staff to sup-

ply chain management and to further provide

training in specic areas. Some companies

even choose to run their own supply chain

academies in order to foster and develop sup-

ply chain talent.

More information on the subject of training

and qualication is provided in chapter 4.

1.4 Overview of supply chain

management standards

This section lists sample approaches intended

to provide an initial overview of the different

strategies, levels of supply chain design, key

performance indicators (KPIs), interfaces, cost

factors and future requirements for communi-

cation processes in supply chain management.

The words written in blue and bold refer to

topics that will be explained and detailed in

the following chapters of this white paper.

1.4.1 Selection of different strategies

The following examples represent a small

selection of the many different SCM strategies

and approaches in place:

• Efcient Consumer Response (ECR) with

logistics components: from vendor/sup-

plier managed inventory (VMI/SMI) and

cross-docking (demand-driven goods dis-

tribution) to synchronised production and

urban production,

• Customer Relationship Management (CRM)

and relationship marketing: continuously

improving customer satisfaction, customer

loyalty and customer acquisition,

• postponement strategies: reducing semi-

nished and nished goods inventories

through delayed differentiation,

• sourcing strategies: single sourcing and

multiple sourcing procuring modules/sys-

tems from system suppliers (modular/sys-

tem sourcing) and developing the market

by systematically expanding the procure-

ment policy to international sources (global

sourcing),

• production and procurement strategies:

Kanban with just-in-time production sys-

tems (JIT) / just-in-sequence (JIS) produc-

tion systems, consignment, indicators of

progress to provide transparency by closely

linking the supplier and customer and man-

aging the collaboration via call-off orders

and JIT delivery schedules, etc.,

• supplier management: qualication, pur-

chasing, logistics, quality,

• electronic marketplaces: as platforms for

the commercial exchange of goods and ser-

vices and the option of selling products at a

certain time and place,

• inter-organisational collaboration: includ-

ing the creation of between legally inde-

pendent partners within the network of a

supply chain via the Internet,

• virtual freight exchanges: to improve ship-

ping capacity utilisation and reduce ship-

ping costs, tracking and tracing (external/

internal) to monitor shipments, e-auctions,

etc.,

• disposal and recycling strategies: which

should also be mentioned for the sake of

completeness.

1.4.2 Levels of supply chain design

In order to assess the different levels of supply

chain design, it is necessary to rst explain

possible approaches or methods to supply

chain management before going into more

detail on the various tools.

Methods

Many companies design their supply chains

by rst introducing and applying general

approaches to SCM and subsequently resolv-

ing the process issues.

The rst SMC approaches to be implemented

in-house often include lean processes and

continuous improvement processes (CIP), time

management methods (‘Arbeitsablauf-Zeit-

analyse’, AAZ) such as methods-time meas-

urement (MTM) or REFA (methods of the Ger-

man REFA Association for Work Design/Work

Structure, Industrial Operation and Corporate

Development) and value stream optimisation

and design and improving process ows.

The following approaches are used in-house

and across companies focusing on the cus-

tomer and/or supplier: design for manufac-

turing (product, process and logistics-related)

and design for testability, design to cost, etc.

In addition, digital or cross-linked factories

and simulations are introduced as well as

inter-company comprehensive value stream

design from the customer (or customer’s cus-

tomer) and the company’s own production to

the supplier/distributor/manufacturer.

The methodology introduced with the SCOR

model in the mid-90s has proved to be reliable

for the practical analysis and design of supply

chains and can also be used for the strategic

coordination of the aforementioned methods

thanks to its top-down approach. This meth-

odology has only recently been expanded to

include the ‘Management for Supply Chain’

(M4SC) concept.

The idea of supply chain segmentation plays

a major role in supply chain design and opti-

misation. In this context, a supply chain can

be understood as a well-dened value stream

that combines products/services and custom-

ers/markets. Supply chain segmentation thus

connects product and market segmentation.

The aim of supply chain segmentation is to

align separate supply chains to the strategic

business requirements in order to avoid a one-

size-ts-all approach to performance manage-

ment and control. Consequently, supply chain

segmentation is essential in establishing

supply chain management as a control tool

aligned to the relevant market requirements.

SCM tools

This section lists the most common SCM tools

according to their relevant application area

and does not claim to be exhaustive.

Two commonly used tools to reduce inventory

are inventory decomposition using ABC/XYZ

analyses and stock coverage and inventory

turnover analyses. By analysing the inventory

range, items can be classied in fast movers

(<3 months), moderate movers (3-12 months)

and slow movers (>12 months).

Cycle time and set-up time analyses are also

extensively performed to understand time

losses. Electronic tools are frequently used

to improve inventory control and reduction:

eKanban, min-max control, C item manage-

ment, etc. Additionally, strategic partnerships

are often established between supplier and

customers to improve inventory management,

including consignment and VMI.

The following SCM tools are used, among

others, to reduce shipping costs: system-sup-

ported shipping requests, automatic shipping

cost calculation, self-billing processes, sum-

mary invoices, standard and returnable pack-

aging, milk runs and round trips, hubs (inter-

nal/external), cross-docking (demand-driven

goods distribution), freight pooling, shipping

guidelines, etc.

For IT support the following tools are wide-

spread in today’s industry: EDI and WebEDI,

barcodes (2D, data matrix, etc.), RFID, BI

(databases; data warehouses), ERP and MES

systems, CAx systems, electronic work ows,

alternative stocktaking procedures, inter-

nal tracking and tracing, comprehensive

traceability, etc.

Accurate, timely and useful information is

essential to effective and optimized supply

chain management, and therefore many com-

panies use internet portals or supply chain

‘cockpits’ to disseminate critical supply chain

information (order statuses, inventories,

inventory ranges, etc.). Additionally, sharing

supply chain information can be dissemi-

nated effectively through the internet, using

e-Learning modules, computer-aided train-

ing, and internal Wikis.

1.4.3 Supply chain controlling KPIs

Supply Chain key performance indicators (KPI)

are used to measure the performance and

quality of a supply chain. Although KPIs need

to be viewed from within their own context,

their importance increases when compared to

a company’s own or external business data.

Examples of KPIs and other aids (results-ori-

ented and time-limited):

• Sourcing KPIs:

delivery times, price trends according to

commodity groups, etc.,

• Planning KPIs:

forecastaccuracyandexibility,

• Warehousing KPIs:

warehouse inventory, inventory turnover

factor, inventory range, etc.,

• Production KPIs:

utilisation rates of business divisions (pro-

duction facilities), cycle times, set-up

times, etc.,

• Distribution KPIs:

orders in hand including forecasts, order

backlog, invoice backlog, total sales/sales

by business division, etc.,

• Financial process KPIs:

productivity and protability KPIs, etc.,

Non-quantiable data, e. g. employee know-

how, is difcult to express in gures. Since

KPIs are determined at a certain point of time

and are therefore static, they should be speci-

ed promptly with the process ows.

Additionally, KPIs provide information on the

‘what’ and ‘where’, but not on the ‘how’. They

neither indicate how they have been compiled

nor how to proceed.

The SCOR

model provides guidance in this

matter with standardised KPIs in a clear

structure: the KPIs (metrics) are organised in

a hierarchical structure according to perfor-

mance attributes, and they are assigned to the

relevant processes.

The strategic metrics form the top level of

the hierarchical structure. They help compa-

nies translate their strategies to supply chain

strategies. Below the strategic metrics, there

are the diagnostic metrics and, at the low-

est level, the root-cause metrics. The SCOR

model denes more than 500 metrics.

1.4.4 Supply chain interfaces

Supply chain interfaces are becoming more

important/critical with increased outsourcing

and globalization. Information on this subject

is detailed in the guideline issued by the ZVEI

working group ‘Traceability’.

Various identication labels serve as inter-

faces between the supply chain stages. Stand-

ardised labels such as MAT labels, GTL

(Global Transport Label for outer packaging)

VDA labels and delivery information in paper

form (e. g. shipping documents) or electronic

form (dispatch notication or EDI messages).

The electronic data interface supports the

sharing of information, ranging from plan-

ning and forecast data, inventory/require-

ments overviews, contracts and orders, order

conrmations and invoices to delivery notes

and delivery status information.

1.4.5 Identicationandpackaging

As a result of increasing cross-company stand-

ardisation, the various identication labels

can again be named as examples here, espe-

cially MAT labels for inner packaging and GTL

for outer packaging, the latter serving also as

a master label.

These labels almost always include barcodes

to enable automatic recording of data con-

tent. RFID labels are also increasingly used

and contain a passive antenna for touch-free

data reading and processing in addition to the

barcode and plain text.

Packaging is also increasingly subject to

standardisation – from standardised box for-

mats to reusable packaging and containers.

1.4.6 Supply chain management cost

factors

Various costs may incur in supply chain man-

agement. Examples of some of the most fre-

quently occurring aspects are given below:

• costs incurring from insufcient speed,

especially when it concerns semiconductor

products or semiconductor-enabled prod-

ucts. According to Moore’s Law

und More

than Moore

some semiconductor products

5 Moore, 1998

6 Zhang and Roosmalen, 2009

Performance Attribute Denition Strategic SCOR

Metric (Examples)

Reliability Ability to perform tasks as

expected

Perfect order fulllment

Responsiveness Speed at which tasks are

performed

Order fulllment cycle time

Agility Ability to respond to

marketplace changes in the

supply chain

Upside supply chain exi-

bility

Cost Costs associated with oper-

ating the supply chain

Total cost to serve

Assets Effectiveness in managing

assets (xed and working

capital) in the supply chain

Cash-to-cash cycle time

Table 1: Examples of strategic SCOR

model metrics (Copyright ZVEI)

Figure 7: Barcodes facilitate quick and easy reading of the

corresponding data. (Copyright Escha)

can be produced at increasingly lower cost,

thus losing value,

• logistics costs (shipping, handling, supply

channels, calculations, etc.),

• employment costs,

• costs incurring from the scrapping of goods,

especially in the event of short product life

cycles and inaccurate forecasts,

• costs incurring from a company’s own

inventories (in-house, consignment),

• packaging costs,

• infrastructure costs (storage facilities, IT

equipment such as manual devices, PDAs,

WLAN coverage, software), external service

providers, etc.),

• insurance costs, taxes, customs, mis-

declaration (e. g. wrong class of goods),

export controls, etc.,

• certicationcosts (e. g. through the Ger-

man Federal Aviation Ofce (LBA) for air-

freight security, authorized economic oper-

ator (AEO), etc.),

• costs for capacity and exibility provision

(storage, production, shipping capacity,

late diversication, scrapping, sales plan-

ning, etc.),

• costs resulting from special activities such as

special deliveries, interim inventories, etc.,

• costs resulting from a lack of standards,

• costs incurring from complaints and

returned shipments,

• costs incurring from sample management,

• costs caused by missing process synchroni-

sation,

• incidental costs (planning provisions, con-

tingencies, sub-optimisation).

1.4.7 Future requirements for standard-

ised and ad-hoc communication pro-

cesses

Rolling sales forecasts transmitted from the

customer in dened formats and intervals are

prime examples of requirements for stand-

ardised communications process. The fore-

casts should be internally discussed in S&OP

(Sales & Operations Planning) meetings and

incorporated into the production and order

planning derived from this data. It is recom-

mended that this process be standardised,

systematised and conducted on a regular

basis (see VDA Recommendation 5009 for the

automotive industry). Forecast accuracy is of

the essence. The better a forecast, the more

downstream processes can be run automati-

cally.

In addition to preventive measures such as

increased inventories, production exibility

(short cycle times) and exible assembly lines

in terms of the products to be produced

, sce-

nario planning will be increasingly requested

in the future. Scenario planing yields, differ-

ent results depending on the business and

production conditions. With information from

scenario planing, companies would be able to

respond quickly and specic to different sit-

uations.

Against the backdrop of increasing volatility,

staff and IT-supported ad hoc communication

will play an increasingly important role. Com-

munication is essential, especially in the event

of a crisis. However, it is equally important to

dene control limits with thresholds trigger-

ing an alarm for action.

7 VDA-Projektgruppe ‘Programm- und Produk-

tionsplanung’, (2008)

As explained in chapter 1, supply chains are

becoming more and more complex due to the

increasing number of company and country

networks as globalization increases.

The ability of companies to adapt to chang-

ing competitive and market conditions is a

key success factor. Supply chains need to be

highly exible.

Another critical factor is the

responsiveness of the supply chain, since this

greatly inuences the exibility and customer

satisfaction. Supply chain processes can be

optimised in this context with high forecast

accuracy and by reducing the bullwhip effect

(see chapter 2.3.1 for denition).

The robustness of a supply chain is another

core element of successful supply chain

management. The supply chain design must

ensure that they are able to withstand disrup-

tions and risks. Consequently, comprehensive

risk management plays a major role in safe-

guarding the supply chain.

The following chapter provides an overview of

the design and control of a supply chain’s cen-

tral success factors: exibility, responsiveness,

forecast accuracy and robustness.

The information provided below is based on

the SCOR

modell (chapter 1.2).

2.1 Measuring and increasing

exibility

Prior to presenting a guideline for measuring

and increasing exibility, it is necessary to

rst dene exibility and to identify the trig-

gers requiring greater exibility.

8 Blecker and Kaluza, 2000

2.1.1 Denitionofexibility

“The more human beings proceed according

to plan, the more effectively they may be hit

by coincidence.” (Friedrich Dürrenmatt)

Although the concept of exibility is gaining

importance, there is no clear denition of the

term. The speed at which companies adapt to

a new external situation is one part of ex-

ibility, as are the resources employed. Costs

incur both from unused exibility or the lack

of exibility.

We dene exibility as follows:

Flexibility is the ability of supply chains or

supply chain companies to adapt to changes

within an appropriate time frame and at a cor-

responding cost.

According to the SCOR

modell, the concept

of exibility can be subdivided as follows:

• Plan exibility includes processes and

methods.

• Source exibility groups production goods

and production procedures.

• Make exibility maps factory and plant

capacities.

• Deliver exibility deals with demand and

shipping.

Flexibility is broken down into internal

and external exibility. Internal exibility

describes internal company processes and

external exibility describes the adaptability

of a cross-company supply chain. It is also

possible to classify the concept in terms of the

planning horizon, i. e. in operational and stra-

tegic exibility.

The following observations focus on internal

and operational possibilities to measure and

increase exibility.

9 Günthner, 2007

10 Simchi-Levi, Kaminsky, Simchi-Levi and

Bishop, 2007

2 Robust Supply Chains with High

Responsiveness and Flexibility

2.1.2 Triggers demanding greater

exibility

A survey has been conducted among ZVEI

members to identify the most common rea-

sons for demanding exibility.

The list above shows the top 10 triggers for

demanding greater exibility in descending

order and assigned to the relevant SCOR

pro-

cess. Short-term changes in supply quantities

requested by customers (Plan) are the main

reasons for exibility, followed by the request

for shorter cycle times (Make).

11 Questionnaire sent to 50 members of the

ZVEI SCM working group, response rate 13

2.1.3 Guideline for measuring and

increasingexibility

Although it is difcult to measure exibility

using hard indicators, there are approaches

available that help make company processes

more exible.

The following recommendations for action

have been devised:

• buffer capacities at plants or dened stor-

age spaces before diversication,

• low and exible quantities in the order and

production stages,

• late diversication,

• product and inventory segmentation.

Short-term supply increases present a major

challenge for companies in terms of exibil-

ity. The challenge in this case is to determine

the appropriate amount of free capacities.

Whereas extremely high capacities lead to

high idle time costs, extremely low free capac-

ities may result in orders that cannot be ful-

lled and lead to customer dissatisfaction.

Companies often specify minimum order

quantities to lower their xed production

and administration costs. These measures,

introduced on the grounds of cost efciency,

adversely affect exibility. Flexible order and

production quantities and specifying ship-

ping costs per unit instead of xed lump-sum

freights, both help companies to support more

exible supply chains.

Another obstacle to supply chain exibility is

the increasing customer demand for custo-

misation combined with ever shorter product

life cycles. Postponement strategies are one

approach to resolving this situation. These

can relate to production (assembly postpone-

ment) or logistics (geographic postponement).

Assembly postponement focuses on keeping

products and processes generic for all prod-

ucts as long as possible. As a result, nearly n-

ished products are then nished to meet the

customer’s individual requirements, allowing

the base, generic product to remain as long

TOP 10 – Triggers for Demanding

Greater Flexibility

01 PLAN

Short-term supply volumes

demanded by customer

02 MAKE Cycle time

03 SOURCE

Short-term supply volumes

required from supplier

04 MAKE Production capacity

05 PLAN Inventory

06 DELIVER Delivery date

07 SOURCE Procurement date

08 PLAN Long-term sales forecasts

09 ENABLE

Performance capability of

the identication technology

10 ENABLE IT architecture

Figure 8: Triggers demanding greater exibility in the electronics

industry (Copyright ZVEI)

as possible in the production, and thus main-

taining a high level of exibility until close

to the delivery, when the customer demand is

known. In logistics, the postponement strat-

egy refers to the storage of already differen-

tiated products in central distribution hubs.

It is recommended that products be catego-

rised according to the order processing strat-

egy, in make-to-stock (MtS) or make-to-order

(MtO) segments. Products that require no

specic customer order to start production

should be manufactured according to the

MtS strategy. It should be possible to forecast

demand for these products as accurately as

12 Pfohl, 2004

possible to ensure they can be sold later. In

the event of low capacity utilisation, the max-

imum stock quantity of these products can be

manufactured until the capacities are required

for other purposes, e. g. for an MtO product.

Thus it is possible to achieve high production

utilisation rates while maintaining high ex-

ibility. The MtO strategy is applied for prod-

uct ramp-up or in the case when it is difcult

or not possible to establish reliable volume

forecasts. The capacity is then utilized only

once an order is received, reducing the risk

of future product scrap. For some industries

it might be advantageous to employ a combi-

nation of MtO and MtS strategies. For exam-

ple, it is often customary in the semiconductor

industry, to make to stock until the ‘Die Bank’,

i. e. as long as all chips are still on one wafer,

and use the MtO strategy from the ‘Die Bank’

onwards.

Decentralised production networks are an-

other option to increase exibility. The aim

of these networks is to localise production on

a regional level, which is particularly useful

in the case of customised products. Decen-

tralized production networks can be achieved

with sustainable manufacturing systems and

application of the relevant logistics, consist-

ing of lean and exible plants through the use

of base products and components, which are

not specic to a particular customer.

Figure 9: IC wafer: Semiconductor innovations enable new prod-

uct launches and product upgrades in ever shorter time frames.

(Copyright X-Fab)

Figure 10: Manufacturing strategies in the semiconductor industry (Copyright Inneon Technologies)

Die Bank

Raw

Material

Supplier

Producer

Tier One

Supplier

OEM

Market

Back-End &

Distribution

centre

Front-End

Make to stock processes Make to order processes

Decoupling point

Delivers to Delivers to Delivers to Delivers to

Orders from Orders from Orders from Orders from

2.2 Measuring and increasing

responsiveness

Prior to introducing a guideline for measuring

and increasing responsiveness, it is necessary

to dene the concept of responsiveness and

detail the measurement methods.

2.2.1 Denitionofresponsiveness

In the context of supply chain management,

responsiveness refers to the time required by a

company to adapt to changing requirements,

which can result from a variety of sources,

including product innovation, technological

process or new legal requirements.

2.2.2 Measuring responsiveness

Responsiveness can refer to:

1. Responding to a customer request: The

time measured from receiving the request

to sending the rst information relating to

the fulllment of the request to the cus-

tomer.

2. Meeting the contractually agreed respon-

siveness: The ratio between the orders

completed according to the agreement and

total number of orders served. Although

this KPI does not measure the responsive-

ness itself, but the delivery reliability, it

provides an initial indicator of responsive-

ness.

3. Fullling the customer request: Here,

responsiveness reects the speed and

ability of a company to respond to a cus-

tomer request. The complete fulllment

of the order, at least delivery time and

quantity, is usually considered. To measure

the result, the KPI On-Time In-Full (OTIF)

can be used. This KPI gives the percent

of deliveries which arrive at the customer

according to the customer’s request date

and request quantity.

To compare with a benchmark or the theo-

retically shortest possible reaction the Flow

Factor (FF) can be used. This is dened, in

this context and for this purpose, as the ratio

between the actual responsiveness and the

theoretically shortest possible reaction.

2.2.3 Guideline for measuring and

increasing responsiveness

The Flow Factor concept comes from the sem-

iconductor industry and is calculated as the

ratio of the Cycle Time (CT) to the Raw Process

Time (RPT). In turn, the Cycle Time is derived

from the ratio between Work in Progress (WIP)

and throughput, here referred to as Going

Rate (GR). Inventory refers to the number of

manufacturing units currently in a production

system and Going Rate to the number of units

manufactured per day, for example. The Raw

Process Time is the average time it takes a job

to be processed under ideal conditions, i. e.

excluding queuing times and inefcient pro-

cesses (provided all four partners involved are

fully available: man material, machine and

method). The theoretical optimum Flow Fac-

tor is thus ‘1.0’. Assuming a given variability

(α) combined with a high availability of the

four partners and their synchronisation, a low

value of α enables high process speed and

results in high utilisation rates. Reasonable

ow factors that can be achieved in the semi-

conductor production, range between 2.5 and

3.0 based on 24/7/365 operation.

The ow factor is often used in connection

with the operating curve, which uses variabil-

ity (α) to show the variation in the operating

curve for a standard manufacturing process

or for processes in general. Low variability α

indicates few disruptions and high utilization

is possible (Flow Factor approaches 1.0).

13 Hopp and Spearman, 2011

Flow Factor

Cycle Time

Raw Process Time

Cycle Time

Work in Progress

Going Rate (throughput)

Assuming a given going rate (in this exam-

ple 80 percent of the maximum capacity of

the production unit), Figure 11 illustrates that

the blue operating curve has a signicantly

smaller ow factor and thus shorter cycle time

compared to the red curve, consequently indi-

cating a considerable advantage of the blue

production network in terms of responsive-

ness. This method, tried and tested in semi-

conductor manufacturing, can also be trans-

ferred to administrative processes in general.

A key element of a company’s responsiveness

is production cycle time, as responsiveness

necessarily decreases with increasing product

cycle time. Therefore, as a short-term solu-

tion, it is recommended that a limited num-

ber (e. g. 10 percent of the manufacturing

capacity) be reserved for emergency batches

to be able to respond to customer requests

received at short notice or with high priority.

Prioritising production orders can be another

solution for such exceptional situations. How-

ever, for long term cycle time improvement,

one approach can be illustrated with the oper-

ating curve. Low variability α, in other words

small deviation from standard manufacturing

processes, enables the lowest cycle time to be

achieved, i. e. a cycle time approaching the

Raw Process Time.

Another approach to increasing responsive-

ness is the employment of different order pro-

cessing strategies.

As discussed in the section 2.1.3, products

which can be reliably forecasted can be pro-

duced as MtS, with a high capacity utilization.

The buffer stock then can fulll demand when

an MtO product is produced.

Being able to respond quickly to customer

requests is particularly challenging for com-

panies whose products have extensive bills

of materials. The many different component

parts present a higher risk of supply short-

ages and of sources of error, both reducing

responsiveness. Standardising the products

and taking a foresighted approach in contract

negotiations with customers and suppliers

are two options to handling this situation.

Improvements can be achieved, for instance,

with dual/multiple sourcing strategies such

as warehousing strategies coordinated along

the entire value chain and dened accept-

ance periods (frozen windows). The provision

of information at the point of sale within all

levels of the value chain can also contribute to

substantially increasing responsiveness.

Cross-company coordination of the entire

value chain is a major challenge. This is often

due to conicting goals and incentives along

the supply chain. For example, a market-

ing unit may inate its demand forecast to

ensure future supply for potential customers.

If the market does not materialize, these g-

Figure 11: Operating points on two different operating curves (Copyright Inneon Technologies)

Operating

Points

α = 1.47

α = 0.85

Capa

Manufacturing Utilization

ures are reduced, resulting in misalignment,

miscommunication and mistrust towards the

upstream supply chain stages and contribut-

ing to the bullwhip effect (see section 2.3).

Simulation programmes can be used to gain

an overview of the complete process chain.

Bottlenecks can thus be identied early on,

countermeasures initiated and emergency

plans developed.

Delivery Flow Factor

The Delivery Flow Factor (DFF) has been devel-

oped based on the ow factor. The DFF is the

ratio of the sum of all production jobs con-

rmed completed to the consumption quan-

tities plus the delay regarding the desired

delivery date per organisational unit.

The sum of conrmed and completed produc-

tion jobs completed includes fully or partially

completed production jobs (quantity and/or

process).

The delay regarding the desired date of cus-

tomer orders must also be considered since it

measures the production service not yet sup-

plied.

Supply backlogs of externally procured mate-

rials, e. g. commodities, must not be included.

This calculation approach shows that the

Delivery Flow Factor is an indicator of the

ability of the supply chain management and

production together to respond to changing

market requirements. This suggests that the

Delivery Flow Factor is more focused on pro-

duction (control).

In addition to the Delivery Flow Factor, it is

recommended that the replenishment lead

time and inventory coverage for in-house

produced items be considered, in order to

highlight possible interdependencies between

these two indicators. The ideal situation is

reached when DFF = 1.0. In this case, the

output of the production areas equals the

required consumption data for all levels of

the BOM to meet customer demands without

affecting the inventory structure of the organ-

isational unit (see gure). The dependency is

reected in the fact that inventories must be

increased or decreased if/when DFF ≠ 1.0.

The data required for the calculation is deter-

mined on the basis of database evaluations.

2.3 Measuring and increasing forecast

accuracy and measuring and reducing

the bullwhip effect

Prior to introducing guidelines for measur-

ing and increasing forecast accuracy and for

measuring and reducing the bullwhip effect,

the concept of bullwhip effect and forecast

accuracy must rst be dened and fore-

cast accuracy measuring methods must be

explained in detail.

2.3.1 Denitionofthebullwhipeffect

The bullwhip effect refers to ‘the phenome-

non where orders to the supplier tend to have

larger variance than sales to the buyer’.

The

information exchanged with regard to orders

is increasingly distorted as it travels upstream

in the supply chain. The reasons for the devel-

opment of the bullwhip effect in supply chains

can be divided into operational and behav-

ioural causes.

14 Lee, Padmanabhan and Whang, 1997

Delivery Flow Factor

Sum of all production jobs conﬁrmed completed

Sum of consumption quantities plus delay regarding the desired delivery date

Figure 12: Delivery Flow Factor (Copyright ZVEI)

Conﬁrmed and Completed

Production Jobs

Conﬁrmed and Completed

Production Jobs

Conﬁrmed and Com-

pleted Production Jobs

Inventory

Customer

Requirement

Customer Requirement

Flow Factor

> 1

< 1

According to Lee

, there are four different

operational causes:

• demand signal processing,

• rationing and shortage gaming,

• order batching,

• price uctuations.

Demand signal processing describes the sit-

uation that the original customer demand is

distorted and delayed due to long lead times

between the individual company orders along

the supply chain and incorrect order volume

interpretation by downstream participants.

When demand exceeds supply, rationing and

shortage gaming occurs. Companies pass

on orders to their upstream suppliers that

are greater than the actual orders they have

received. The aim is to receive a larger portion

of the limited supply.

15 Lee, Padmanabhan and Whang, 1997

Order batching results from the various ware-

housing and storage strategies of companies

resorting to material requirements planning

(MRP), enterprise resource planning (ERP) or

advance planning systems (APS). These sys-

tems are usually based on monthly or weekly

planning cycles and issue orders at similar

times. Consequently, the majority of orders

are issued weekly/monthly, i. e. within a short

time window. Fixed order and shipment costs

or minimum order quantities – although often

necessary and reasonable – are another rea-

son for combining orders and thus further dis-

torting the original demand signal.

The fourth cause of price uctuations refers

to demand distortion by granting discounts to

drive up sales gures, for example. Due to the

periodic discounts, customers buy more than

they need and stock the excess quantity. As a

result of these additional orders, demand is

further distorted since less is ordered in the

subsequent periods than the actual demand.

Figure 13: Risks spring from unlinked supply chains – the bullwhip effect (Copyright Inneon Technologies)

Bullwhip Effect

Overshooting in

the Value Chain

Customer

OEM Tier 1 Tier 2

Semi-

conductor

Equipment

supplier

Red Line: WSTS

Forecast

Growth Rates y/y: 1997:1Q – 2014:4Qe

-50%

-40%

-30%

-20%

-10%

10%

20%

30%

40%

50%

-5%

-4%

-3%

-2%

-1%

4Qe

1Qe

2Qe

3Qe

4Qe

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

World Semi [ToMM] market Growth

[y/y%]

World Economy, Real GDP Growth

[y/y%]

Orange Line: IHS

Nienhaus

observed the behavioural causes

when analysing the behaviour of the players

participating in the beer distribution game.

The rst behaviour, also referred to as safe

harbour strategy, describes the participants’

aim to create safety stock in order to prevent

bottlenecks and shortages. Thus, participants

place larger orders than they need and thus

articially inate demand.

The second pattern observed is the panic

strategy: participants manage their stock slop-

pily until it falls below a dened safety level.

In this case, they panic when receiving more

orders, which is reected in the signicantly

higher number of orders they issue. Conse-

quently, the demand signal is not correctly

passed on at any time.

The bullwhip effect is well documented and is

a wide-spread phenomenon in supply chains.

16 Nienhaus, Ziegenbein and Schönsleben,

2006

2.3.2 Denitionofforecastaccuracy

Forecast accuracy is the ability to forecast as

accurately as possible demand and demand

development of a customer or market segment

for a product or product group High forecast

accuracy is essential for creating efcient sup-

ply chains and preventing the bullwhip effect.

2.3.3 Measuring forecast accuracy

To continuously improve forecasts, metrics

are required that help analyse the planning

data. There is a wide variety of complex and

less complex metrics available for companies

to employ. This paper explores the two most

popular metrics and their interpretation.

The rst metric is the Mean Absolute Per-

centage Error (MAPE), which is the arithmetic

mean of the absolute deviation of the forecast

from the actual customer orders received in

relation to the actual demand. MAPE is thus

easy to calculate and can be intuitively inter-

preted.

For other analyses, the Symmetric Mean Abso-

lute Percentage Error (SMAPE) can be used.

Although it is more complex to determine

and its interpretation is less intuitive, SMAPE

is more stable in terms of demand distortion

caused by individually occurring major devia-

tion periods.

Figure 14: Typical demand distortion along a supply chain (Screenshot – Copyright Inneon Technologies)

The following section details activity

approaches to improve forecast accuracy. It is

recommended that the two metrics mentioned

above be used to measure the success of the

activities.

2.3.4 Guideline for measuring and

increasing forecast accuracy

Insufcient reconciliation of synchronously

running planning systems within a company

and its departments can result in coordina-

tion problems. Sharing information, enforcing

decisions and generally improving collabora-

tion is therefore essential in this context. It is

recommended that a standard framework be

created, e. g. by using the same metrics in all

planning processes and exchanging demand

data via standardised electronics formats.

Introducing a global Sales & Operations Plan-

ning process (S&OP) can help counteract the

lack of focus and system reconciliation. This

process ensures that the operational plans

are coordinated between all functions of an

organisation and thus support the business

plan in the long term.

A clear differentiation between original and

adjusted forecast data must be provided to

ensure that the analysis of deviations is not

neglected but continues to be pursued. Coher-

ent and, above all, current data is required for

a good forecast. It is recommended that the

data at the point of sale be used to capture

demand changes more quickly and more accu-

rately. This data updated on a daily or weekly

basis reects the actual and direct customer

demand. Standardised formats, preferably

the Electronic Data Exchange (EDI), should be

used for sharing this information along the

entire supply chain.

The systematic evaluation of the forecast

and analysis of its origins is one of the basic

requirements for a company’s planning pro-

cess. Systematic reporting using MAPE or

SMAPE for metrics supports the identication

of sources of error and misinterpretations.

2.3.5 Guideline for measuring and

reducing the bullwhip effect

The following discusses recommendations for

actions to counteract the operational causes

(demand signal processing, rationing and

shortage gaming, order batching and price

uctuations) of the bullwhip effect.

Insufcient or delayed information ow along

the supply chain amplies the bullwhip effect.

Improving demand signal processing involves

raising awareness of this effect, providing

good forecasts and creating transparency. By

training the parties involved in the supply

chains, the presence and causes of the bull-

whip effect can be communicated. Accurate

forecasts can also help reduce distortion of

the original demand along the supply chain.

Measures to improve the forecast accuracy

are detailed in chapter 2.3.4 Guideline for

measuring and increasing forecast accuracy.

However, it is not sufcient that each com-

pany improves its in-house forecasts for its

own use. For a reliable forecast (not limited

by production capacities), it is necessary to

have access to demand forecasts of supply

chain participants. In order to be able to make

reliable statements (capacity or order unitre-

lated) in terms of the forecast and delivery

MAPE

At – Ft

t = 1

SMAPE

At – Ft

( At – Ft )

t period 1 to n

n number of periods for which MAPE or

SMAPE is calculated

forecast for period t

actual demand in period t

time, companies need information on inven-

tories, production capacities, cycle times and

expected coverage rate of the inventory cur-

rently processed in addition to the forecasts.

Exchanging this data provides transparency,

thus ensuring long-term improvement of

the information ow along the supply chain

and counteracting one cause of the bullwhip

effect.

Rationing and shortage gaming is another

cause of the bullwhip effect. In this context

it can be helpful to segment the customers.

Instead of allocating the limited supply of

goods according to the actual order volume

on hand, customer prioritisation should follow

other criteria such as customer-specic plan-

ning quality and the general availability of

forecast data for a dened time frame beyond

the mere replenishment time.

Order batching also contributes to demand

distortion. Customers can break bulk orders

by ordering minimum quantities only instead

of their actual demand, for instance. While

higher costs may arise from the adjustment of

the customer’s production to the lower order

quantities, truckloads containing different

products from the same manufacturer may

help reduce xed transportation cost for the

individual orders. The external logistics ser-

vice provider may group different orders, also

from other companies, and thus lower freight

charges considerably. This approach can be

implemented company-wide provided that the

order volume is sufciently high.

Frequently changing prices result in a sim-

ilar phenomenon to order batching. Lower

sales prices induce customers to buy more

products than they actually need. However,

this may annoy customers who purchased the

same products earlier at regular sales prices. A

low-price policy can help counteract these two

effects of price uctuations by guaranteeing

customers permanently low sales prices.

These recommendations clearly show that it

is only possible to limit the bullwhip effect

by a mutual exchange of information, i. e.

mutual trust and transparency within the sup-

ply chain.

2.4 Meaning of a robust supply chain

Companies face major challenges resulting

from growing market globalisation and hence

continuously increasing complexity, which

requires companies to permanently optimise

their internal value chain and supply. Not only

must companies respond to higher prices and

changing market competition, they also must

manage a greater number of variants and

reduce delivery times and inventories.

Companies that fail to adapt in time to the

changing conditions will face substantial dis-

advantages in terms of protability and long-

term competitiveness.

17 Becker, 2007

18 Beckmann, 2004

Figure 15: It is essential that supply chains are robust. (Copyright ZVEI)

Sou rce Make Deliver

Design

Pla n

However, it is not enough just to meet and fur-

ther optimise the new requirements caused by

market changes. In closely linked global supply

chains, minor network interruptions may result

in breakdowns along the entire supply chain.

Therefor the focus of supply chain management

should also be on end-to-end planning, con-

trolling and monitoring processes along entire

value adding networks (supply chains)

, with

the aim is to identify weaknesses and risks in

supply chains early on and implement robust

processes to prevent breakdown.

2.5 Denitionofarobustsupplychain

No clear term denition of robust supply chain

can be found in the literature. Robust processes

are described as insusceptible to external errors.

Another denition of robust processes refers to

their ability to eliminate minor process devia-

tions autonomously.

This means that a robust supply chain must be

as reliable and immune as possible to exter-

nal inuences and risks, possibly intercept-

ing errors when they occur to minimise their

impact on downstream processes.

19 Dumke, 2013

20 Beckmann, 2004

21 Becker, 2005

2.6 Development of a robust supply

chain

To design a supply chain as robustly as possi-

ble and hence protect it from potential risks, it

is necessary to identify the weaknesses of the

individual areas of a supply chain (e. g. pur-

chasing, materials management and inbound

logistics, production planning and production,

requirements and sales planning, development

and design, outbound logistics and warehous-

ing). This paper rst discusses the risks that

may occur in the individual areas. Then, the

protection measures identied for these areas

in order to improve the robustness of the sup-

ply chain ar detailed.

2.6.1 Risks to the individual areas

A supply chain risk is the damage – assessed

by its probability of occurrence – that affects

more than one company in the supply chain

and that is caused by an event within a com-

pany, within a supply chain or its environ-

ment.

A number of international and rec-

ognised standards (e. g. ISO 31000 – Risk

Management, IEC 31010 – Risk Manage-

ment – Risk Assessment Techniques).

Comprehensive risk management requires

knowledge of the risks that may occur in the

different areas of the supply chain.

A classication of supply chain risks according

to the SCOR

areas is provided in the following

subsections. The Design area has been added

since, in our opinion, it also poses substantial

risks for supply chains. The Return process is

not considered since we feel it plays a minor

role in this context.

22 Kersten, Hohrath and Winter, 2008

23 Lasch and Janker, 2007

Figure 16: Research and development areas signicantly inuence the complexity

of the future supply chain. (Copyright Escha)

2.6.1.1 Design

The future complexity of the supply chain

and its structures is already being deter-

mined in the eld of research and develop-

ment (Design). In addition to procurement

costs, production and distribution, the prod-

uct architecture greatly inuences the variant

diversity.

Greater variant diversity means higher com-

plexity and risks in the downstream supply

chain processes. The use of extremely specic

purchased parts and technological dependen-

cies on individual suppliers can lead to supply

chains that are difcult to control and which

face higher risk of disruption. In this way, the

design process directly inuences the pur-

chasing strategy and supply chain of a com-

pany and dictates process ows.

Possible supply chain risks in the area of

Design are:

• increased complexity caused by variant

diversity,

• technological dependencies, specic pur-

chased parts,

• single sourcing,

24 Corsten and Gabriel, 2004

• unforeseeable procurement costs,

• geographical risks caused by the necessity

to procure goods from volatile markets,

• long-term availability of purchased parts,

• absent/insufcient collaboration with down-

stream supply chain areas (comparing/shar-

ing specialist knowledge).

2.6.1.2 Plan

Possible risks for the Plan process may arise

from the ow of information and material ow

control and planning. The uncertainties and

risks occurring here may impact all processes.

Inaccurate planning is often the result of inac-

curate information (see chapter 2.3). If infor-

mation about changing requirements or fore-

casts, capacity shortages, process disruptions

or imminent or existing supply bottlenecks

is not passed on or passed on too late within

company, the Plan process provides no basis for

decision-making. Risk indicators are thus either

incorrect or incomplete or not identied at all.

Supply

Planning

Capacity

Planning

Demand

Planning

Production

Management

Order

Management

Scenario

Plan

Marketing-

Demand

Sales

Plan

Supply Plan Demand Plan

Figure 17: During the planning process it is essential to consider foreseeable and unforeseeable events to be able to respond directly.

(Copyright Inneon Technologies)

Possible supply chain risks in the area of Plan

are:

• information about requirements or forecast

changes is passed on too late,

• information about requirements or forecast

changes is passed on incorrectly or not in

full,

• insufcient forecast accuracy in terms of

upstream supply chain areas,

• information about internal/external distur-

bance factors (e. g. capacity, process, qual-

ity) is passed on insufciently or not at all.

2.6.1.3 Source

The impact of supply chain risks occurring in

the Source area extends from the supplier to

production. Identifying early on the full scope

of all major procurement risks that may arise

in the procurement market or on the supplier

side is essential in managing a supplier-cus-

tomer relationship in a way that is commensu-

rate with the risks involved.

In addition to the geographical location of the

respective procurement source/supplier, the

stability of the supplier in terms of quality,

reliability, exibility and nancial standing

plays a key role. Delays in delivery on the

part of suppliers or their sub-suppliers signi-

cantly affect downstream supply chains.

Possible supply chain risks during the Source

process include:

• procurement markets with geographical

risks (e. g. oods, earthquakes or other

forces of nature),

• political uncertainties,

• tariff restrictions (see chapter 3.2),

• missing/insufcient supplier expertise and

exibility to be able to respond to increas-

ing requirements regarding dynamics and

quality,

• allocation vulnerability,

• long or inaccurate restocking and delivery

times,

• missing/insufcient system-supported pro-

cesses /information ows,

• missing certications.

25 Vahrenkamp and Siepermann, 2007

2.6.1.4 Make

The Make process considers the supply chain

risks of the company’s in-house production.

In this context it is necessary to rst clarify

the question as to which factors may disrupt

production systems to be able to evaluate

possible risks. Disruptions can be caused by

external and internal factors.

External factors inuence the production sys-

tem from the outside and cause disruptions

within the system. Examples are quality or

quantity-related problems with purchased

parts (see Source process).

Internal factors refer to inherent uncertainties

occurring in the event that the production

programme is not fullled or the production

system disrupted.

Internal factors/risks can be divided into:

• information risks,

• input risks,

• process risks,

• output risks.

If changes in demand structures and hence

changing capacity utilisation rates in the

affected production area are not or are insuf-

ciently passed on due to absent information

ows within a company, there is a high risk

that occurring bottlenecks are not detected in

time or not at all.

The following bottlenecks may occur in the

Make area:

• insufcient system capacities,

• insufcient tool capacities,

• insufcient workforce capacities.

Moreover, the latent danger exists that com-

panies cannot respond to technical or variant

changes in time and are thus unable to man-

ufacture products for which there is market

demand.

26 Zschorn and Käschel, 2007

27 Rogler, 2002

Internal input risks refer to:

• damage of goods fed into production,

• unplanned increased consumption of goods

(e. g. wastage),

• shortage of materials supplied from upstream

areas.

Unplanned production waste results in

unplanned higher upstream supply chain

demand. Companies often lack the neces-

sary response time to be able to compensate

higher material consumption, which increases

the risk of material shortage.

Process risks are disruptions that result in

quantitative or qualitative losses during the

production process. They represent another

risk factor since capacities that have been the-

oretically determined are not fully exploited

(see above).

Output risks include, among others, products

that fail to meet the specications, products

that fail to meet demand and products that

cannot be produced due to plant emergen-

cies.

Possible supply chain risks during the Make

process include:

• insufcient/delayed (system-supported)

information ows within companies,

• delayed (system-supported) transfer of

information, e. g. demand changes to the

affected supply chain areas,

• missing/incorrect master data,

• process disruptions,

• missing capacity evaluations,

• higher wastage,

• missing quality control loops.

28 Rogler, 2002

2.6.1.5 Deliver

The Deliver area considers the supply chain

from a company’s production to the customer.

The following errors/risks primarily occur dur-

ing the Deliver process:

• wrong point of delivery,

• schedule deviations,

• quality deviations,

• quantity deviations,

• damaged or lost goods.

Examples of a wrong point of delivery and

schedule deviations can be incorrect/faulty

order picking or packaging (e. g. caused by

untrained staff). External factors such as wait-

ing times or goods clearing problems (e. g. if

customs formalities have not been considered

early on) also contribute to schedule devia-

tions.

Figure 18 and Figure 19: Transport carrier for wafers and exible 300 mm discs: It is no longer possible to use traditional

carriers in cleanrooms for handling ultrathin wafers for energy-saving power semiconductors.

(Copyright Figure 18 X-Fab / Copyright Figure 19 Inneon Technologies)

Figure 20: Deliver process risks quickly lead to quantity and schedule problems that may incur substantial

extra costs.(Copyright Inneon Technologies)

Quality deviation in the context of Deliver

refers to damage to the goods by non-produc-

tive areas. Incorrectly picked/packed/shipped

goods (over-/underdeliveries (quantity devia-

tions), wrong/mixed goods, incorrect shipping

documents) can also lead to quality-related

issues.

Damage or loss of goods refers to the partial

or full destruction of goods. This can be the

result of plant emergencies, shipping acci-

dents or force majeure (re, oods, etc.).

29 Ziegenbein, 2007

In the event of errors occurring during the

Deliver process, supply is sometimes only pos-

sible at substantial extra cost.

2.6.1.6 Tabular risk summary

The main risks that may occur in a supply

chain are summarised below and assigned

to the areas Design, Plan, Source, Make and

Deliver.

Risk Design Plan Source Make Deliver

Increased complexity x x x x x

Variant diversity x x x x x

Technology dependence x x

Long-term availability (end-of-life) x x

Transfer of expert knowledge x x x

Delayed or insufcient information ows x x x x x

Insufcient forecast accuracy/planning safety x x x

Demand uctuations x x x

Insufcient system-supported processes/IT processes x x x x x

Geographical location risks x x

Political risks in procurement markets x

Currency x

Tariff restrictions x x

Missing certications/missing expert knowledge x

Single sourcing x

Procurement costs x x

Flexibility x x

Capacities x x

Qualication x x

Long replenishment lead times/delivery times x x

Allocation x

Master data x x x

Process disruptions x

Quality x x x

Wastage x x

Packaging x x x

Transport damage/plant emergencies x x x

Table 2: Typical supply chain risks (Copyright ZVEI)

2.6.2 Safeguarding areas against risks

Companies need to have a systematic,

cross-company risk management system in

place to be able to safeguard the supply chain

against the risks identied in chapter 2.6.1 to

the best possible extent.

The aim of risk management is to iden-

tify early on potential risks along the sup-

ply chain, evaluate their potential impact,

identify preventive measures, and evaluate

their impact through a cost-benet analysis.

Preventive measures based on this analysis

should be implemented to ensure the highest

possible level of supply safety for the compa-

nies involved in the value-adding process.

In the next sections, measures to safeguard

the supply chain are grouped according to the

SCOR

model.

2.6.2.1 Design

It is necessary to involve all areas participat-

ing in the supply chain process so as to be

able to already identify and consider risks

during the product development process.

Establishing inter-disciplinary project teams

in the organisational structure can help pro-

vide a comprehensive view of the risks and

opportunities that may arise in a project. In

addition to staff members from development,

the core functions such as purchasing, logis-

tics, production and quality management,

should also be represented on the teams.

30 Kajüter, 2007

31 Vahrenkamp and Siepermann, 2007

For example, the following can already be

considered and analysed during the product

development stage:

• standard parts/preferred parts,

• preferred suppliers,

• long-term availability (end-of-life),

• supplier performance,

• technology dependence,

• single sourcing risks,

• geographical uncertainties (unstable pro-

curement markets),

• technological and qualitative feedback

from the series organisation, e. g. from

preprojects (transfer of expert knowledge,

lessons learned),

• complexity can be reduced by deliberately

using standard components and platform

strategies.

In addition to inter-disciplinary project teams,

system-supported information such as a cen-

tral component database, problem reports, 8D

reports, FMEA, FAMP and supplier evaluations

create transparency.

Figure 21: Interdisciplinary project teams enable a comprehensive view of the risks

and opportunities along a supply chain.

(Copyright Siemens)

2.6.2.2 Plan

Today, the ow of goods and information is

controlled by different systems depending on

the company size and industry. ERP systems

provide the basic architecture to integrate

business processes across functional organi-

sational structures and optimise the process

ow.

However, traditional ERP systems are limited

in the face of continuing market globalisation

and increasingly complex supply chains. Con-

sequently, supply chain management systems

(SCM systems) are used more and more to

master and safeguard increasing supply chain

complexity. A major difference between SCM

and ERP systems is their approach. SCM sys-

tems consider concurrent and cross-company

planning steps beyond company boundaries,

whereas ERP systems are limited to the inter-

nal company planning an processes. Using

SCM systems, it is also possible to simulate

changes using predened conditions/limita-

tions or to include them in optimisation sce-

narios.

32 Kilger and Müller, 2002

The purpose of SCM systems is to:

• communicate information promptly, in full

and without error,

• generate requirements forecasts,

• coordinate and control physical process

ows,

• control intra-logistic and external supply

chains,

• ensure maximum supply chain transpar-

ency,

• simulate supply chain scenarios,

• enable stress tests by simulating extreme

but possible demand scenarios

• optimise supply chains.

Adaptive SCM systems using the database of

existing ERP systems and extending it as nec-

essary, are also referred to as Advanced Plan-

ning and Scheduling Systems (APS).

The following gure illustrates the systemic

boundaries between the different systems.

Figure 22: Symmetric differentiation between the different

supply chain management systems.

(Copyright ZVEI)

33 Gruber, (2012)

34 Wannenwetsch, 2005

35 Schulte, 2013

Source Make SellDeliver

Supply Chain

Conﬁguration

Strategic Supply Chain Modelling

Strategic Supply Chain Optimisation

Supply Chain

Planning

(incl. APS)

Supply Chain

Execution

(ERP)

Strategic

Planning

Systems

Optimisation

Tools

Advanced

ERP-1

Systems

Supplier

Management

Procurement

Programme

Planning

Procurement

Handling

Overarching

Planning

Master

Planning

Detailed

Production

Planning

Production

Handling

Inventory and

Warehouse

Management

Distribution

Planning

Warehouse

and Shipment

Handling

Customer

Order

Management

Sales/

Requirements

Planning

Customer Order

Simulation

(ATO, CTO)

Sales

Handling

The holistic modelling and planning approach

of APS systems across company boundaries

and the classication of the different systems

mentioned above is mapped in Figure 23

below.

Figure 23: The holistic modelling and planning approach of APS

systems is required for a view beyond company boundaries.

(Copyright ZVEI)

2.6.2.3 Source

The continuously growing globalisation of pro-

curement markets, combined with the increasing

delegation of responsibilities to upstream supply

chain partners, places great expectations on sup-

pliers. Selecting suitable and powerful partners/

suppliers is thus of utmost importance for supply

chain managers.

Supplier Relationship Management (SRM) has

increasingly gained importance in companies

over the years as part of the comprehensive view

of supplier structures and the pro-active man-

agement approach of all supplier relationships.

The main focus of SRM is on collaborating with

suppliers with the aim of speeding up the joint

development of products that are more reliable

at less cost. Thanks to its collaborative approach,

SRM offers the opportunity to reduce friction

losses and deploy resources optimally.

36 Hribernik, Ghrairi and Carl, 2011

37 Lasch, Bogaschewsky and Essig, 2011

38 Corsten and Gabriel, 2004

As part of the process of identifying and select-

ing new suppliers/business partners, the scope of

procurement markets to be analysed is reduced.

Geographical, political and currency risks of the

individual markets are estimated and evaluated.

A supplier analysis is usually conducted to ena-

ble a comparison of the potential suppliers.

Individual supplier portfolios are created for this

purpose based on existing and researched infor-

mation (e. g. company reports) and certication

records.

Strategic

Network

Design

Sales Planning

Network Planning

Pro-

curement

Planning

Production

Planning

Distribution

Planning

Availability and Feasibility Check (ATP/CTO)

Detailed

Procurement

Planning

Detailed

Distribution

Planning

Detailed

Production

Planning

Execution

Collaborative Planning

Warehouse

Transport

Production

Planning

Workﬂow – Management

Alert – Management

Track – Trace

Monitoring

Communication

e-Fullﬁll

Data Integration

e-Shop

CRM

SRM

e-Proc

e-Fullﬁll

Supply Chain Event Management

Network – Information Management

Order Processing

Possible content of supplier portfolios:

• technological and logistic expert knowledge,

• performance,

• price structures,

• organisational structure,

• scope of IT-supported information ows,

• exibility,

• liquidity, capital structures, economic stabil-

ity,

• certicates.

The system-supported supplier evaluation

contains the major performance data of a

supplier. Consequently, poor performance or

the loss of efciency can be identied early

on and countermeasures to prevent imminent

supply chain risks initiated.

The following gure illustrates the supplier

management process.

Figure 24: Supplier management process

(Copyright ZVEI)

39 Lasch and Janker, 2007

40 Lasch and Janker, 2007

If the performance of existing suppliers

decreases, countermeasures must be intro-

duced. This can range from discussing the

problem with the supplier, and devising reme-

dial actions to conducting process audits or

specic supply chain audits, e. g. according to

Global GMMOG/LE standard, at the respective

supplier’s end. In the extreme case, the sup-

plier can be dropped and replaced.

To systematically record, track and remedy

logistic or qualitative performance errors of

third-party goods, it is recommended that sup-

plier management be incorporated into estab-

lished quality control loops. System-based

test reports are recommended to record and

assign performance errors on a causal basis

and forward them to the responsible party.

Decision Framework of

Supplier Management

Supplier Identiﬁcation

Supplier Shortlisting

Supplier Analysis

Control of the Supplier Relationship

Sup.-Controlling

Sup.-Relationship

Management

Supplier Evaluation

Company Strategy

Procurement Strategy

Procurement

Item and Pro-

Curement

Source

Test reports may provide information on:

• defective product, defective process (includ-

ing ident information),

• error description,

• date and place of error occurrence,

• supporting visual documentation (if avail-

able),

• timeline for corrective measures to be ini-

tiated.

Subsequently, the party causing the perfor-

mance error creates an 8D report based on the

error notication, describing and scheduling

immediate, medium and long-term measures

as well as actions to protect the customer.

After the countermeasures have been imple-

mented, their effectiveness and long-term

impact is checked.

2.6.2.4 Make

The integration of a comprehensive business

process-oriented risk management requires

transparency in terms of structure and per-

formance of the processes to be analysed.

For this purpose, a risk analysis and evalua-

tion must be conducted to identify the scope

of internal and external risks as well as their

impact on performance. This can be done by

means of a risk classication matrix (see 25).

The purpose of a risk classication matrix is

to classify risks according to impact and local-

ise areas where the risks may arise in order

to dene and implement suitable measures

based on these ndings.

41 Himpel, Kaluza and Wittmann, 2008

Figure 25: The purpose of a risk classication matrix is to classify

risks according to cause and effect.

(Copyright ZVEI)

Risks can be grouped as in chapter 2.6.1.4

into ‘information ows’, ‘input’, ‘process’ and

‘output’. The following focuses primarily on

internal factors since the external factors have

already been dealt with above.

Informationows

To safeguard information ows, it is necessary

to ensure end-to-end supported transmission

of information relevant for all process par-

ties along the supply chain. It must also be

ensured that the information is transmitted

promptly, in full and without any error. This

can be achieved through the use of supporting

systems to manage and control the process

and provide adequate transparency.

42 Himpel, Kaluza and Wittmann, 2008

Risk – Effect

Risk – Cause

System Failure

Intra-Process Extra-Process

Intra-

Company

Extra-

Company

Extra-ProcessIntra-Process

Intra-

Company

Extra-

Company

The following provides an overview of sup-

porting system landscapes.

Traditional Production Planning and Controls

systems (PPC systems), which are nowadays

usually based on Manufacturing Resources

Planning (MRP II), monitor, control and plan

the individual process steps along the supply

chain.

43 Hribernik, Ghrairi and Carl, 2011

These systems are generally embedded in

Enterprise Resource Planning Systems (ERP

systems) that cover the standard functional

areas of a company in terms of processing

functionalities and operate on a process-inte-

grated basis.

The following gure illustrates the complete

process ow of PPC system in an ERP land-

scape.

Figure 26: Complete process ow of a PPC system in an ERP

landscape

(Copyright ZVEI)

44 Heiserich, Helbig and Ullmann, 2011

Production

Programme Planning

Production

Planning

Production

Control

Customer Order

Management

Programme

Planning (MPS)

Inventory

Management (SIC)

Material Requirements

Planning (MRP)

Procurement

Lead Time Scheduling/Capa-

City Requirements Planning

Capacity Alignment/

Order Release

Sequence Planning/

Work Distribution

Order Monitoring

Forecasts

Quantity

Planning

Scheduling and

Capacity Planning

Order Generation

and Monitoring

Customer

Orders

Orders Delivered

Planned Incoming/Outgoing

Stock of Finished Products

Production Programme

Production Proposal

Incoming Stock

Routing

Plans

Available

Capacity

Material

Availability

Incoming Stock

Order Proposal

Planned Incoming/Outgoing

Stock of Components

Product Structure

(BOMs)

Industries with long cycle times require early

capacity planning. The relevant coordination

processes take place at several levels.

Input

Safeguarding initial (input) risks requires

sufcient system-supported process trans-

parency. Information on higher wastage rates

during the production process or defective

goods received must be forwarded early on

to the responsible party. Short, closed quality

loop control systems are pivotal in this con-

text.

Queuing times within production areas are

often the result of illcoordinated processes,

different line cycle times or problems within

existing information ows. To remedy this sit-

uation, it is necessary to create smooth-ow-

ing and steady processes to eliminate friction

losses between internal customer-supplier

relationships. To reach this goal, the logistics

area uses pull systems as self-controlling and

demand-oriented logistics systems. Unlike

conventional control logistics, which operate

according to the push principle and utilise

capacities, the pull principle ensures supply

replenishment exclusively based on consump-

tion. Thus, material required for production

can be requested early on without the risk of

bringing too much material into the produc-

tion areas. In addition to providing better pro-

tection for production systems against long

queuing times, the application of pull systems

also optimises the supply process. Pull systems

are primarily realised via Kanban control sys-

tems. All information required for the delivery

process (material, quantity, delivery batch,

place of delivery, etc.) is summarised on a

card (Kanban is Japanese for ‘sign board’) and

assigned to a material unit (container). After a

unit has been consumed, the relevant card is

passed on as a resupply order.

45 Durchholz, Klenk and Boppert, 2013

Figure 27: Extended planning landscape of Inneon (Copyright Inneon Technologies)

Capacity

Demand

Aggregated

Capacities

Scenario

Planning

Marketing

Demand

Sales

Demand

Orders/

EDI Forecast

Aggregation For Months 0-6

Orders/EDI Forecast

Forecast

Planned Stock

Orders/

EDI Forecast

WIP

Prod. Requests

Prod.

Commit

Supply Plan

(ATP)

Target

Allocation

(AATP)

Orders/

EDI Forecast

Request

Promise

Conﬁrmation

ATP = Available to Promis

System from jda System from SAP

IFX own system or other vendors

Bottleneck

Capacities

Operational

Demand

Stocks

Master Plan

Allocation

Demand

Fulﬁllment

Order

Management

Commit

Process

Lot Tracking

Production

Starts

Production Program

0-6 Months

BIZ Scenario

> 6 Months

In the past, pull systems have been manually

operated without any connection to existing

systems. Consequently, developments in this

area are increasingly focused on system-in-

tegrated solutions. The importance of cards

used as triggers for resupply orders is decreas-

ing and being replaced by automatic scan or

RFID solutions. This is in line with the further

development of system-supported logistic sys-

tems aimed at increasing process reliability.

The following gure illustrates the difference

between conventional and consumption-ori-

ented supply systems.

Figure 28: Difference between conventional and consump-

tion-oriented supply systems

(Copyright ZVEI)

Process

It is also recommended that a system be used

to record downtimes and failures in order

prevent or reduce performance losses caused

by production process disruptions. Creeping

performance losses can therefore be identi-

ed early on and counter-measures initiated.

Downtime analyses or a Total Productive Main-

tenance System (TPM) could, for example, be

used in this context.

46 Heiserich, Helbig and Ullmann, 2011

In the event that a repair becomes necessary,

preventive service contracts stipulating short

response times should be agreed.

The Failure Mode and Effects Analysis (FMEA)

is an established method of systematically

recording and tracking failures. It reviews

failure modes that may possibly arise for the

object of investigation (product, manufactur-

ing process, process changes, etc.) with regard

to the cause and potential risk. The failure

modes are then classied according to a risk

factor and prevention measures are dened.

After the measure has been implemented, a

new review is conducted. In the nal step, the

result is evaluated comparing the evaluations

according to their key performance indicators

to check if the measures are effective.

Output

In addition to the FMEA analyses/evalua-

tions mentioned in the Process section, it

is necessary to check products during and

after the manufacturing process according

to the dened and documented product-spe-

cic quality requirements in order to assure

their quality. The result of a successful qual-

ity test and inspection must be documented

in a traceable manner. It is also necessary to

dene quality loops and action control lim-

its to be able to respond early if the quality

deteriorates (e. g. production stop after three

consecutive errors of the same type). This also

helps prevent the scrapping and renewed pro-

duction of large production batches due to

quality defects.

To ensure that the production department

manufactures the correct product variants,

does not use unplanned component parts

for wrong variants and utilises capacities as

planned, it is necessary to transmit the manu-

facturing programme systematically, early on

and without any errors.

47 Syska, 2006

Central Production Control

Raw

Material

Roug-

hing

Finis-

hing

Preas-

sembly

Final

Assem-

bly

Finished

Goods

Warehouse

Production Control According to the Kanban Principle

Raw

Material

Finished

Goods

Warehouse

Roug-

hing

Finis-

hing

Preas-

sembly

Final

Assem-

bly

KPI systems

For monitoring the performance, it has

become evident that the processes and infor-

mation ows along the supply chain need to

be designed in a transparent and measurable

manner. Process-oriented key performance

indicator systems are usually used for con-

trolling. This involves the denition of action

control limits for the individual processes. In

the event that the KPIs fall below or exceed

these limits, traceable countermeasures are

initiated as soon as possible.

Many compa-

nies use standardised action plans (e. g. PDCA

– Plan Do Check Act) for this purpose. There

are a variety of adaptable system applications

available to ensure KPI controlling is as ef-

cient as possible.

2.6.2.5 Deliver

The Deliver process creates the direct interface

to the customer. Performance errors in this

area directly impact the delivery performance

or, rather, the level of delivery service to the

customer. To ensure a process as error-free

and reliable as possible from the acceptance

of products from upstream areas (Make or

Source) to the actual hand-over to the cus-

tomer, it is suggested that a system support

for ‘delivery date scheduling’, ‘order picking’

and ‘shipping be provided’.

A system-supported provisioning process uses

backward scheduling, based on the hand-over

date to the customer and considers the nec-

essary upstream processes (outsourcing, order

picking, provisioning, shipping). This ensures

that necessary process cycle times are consid-

ered and adhered to. Order picking processes

have become increasingly complex over the

years due to higher variant diversity. To pre-

vent errors such as wrong labels, incorrect

assignment to customers or product mix-ups

during order picking or shipping processes, it

is recommended that scanner-supported pro-

cesses be implemented. These ensure that the

VDA product label is correct with regard to the

original label and to check the assignment of

the products to the individual shipments.

48 Note: These can be complemented by control

cards with statistical control limits.

To respond early to delays or disruptions that

prevent on-time delivery to the customer,

alternative shipping routes should be in place,

taking into account political, geographical,

infrastructure-related or administrative con-

ditions.

Since shipping is a key process in most sup-

ply chains, risk-prevention measures should

start with minimising the risk in the transpor-

tation process and, obviously, selecting the

appropriate means of transport. The means

of transport to be used should be selected

with regard to the goods to be shipped and

the topographic conditions, according to ship-

ping quality criteria such as speed, reliability,

exibility and network density, since interrup-

tions may damage the goods and cause time

delays.

49 Kersten, Hohrath and Winter, 2008

In view of the on-going market globalisation,

companies also often stockpile products to

protect their supply chains against disruptions

which may impact their delivery performance.

There has been an increasing trend from mul-

tiple warehousing toward single-stage ware-

housing over the last few years, meaning

that the nal stockpiling takes place at the

consumer’s end (i. e. the customers) in con-

signment warehouses. Consequently, supply

chains are better protected while inventories

can be reduced along the entire supply chain.

2.6.3 Organisation

In addition to the conceptual risk manage-

ment design regarding risk identication and

preventive measures in supply chains, the

question of organisational integration and

implementation of these approaches in a com-

pany needs clarication.

A distinction is made between organisational

approaches before a risk occurs, i. e. preven-

tion, and after a risk has occurred, i. e. mini-

mising the impact.

Many companies employ a central risk man-

ager who reports directly to the board of

directors/management. Typically, the risk

manager works with a risk committee which

operates across different divisions.

50 Kersten, Hohrath and Winter, 2008

The risk committee represents a central con-

trol, monitoring and steering unit within the

risk management organisation. Its main task is

to independently analyse risks from an overall

company perspective. The committee should

be primarily composed of senior executives

who deal with risk management issues on a

daily basis as part of their line function: man-

agers from the areas of Controlling, Strategy,

Treasury, Law, Quality Management, Purchas-

ing or Environmental Safety and IT Security.

The management board can also be a member

of the committee.

Here is an overview of a committee’s possible

organisation and tasks:

• small number of members to ensure swift

responsiveness,

• members are appointed by the manage-

ment board,

• members work in teams, no task distribu-

tion,

• committee meets regularly,

• analyses major risks from an overall com-

pany perspective,

• questions existing remedial actions,

• agrees and coordinates risk management

programmes and measures,

• monitors limits and checks whether deci-

sions are observed and whether measures

are effective,

• supports the risk manager during the devel-

opment of the risk management system.

Risk managers are responsible for collect-

ing information on potential risks, conduct-

ing standardised evaluations and presenting

these to the board of directors/management

board.

Figure 29: From a multiple-stage to single-stage warehousing strategy (Copyright Leopold Kostal)

Production

Supplier

Warehouse Warehouse

Warehouse

Customer

Before

Now

The assignments of a risk manager (not neces-

sarily a full-time assignment) should include:

• ensuring a suitable risk management sys-

tem is in place and functioning,

• internal risk reporting and preparation of

the risk report for the annual management

report,

• coordinating and organising the risk com-

mittee as a permanent member,

• supporting the organisation by providing

methods and tools,

• devising and further developing the risk

management guideline and ensuring it is

fullled.

Experts of the individual company divisions

(risk owners) should provide operational sup-

port for risk managers by conducting risk

analyses and evaluations for their divisions

and addressing the implementation of the risk

strategy.

The tasks of risk owners are often dened as

follows:

• bearing the responsibility for the imple-

mentation of the measures according to the

list of measures for their area of responsi-

bility (risk management),

• setting up risk teams to improve coordina-

tion,

• assessing risks on a regular basis,

• internal reporting.

It is also recommended that, in the event that

a risk occurs, the assignment of authority and

responsibility be prepared and that questions

claried in advance as to who may take what

decisions at short notice in the event of a cri-

sis.

In the long term, the risk committee should

ensure that risk criteria are considered when

taking decisions on business strategies, e. g.

selection of location, dividing teams between

different locations, etc.

Ultimately, risk management is not to be seen

as an isolated parallel organisation but as a

process integrated into existing management

structures with interfaces to other business

processes.

What is generally valid for risk management

is especially valid for risk management along

the supply chain. Here, the extreme risks, such

as the risk of natural disasters, which resulted

in such devastating events (ash clouds over

Iceland, the tsunami in Japan or the oods

in Thailand), are not the focus. Supply chain

risk management must consider risks, such

as those triggered by changing customer

demand, risk of new product ramp-up or risk

of sudden problems in global manufacturing

networks. Identifying the scope and impact of

the risk quickly is essential for containing the

consequences along the supply chain. Compa-

nies often address risks internally by respond-

ing quickly with a exible supply chain net-

work that offers alternatives. If this does not

solve the problem, end-to-end collaboration

along the supply chain, i. e. from the suppli-

er’s supplier to the customer’s customer, is

decisive in this context.

Figure 30: Organisational integration of risk management in the company (Copyright ZVEI)

Controlling Strategy Treasury Law

Quality

Management

Risk Manager

Risk Committee

Board of Directors/

Management

Report

Purchasing

Environmental

Safety

Security

Communication in risk management

Availability and fast communication are of

vital importance in the event of a crisis. The

information ow of internal risk management

should run both ways, i. e. top-down and bot-

tom-up:

Top-down: The management board should

maintain adequate top-down communica-

tion to risk owners and employees to ensure

they understand clearly which risk policy and

strategy they need to focus their efforts on

and which projects are planned as part of the

set-up, introduction and monitoring of the

risk management system.

Bottom-up: Conversely, there is the need for

reliable communication of relevant informa-

tion from the risk owners and/or risk manag-

ers ‘up to’ the management board.

The management board should receive risk-rel-

evant information from the business divisions

and/or question their risk assessments. Con-

trolling, legal and other experts from central

supporting functions assist by offering their

assessments (second opinion). The internal

auditing and risk management department

should share their risk assessment information

to ensure the most efcient evaluation of the

organisation.

The management board should evaluate the

risk prole of the organisation, approve and

monitor risk limits and dene key points of

the risk management in formal risk commit-

tees. Regular risk reports inform about risks

and possible loopholes in the control system.

Small preventive measures such as address

lists with emergency phone numbers/emer-

gency telephone lists (who needs to be

informed when about what in the event of

a crisis) can help control the situation and

ensure transparency at all times.

External risk communication includes stake-

holders outside a company (customers, sup-

pliers, etc.). It is recommended that suppliers

are actively involved in risk management.

2.7 Supply chain checklist/

questionnaire

The following supply chain checklist is based

on the information provided in the preceding

chapters, mapping the risks and protective

measures of the different supply chain areas.

The questions help you clarify for each area

specically whether your company’s processes

are adequately safeguarded against potential

risks.

If your answer to one or several questions

from the different areas is partly true or not

true, this means that there is an increased/

higher risk for these processes and that the

supply chain is not safeguarded. We recom-

mend you initiate measures and, if necessary,

adapt structures for the areas/processes that

are identied as critical to permanently elimi-

nate the risk factors detected.

The tools listed in the supply chain checklist

have been kept as general as possible since

the scope of system support can vary depend-

ing on the business type and size, for exam-

ple. However, we recommend implementing

the fundamental scheme of the listed instru-

ments in your business.

Figure 31: Internal communication within the context of risk management (Copyright ZVEI)

Management Board

Board of

Directors

External Auditing

Internal

Auditing

Business

Divisions/

Experts

Risk

Manage-

ment

Organisation

Discussion

Questions/

Checks

Table 3: Supply chain checklist (Copyright ZVEI)

Rating

Area Question True

Partly

True

Not

True

Design

Does your company use inter-disciplinary teams during the product development phase/for development

projects?

Does your company‘s product development process consider/evaluate information from supply chain areas

(preferred suppliers, preferred parts, technology dependence, geographical uncertainties in the procurement

market, single sourcing, technical and qualitative feedback from operative divisions, etc.)?

Does your company have design concepts (e. g. Design for X (DFX)) in place that have been aligned to the

company strategy and consider complexity-reducing aspects (e. g. platform strategies)?

Plan

Is information about changing requirements or forecasts passed on promptly, correctly and systematically

within your company?

Are your company‘s forecast methods sufciently accurate to provide a basis for upstream supply chain area

planning?

Is information on existing capacity problems passed on promptly, correctly and systematically?

Is information on existing process disruptions passed on promptly, correctly and systematically?

Is information on existing quality problems passed on promptly, correctly and systematically?

Source

Are there systematic procedures to identify, shortlist and analyse suppliers as part of the supplier selection

process?

Does the supplier use system-supported processes for automated information processing and transmis-

sion (e. g. EDI, WebEDI, ASN, etc.)?

Does the supplier have adequate references, and have ratings and/or evaluations from any projects in

which the supplier is already involved been considered?

Is there a process for systematic supplier evaluation?

Does your company conduct supplier controlling/management including dened escalation mechanisms

(supplier meetings, action plans/supplier development plans, supplier audits)?

Is the supplier management process integrated into quality control loops (to systematically record, track and

remedy logistic or qualitative performance failures in terms of third-party goods)?

Make Are the information ows within your company supported by systems?

Is information, e. g. changing requirements, passed on promptly using system support?

Is secure master data management in place to prevent master data errors?

Are process disruptions systematically recorded/made transparent, analysed and remedied?

Is waste occurring during the production process recorded/made transparent and are systematic remedial

actions conducted?

Is there a system-based process for capacity monitoring to identify short/medium and long-term shortages or

bottlenecks early?

Is information about disruptions occurring during the production process passed on promptly and systematic

to the party responsible?

Deliver

Does your company perform system-supported backward scheduling based on the customer‘s arrival/collec-

tion date and considering current process cycle times (outsourcing, order picking, provisioning, transport)?

Is there a system-supported process to prevent incorrect labelling or product mix-ups (e. g. VDA labels, correct

cargo assignment to transports, etc.)?

Has a selection of reliable hauliers to realise transport been dened?

Are there alternative routes dened to be used in the event of unforeseen circumstances?

Is there a system for measuring delivery performance towards the customer (measurement of delivery and

quantity reliability, external delivery service level, etc.)?

Are requirements of the downstream source process considered in the delivery process (e. g. comparison of

external delivery service level with delivery performance measurement at the customer‘s end)?

Available

Yes No

Tools* Forecast system

Team meetings, interdisciplinary regularly scheduled meetings

Supplier evaluation (operative/strategic)

Internal process audits

External supplier audits

Certication audits

Supplier relationship management (SRM)

Quality management

Systematic acquisition of production and machine data (PDA/MDA)

Transparency and control KPIs (system)

Material requirements planning (MRP), production planning and control systems (PPC)

* Degree of system support may vary subject to company type and size

2.8 Conclusion to robust supply chains

with a high level responsiveness and

exibility

Globalisation offers opportunities to save

costs and increase exibility. Companies that

focus on their core expertise and ensure that

the relevant processes are safeguarded, along

with their supply chains, have an advantage

in today’s global and ultra-competitive mar-

ketplaces. These companies can better man-

age uctuating demand and the pressure to

reduce costs further at the same time. This

chapter described the possibility of reduc-

ing the bullwhip effect with a high level of

responsiveness and measures to improve fore-

cast accuracy. Specic recommendations for

action and metrics to measure the ow factor

or SMAPE and MAPE formulas were presented.

To master the higher complexity caused by

increasingly global markets and greater vari-

ant diversity, a robust supply chain is essential

for ensuring continuous supply availability

and hence contributes decisively to a compa-

ny’s market success.

A look at the closely connected processes and

areas involved in the supply chain clearly sug-

gests that it is not enough to review just one

area to achieve a robust end-to-end supply

chain.

Instead, it is necessary to install a cross-com-

pany risk management system that identies

potential risks along the value chain and min-

imises these risks with preventive safeguard-

ing measures. The risk management process

must be integrated into the company structure

in terms of structure and organisation.

A supply chain that is as transparent as pos-

sible, controlled by KPI systems with dened

action limits, provides the possibility to

respond to changes early on. These system

can also help take advantage of new oppor-

tunities as they arise and aide risk prevention

measures.

It is very important to look into a number of

external framework conditions to be able to

maintain a robust supply chain. For instance,

excellent knowledge of the laws and regula-

tions is required when dealing with customs

and tariffs as well as export control in interna-

tional freight trafc. Minor instances of care-

lessness in terms of regulations can quickly

result in many days of waiting time until the

goods are cleared from customs. Infringe-

ments may even lead to high penalties. Under

German law, the export compliance manager

in any company – the highest-ranking person

with responsibility for exports, a member of

the management or executive board – is per-

sonally liable for violations of export regula-

tions. The ofcer cannot invoke ignorance or

misunderstanding of the relevant regulations.

The subject of transport and services is also

often underestimated, and issues dealing

with sustainability are becoming increasingly

important for all supply chain parties. The

following chapter aims to provide a compre-

hensive overview of the key aspects of this

area and suggests some ideas to identify and

exclude related risks for the supply chain early

on.

3.1 Export control

The basic principle of the German Foreign

Trade and Payments Act (Außenwirtschafts-

gesetz) says: “The trade in goods, [...] with

foreign territories, [...] is, in principle, not

restricted.” However, the export requirements

should always be claried before shipping

the goods, i. e. necessary documents, existing

export restrictions and applicable formalities.

The goods to be exported as well as the nal

destination, nal usage and nal recipient are

to be checked closely according to the follow-

ing criteria:

• List-related licence requirements:

These requirements are based on the nature

of the goods. All goods mentioned in the

Export List (Ausfuhrliste, AL) require an

export license if, for example, special prop-

erties also allow their use for military pur-

poses.

• Use-related licence requirements:

These requirements are based on the

intended use of the goods. Military or

nuclear applications always require an

export licence. (Key word: dual-use, i. e.

item may be used for civil and military pur-

poses).

• Person-related licence requirements:

These requirements are based on the recipi-

ent of the goods.

• Country-related licence requirements:

These requirements prohibit shipments to a

specic country.

The Federal Ofce of Economics and Export

Control (Bundesamt für Wirtschaft und Aus-

fuhrkontrolle, BAFA) in Eschborn/Germany is

responsible for granting all German export

licences.

3 External Framework Conditions

Figure 32: The economic relations of companies are intertwined worldwide. (Copyright Inneon Technologies)

For more information on export control, e. g.

regulations, laws, items lists, embargo regu-

lations, etc. consult the BAFA website.

Infor-

mation on existing prohibitions and licence

requirements as well as an overview of the

licensing requirements and procedures can

also be found on the Internet.

Violating legal procedures and duties of the

exporter are considered an administrative

offence against the German Foreign Trade

and Payments Act (AWG) and German For-

eign Trade and Payments Ordinance (Außen-

wirtschaftsverordnung, AWV) and ned with

penalties of up to € 500,000.

Software support

Checking business partners (customers, sup-

pliers, service providers, etc.) with regard to

existing sanctions lists (EU anti-terrorism leg-

islation, regulations pertaining to embargoes

imposed on individual persons, U.S. black-

lists, other national lists) are an integral part

of export control.

The great number of listed items and frequent

changes makes it impossible to reliably han-

dle this task manually. It is suggested that

suitable software is used to check automati-

51 www.bafa.de

52 www.ausfuhrkontrolle.info

cally. Software providers like SAP, AEB, CSF,

etc. offer good support.

The contents of the sanctions lists are also

available on CD-ROM and can be ordered from

Bundesanzeiger Verlag (HADDEX sanction

lists of the BAFA). The CD-ROM is regularly

revised and can be updated online. The data

can be used for checking individual addresses,

names, companies, etc. and require no inter-

face to any other system (e. g. for companies

with only a few, sporadic transactions).

3.2 Customs law

A person who, in the course of his/her busi-

ness, is involved in activities covered by cus-

toms legislation, i. e. import and export trans-

actions, requires an EORI (Economic Operators

Registration and Identication) number.

The EORI number should be applied for prior

to the conduct of import and export transac-

tions. However, this can also be done during

the rst customs operation.

EORI registration can take several days,

though. The EORI number must be used for all

electronic customs declarations.

Figure 33: It is important for all parties in a global supply chain to be familiar with the customs regulations of the countries involved.

(containers at customs border – Copyright Calado-fotolia)

3.2.1 Authorisationsandsimplied

procedures

Authorisations and simplied procedures that

facilitate customs clearance play a major role

in the daily import and export transactions of

globally operating companies.

As part of the two-step clearing procedure,

goods must normally be presented at the

site of the customs ofce of export (inland

customs ofce) after declaration and to the

customs ofce of exit (EU’s external borders)

during opening hours. If a company also

needs a preference document in the form of

an EUR.1 or EUR-MED movement certicate

for the same export transaction, these must

be applied for individually at the relevant cus-

toms authorities usually for shipments whose

total value exceeds € 6,000.

Thanks to simplied procedures, companies

can design their logistical import and export

processes more effectively and above all

become more exible. Authorised exporters,

for example, are exempt from having to pres-

ent their goods to the inland customs ofce.

Approved exporters are granted by the cus-

toms authorities the status of being able to

make out an invoice declaration (i. e. state-

ment of origin on invoice) for consignments

of € 6,000 and above. This also eliminates the

need to go to the customs ofce.

The main simplied procedures that facilitate

customs clearance for companies are:

• authorised exporter,

• approved exporter,

• authorised importer,

• local clearance procedures for imports,

• simplied declaration procedure for

imports,

• additional facilitations and relief from cus-

toms duties can be claimed when placing

goods under inward/outward processing.

Inward processing refers to goods that are

imported from outside the EU (third country

goods) for processing, while outward pro-

cessing refers to goods exported from the

EU to third countries for processing. It must

be noted that the origin of the goods may

change under certain circumstances.

• Companies may also be able to obtain relief

from customs duty by placing imported

goods under customs control and entering

goods for free circulation for end use.

Customs procedures with economic impact

are subject to certain conditions and must be

applied for at the main customs ofce respon-

sible.

3.2.2 Tariffclassication

The customs tariff system is a systematic list

of goods, also referred to as nomenclature.

All goods that may cross the border as part

of international shipments are included in

this customs tariff schedule, i. e. each good

is assigned a specic code number. Classi-

fying the goods in the appropriate customs

tariff is essential for smooth and standardised

customs clearance. To determine the customs

tariff, the goods are assigned a specic num-

ber to encode the description of the goods.

For imported goods the code can have up to

11 digits, for exported goods up to 8 digits.

In addition to the classication of the tariff

rates, cross-border movement of goods also

entails other legal obligations as to whether:

• bans and restrictions need to be observed,

• import or export licences are required,

• separate statistical information pertaining

to international trade is required,

• additional documents must be provided to

enable further customs clearance,

• specic measures must be notied,

• anti-dumping regulations apply to the

goods or,

• quotas can be used or a suspension of duties

is possible.

The Harmonised System (HS) provides the

basis of the 11-digit code number. It is main-

tained by the World Customs Organisation

(WCO) and determines the rst six digits of

the code number. The purpose of the HS is to

name and code commodity groups to achieve

uniform classication of goods worldwide.

Binding Tariff Information (BTI) issued by the

customs authorities of the EU Member States

provides legal certainty with regard to the

classication of goods into the Common Cus-

toms Tariff of the EU. The BTI is currently only

binding on the EU Member States customs

authorities towards the holder of the informa-

tion. A BTI is valid for six years, however, only

in respect of the classication of the goods. It

usually takes several months for a BTI to be

issued.

3.2.3 Origin of goods

A distinction is made between non-preferen-

tial and preferential origin of goods.

3.2.3.1 Non-preferential origin of goods

Many of the regulations governing the inter-

national trade of goods pertain to non-pref-

erential origins and are primarily intended to

safeguard the economic interests of the Euro-

pean Community or their trade partners.

The non-preferential origin of goods provides

the basis for several legal measures. The ori-

gin is not necessarily derived from the place

of shipping, but confers an ‘economic’ nation-

ality on goods, The Community Customs Code

(CC), Articles 22 to 26, lays down the scope

and provisions to determine and document

the origin of goods for the European Union

Member States.

Non-preferential origin is used to determine:

• the application of the Customs Tariff of the

European Union, especially when it comes

to imposing anti-dumping tariffs; however,

it must not be used for the reduction in or

suspension of duties according to the rele-

vant preferential legislation,

• the application of measures other than tar-

iff measures, established by the Community

provisions governing specic elds relating

to trade in goods, especially foreign trade

licensing requirements,

• provisions pertaining to exports in the

country of destination.

A Certicate of Origin usually serves as proof

of origin and must be issued by an author-

ised body of the exporting country. In Ger-

many, non-preferential certicates of origin

are always issued by the Chambers of Industry

and Commerce, Chambers of Trade and Cham-

bers of Agriculture.

Goods whose production involved more than

one country have their origin in the country,

where they underwent their last, substantial,

economically justied processing or transfor-

mation, and resulting in the manufacture of a

new product.

3.2.3.2 Preferential origin of goods

Preference rules may qualify goods imported

into the Community or exported to the respec-

tive countries of destination for a customs

reduction or suspension if documentary proof

of the preferential origin (originating status)

or of the customs status of the goods (free

circulation status) is provided. The individual

rules differentiate between:

• standard preference documents issued by

a customs ofce or competent authority.

These include the movement certicates

EUR.1, EUR-MED and A.TR as well a GSP

Form A,

• simplied preference documents issued

independently by any exporter up to a

certain value of exported goods or by an

Approved Exporter upon authorisation for

simplied procedures.

Figure 34: Commodity Classication for Foreign Trade Statistics

published by the German Federal Statistical Ofce. (Copyright

Statistisches Bundesamt)

3.2.4 Authorised economic operator

(AEO)

Companies within

the European Union

involved in customs

clearance processes

have been able to

apply for Author-

ised Economic Operator (AEO) status since

January, 1

2008. Since Authorised Economic

Operators are considered to be particularly

reliable and trustworthy they are entitled to

benet from facilitations of customs controls

relating to security and safety as well as sim-

plications of the customs rules.

The status is granted by the customs authori-

ties in all Member States. Three types of certif-

icates can be applied for within the EU:

• Customs Simplications AEO certicate

(AEOC),

• Security and Safety AEO certicate (AEOS),

• Combined Customs Simplications/Security

and Safety AEO certicate (AEOF).

Holders of an AEOS or AEOF certicate are

entitled to reduced data sets for entry and

exit summary declarations (also called prior

notications), and in addition there should be

fewer controls of goods and documentation.

Moreover, consignments are treated with pri-

ority if selected for further control as a result

of a risk analysis conducted by the customs

authorities.

The purpose of the introduction of the AEO

status was to secure international end-to-end

supply chains from the manufacturer of a

good to the end consumer. International rec-

ognition of the AEO status is therefore a pre-

requisite. To this end, agreements have been

signed with Switzerland, Norway, Japan and

the United States.

Applying for AEO status is not mandatory for

companies involved in international business.

All previously granted customs facilitations

remain valid. AEO status is no prerequisite

for being admitted to new customs simpli-

cations and receiving permission for special

customs procedures with economic impact,

but it makes it much easier to obtain customs

simplications for the entry and exit of goods.

Moreover, companies may also benet indi-

rectly, e. g. process optimisations, improved

control mechanisms and thus less theft or

unexplained loss of goods.

In addition, many customers require their

supplier to be AEO certied, especially in the

United States, which has signed an agreement

with the European Union to mutually recog-

nise the C-TPAT (Customs-Trade Partnership

Against Terrorism) and AEO programmes.

After all, the status of an Authorised Economic

Operator is considered an international seal

of quality that also provides competitive ben-

ets.

(Copyright European Union)

3.2.5 ATLAS

ATLAS stands for automated tariff and local

customs clearance system and is used in Ger-

many to submit electronic export (from the EU

to a third country) or import declarations.

The aim is to facilitate the processing of

imports and exports for customs authorities

and declarants. It signicantly speeds up cus-

toms clearance since it is usually not neces-

sary to present documents such as invoices

or preference documents at the time of the

clearance and it also eliminates the need to

go to the customs ofce. Thanks to the greater

transparency this provides, efciency of the

risk management system also increases.

To participate in ATLAS, which is mandatory in

Germany, economic operators require an EORI

number, software certied for the intended

use and a BIN number (Beteiligten-Identika-

tions-Nummer), which is a participant iden-

tication code and replaces the handwritten

signature in the electronic data exchange with

customs authorities.

ATLAS is used to le electronic declarations for

goods imported into Germany before they are

released for free circulation or forwarded to

inward processing, processing under customs

control procedures or handling under customs

warehousing procedures.

The transit procedure with ATLAS (also NCTS –

New Computerised Transit Systems for Europe)

allows for the temporary suspension of duties,

taxes and commercial policy measures that

are applicable at import. It allows the trans-

port of goods that have not been cleared

by customs within the EU since the customs

clearance formalities take place at the desti-

nation rather than at the point of entry into

the customs territory. In the European Union,

the T1 procedure applies to the movement of

non-Community goods.

Using the ATLAS system, it is much easier for

authorised exporters to place goods under the

export procedure since they are not required

to present the goods to the customs ofce of

exit and, if applicable, submit an export dec-

laration which might not contain all the infor-

mation.

As of January, 1

2011, economic operators

are obliged to lodge entry and exit summary

declarations in electronic form using ATLAS-

EAS. The information provided in these decla-

rations enables authorities to conduct IT-sup-

ported risk analyses before the goods enter or

exit the Community’s customs territory. This

is based on the rules and regulations estab-

lished by the European Commission since

April, 1

2004.

As mentioned beforehand, specic hard-

ware and software is necessary to participate

in ATLAS, whereby different access options

are offered by certied software providers.

The person involved in the electronic data

exchange with customs authorities must not

necessarily have the required software him-

self, but can also go through a third party. The

third party transmits the data, but does not

become the person’s appointed customs rep-

resentative. Although the service/processing

of the customs declaration is transferred to a

third party, the responsibility always lies with

the importer or exporter.

The decision to use an in-house solution or a

service provider should be based on the num-

ber of export and import transactions. In addi-

tion, other aspects such as range of products,

trade partners, customs/export control knowl-

edge or the company’s IT structure should also

be considered.

Thanks to its 24-hour availability and dened

processes, ATLAS has become a major factor in

optimising supply chains to be able to meet

legal requirements, secure high process reli-

ability and speed up international commodity

ows.

53 For more information, visit the website of the

German Customs Ofce www.zoll.de.

3.2.6 Movement of goods during busi-

ness travel

Carrying goods such as tools, devices, spare

parts, samples for demonstration purposes in

one’s personal luggage may cause customs

and tax problems for employees and compa-

nies when leaving and entering the country

(suspected tax and customs fraud).

Employees who carry goods in their personal

luggage when on business trips must be able

to provide evidence that these goods are

professional equipment and company prop-

erty. This can be sufciently documented by

a delivery note or pro forma invoice with the

following information:

• name of the traveller,

• destination,

• length of stay,

• quantity and type of good(s) transported,

• name, inventory, series and machine num-

ber,

• value of good(s),

• HS code number,

• country of origin (non-preferential origin).

The delivery note/pro forma invoice must be

presented to the customs ofce at the airport

before leaving the country to have the identity

(comparison of the information on the deliv-

ery note/pro forma invoice and on the goods)

conrmed by customs.

When returning to Germany and if requested

by the customs ofce, employees can prove

that the goods had already been in their

possession on exit and hence not purchased

abroad.

3.3 Statistics (intrastat/extrastat)

Intrastat reporting is used to statistically

record the actual movement of Commodity

goods between the 28 Member States of the

European Union. The statistics created from

the Intrastat reports help provide current data

on intra-Community trade.

Figure 35: Carrying goods when travelling on business requires careful preparation. (Copyright Inneon Technologies)

When shipping goods, the party responsible

for providing information is usually the per-

son dispatching or providing for the dispatch

of an intra-Community consignment under

the value added tax regulations. When receiv-

ing goods, the party responsible for provid-

ing information is usually the person taking

delivery of the intra-Community consignment

under the value added tax regulations. Arriv-

als and dispatches must be declared sepa-

rately. The party responsible for providing

Intrastat information may transfer the task to

a third party, who must be based in the EU.

In Germany, VAT-registered businesses whose

scope of dispatches to other EU Member

States or scope of arrivals from those coun-

tries did not exceed the specied threshold

of € 500,000 each in the previous year are

exempted from reporting. Operators need

only provide information for the direction of

trade – either arrivals or dispatches – exceed-

ing the threshold. If the amount is exceeded

in the current calendar year, the obligation to

provide information will begin with the month

the threshold is exceeded. Declarations can

only be submitted in electronic form. This can

be done via IDEV (Internet data collection sys-

tem) or the eSTATISTIK.core procedure.

54 More information is provided in the

‘Intra-Community Trade Statistics General

Guide’ that can be downloaded from the web-

site of the German Federal Statistical Ofce

(Statistisches Bundesamt) (www.destatis.de)

bereit.

The extra-EU trade statistics covers the trade

of goods between Germany and third countries

(outside the European Union). The customs

authorities are generally responsible for col-

lecting the extra-EU trade data as part of the

statutory import and export regulations. The

ATLAS electronic system (see chapter 3.2.5) is

mostly used as a source of information since it

contains all data on imports and exports.

3.4 Taxes

This chapter explains some of the major

tax-relevant terms such as the recapitulative

statement, certicate of entry, chain transac-

tions and consignment warehouses.

3.4.1 Recapitulative statements

Recapitulative statements, also known as

European Community Sales List or ECSL, are a

core piece of the VAT control procedure within

the European Union. The control procedure is

based on the exchange of specic data within

the European Union. In Germany, this data is

stored by the Federal Central Tax Ofce (Bun-

deszentralamt für Statistik, BZSt). The data

collection is based on the VAT registration

number, which is issued in Germany by the

Federal Central Tax Ofce. Holders of a VAT

registration number can ship goods at zero

rates to other EU Member States if the recip-

ient also has a valid VAT registration number

and if the purchased item is subject to the

provisions pertaining to value added taxation

Figure 36: When collecting information on goods for statistical purposes, differentiation must be made between intra-Community trade

statistics and international extra-EU trade statistics. (Copyright Inneon Technologies)

INTRASTAT



System for collecting statistics on

the trade in goods between

the 28 EU Member States

Intra-Community

trade statistics



Separate forms for

arrivals and

dispatches



Electronic

reporting:



IDEV reporting system



eSTATISTIK.core

EXTRASTAT



System for collecting statistics

on the cross-border trade in

goods (with non-EU countries)

Extra-Community

trade statistics



Reporting to customs

authorities (at the time

the statutory import

or export formalities

are settled)



Electronic

reporting:



ATLAS (IT

procedure)

in the other EU Member State. In Germany,

companies can contact the Federal Central Tax

Ofce to conrm the validity of their inter-

national customers’ VAT registration number.

Conversely, international companies may ask

their competent central authority to check the

validity of the German VAT registration num-

ber.

The obligation to complete a recapitula-

tive statement applies to any entrepreneur

engaged in zero-rated intra-Community sup-

plies of goods/services within the reporting

period (usually one calendar month) and/

or intra-Community triangular transactions

or providing (since January, 1

2010) other

cross-border services to companies, on which

the nal customer based in the other EU Mem-

ber State has to pay VAT (reverse charge pro-

cedure regulated in Germany in the ‘Turnover

Tax Act’ Section 13).

Small undertakings are exempt from this obli-

gation under the rules of Section 19/1 Ger-

man Turnover Tax Act (according to Section

19/1, second sentence, the total of sales made

in the previous year did not exceed € 17,500

and will presumably not exceed € 50,000 in

the current year).

Recapitulative statements must not be con-

fused with the Intrastat reporting, which must

be submitted to the German Federal Statisti-

cal Ofce in Wiesbaden (see chapter 3.3).

55 More information about what has to be

reported when and the consequences that will

occur if a recapitulative statement is sent in

late or not at all, is provided by the Hamburg

Chamber of Commerce and Industry (www.

hk24.de) or the Federal Central Tax Ofce in

Bonn (www.bzst.de).

3.4.2 Certicateofentry

All zero-rated intra-Community deliveries

must be conrmed by the recipient, assur-

ing that the shipment has reached its nal

destination. In addition to a duplicate of the

invoice, the certicate of entry (Gelangens-

bestätigung) can be used for evidence, con-

taining the following information:

• name and address of recipient,

• quantity and standard commercial name

of the object of supply, including the vehi-

cle identication number if the delivered

object is a vehicle,

• place and month (not day) the transporta-

tion of the object of supply ended, i. e. it

was received in the Member State. This also

applies if customers collect and ship the

goods themselves. The collection as well as

the arrival at the place of documentation

must be documented.

• Date of issuance,

• signature of the recipient or a third party

authorised to accept the object of supply.

No signature is required for the electronic

transmission of the certicate of entry, pro-

vided that the electronic transmission rec-

ognisably begins in the customer’s or repre-

sentative’s sphere, which can be veried, for

example, via the used e-mail account of the

recipient.

The certicate of entry may consist of several

documents. It is also possible to submit a

summary declaration for the supplies within a

quarter, stating the relevant months when the

transports ended. In chain transactions, the

recipient and nal customer can both send

the conrmation.

56 For more information on this subject, please

visit the websites of the German Federal Min-

istry of Finance (www.bundesnanzministe-

rium.de) or Hamburg Chamber of Commerce

and Industry (www.hk24.de).

3.4.3 Special case: chain transactions

In chain transactions, several companies con-

clude purchasing contracts for the same item

and this item is directly shipped from the rst

company to the last company along the chain.

A chain transaction consists of one ‘moved’

supply and one (or several) ‘unmoved’ sup-

plies, but with only one physical movement of

goods. This movement is referred to as ‘moved’

supply. VAT exemption for intra-Community

or export supplies can only be applied to the

‘moved’ supply (for export supply see Section

6 German Turnover Tax Act, intra-Community

supply Section 6a German Turnover Tax Act).

The ‘moved’ supply is dened by which party

arranges for the transportation, i. e. performs

the transport and commissions the freight

forwarder. This also determines who may be

required to provide Intrastat information.

All other supplies along the chain involve

no actual physical movement. Consequently,

invoices must be made out stating the foreign

tax which may then require entrepreneurs to

submit a tax return.

3.4.3.1 Intra-Community triangular

transactions

Intra-Community triangular transactions are a

special case of intra-Community chain trans-

actions. It is a simplication measure ena-

bling the intermediate supplier to avoid an

obligation to register for VAT in the country

of arrival. It is a general requirement that the

object of supply is actually moved from one

Member State to the other Member State and

arrives there. Moreover, the following three

conditions must be met:

• three companies must be involved in a clas-

sic triangulation situation,

• the parties involved use VAT registration

numbers from three Member States,

• it must be possible to allocate the ship-

ment to the rst supply along the chain.

Simplication is possible if the rst party

is responsible for the transport. Conversely,

no simplication is possible if the last party

collects the goods.

Example: The German company D buys

goods in Belgium and sells them to an Ital-

ian company. The goods are transported

directly from Belgium to Italy. Intrastat

returns must be made in Belgium (dispatch)

and Italy (arrival), i. e. in the EU Member

States where the physical movement took

place.

3.4.3.2 Indirect exports

Indirect exports refer to the direct shipment

of goods to a third country (non-EU), while

the recipient of the invoice is based in the

European Union. In terms of customs, this

is considered a zero-rated supply since the

goods are physically moved to a third country,

however, the EU-based recipient of the invoice

must be the exporter of records.

There are two different scenarios:

• the recipient of the invoice (exporter of

records) is based in Germany.

In this case, the party sending the goods

must submit an incomplete export declara-

tion in direct representation of the recipient

of the invoice, which must then be replaced

by a supplementary declaration fully com-

pleted by the recipient of the invoice and

submitted to the relevant customs ofce of

exit. The supplementary declaration must

state the recipient of the invoice as exporter.

If an export licence is required, the export

licence of the recipient of the invoice is to

be used.

• The recipient of the invoice (exporter of

records) is based in another EU Member

State.

In this case, the sender must create a fully

completed export declaration, stating the

Figure 37: Several purchasing transactions for the same item (chain transactions) (Copyright ZVEI)

'Moved' Supply

> > >

A B C D

Item Item Item

Chain Transaction

Several Purchasing Transactions for the Same Item

invoice recipient as exporter and also men-

tioning the direct power of representation.

If an export licence is required, the export

licence of the recipient of the invoice is to

be used.

It is important that triangular transactions or

indirect exports are identied as such to pre-

vent the application of standard procedures.

Since a routine approach to these cases can

often result in errors, it is always recom-

mended that customs or tax experts are con-

sulted in case of doubt.

3.4.4 Special case:

consignment warehouse

A consignment warehouse refers to a ware-

house, usually set up in close proximity to the

customer. The specic nature of this is that

the supplier remains the owner of the goods

until the customer removes them from the

warehouse. Since the material is not invoiced

until removal from the warehouse, less capital

is tied up.

If the supplier and consignment warehouse

are located in different countries of the EU,

it must be checked which procedures or rules

apply, because some simplication measures

exist only in some countries.

In this case it is assumed that a zero-rated

intra-Community supply is performed at the

time the goods are removed from the ware-

house.

If there is no simplication measure in place,

the supplier is required to register for VAT in

the country, where the consignment stock is

located, and submit the relevant declarations.

This may also include Intrastat reporting sub-

ject to the sales volume and tactical thresh-

olds.

Figure 38: Indirect exports (C = Company) (Copyright Inneon Technologies)

First Supplier

Germany/

Other EU

Country

Buyer

Third Country,

Non-EU Country

Recipient

Export Declarant

Exporter of Records

Zero-Rated Export

Indirect Export

Germany/

Other EU

Country

Triangle

Invoicing

If the consignment warehouse of a supplier is

lled from a third country with an Incoterm

(see chapter 3.5.1) other than DDP, and if

the supplier is not VAT-registered in the EU,

the customs warehousing procedure must be

applied when importing the stock. The phys-

ical removal of the stock marks the point of

time the goods are cleared into free circula-

tion.

3.5 Trafc/transport/services

This chapter examines the aspects Incoterms

Known Consignor, cargo safety/lorries and

transport of dangerous goods as well as docu-

mentation guides for international shipments.

3.5.1 Incoterms

The International Commercial Terms or Inco-

terms

were published rst in 1936 by the

International Chamber of Commerce (ICC) and

have been periodically updated since. They are

used between buyers and sellers and include

rules on the place and time of delivery as well

as means and ways of transport. They do not

address the transfer of ownership, warranty

issues, payment processes and the like. Inco-

terms

are only legally binding if the relevant

rule regarding the place of delivery and rele-

vant version is part of the contract.

These rules apply to national and interna-

tional contracts and thus also facilitate cus-

toms clearance.

The main purpose is to set out the responsi-

bilities of all contract partners as well as the

transfer of costs and risks for a dened route.

They also govern the duties to provide informa-

tion and who is to check the packaging of the

goods and the contents of the shipment, who

is responsible for insuring the goods and who

provides the goods and transport documents or

has to pay for customs duties if these should

arise. They also determine who has to bear the

costs incurred by these activities.

On January, 1

2011, the seventh revision of

the Incoterms

came into force, classifying the

11 rules according to the mode of transport.

While the rules EXW, FCA, CPT, CIP, DAT, DAP

and DDP apply to all modes of transport, FAS,

FPB, CFR and CIF may only be used in con-

nection with sea or inland waterway transport.

Although old Incoterms rules are still valid, it

is advisable to start using the new terms.

Figure 39: Shipping goods requires compliance with the specics and regulations regarding the different ways

and means of transport. (types of transport – Copyright 3ddock-fotolia)

The sequence illustrated in gure 40 reects

the increasing responsibility of the seller. The

following provides tips from practical experi-

ence on some sample Incoterms

Ex-works (EXW) means the buyer bears the

full costs and risk involved in the transport.

However, problems may arise during loading

if the carrier is not adequately equipped to

load the shipment. In this case, if the seller

arranges for the loading of the goods, the

seller is not insured in the event of any dam-

age. Since EXW also means that the seller is

not responsible for any customs and clearance

formalities, this rule only makes sense in the

trade of goods at national level.

Conversely, FCA clearly stipulates that the

seller is responsible for loading the goods

cleared for export and that the transport costs

and risk are transferred to the buyer after

The C-rules (CPT, CIP, CRF and CIF) are charac-

terised by the fact that the passing of risk and

passing of the costs takes place at two differ-

ent points of time (two-point clause).

Also DAT and DAP clauses stipulate that the

buyer is responsible for all import formalities.

DDP means that the seller is responsible for

the transport, bearing all costs right to the

destination point where the buyer is respon-

sible for unloading the shipment.

3.5.2 Known consignor

According to EU-wide safety regulations that

came into effect in April 2013, air cargo

shipments of a company are provided with

a ‘safe’ status only if the exporting or ship-

ping company holds the status of ofcially

approved Known Consignor. In Germany, the

Federal Aviation Ofce (Luftfahrt-Bundesamt,

LBA) is responsible for conducting the valida-

tion and approval. Without Known Consignor

status, the carriage must be comprehensively

checked by a Regulated Agent authorised for

this purpose or by the aviation company in

question. This may result in higher costs and

delays. Known Consignors are approved by the

appropriate authority of the Member State in

which the site is located, e. g. the Federal Avi-

ation Ofce for Germany. The company must

57 For more information, go to

www.iccwbo.org.

Figure 40: Overview of Incoterms

rules by mode of transport (Copyright ZVEI)

Seller

Carrier Harbour

Ship

Harbour

Terminal

Named Place

Buyer

EXW

FCA

CPT

CIP

DAT

DAP

DDP

FAS

FOB

CFR

CIF

EX WORKS – Ab Werk

FREE CARRIER – Frei Frachtführer

CARRIAGE PAID TO – Frachtfrei

CARRIAGE AND INSURANCE PAID TO – Frachtfrei versichert

DELIVERED AT TERMINAL – Geliefert Terminal

DELIVERED AT PLACE – Geliefert benannter Ort

DELIVERED DUTY PAID – Geliefert verzollt

FREE ALONGSIDE SHIP – Frei Längsseite Schiff

FREE ON BOARD – Frei an Bord

COST AND FREIGHT – Kost und Fracht

COST, INSURANS AND FREIGHT – Kosten, Versicherung und Fracht

All Transport Modes

Sea and Inland

Waterway Transport

Seller bears the costs

Buyer bears the costs

Seller bears the risk

Buyer bears the risk

Sell is obliged to take out a transport

insurance

appoint a person responsible for air cargo

safety and a relevant security programme.

Once all relevant staff have been trained and

all necessary measures in terms of the phys-

ical safety (processes, staff, buildings/access)

been implemented, approval is granted after

passing a nal reliability check.

The advantages that arise from an accredita-

tion include simplied shipping procedures

and hence shorter lead times, greater secrecy

of product-related information and lower

costs for security services (no x-ray scanning

of shipments) as well as lower packaging risks

during manual inspections. An accreditation

is always required if the cargo should not be

x-rayed or scanned, e. g. large units or special

packaging (e. g. ESD protection). The Known

Consignor status can also give a competitive

edge. For instance, this is always required by

customers in the automotive industry.

The goods of a Known Consignor can be

shipped by a Regulated Agent (accredited

haulier) or a non-accredited haulier to the

airport. In the latter case, the haulier must

provide the Known Consignor with a signed

haulier declaration, conrming compliance

with the requirements pertaining to people

(training courses, training history, etc.) carry-

ing out the transport and the transport pro-

cess to ensure the safety and security of civil

aviation. The people carrying out the trans-

port must present appropriate identication

when picking up the goods or delivering them

to the airport.

In Germany, a template of the haulier decla-

ration can be downloaded from the website of

the Federal Aviation Ofce.

58 www.lba.de (website of the German Federal

Aviation Ofce)

3.5.3 Cargo securing/lorry

On July, 1

1998, the German Transport Law

Reform Act (Transportrechtsreformgesetz, TRG)

introduced a new freight law to the German

Commercial Code (Handelsgesetzbuch, HGB)

and cancelled the former provisions pertain-

ing to the waybills stipulated in the German

Motor Trafc Ordinance (KVO) and German

General Terms and Conditions for Short Dis-

tance Hauling (AGNB).

According to Section 412 of the German Com-

mercial Code, the sender is responsible for

loading the goods in a manner that is safe

for operation, irrespective of the type of good

and haul distance. The law follows closely the

provisions of the Convention on the Contract

for International Carriage of Goods by Road

(CMR).

Loading goods safe for transport includes the

stacking, stowing, lashing, blocking, stacking

and securing of the cargo with suitable aids to

ensure that neither the goods nor the vehicle

is damaged under normal transport circum-

stances as specied in the contract.

Experience shows that cargo is often insuf-

ciently or incorrectly secured. Proper secur-

ing signicantly increases road-trafc safety

since inadequate securing measures could

cause injury to persons in addition to dam-

age to the cargo. Under German law, the

shipper, haulier and driver as well as the

vehicle owner are all responsible for secur-

ing the cargo. If a routine trafc control nds

Figure 41: Cargo safety is particularly essential when it comes to

shipping sensitive electronic components.

(Lorry – cargo ratchet strap – Copyright Jürgen Fälchle-fotolia)

that a vehicle’s cargo is not properly secured,

the driver of the vehicle may be ordered to

stop the vehicle and secure the cargo before

proceeding, and be charged with a road

trafc offence including a ne and penalty

points. In the event of a trafc accident due

to improperly secured cargo causing mate-

rial damage, the driver will be charged

with a road trafc offence including a ne

and penalty points, and in the event of per-

sonal injury, criminal charges will be pressed

involving a ne or even imprisonment.

3.5.4 Transport of dangerous goods

Dangerous goods are substances, preparations

(mixtures, solutions) and objects containing

substances the transport of which may pose a

risk to public safety or order, in particular to

the general public, important public property

or jeopardise the life and health of people,

animals and other objects due to their nature,

physical or chemical properties or state.

Within the meaning of the German Transport/

Cargo Law, dangerous goods are also those

materials that are harmless by themselves but

must be classied as dangerous during trans-

port.

Numerous regulations and conventions gov-

ern the transport of dangerous goods by road,

rail, water or sea, e. g. in terms of packaging,

secure loading, marking and shipping. In

addition to the safe handling of dangerous

goods transports, the purpose of these regula-

tions is to provide quick and fast information

for emergency teams to identify an incident

as a dangerous goods accident and hence take

appropriate measures.

59 For more information, go to the website of

the German Federal Institute for Materials

Research and Testing www.tes.bam.de or refer

to the information on load securing provided

under www.tis-gdv.de.

All parties involved in the transport of dan-

gerous goods must provide evidence of the

relevant knowledge of dangerous goods reg-

ulations. To obtain this knowledge, they must

regularly attend training courses. Companies

involved in the transport of dangerous goods

are usually required to appoint a person

responsible for dangerous goods.

Drivers of all vehicles carrying dangerous

goods must have an ADR training certicate.

They also need to carry personal protective

clothing (PPE), spillage and re-ghting

equipment as well as aids to secure the acci-

dent site as stipulated in the instructions in

writing (and subject to the relevant danger-

ous good). In addition, the consignment items

must be appropriately marked and labelled

and be accompanied by certain paperwork,

e. g. the transport document. The transport

document must state the name and address of

the consignor and consignee.

3.5.5 Consular and model rules

The consular and model rules (German Kon-

sulats- und Mustervorschriften, K&M) are a

German reference work for export business. It

provides information on shipping documents

and regulations that are required and must be

observed for the international trade of goods.

In addition, it details packaging, labelling and

origin marking requirements, contains infor-

mation on harbours and customs airports as

well as on legalisation provisions and consu-

lar fees, provides contact data of Germany’s

diplomatic missions, consular posts and trade

representations abroad as well as German

Chambers of Commerce (Außenhandelskam-

mern, AHK). This set of rules also includes

basic knowledge on the trade of goods with

third countries.

60 For more information go to http://en.wiki-

pedia.org/wiki/Dangerous_goods or refer to

the website of the German Federal Ministry

of Transport and Digital Infrastructure. (www.

bmvbs.de).

(Copyright ZVEI)

It has been published by the German Cham-

ber of Commerce in Hamburg since 1920. The

team of authors consists of staff of the Ham-

burg Chamber of Commerce with practical

export consulting experience. The reference

work has since been revised every two years

and as of its 40

edition, it is released by the

Mendel Verlag (publisher) in Witten/Germa-

ny.

3.6 Compliance/ethics/environmental

protection

Social responsibility as well as directives and

regulations of the European Union are impor-

tant topics in the area of compliance/ethics/

environmental protection.

3.6.1 Social responsibility

Social responsibility and environmental man-

agement are two terms that have become

established as key elements in supply chains

over the last few years. The world has real-

ised that economic success based on the

exploitation of the environment and people is

no longer acceptable. The term sustainability

has been considered for several years as an

approach towards a future-oriented and long-

term development of mankind. Future-ori-

ented management means: We have to leave

our children and grandchildren an intact eco-

logical, social and economic system. The one

cannot be achieved without the other.

Operating a business successfully in today’s

global economy increasingly requires compa-

nies to provide proof that sustainability is an

integral part of their companies’ principles.

After having arranged for the in-company

implementation of a Code of Conduct (CoC),

big companies have been increasingly facing

the challenge over the last few years to ensure

the sustainability rules and requirements are

also implemented and complied with along

the entire supply chain.

61 Mendel Verlag (www.mendel-verlag.de)

3.6.1.1 ZVEI Code of Conduct

ZVEI and its member companies afrm their

Corporate Social Responsibility as a part of

their global business activities (internationally

known as ‘CSR’). By signing this self-imposed

obligation, companies signal the market that

they follow recognised industry guidelines.

This Code of Conduct includes statements on

working conditions, social and environmen-

tal compatibility, transparency, collabora-

tion and dialogue that are marked by trust.

It also includes key reference points such as

the United Nation’s Universal Declaration of

Human Rights (UN Resolution 217 a (III)) of

1948, the United Nations Convention against

Corruption of 2003 and several other ILO Con-

ventions (e. g. ILO No. 138 of 1973 and No.

182 of 1999 relating to child labour).

3.6.1.2 United Nations Global Compact

The UN Global Compact is a strategic policy

initiative for businesses that are committed

to aligning their operations and strategies

with ten universally accepted principles in

the areas of ‘human rights’, ‘labour’, ‘envi-

ronment’ and ‘anti-corruption’. By doing so,

business, as a primary driver of globalisation,

can help ensure that markets, commerce,

technology and nance advance in ways that

benet economies and societies everywhere.

This ever-increasing understanding is reected

in the Global Compact’s rapid growth. With

over 12,000 corporate participants and other

stakeholders from over 145 countries, it is the

largest voluntary corporate responsibility ini-

tiative in the world.

3.6.1.3 Conictminerals

The subject of conict minerals is a recent

example of the increasing pressure exercised

by politics and economy, which ultimately

ensures that social responsibility nds its way

into legislation.

‘Conict minerals’ include the raw materials

columbite-tantalite, also known as coltan,

tin (casserite), wolframite (tungsten) and

gold. Many of the sites where these ores are

mined are located in the Democratic Repub-

lic of Congo and its nine adjoining countries

(Angola, Burundi, Central African Republic,

the Republic of the Congo, Rwanda, South

Sudan, Tanzania, Uganda and Zambia). These

mines are often controlled by different armed

rebel groups that nance their ghting with

the export of these ores. On July, 21

2010,

President Barack Obama signed the Dodd-

Frank Wall Street Reform and Consumer Pro-

tection Act, Section 1502. It forces companies

listed on the New York Stock Exchange to dis-

close their consumption of conict minerals.

To this end, the electronics industry started

major queries along its entire supply chain

in 2012 and 2013 to trace their value chains

back to the mines. Many customers request

the use of an ‘EICC Conict Minerals Report-

ing Template’, which has become a widely

accepted global standard. The EICC report

documents, among other things, the smelt-

ers identied along the supply chain. One of

the objectives is to audit and certify as many

smelters as possible as ‘conict-free’ and thus

ensure that smelters no longer use conict

minerals.

3.6.2 Directives and regulations of the

European Union

More detailed information on the RoHS Direc-

tive, the ELV Directive and REACH regulation

of the European Union is given below.

3.6.2.1 RoHS directive

The Restriction of Hazardous Substances

Directive (RoHS) originated in the European

Union and took effect in 2006. It restricts the

use of certain hazardous substances in new

electrical and electronic equipment put on

the market. It was revised in 2011 (RoHS 2

Directive 2011/65/EU) and had to be imple-

mented at national level by January 2013. In

Germany, for example, the rules of the Direc-

tive were transposed to a new ordinance ‘Elek-

troStoffVerordnung’, which came into force on

May, 9

2013.

It restricts the use of the following substances

to a maximum concentration value in homo-

geneous materials:

These requirements apply to new products

placed on the market. However, nal man-

ufacturers also expect their component sup-

pliers to deliver RoHS-compliant component

parts. RoHS compliance must therefore be

ensured along the entire supply chain.

Lead

0.1% by weight in homogeneous

materials

Cadmium

0.01% by weight in homogeneous

materials

Hexavalent Chromium

0.1% by weight in homogeneous

materials

Polybrominated Biphenyls

(PBB)

0.1% by weight in homogeneous

materials

Polybrominated Diphenyl

Ethers (PBDE)

0.1% by weight in homogeneous

materials

Mercury

0.1% by weight in homogeneous

materials

Table 4: Maximum concentration levels of homogeneous material according to the German

‚ElektroStoffVerordnung‘ (Copyright ZVEI)

There are numerous exemptions relating to

substance restrictions, transfer periods, mark-

ing requirements (CE marking) and conformity

assessments. More information is provided in

the brochure ‘ElektroStoffVerordnung – Hand-

lungshilfe für Industrie und Handel zur Kom-

munikation entlang der Lieferkette’, which is

available from the ZVEI.

3.6.2.2 ELV Directive

The End of Life Vehicle Directive (ELV) passed

into European Law in October 2000 and took

effect in Germany on June, 21

2002 when

the ELV Ordinance was adopted, regulating

the surrender, take-back and eco-friendly dis-

posal of end-of-life vehicles.

It governs the recycling and material recov-

ery of vehicles within the European Union

and contains certain substance bans for lead,

cadmium, mercury and hexavalent chromium

similar to the RoHS Directive. It also stipu-

lates the provision of conformity proofs by the

manufacturer and supplier.

3.6.2.3 REACH Regulation

REACH stands for Registration, Evaluation,

Authorisation and Restriction of Chemicals.

Adopted in summer 2007, this regulation

is the rst fundamental reform launched to

standardise the European chemicals policy. Its

purpose is to improve the protection of human

health and the environment from the risks

that can be posed by chemicals, while enhanc-

ing the competitiveness of the EU chemicals

industry.

In principle, REACH applies to all chemical

substances, not only those used in industrial

processes but also in our day-to-day lives, for

example in cleaning products, paints as well as

in articles such as clothes, furniture and elec-

trical appliances. Therefore, the regulation

has an impact on most companies and indus-

tries across the EU. The electronics industry as

a downstream user is also directly affected by

the REACH requirements. This is the result of

the technological bandwidth of the electronics

industry and the use of its products in many

different customer industries.

REACH establishes procedures for collecting

and assessing information on the properties

and hazards of substances. Companies must

collaborate with other companies for this pur-

pose. Communication along the supply chain

is a core element of the REACH regulation.

Since non-compliance with the duty to com-

municate may result in high nes, it is recom-

mended that REACH experts be consulted in

case of doubt. First points of contact are the

ZVEI

, the Federation of German Industries

(Bundesverband der Deutschen Industrie)

the European Chemicals Agency (ECHA)

the REACH-CLP-Biocide Helpdesk of the Ger-

man Federal Authorities.

As with many other EU Directives and reg-

ulations, non-European countries are also

interested in introducing similar REACH leg-

islation. China leads the way again (as was

the case with RoHS and ELV) and introduced

a regulation on the registration of new chemi-

cals initiated by the Ministry of Environmental

Protection of the People’s Republic of China

as early as October 2010.

62 www.zvei.org

63 www.bdi.eu

64 www.echa.europa.eu

65 www.reach-clp-biozid-helpdesk.de

3.7 Conclusion on external framework

conditions

The chapter on external framework conditions

clearly shows that inuences impacting on the

supply chain from outside must not be under-

estimated.

Not only may insufcient knowledge of possi-

ble customs, export control or transport regu-

lations signicantly increase shipping times,

violations of legal procedures and duties may,

in the worst case, be deemed as an admin-

istrative offence, e. g. against the German

Foreign Trade and Payments Act or applicable

duties to inform and sanctioned with nes.

For instance, the innocent performance of

chain transactions may result in tax-relevant

registration duties in a country, which in turn

can substantially increase costs and efforts.

This is why economic operators should always

study any relevant legal requirements inten-

sively before taking up the assignment and

consult external advisors in case of doubt

(customs, export control, tax experts, etc.).

Supply Chain Management is carried out

by people. This is a fact which sometimes

is forgotten: Solutions in the area are often

perceived as depending on tools, a concept

typically associated with IT solutions. Tools,

however, cannot manage the supply chain.

They can only serve as what they are, tools

that support supply chain specialists. No less,

but also no more.

Key supply chain management concepts:

Flexibility, speed, efciency – can be

achieved by your employees!

Staff from every department and every hier-

archical level are responsible for your supply

chain and its performance. Their skills and

capacity to act are decisive and make a signif-

icant contribution to the success of your enter-

prise on the international stage. Ensuring that

employees are both challenged and supported

as they develop their skills and expand their

qualications is a central task for manage-

ment.

Developing human capital secures the

future.

Ensuring you will be able to draw on skilled

and capable specialist staff in the future must

be seen as an investment. Neglecting to invest

in this area can lead to gaps opening up that

can potentially undermine the functioning and

the very existence of an enterprise. Neglecting

to invest in capital goods is a mistake that can

be remedied at a stroke if need be. In other

words: you simply purchase the capital good!

But in the area of human capital development,

a year or two of inactivity cannot be remedied

so easily: staff shortages or skills shortages

cannot be resolved at short notice, at least not

without paying a huge premium. The required

human resources are simply not (or no longer)

available.

Human capital development has a posi-

tivecost-benetratio!

The hot spots presented below, zone in on

skills and qualications that are increasingly

needed along the supply chain and shows that

the topics highlighted by the survey are not

optional, but essential for a functional supply

chain and for business success!

Topics such as sales planning and forecasting,

vendor-managed inventory (VMI), process

organisation or Kanban, reduce costs directly.

In areas such as foreign trade and customs,

the level of customs and import duties paya-

ble depends on the specialist expertise of your

staff, as do logistics costs and possible extra

penalties or charges.

For turnover in a particular market to trans-

late into the creation of real value, excellent

employees with intercultural competence, for-

eign language skills and specialist SCM exper-

tise are needed. The further away from the

company headquarters a new market is, the

more acute this need becomes!

The considerable risks associated with

global supply chains can only be miti-

gated by excellent employees!

Under German law, the export compliance

manager in any company – the highest-rank-

ing person with responsibility for exports, a

member of the management or executive

board – is personally liable for violations of

export regulations. The buck stops with the

export compliance manager: he or she can-

not plead ignorance of regulations or blame

problems on misunderstandings. Ensuring an

enterprise maintains its capacity to deliver

and enjoys import and export concessions is

only one example for the importance of devel-

oping specialist expertise in companies and

ensuring it is always on hand.

4 Supply Chain Management

Education and Training

4.1 Process-oriented skills manage-

ment

An efcient and effective supply chain

depends on skills management based on an

understanding of how processes are linked

and designed to tap the potential of employ-

ees in relevant functional areas, in individ-

ual functional roles and at every level within

the enterprise through a holistic long-term

approach.

It is key that skills development is oriented

towards the real work situation and anchored

to actual job requirements and concrete work

processes. Task-based process descriptions

and the skills needs derived from these can be

used to generate and implement education,

training and qualication strategies for indi-

vidual employees and for the enterprise as a

whole.

The following tables give an overview of how

individual SCM functional areas and their

respective SCM role proles match up with the

ve process categories described in the SCOR

model. The SCM role proles are divided into

operative and strategic roles. Operative roles

are directly involved in the execution of work

processes. Strategic roles typically involve

larger spheres of responsibility and corre-

spondingly greater accountability for budgets

and human resources.

A system of colour marking also shows which

role proles, with their typical tasks and activ-

ities, form core areas or areas more tangen-

tially involved in the respective SCOR

pro-

cess categories. Depending on the size of the

enterprise, its organisational structures and

the nature of its operations (make-to-stock,

make-to-order or repair and maintenance)

specialists may be involved in one or several

of the ve basic SCOR

process types in one

or more role prole. Education, training and

qualication pathways must be tailored to the

particular tasks and job specications of staff.

Table 5: How strategically important functional SCM role proles map to process categories in the SCOR

model (Copyright ZVEI)

Table 6: How strategically important functional SCM role proles map to process categories in the SCOR

model (Copyright ZVEI)

Functional SCM-

role proﬁles

Synonyms Plan Source Make Deliver

Return

Logistics ManagerSupply Chain Manager

Strategic PlannerIndustrial Engineer

Logistics Planner

Process coordinatorSCM Application

Developer

Purchasing Manager

Commodity

Procurement

Project Purchaser

Goods Receipt Manager

Inventory Management

Coordinator

Warehouse Manager

Production Manager

Dispatch Manager

Functional SCM-

role proﬁles

Synonyms

Plan Source Make Deliver Return

Customer Order

Handler

Customer Service Staff

(Order Processing)

Demand PlannerOrder Manager

Launch Support

Professional

Production Planner

Production Scheduler

Order Fulﬁllment

Planner

Material Planner

Strategic Purchaser

Commodity

Procurement

Goods Receipt

Employee

Goods Receipt Quality

Control Employee

Warehouse Employee

Order Picker

Production Supervisor

Production Line

Supervisor

Production Line

Employee

Skilled Worker

Packer

Transportation

Planner

Transportation

Manager

Driver

Complaint

Management Staff

Customs Expert

Foreign Trade and

Export Expert

Dangerous Goods

Safety Advisor

Waste and Reclaim

Expert

4.2 Hot spots for skills development

Following a survey of multiple enterprises,

one-page guides dealing with 11 hot spots

for skills development and qualication were

developed. Before the topics are treated indi-

vidually, a note on the survey design and on

the thinking behind the individual one-page

guides follows.

4.2.1 Enterprise survey as departure

point

ZVEI members were surveyed to arrive at an

up-to-date assessment of the areas in the elec-

trical and electronics industry that have the

greatest need for skills development in the

area of supply chain management.

Members were presented with 50 SCM key-

words and asked to identify the areas in which

they perceive a need for skills development or

have already started implementing measures

of their own.

The working group then prepared brief over-

views of the top ten hot spots. The one-page

guides that resulted are presented in this

chapter. Each gives a quick overview of the

respective topic and the main functions and

areas it relates to.

Because of their importance, the hot spots

goods labelling (rank 13, chapter 4.2.12) and

Kanban (rank 15, chapter 4.2.13) were also

included in the one-page guides. In addition,

the hot spots classic and WebEDI were summa-

rised in one guide, as they are closely-related.

4.2.2 How to use the one-page guides

The guides have been designed to cover the

key hot spots highlighted by the survey in a

form which can be taken in at a glance and can

serve to guide the actions of decision-makers.

Not only are these guides intended to assist

enterprises in discovering the right staff by

focusing on initial vocational training, univer-

sity education and advanced vocational train-

ing, but they are also intended to demonstrate

how companies can develop and upgrade the

skills of their staff through company educa-

tion and training programmes and continued

education measures.

Each of the hot spots was assigned to one

of three areas: eld of action, tools and pro-

cesses. Symbols for these areas are displayed

on the appropriate pages so that readers

can see at a glance which area each guide

addresses.

Table 7: How SCM functional areas map to process categories in the SCOR

model (Copyright ZVEI)

Key to symbols:

Core area Related area

SCM Departmental

Areas

Synonyms

Plan Source Make Deliver Return

Demand & Supply

Planning

Demand Planning

Procurement (Strategic

Contracts)

Strategic Procurement

Procurement (Operative

Orders)

Operative Procurement

Customer Service Order Management

Receiving (Area)

Warehousing

Order Fulﬁllment

Production

DeliveryOrder Management

Goods Transport

(Internal)

Internal Transport/Picking/

Readying for Dispatch

Goods Transport

(External)

Each one-page guide is structured to take in

the following points (each indicated with its

own symbol) so that readers can orient them-

selves rapidly and intuitively:

Table 8: Symbols for matching hot spots to areas (Copyright ZVEI)

Table 9: Symbols to aid orientation (Copyright ZVEI)

Denition Briey outlines the signicance of the focus

topic. The SCOR

map shows which categories

of the SCOR

model are affected. This should

make it easier to see how the focus topic links

to processes.

The processes that participants identied in

the survey as areas affected in their own

enterprises are marked in red, processes in

upstream or downstream areas that are usually

also affected in pink.

Aims Shows purpose of focus topic.

Potential List of positive effects for the enterprise.

Skills Content Shows which learning content should be dealt

with in qualication programmes to generate

a solid understanding of the respective focus

topic.

Target Group Illustrates which functional roles on the stra-

tegic and operative sides of the organisa-

tion should be targeted for specic training.

Depending on the size of the enterprise, an

employee may have several roles.

Relevant Functions Illustrates which functional areas along the

value chain in the enterprise that come into

contact with the focus topic (red background).

Field of Action

Tool

Process

4.2.3 Sales planning and forecasting

Rank 1

Denition

Forecasting of market demand for a product.

Aims

Precise planning of sales volume per product.

Potential

• Optimised capacity utilisation rate, higher

delivery service level, lower capital commit-

ment,

• smoothing of procurement, production and

distribution quantities through coordinated

planning between supplier and customer,

• voidance of unnecessary costs result-

ing from incorrect planning of material,

machinery or personnel,

• avoidance of the bullwhip effect.

Skills content

• Sales plan as basis for an enterprise-wide

projection of all relevant resources,

• derivation of sales volume from bills of mate-

rials and production plans in order to coordi-

nate personnel, machine capacity and order

quantities,

• consideration of seasonal uctuations,

short-term uctuations and external factors

through continuous planning,

• opportunities and need to communicate

regularly and closely with customers, e. g.

through (Web)EDI.

Target groups

Functions affected

(shown against red background)

Strategic Operative

Supply Chain Manager Order Manager, Order Fulllment Planner

Purchasing Manager Production Planner, Production Scheduler

Order Fulllment Manager Materials Planner

Production Manager Inventory Management Coordinator

Production Supervisor Order Manager

Figure 42: Sales Planning and Forecasting in the SCOR

model (Copyright Osram OS)

DELIVER

RETURN

RETURN RETURN

SOURCEDELIVER

PLAN

MAKE

PLANPLAN

RETURN

RETURNRETURN

MAKE

DELIVER

SOURCE

RETURN

MAKE

Supplier

Internal or External

Customer

Internal or External

Customers'

Customer

Suppliers'

Supplier

SOURCE

DELIVER

SOURCE

RETURN

Your Organisation

Table 10: Sales planning and forecasting target groups (Copyright Osram OS)

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

Figure 43: Functions affected by sales planning and forecasting (Copyright Osram OS)

4.2.4 Customs and international trade

Rank 2

Denition

International trade is the exchange of goods,

services and capital across international bor-

ders or territories.

In Germany, the customs authorities are sub-

ordinate to the Federal Ministry of Finance

and are tasked mainly with the collection of

tax in general, the levying of excise duties in

particular, the provision of clearance proce-

dures, risk analysis for the trade in goods, the

enforcement of market regulations and debt

collection on behalf of the Federal Republic.

Aims

Aims here fall into two categories: the (once-

off) task of creating the prerequisites for

developing new markets, and the medium/

long-term safeguarding of a cost-effective,

low-risk, and high-quality (and therefore also

high-speed) supply chain.

Potential

• Opportunities to make strategic deci-

sions about entering foreign markets – in

advance,

66 A more detailed guide to customs and inter-

national trade can be found in Appendix 5.7.

67 http://en.wikipedia.org/wiki/International_

trade

68 www.zoll.de

• avoidance or minimisation of legal risks,

• knowledge and therefore also consideration

(possible avoidance, minimisation) of tariff

and non-tariff barriers to trade,

• securing the stability of the supply chain (for

example through transparency, processes,

documentation),

• avoiding time delays (e. g. customs clear-

ance formalities, processing of payments,

issues with documentation or labelling),

• reduction of costs (temporary storage unre-

lated to transportation, interfaces and media

discontinuity, duration of transportation,

customs and import duties, costs of nance

and risk mitigation).

Skills content

• Finance instruments for simplifying import

and export activities, reducing capital

investment needs and simplifying cash

management,

• international sales law as the basis for low-

risk multinational trade relations,

• precise drafting of international sales con-

tracts as a precondition for the successful

pursuit of legal remedies in foreign countries,

• delivery and payment terms and the appli-

cation and signicance of payment, trade,

insurance, customs and foreign trade doc-

umentation,

• implementation of risk analyses and of

strategic and operative management of the

main goods, currency, country-specic, pay-

ment and product liability risks,

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Figure 44: Customs and international trade in the SCOR

model (Copyright Osram OS)

• ability to plan around key aspects of foreign

trade law, including customs, taxes, registra-

tion requirements and market regulations,

• application of import and customs clearance

procedures and types of customs duty, abil-

ity (in connection with this) to work within

rules governing contingents, the origin of

goods and preferential tariffs,

• application of standard and simplied cus-

toms clearance procedures and ability to

factor in both country-specic characteris-

tics and aspects of export control related to

the specic nature of the goods.

Target groups

Functions affected

(shown against red background)

Strategic Operative

Senior Management,

Executive Board

Manager of Legal

Department

Sales Controller

Admin Staff in Legal Department,

Legal Advisor

Head of Sales

Head of Product Devel-

opment

Admin Staff Responsible for

Exports, Key Account Managers,

Project Managers

Admin Staff in Product Develop-

ment

Head of Procurement/SCM Head of Production Strategic Purchaser Production Planner

Head of Finance Head of Logistics

Accountants, Admin Staff in

Credit Administration, Customs

Clearance and Accounting

Dispatch Staff, Admin Staff Handing

Imports or Logistics

Table 11: Customs and foreign trade target groups (Copyright Osram OS)

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

Figure 45: Functions affected by customs and foreign trade (Copyright Osram OS)

4.2.5 Simulation-based optimisation

Rank 3

Denition:

Optimisation of complex, real business pro-

cesses using results from computerised sim-

ulation models.

Aims

Optimisation of real business processes.

Potential

• Optimal utilisation of human resources and

machines,

• optimal layout and integration of logistics

and production,

• avoidance of expensive implementation

errors,

• timesavings through more rapid results from

computerised simulation of alternatives.

Skills content

• Opportunity to become familiar with different

simulation systems – how they work, areas of

deployment, characteristics, strengths and

weaknesses,

• system support for implementation of

detailed planning of production and logis-

tics workows showing machines, equip-

ment set-up, material, personnel, informa-

tion (such as orders), etc.,

• opportunity to become familiar with a selec-

tion of system-based optimisation algo-

rithms that can help to pick the best course

of action,

• opportunities for dynamic representation of

different levels of demand to reect uc-

tuation during the day, week, and month,

seasonal trends within specic sectors, etc.,

• development of solutions for over/under-uti-

lisation of manufacturing capacities, and

bottlenecks that arise at particular junctures

(machines, personnel, infrastructure),

• opportunities to simulate the entire supply

chain across enterprise boundaries,

• computerised or manual calculation of opti-

misation plans.

Figure 46: Simulation-based optimisation in the SCOR

modell (Copyright Osram OS)

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Target groups

Functions affected

(shown against red background)

Table 12: Simulation-based optimisation target groups (Copyright Osram OS)

Strategic Operative

Supply Chain Manager Logistics Planner

Production Manager Production Planner, Production Scheduler

Production Supervisor Materials Planner

Warehouse Manager Inventory Management Coordinator

Order Manager

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

Figure 47: Functions affected by simulation-based optimisation (Copyright Osram OS)

4.2.6 Vendor managed inventory (VMI)

Rank 4

Denition

Inventory managed by supplier/seller.

Aims

Improved capacity to deliver with simultane-

ously reduced costs.

Potential

• Smoothing of production and distribution

quantities,

• reduced complexity and administrative

overhead for article management for cus-

tomers and suppliers,

• reduced storage of stock at supplier, elimi-

nation of the bullwhip effect,

• fewer errors and faster throughput time due

to automation,

• reduced transport costs and better utilisa-

tion of transportation capacity,

• improved service quality,

• strengthening of business relationship

between customer and supplier.

Skills content

• Opportunities for and possible variants of

vendor self-management,

• necessary information for vendor self-man-

agement,

• distribution of responsibilities with vendor

self-management,

• necessary communication,

• automation and electronic connectivity with

vendor self-management,

• binding agreements governing electronic

connections,

• appropriate VMI combinations.

Figure 48: VMI in the SCOR

model (Copyright Osram OS)

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Internal or External

Customers'

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SOURCE

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Your Organisation

Target groups

Functions affected

(shown against red background)

Strategic Operative

Supply Chain Manager Logistics Planner

Purchasing Manager Production Planner, Production Scheduler

Warehouse Manager Inventory Management Coordinator

Production Manager Warehouse Staff

Production Supervisor Materials Planner

Logistics Planner Order Manager

Project Manager Customer Order Handler

Transport Manager Transport Scheduler

Logistics Planner

Table 13: VMI target groups (Copyright Osram OS)

Figure 49: Functions affected by VMI (Copyright Osram OS)

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

4.2.7 EDI classic and WebEDI

Rank 5 and 8

Denition

EDI (Electronic data interchange) allows data

to be exchanged between company or state

agency computer systems without interrup-

tions. For example, business processes such

as orders, order conrmations, delivery noti-

cations, and invoices can be processed via

EDI. WebEDI portals are designed for systems

in which one of the business partners cannot

support classic EDI.

Aims

Avoidance of media discontinuity, and support

for lean supply chain management strategies.

Potential

• Time savings and minimisation of costs and

errors in business transactions with external

partners,

• strengthening of relationship between sup-

plier and customer,

• automation of business processes with

external partners that lack EDI infrastruc-

ture,

• more rapid exchange of data,

• minimisation of redundant data.

Skills content

• Overview of the most common EDI stand-

ards (including EDIFACT, ANSI X12 and

RosettaNET),

• practical examples showing EDI support for

processes such as placing orders,

• demonstration of differences between the

various EDI methods and their requirements

(with WebEDI, for example, one partner is

always EDI enabled, while the other is not),

• WebEDI examples from everyday life, such

as the deployment of WebEDI at Amazon.

Figure 50: EDI classic and WebEDI in the SCOR

model (Copyright Osram OS)

DELIVER

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Internal or External

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SOURCE

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Target groups

Functions affected

(shown against red background)

Table 14: EDI classic and WebEDI target groups (Copyright Osram OS)

Figure 51: Functions affected by EDI classic and WebEDI (Copyright Osram OS)

Strategic Operative

Supply Chain Manager Commodity Procurement

Purchasing Manager Project Purchaser

SCM Application Developer Strategic Purchaser

Customer Order Handler

Foreign Trade and Export Expert

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

4.2.8 Tracking and tracing

Rank 6

Denition

Consignment tracking and tracing makes it

possible to monitor and verify the status of

deliveries both before and after their arrival.

Aims

Makes it possible to identify the location, path

and status of goods/consignments within the

supply chain.

Potential

• Rapid identication of errors,

• easy to detect wastage (waiting time,

unnecessary movement of goods, through-

put time, etc.),

• savings from making standardised informa-

tion available to different partners/inter-

ested parties,

• opportunity to respond rapidly to customer

complaints; improved communication with

customers,

• supply chain security,

• avoidance or minimisation of theft,

• identication of counterfeit or black market

products,

• rapid tracing of errors and elimination of

their causes through data availability.

Skills content

• Opportunities presented by tracing of ship-

ments (with reference to, for example, par-

cel delivery services),

• options for labelling products and reading

labels (scanning methods = codes, optical

image recognition, etc.),

• opportunities and methods for visualising

ows of goods.

DELIVER

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Figure 52: Tracking and tracing in the SCOR

model (Copyright Osram OS)

Target groups

Functions affected

(shown against red background)

Strategic Operative

Supply Chain Manager Customer Order Handler

Industrial Engineer Materials Planner

Logistics Planner Order Manager, Order Fulllment Planner

Warehouse Manager Warehouse Staff

Dispatch Manager Transport Scheduler

Demand planning

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

Table 15: Tracking and tracing target groups (Copyright Osram OS)

Figure 53: Functions relevant to tracking and tracing (Copyright Osram OS)

4.2.9 Process organisation

Rank 7

Denition

Process organisation represents an enterprise

in terms of its business processes. These can

be classied further as core processes, sup-

porting processes and management processes.

Examples for core processes could include:

marketing, production, material and logistics

processes. In the SCOR

model, these pro-

cesses could be summarised under the con-

cepts Plan, Source, Make, Deliver and Return.

The support or management-oriented area is

described using the concept Enable.

Aims

• Laying down foundations for exibility and

adaptability,

• representation of activities as they are

linked in the ow of goods and services

through the enterprise,

• intensive focus on customer-specic

requirements.

Potential

• Minimisation of waste through concentra-

tion on activities that create value and are

therefore paid for by customers,

• minimisation of errors and their cost

through greater transparency and greater

control over workows,

• higher employee motivation through more

varied tasks (cross-functional areas).

Skills content

• Organisational structures and procedures,

• reasons for process organisation,

• structure of process organisation.

Figure 54: Process organisation in the SCOR

model (Copyright Osram OS)

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SOURCE

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Your Organisation

Target groups

Functions affected

(shown against red background)

Strategic Operative

Supply Chain Manager

Industrial Engineer

SCM Application Developer

Logistics Planner

Purchasing Manager

Production Manager

Table 16: Process organisation target groups (Copyright Osram OS)

Figure 55: Functions affected by process organisation (Copyright Osram OS)

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

4.2.10 Shipment guidelines

Rank 9

Denition

Set of rules showing which forwarder should

be used for which loads, as distinguished by

weight, volume, load carrier, deadlines, classi-

cation as dangerous goods and a large range

of other criteria.

Aims

Ensure goods are transported with approved

transport providers at negotiated prices.

Potential

• High potential for savings on transportation

services,

• better selection of transportation service

providers for all relevant criteria.

Skills content

• Negotiated transport terms for optimal

cost-benet ratios at a dened quality

standard,

• structured and systematic selection of ser-

vice providers,

• table with weight limits, volume limits and

load carriers showing which transport pro-

viders should be used in which cases,

• xed rules per region, country, type of

goods (e. g. dangerous goods), for national

and international road haulage and air and

sea freight.

DELIVER

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Customers'

Customer

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SOURCE

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Your Organisation

Figure 56: Shipment guidelines in the SCOR

model (Copyright Osram OS)

Target groups

Functions affected

(shown against red background)

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

Table 17: Shipment guidelines target groups (Copyright Osram OS)

Figure 57: Functions affected by shipment guidelines (Copyright Osram OS)

Strategic Operative

Supply Chain Manager Transport Manager

Purchasing Manager Dangerous Goods Safety Advisor

Foreign Trade and Export Expert

4.2.11 Consignment

Rank 10

Denition

Consignment stock refers to stock of a supplier

or service provider held in the company of the

buyer. It remains the property of the supplier

until it is removed by the buyer. The merchan-

dise is only paid for when it is taken from con-

signment stock. This form of inventory manage-

ment is known as consignment.

Aims

• Improved availability on the customer side

and improved performance on the supplier

side,

• lower inventory levels across the entire sup-

ply chain.

Potential

• Minimisation of process costs,

• minimisation of transportation costs,

• optimisation of set-up costs (free choice

from supplier’s production batches),

• strengthening of customer-supplier rela-

tionship,

• transfer of the risks and rewards of owner-

ship delayed. Depending on the arrange-

ments made for settling accounts, a longer

term of credit may also result,

• in intercompany transactions, the entire

inventory appears based on production costs

in the general ledger account of the supplier;

once country-specic regulations are taken

into account, this can have non-recurrent tax

effects.

Skills content

• Options for representing consignment stock

in inventory management systems,

• contract drafting basics and variations,

including, for example:

• storage location, cost absorption,

delayed acceptance of goods,

• warehouse operators, rights and respon-

sibilities of the contracting parties,

• liability issues, transfer of ownership,

and invoicing,

• insurance,

• inspection of goods,

• beginning of validity period/termina-

tion,

• any other terms and conditions (place of

jurisdiction, references to further agree-

ments),

• individual supplemental agreements

(such as the type of packaging to be

used, minimum or maximum orders),

• rolling forecast/inventory, etc.

DELIVER

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MAKE

Supplier

Internal or External

Customer

Internal or External

Customers'

Customer

Suppliers'

Supplier

SOURCE

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SOURCE

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Your Organisation

Figure 58: Consignment in the SCOR

model (Copyright Osram OS)

Target groups

Functions affected

(shown against red background)

Strategic Operative

Head of SCM Customer Order Handler Complaint Management

Purchasing Manager Order Manager Goods Receipt Employee

Warehouse Manager Materials Planner Goods Receipt Quality Control Staff

SCM Application Developer SCM Application Developer Warehouse Staff

Inventory Management Coordinator Order Picker

Foreign Trade and Export Expert

Table 18: Consignment target groups (Copyright Osram OS)

Figure 59: Functions affected by consignment (Copyright Osram OS)

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

4.2.12 Goods labelling

Rank 13

Denition

Goods labels (for example MAT labels, GTL)

contain information such as article numbers,

descriptions and possible further data that

must remain with the goods to facilitate their

unambiguous identication.

Aims

• Machine-readable, unambiguous identica-

tion and traceability,

• standardised and uniform labelling, for

example using the ANSI system (American

National Standards Institute),

• efcient receipt and onward expediting of

material.

Potential

• Higher degree of automation, improved

throughput times, reduced identication

errors,

• deployment of technical aids such as scan-

ners, PDAs, etc. for quick and reliable iden-

tication and further processing or expedit-

ing,

• rapid cross-check against database to verify

correctness of labels.

Skills content

• Options for unambiguous labelling and

description of materials, containers and

packaging, for example MAT label, RFID

tags or GTL (Global Transport Label),

• machine-readable labels (optical scanning

technologies, RFID readers, etc.),

• necessary information for ensuring trace-

ability such as date code, humidity class,

RoHS compliance, etc., see also the ZVEI-

guide on ‘Identication and Traceability in

the Electrical and Electronics Industry’,

• options for and benets from tracing the

ow of material and information along the

entire supply chain from suppliers via manu-

facturers all the way through to customers,

• examples for current labels that account for

industry sector guidelines, goods character-

istics, etc.

Figure 60: Goods labelling in the SCOR

model (Copyright Osram OS)

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MAKE

Supplier

Internal or External

Customer

Internal or External

Customers'

Customer

Suppliers'

Supplier

SOURCE

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SOURCE

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Your Organisation

Target groups

Functions affected

(shown against red background)

Strategic Operative

Supply Chain Manager Goods Receipt Employee

Purchasing Manager Goods Receipt Quality Control Staff

Goods Receipt Manager Warehouse Staff

Dispatch Manager Complaint Management Staff

Industrial Engineer Customer Order Handler

Transport Manager Packer

Logistics Planner Order Picker

Skilled Worker

Table 19: Goods labelling target groups (Copyright Osram OS)

Figure 61: Functions affected by goods labelling (Copyright Osram OS)

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

4.2.13 Kanban

Rank 15

Denition

Kanban is an inventory management strategy

in which replenishment is triggered by con-

sumption. The advantage of this method is

that complex planning is not needed to trig-

ger a replenishment signal. Kanban is espe-

cially helpful as a means of ensuring efcient

supply chain workow management across

different areas.

Aims

Maximum availability, minimum stock – the

result of consumption being managed by

coordination between two parties.

Potential

• High potential for cost-savings in inventory

management,

• supports lean production workows.

Skills content

• Functions as self-regulating feedback loop

connecting production and consumption,

• differences between push and pull princi-

ples,

• ensures human resources and inputs are

deployed exibly by giving control over

short-term workow management to the

employees executing the relevant tasks,

• use of Kanban cards as information system,

• prerequisites for introducing a Kanban sys-

tem,

• understanding and knowledge of lean strat-

egy.

DELIVER

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Supplier

Internal or External

Customer

Internal or External

Customers'

Customer

Suppliers'

Supplier

SOURCE

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SOURCE

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Your Organisation

Figure 62: Kanban in the SCOR

model (Copyright Osram OS)

Target groups

Functions affected

(shown against red background)

Strategic Operative

Supply Chain Manager Order Manager

Purchasing Manager Production Planner, Production Scheduler

Warehouse Manager Materials Planner

Production Manager Inventory Management Coordinator

Production Supervisor Warehouse Staff

Skilled Worker

Demand Planning

Procurement (StrategicContracts)

Procurement (OperativePurchases)

Customer Order Management

Production Planning

Receiving (Area)

Warehousing

Production/Manufacturing

Delivery

Transport

Value Chain

Table 20: Kanban target groups (Copyright Osram OS)

Figure 63: Functions affected by Kanban (Copyright Osram OS)

4.3 Education, training and skills

development

This subsection begins by shedding light on

the current situation and on the need for

action to address current and future skills

demand in the area of supply chain manage-

ment. This is then followed by a more detailed

exploration of various training and educa-

tion options which include initial vocational

training, degree programmes at institutions

of higher learning, advanced vocational train-

ing, continued education and company train-

ing.

4.3.1 Situation and need for action

In the past, enterprises tended to work at

optimising individual functional areas like

purchasing, warehouse management and

distribution. Today, the focus tends to be

on implementing and ne-tuning the entire

supply chain in line with the SCOR

model to

achieve lower costs, faster throughput times

and improved product and service quality

– even as product life cycles become ever

shorter. Optimising value streams within a

single enterprise is no longer enough. Poten-

tial for increasing productivity and saving

time while creating value is now sought and

realized across the entire supply chain. Skilled

staff at every level is the key to success here.

Business-oriented vocational education and

academic degree programmes still tend to

deal with materials management, procure-

ment, and logistics in the ‘classic’ manner. The

supply chain management approach, with its

interlinking of different areas and the empha-

sis on processes and data which connects it

to product life cycle management (PLM), has

been integrated into the relevant curricula

only hesitantly. For the necessary change to

happen, both vocational and academic pro-

grammes will have to open up to change,

extension or adjustment, or they will be swept

aside by more holistic and global approaches.

The needs highlighted by enterprises (with

convincing justications) in this white paper

are also supported by operational practices in

enterprises. In what follows, various different

starting points and possibilities are sketched,

along with examples for some of the best

approaches and ideas to come out of aca-

demic and vocational education programmes

and continued education and training meas-

ures. The concept of supply chain manage-

ment, as used here, always refers to the entire

supply chain, from the supplier’s supplier all

the way down to the customer’s customer –

broken down into the processes Plan, Source,

Make, Deliver and Return, which also include

classic logistics.

4.3.2 Training and education pathways

The illustration shows a number of possible

training and education options for developing

skills in the area of supply chain management.

• Initial Vocational Education and Training:

within the framework of the dual system,

apprentices acquire skills required for oper-

ative tasks,

• Academic Degree Programmes: students

acquire skills required for operative and

strategic tasks at traditional universities,

universities of applied sciences and voca-

tional academies,

• Advanced Vocational Education and Train-

ing: qualies candidates for specialist tasks

and leadership roles,

• Continuing Education: qualies participants

for specialist tasks.

Conclusion:

• opportunities for skills development in the

eld of SCM are varied,

• the relevant vocational and academic

learning content is complex and cross-

linked.

Work Experience

Advanced

Vocational

Training

Continued

Education

(Professional Training,

Company-Speciﬁc Training)

Initial Vocational

Training in the

Dual System

Academic Degree

Programmes

General School

Leaving Qualiﬁcation

Figure 64: Education, training and skills development pathways

in the area of supply chain management (Copyright ZVEI)

The text which follows below will create much-

needed transparency.

4.3.3 Initial vocational training in the

dual system

The space afforded by the general training

plans and framework curricula governing

apprenticeships is discussed below before the

potential for incorporating more SCM con-

tent in both areas is explored. The authentic

example of Zollner Elektronik will then be pre-

sented as a practical case-study.

4.3.3.1 Room for manoeuvre in general

training plans

The general training plans included in the

specic training regulations for each occupa-

tion are conceived of as guidance that should

be used to create enterprise-specic training

plans. Large swathes of time are left free for

deepening and broadening the skills that are

to be acquired. It follows that SCM content

can be integrated into the three apprentice-

ship programmes depicted in the following

(two business-related programmes and one

from the manufacturing sector) at any point

without difculties. The three apprenticeship

training programmes dealt with here are

those with the greatest potential for integrat-

ing SCM learning content into training in the

area of electronics manufacturing.

4.3.3.2 Supply chain management con-

tent in general training plans and frame-

work curricula

The extent to which supply chain management

content is already anchored in general train-

ing plans (Ausbildungsrahmenpläne), frame-

work plans that serve as a basis for developing

company-specic training and in the frame-

work curricula (Rahmenlehrpläne) that gov-

ern the learning content dual system trainees

cover in vocational school, will be shown in

the following:

4.3.3.2.1 Industrial clerk

Occupationalprolerequirementsofrel-

evance for supply chain management in

general training plan governing company

training:

• logistics (4.1),

• exploratory/preparatory phase of acquiring

orders (5.1),

• order handling (5.2),

• order handling and customer service (5.3),

• demand planning and scheduling (6.1),

• placing of orders (6.2),

• inventories and inventory control (6.3).

69 see www.bibb.de, core area ‚career‘ (only

available in German)

Work Experience

Advanced

Vocational

Training

Continued

Education

(Professional Training,

Company-Speciﬁc Training)

Initial Vocational

Training in the

Dual System

Academic Degree

Programmes

General School

Leaving Qualiﬁcation

Figure 65: Overview of the apprenticeship programmes in electronics manufacturing

with the greatest SCM potential (Copyright ZVEI)

Industrial

Clerk

Freight

Forwarding

and Logistics

Services Clerk

Business-

Oriented

Production

Technologist

Technical

Learning elds of relevance to supply chain

management in vocational school framework

curriculum:

• plan, monitor and manage value creation

processes

(learning eld 5),

• plan, monitor and manage procurement

processes

(learning eld 6),

• plan, monitor and manage sales processes

(learning eld 10).

4.3.3.2.2 Freight forwarding and logis-

tics services clerk

Occupationalprolerequirementsofrel-

evance for supply chain management in

general training plan governing company

training:

• process-oriented performance of services in

freight forwarding and logistics (4),

• goods dispatch and transport (5.1),

• inventory logistics (5.2),

• groupage and groupage networks (5.3),

• international freight forwarding (5.4),

• logistics services (5.5),

• contracts, liability and insurance (6),

• dangerous goods, protective measures and

safety (8).

Learning elds of relevance to supply

chain management in vocational school

framework curriculum:

• compare transport modes and process road

freight orders

(learning eld 4),

• process groupage orders

(learning eld 5),

• process intermodal freight transportation

(learning eld 6),

• plan, monitor and manage procurement

processes

(learning eld 8),

• provide and coordinate warehouse services

(learning eld 9),

• process export orders

(learning eld 10),

70 see www.bibb.de, core area ‚career‘ (only

available in German)

71 see www.bibb.de, core area ‚career‘ (only

available in German)

• process import orders

(learning eld 11),

• provide and organise procurement logistics

(learning eld 12),

• provide and organise distribution logistics

(learning eld 13),

• adjust dispatch and logistics-related busi-

ness processes in line with prevailing eco-

nomic conditions

(learning eld 15).

4.3.3.2.3 Production technologist

Occupationalprolerequirementsofrel-

evance for supply chain management in

general training plan governing company

training:

• planning and preparation of production

orders (1.1),

• execution of production orders (1.2),

• nishing production orders (1.3),

• organization of logistics processes (5.4),

• IT systems and networks (3.2),

• product and process data management

(3.3).

Learning elds of relevance to supply

chain management in vocational school

framework curriculum:

• project analysis and project management

(learning eld 8),

• setting up material ow and handling sys-

tems

(learning eld 9),

• analysis of production processes

(learning eld 10),

• optimisation of production processes

(learning eld 12),

• organisation of logistics processes

(learning eld 13).

72 see www.bibb.de, core area ‚career‘ (only

available in German)

73 see www.bibb.de, core area ‚career‘ (only

available in German)

74 see www.bibb.de, core area ‚career‘ (only

available in German)

4.3.3.3 Case study: Zollner Elektronik

– supply chain management training

scheme

Trainees undergoing initial vocational train-

ing at Zollner Elektronik in Zandt, Bavaria

spend six months in the supply chain man-

agement department following the company’s

own training scheme. The material covered

by the trainees takes in the following topics:

EDI, WebEDI, inventory control (and inven-

tory sampling), connectivity to customers and

suppliers, Incoterms

, goods labelling by sup-

pliers, the MAT label, and container manage-

ment.

The enterprise has registered that trainees

nd the programme stimulating, are clearly

motivated by it, and often express an interest

in working in this department after complet-

ing their traineeships.

The ‘Business Process Optimisation / Sup-

ply Chain Management’ manual:

Points used to structure the manual:

Explanation of key concepts

Supply chain management, business process

optimisation, and management in logistics:

• reasons for SCM, results of effective SCM,

• idea and strategic concept behind SCM,

implementation of SCM strategies,

• demarcation from logistics, practical imple-

mentation of SCM.

Task descriptions for trainees and students on

work experience placements taking in the fol-

lowing areas:

Theme: Goods receiving

• incoming goods in parcels and on pallets,

• identication of goods and data logging to

ERP and MES systems,

• incoming goods inspection and logging,

generation of quality notications.

Theme: Warehouse management

• suitable storage,

• carrying out an inventory,

• picking and dispatching orders,

• inventory adjustments/materials analyses/

inventory.

Theme: Dispatch

• dispatch handling and dispatch process

planning,

• dispatch labels,

• electronic data exchange (EDI) and message

types.

Theme: Inventory

• inventory procedures,

• inventory process (before, during, after an

inventory),

• create and process inventory documents.

Figure 66: Front cover of the ‘Business Process Optimisation and Supply Chain Management‘ manual issued by the enterprise Zollner

Elektronik. (Copyright Zollner Elektronik)

Over and above this, a print guide has been developed in

order to give participants in vocational training and other

relevant groups (students with academic backgrounds

completing work placements or thesis-related projects) a

preliminary grounding in the tasks and content of supply

chain management. Key concepts in supply chain man-

agement, business process optimisation, and structures

and workows in the SCM area are covered. The last sec-

tion of the manual describes the various tasks handled by

the SCM department individually and in terms of how they

relate to one another. These different specialist areas are

shown in depth.

Theme: Goods labelling

Theme:Materialsowandstoragetech-

nology, intralogistics

Theme: Statistics in the SCM database

4.3.4 Degree courses at institutions of

higher learning

An overview of key academic degree courses

with relevance for supply chain management is

given below, as is an overview of the current

offering of logistics courses. The learning con-

tent of these courses is then explored further

before conclusions are drawn regarding the

further development of courses and the possi-

ble implementation of supply chain manage-

ment modules.

4.3.4.1 Key courses of study in the sup-

ply chain management area

The following illustration shows key degree

programmes that are relevant for supply chain

management. As supply chain management

extends beyond the scope of classic logistics.

The terms SCM and logistics are handled here

synonymously.

4.3.4.2 Degree programmes offered in

logistics

In the year 2008

, 127 higher education

institutions throughout Germany offered

logistics courses covering 210 specialist areas.

The distribution among the different types of

institutions of higher learning was as follows:

• 43 universities,

• 69 universities of applied sciences (Fach-

hochschulen),

• 15 vocational academies (Berufsakademien).

Training in logistics seems, thus far, to have

kept pace with developments within the area

and its increased signicance. In the future,

it can also be expected that “[...] the ongo-

ing expansion of new specialist elds within

logistics will continue to be matched by an

expansion in education and training provision

[...]“

4.3.4.3 Analysis of degree course con-

tent

• Learning content in technical degree pro-

grammes barely places any emphasis on

processes. Business courses are not process-

oriented enough,

• graduates generally have a comprehen-

sive grasp of their specialist areas, but lack

awareness of operational processes in SCM,

• graduates need both emotional intelligence

and very well-developed problem-solving

skills.

4.3.4.4 Conclusions for ongoing course

development – more focus on pro-

cess-orientation

Essentially from the perspective of industry, it

is clear that learning content in the area of

supply chain management must be covered in

a process-oriented fashion. Guidance on this

comes from from asking questions such as:

• How are enterprises structured with regard

to SCM processes?

• What factors inuence SCM processes?

• What effects and results are reached

through these?

• What functional roles and tasks do univer-

sity graduates take on in this process?

75 More current data is unavailable.

76 Hildebrand and Roth, 2008

Figure 67: Overview of key academic degree programmes in the supply chain management area

Business Administration

Industrial Engineering

(Electrical or Mechanical Engineering)

Business Informatics

Transport/Logistics

Courses of

Study

Note:

The courses of

study listed here are also

offered as dual track (integrated)

studies with a strong operational

focus in cooperation with

enterprises. Examples:

Universities of cooperative

education (Baden-Württemberg)

or Universities of Applied

Sciences (Bavaria).

4.3.4.5 Implementation of supply chain

management study modules

Learning content in this area could be

enhanced by developing and implementing

supply chain management modules for busi-

ness and engineering courses of study. Such

modules should be developed. The content

can be drawn from a special certicate course

for company-based training encompassing

the following thematic areas:

• supply chain structures and processes,

• Plan: Supply chain planning strategies and

processes,

• Source: Procurement strategies and pro-

cesses,

• Make: Production strategies and processes,

• Deliver: Distribution and logistics strategies

and processes (see chapter 4.3.5.2.3),

• Enable: Concepts and methods for analys-

ing the value chain,

• Return: Reverse logistics strategies and pro-

cesses.

4.3.5 Advanced vocational training

An overview of the advanced vocational

training courses and qualications currently

offered in the SCM area will be followed by

more detailed exploration of the learning con-

tent of individual courses.

4.3.5.1 Key advanced vocational training

courses in the supply chain management

area

The following illustration shows key advanced

vocational training programmes in the area of

supply chain management.

4.3.5.2 Supply chain management –

related content in individual courses of

study

The supply chain management-related learn-

ing content of three advanced vocational

training courses will be explored in depth

below. The three relevant qualications are:

Bachelor Professional of Management for

Industry (CCI), Master Professional of Techni-

cal Management (CCI), and Bachelor Profes-

sional of Freight Transport and Logistics (CCI).

The sufx CCI indicates that these qualica-

tions are awarded by the Chambers of Com-

merce and Industry in the respective regions.

4.3.5.2.1 Bachelor professional of man-

agement for industry

In the eld of production processes, compe-

tence in production planning and control is to

be demonstrated, along with the capability to

assess technical background conditions that

are relevant for production. Candidates must

also demonstrate that workows from product

development up to the handover of a product

to the sales department have been understood

and can be matched to specic stages and sit-

uations in production. To this end, it must be

demonstrated that the enterprise-wide func-

tion of supply chain management has been

grasped, and that the SCM sub processes

relevant for production can be explained. A

detailed description of the eld follows:

6. production processes,

6.1 assess production planning,

6.2 analyse production control,

6.3 assess technical background conditions

for production,

Figure 68: Overview of the key advanced vocational training courses in the area of supply chain management (Copyright ZVEI)

Bachelor Professional of

Management for Industry

Master Professional of

Technical Management (CCI)

Bachelor Professional of

Freight Transport and Logistics (CCI)

6.4 logistics as enterprise-wide function,

6.5 execute demand analysis,

6.6 structure procurement and purchasing,

6.7 compare warehousing and transport

options,

6.8 explain reverse logistics.

4.3.5.2.2 Master professional of techni-

cal management (CCI)

In the examination area materials, produc-

tion and marketing management, candidates

must demonstrate the capacity to understand

connections and interdependencies in supply

chains from the supplier’s supplier through

production and on to customers. They must be

in a position to analyse the causes and effects

of clashes between objectives and to make or

prepare the ground for decisions that need to

be made from the perspective of the enter-

prise as a whole. In detail, the scope of this

area for examination purposes is as follows:

4. materials, production and marketing

management,

4.1 assessment of market conditions and

the market positioning of the enter-

prise, mastery of marketing instru-

ments

4.2 assessment of the product life cycle,

assistance with product planning

(including consideration of industrial

property legislation)

4.3 application of purchasing policy and

purchasing marketing instruments and

demand planning methodology, mas-

tery of procurement processes, assess-

ment of the enterprise-wide effects of

procurement decisions on enterprise

workows,

4.4 consideration of legal aspects of

purchasing and sales and of the trade

terms that nd application in the inter-

national movement of goods,

4.5 mastery of different material ow and

warehousing systems and logistics

strategies,

77 This module also covers topics extending

beyond supply chain management.

78 This module also covers topics extending

beyond supply chain management.

4.6 assessment of systems for planning and

controlling production,

4.7 assessment of the deployment of

production factors, the different types

of production and the ways production

can be organised.

4.3.5.2.3 Bachelor professional of

freight transport and logistics (CCI)

The following supply chain management top-

ics are dealt with within this advanced voca-

tional training qualication:

1.2 evaluation of developments in national

and international markets for logistics

and the transportation of goods, and

derivation of steps to be taken,

1.5 development of work processes,

2.1 planning, controlling and optimising

goods transport and logistics service,

2.6 implementation of internal and exter-

nal requirements to ensure the safety of

the supply chain,

2.7 consideration of foreign trade regula-

tions when planning supply chains.

4.3.6 Continued training and education

The overview of current continued education

and training options in the area of supply

chain management presented below is then

followed by more detailed exploration of the

idea of developing a certicate course in sup-

ply chain management.

4.3.6.1 Continued education and train-

ing opportunities in the supply chain

management area

A distinction must be made between contin-

ued education programmes leading to recog-

nised qualications and other courses (such as

one-day seminars). Recognised qualications

could include, for example:

• logistics manager,

• Bachelor Professional of Inventory Manage-

ment and Control (CCI),

• Bachelor Professional of Materials Procure-

ment and Logistics (CCI), Diploma in pro-

curement,

• Diploma in purchasing management.

Figure 69: Selected continuing education providers in the area of

supply chain management

(Copyright ZVEI)

4.3.6.2 Suggestion from an industry

perspective:developmentofacerticate

course in supply chain management

A certicate course geared to the specic

requirements of supply chain management in

the electrical and electronics industry could

be developed and offered by ZVEI’s service

company ZSG (ZVEI-Services Gesellschaft).

See also chapter 4.3.4.5.

A preliminary outline for such a course could

be represented as follows:

ZVEI-academy certicate course ‚Supply Chain

Management in Electronics Manufacturing‘

Participants in the certicate course Supply

Chain Management become familiar with

the central relationships and functionality

involved in supply chain management. In

four modules, participants gain an under-

standing of how processes along the value

chain, in the direction of suppliers and cus-

tomers, can be optimised, costs reduced and

efciency increased. Following this training

programme, participants can deploy methods

79 www.berufswelt-logistik.de

and instruments of supply chain management

in a targeted fashion to optimise the value

chain within their respective enterprises in a

systematic and lasting fashion.

Module 1: Supply chain structures and

processes

• the value chain (supply chain),

• tasks, aims, and benets of supply chain

management,

• organising structures and procedures, work

process organisation,

• functionally-oriented key supply chain

management processes according to SCOR

model (Plan, Source, Make, Deliver, Return,

Enable),

• planning and controlling instruments,

• sales/capacity planning,

• collaborative planning,

• forecasting and replenishment (CPFR),

• detailed planning: Advanced planning sys-

tem (APS),

• Kanban,

• efcient Consumer Response (ECR),

• backlog handling.

Industrie- und

Handelskammern

BME Akademie,

Frankfurt on the Main

BSH – Bildungswerk

Spedition und Logistik,

Frankfurt on the Main

BVL Campus, Bremen

DEKRA Akademie,

Stuttgart

IQ, Bremen

Nordakademie, Hamburg

VWA Verwaltungs- und

Wirtschaftsakademie, u.a.

Frankfurt und Berlin

Offerings

Leading to

Recognised

Qualiﬁcations

4ﬂow academy, Berlin

Euroforum Deutschland,

Düsseldorf

Excellence Network,

Weiterstadt

forward academy,

Fernwald

Haufe Akademie,

Fribourg

HAUS DER TECHNIK,

Essen

Management Circle,

Eschborn

Production Management

Institute, Planegg bei

Munich

TÜV Rheinland Akademie,

Cologne

ZVEI-Services (ZSG)

Education

Providers

Offering Day

Seminars

100

Module 2: Concepts and methods for ana-

lysing the value chain

• simulate, visualise and analyse the ow of

goods and materials,

• ABC analysis, XYZ analysis, SWOT analysis,

cost structure analysis, potential analysis,

• fundamentals of supply chain controlling.

Module 3: Production strategies

• make-to-stock (MTS), make-to-order (MTO),

engineer-to-order (ETO),

• capacity utilisation rate, throughput time,

reliability in meeting deadlines,

• production control strategies: push/pull,

Kanban, ‘supermarket’,

• buffering against uctuations in demand,

• fundamental relationships within and

impact of demand uctuations on the sup-

ply chain.

Module 4: Distribution and logistics

• warehousing steps/delivery strategies: Just-

in-time (JIT), just-in-sequence (JIS), con-

signment stock, vendor-managed inventory

(VMI),

• transport strategies: milk runs, cross-docking

etc.,

• shipment guidelines,

• customs and foreign trade,

• goods labelling,

• change drivers, developments, trends in

distribution and logistics.

Each module to be covered over two subse-

quent days, with gaps of around 4-6 weeks

between modules. During this period, partici-

pants work on dened tasks and on their own

practically-based project work.

Methods

Lectures, discussion, practical exercises, case

studies, simulations, models and checklists

that have been tried and tested in practice

Certicate

For the certicate to be awarded, participants

must prepare and present a practical project.

The presentation and discussion demonstrate

that the course content has been mastered

and can be integrated operatively. Marks are

awarded for examination performance.

Course leaders

These would include experienced experts from

relevant specialist elds within the electri-

cal and electronics industry. Development of

courses would possibly be in partnership with

an appropriate department in a traditional

university, or a university of applied sciences

(Fachhochschule, FH).

Further steps

A certicate course Supply Chain Management

will be developed by the ZVEI academy. This

course will be offered as a certicate course

in the portfolio of courses offered by the ZVEI

academy. Another option would be to also

implement this certicate programme within

the context of a teaching and research insti-

tution.

4.3.7 Company training

Within the general framework of company

training, it is key to distinguish program-

mebased approaches to continuing edu-

cation and training from process-oriented

approaches. The differences will become clear

in the notes below. An example of the former

will be treated with reference to two concrete

case-studies from enterprises with supply

chain management education and training

programmes. The latter option, process-based

education and training, will be described on a

more general level.

4.3.7.1 Continuing education and train-

ing programmes

Continuing education and training in coordi-

nated programmes will be illustrated in the

following two case-studies based on the expe-

riences of Inneon and Osram Opto Semicon-

ductors.

101

4.3.7.1.1 Case study: company training

atInneon

Inneon has reacted to the shortage of SCM

expertise with the launch of two programmes,

its Supply Chain Trainee Programme and its

Senior Expert Development Programme.

Supply chain staff development pathways are

based both on Bachelor and Master courses at

the company’s SC Academy, and on job rota-

tion within the SC departments.

The increasing complexity of processes and

automation is tackled at the SC Academy

through the use of a mix of computer-aided

learning, webinars and classroom training

sessions.

It has become clear that the supply chain

needs talented employees who have both

mastered the relevant processes and possess

a high degree of emotional intelligence. Staff

needs to have strong problem-solving skills

and a background in operations research to

manage contacts with suppliers and custom-

ers.

The training goes beyond classic university

teaching. The company-internal SC Academy

offers employees the chance to take iLearns

and to participate in interactive webinars from

anywhere in the world. Staff/students and

customers can also take a Diploma in Supply

Chain Management at the University of Lim-

erick.

Today, Inneon has over 98 iLearn modules

with about 2,258 users in the supply chain

area.

Figure 70: Supply chain talent at Inneon: Processes (SCOR

skills), emotional intel-

ligence, towards customers and suppliers, engineering skills like operations research

and Six Sigma (Copyright Inneon Technologies)

Figure 71: Aims of the supply chain academy at Inneon (Copyright Inneon Technologies)

Figure 72: People development at Inneon (as in June 2014, Copyright Inneon Technologies)

Supply Chain Talent

SCOR Skills:



Training (Know-how)

Aptitudes

Experience



Emotional Intelligence:



Social Skills

Self Awareness/

Management

Attitude



Problem Solving:



Mathematical/

Operations

Research

IT Know-How

Six Sigma/Statistics



Internal and External Supply Chain Academy

 SC Academy offers tailored SC courses for SC and capacity planning

(iLearn + classroom) based on SCOR , globally up-to-date and identical

 SC diploma program (Bachelor and Master) with University of

Limerick running with employees/students from Austria, China,

Germany, Ireland, Singapore, Taiwan and US and customers



The Bachelor/Master program is open for all interested parties!

 34 IFX Participants, 29 already

graduated

Bachelor/Master Program

SC Academy Searching for Talents

 Trainee Program closes the gap of

supply chain experts

 Partially Funded by EDB in SIN

 Pool of Students

 Searching of Talents

 Support our Pre-Studies'

 98 iLearn Modules for SC

 ~ 2,258 Users

Average 4

Modules/User

completed



102

4.3.7.1.2 Case study: company training

at Osram Opto Semiconductors

Osram OS also runs its own Supply Chain

Academy in order to strengthen staff skills in

the area of supply chain management.

Figure 73 shows how training units in the

company-internal supply chain academy build

on one another.

Organisation of employee training

around SCOR

people skills

Within the Osram OS supply chain, all func-

tional roles have uniform titles and structures

which apply worldwide and have been mapped

to specic SCOR

people skills. In gure 74,

this mapping process is shown using the role

of the Demand Planner as an example. The

main tasks involved in the job description are

outlined and also mapped to the skills needed

in the role.

In the SCOR

handbook, every skill can be

linked to particular training courses, areas of

experiences and aptitudes. As such, every func-

tional role has a prole which is then adjusted

in line with the qualications and skills of the

relevant specialist and the demands of SCM/

logistics processes. As the SCOR

handbook is

oriented towards the English speaking-world,

some of the training it describes relates to

content which German trainees encounter at

quite an early point in their careers, since it

forms an integrated part of training plans

and curricula. This simplies the appropriate

implementation of the handbook content in

Germany. The proles generated in this way

are linked, in a second step, to existing Osram

OS training courses to determine training

needs on an individual basis.

Figure 73: Overview of the organisation of training areas at Osram Opto Semiconductors

(Copyright Osram OS)

Figure 74: Example for mapping of SCOR

People Skills at Osram Opto Semiconductors

(Copyright Osram OS)

OSRAM OS Supply Chain Academy

Training Progress

• Supply chain and process courses provided by external partners

• Discussion of topics related to OS supply chain

• Cross-departmental process training to discuss connections

• Targeted software training on SAP, MS Office and processes

Supply Chain

Basic Training

(Mandatory)

Supply Chain

Advanced Training

• Role-specific training following SCOR people skills matrix

• Overview training on principal OS supply chain themes

• General themes from initial orientation plan (supply chain)

and on-the-job training

• Workshops, seminars and discussions with academics and

business partners

• Case Study Newsletter

OSRAM OS Supply Chain Academy | Simon Geisenberger

Training

Experience

Aptitude

Main Tasks

Training

Experience

Aptitude

Skills

•

OSRAM OS Supply Chain Academy | Simon Geisenberger

Demand Planner

Worldwide demand and supply planning for finished goods

Optimised generation of delivery documents

Inventory control of finished goods

Inventory Management

Statistics

APICS Certification

Advanced Excel Techniques

......

Enterprise Resource Planning (ERP)

Product Life Cycle Management

Experience of Working in a Warehouse

......

Responsible

Analytical Skills

Customer-Oriented

......

Costs Analysis

......

Supply Chain Planning

......

Project Management

......

103

Collaboration with institutions of higher

learning

As the opportunity to exchange expertise with

institutions of higher learning is seen as very

important, the supply chain academy at Osram

OS maintains close links with the technical

university OTH Regensburg (see gure 75).

This gives students a chance to gather profes-

sional experience and work on their Bachelor

and Master theses at Osram OS. Students also

have the option of solving current problems at

Osram OS as participants in a project seminar

linked to the M.A. in Logistics course offered

at OTH Regensburg.

Within the framework created by these con-

tacts, regular discussions between professors

and company representatives cover current

developments and topics and discuss what the

company expects of graduates in the supply

chain area.

Many institutions of higher learning also

offer various forms of continuing education.

The supply chain academy at Osram OS has

organised in-company education and training

sessions in collaboration with the Centre for

Adult Education and Knowledge Management

(ZWW) at OTH Regensburg. These are tailored

to the specic requirements of the enterprise,

and have been welcomed warmly by both par-

ticipants and trainers. A further point of col-

laboration relates to access to the university

libraries. Almost all media held by the univer-

sity library can be accessed and borrowed to

carry out the necessary literature research for

supply chain projects.

4.3.8 Continued education and training

in processes

Process-oriented continued training in supply

chain management is described from a uni-

versal point of view below. Key aspects to be

explored in depth include the integration of

learning into day-to-day processes, the role of

superiors as promoters of skills development,

the creation of conditions which support

learning, key elements of skills development

and qualication strategies, and the integra-

tion of skills, human capital and organisa-

tional development.

Grounding learning in the day-to-day

running of the company

An efcient and effective supply chain

requires competent staff at every level with a

comprehensive and shared understanding of

supply chain management processes.

Education and training-oriented towards work

processes forms a link between training and

the day-to-day handling of SCM workows in

the enterprise. Almost nobody performs rou-

tine tasks all the time. And as challenges crop

Figure 75: Examples for the exchange of knowledge with third-level institutions (Copyright Osram OS)

OTH Regensburg

Opportunities for Exchanging Knowledge

(Example: OTH Regensburg)

OSRAM Opto Semiconductors GmbH

Supply Chain Academy

OSRAM OS Supply Chain Academy | Simon Geisenberger

Internships and

Work-Placement

Students

Bachelor and

Master

Dissertations

Project Seminars

in MA Logistics

Course

Ongoing

Consultation and

Discussions

Inhouse Training Adapted to

Enterprise Requirements

Literature

Students

Logistics Department

Lecturers in the Faculty

of Business Studies

Centre for Adult Education and

Knowledge Management (ZWW)

University

Library

104

up, people are pressured to react to them.

Specialised employees learn simply by per-

forming their jobs, as well as by acquiring new

skills and knowledge in a targeted fashion. Up

to now, little has been done to promote such

informal learning systematically. Formalised

training regimes (as described in chapter

4.3.7.1) with clearly dened learning targets

and preordained learning pathways are still

the norm.

Work-process-oriented continuing education

and training is also a formalised learning

opportunity, but one that draws on and sup-

ports informal learning processes. The chal-

lenges which arise in day-to-day work are

seen as challenges to learn. Specialists cope

with these challenges, and learn in the pro-

cess. Skills acquired in this way can be demon-

strated and certied within the context of edu-

cation and training regimes.

Such learning through work processes is,

however, not automatic. It takes a process

of reection to turn experiences at work into

a resource that can be tapped into in the

future. Only this conscious reection of what

has been learned makes it possible to draw

abstract conclusions from it and to apply the

new specialist expertise to other new situ-

ations. Where such practical learning suc-

ceeds, more is learned (and retained in the

long term) than would ever be the case in a

seminar featuring more traditional educa-

tional methodology. And the highlight: Learn-

ing like this ties in with what specialists have

already experienced and provides answers to

questions which are pressing: the motivation

to learn and the transfer of what has been

learned into practice are almost automatic.

Managers as promoters

Work-oriented continuing education is of

central importance for all who manage staff

directly and need to foster the skills and capa-

bilities of employees. Creating the conditions

for successful learning during work processes

nurtures the ability of staff directly. In small-

and medium-sized enterprises, work-pro-

cess-oriented continuing education can be

a good way to get a companywide strategy

for the internal development of specialist

expertise off the ground. In large enterprises,

guidelines can give managers and supervi-

sors, human resources development staff and

those responsible for education and training

additional methodological tools.

Managers have a particular role to play in

implementing skills development in the area

of supply chain management, and a particular

responsibility.

Managers are the promoters who must demon-

strate leadership when it comes to work-ori-

ented continuing education, since they:

• are familiar with the specialist requirements

of their respective areas of accountability,

• are familiar with the tasks and skills of indi-

vidual staff members,

• can analyse skills needs and determine nec-

essary measures on this basis,

• can promote the skills development process

and take responsibility for it,

• can ultimately control the performance of

their own units in this way,

• foster the development of staff in line with

current best practice and current require-

ments,

• can ensure that learning is permanently

anchored in the work process, and that

learners inuence their own skills develop-

ment actively.

Mentors, experts and coaches may also have

a role to play as promoters alongside manag-

ers. They can come from within or outside the

company.

Tasks at work ...

... present challenges. Employees ...

... learn and grow in experience.

Reﬂection ensures ...

... learning takes place. Employees acquire the skills they need to perform in their roles.

Figure 76: Process-oriented learning along the supply chain (Copyright ZVEI)

105

Conditions that promote learning

Work process-oriented continuing education

and training can only succeed when the nec-

essary requirements and a solid base of sup-

port for the respective employee have been

put in place. Managers have a crucial role to

play here:

• they ensure that the education and training

structures have been approved at executive

level,

• they ensure that work structures and learn-

ing conditions are designed to promote

learning,

• they ensure that colleagues support the

process of skills development,

• they provide employees with specialist

advice and learning process support,

• they ensure staff are enrolled for relevant

education and training offerings (a ZSG cer-

ticate course, for example),

• they ensure information is exchanged at

regular intervals,

• they ensure that skills development is

demonstrated in a form that conforms to

standards,

• and they ensure that the skills development

and qualication process is integrated into

a long-term human capital development

strategy.

Modern supply chain management coaching

is also regularly targeted at teams or project

teams. The focus here is on how methods and

tools acquired in the course of a project can

support the learning organisation.

Shaping conditions which support learn-

ing does not require the delineation of new

spheres of responsibility. The key person

responsible for promoting skills development

is the respective manger: the role lies at the

epicentre of his or her ambit of responsibility.

Key elements in the education and train-

ing strategy

In contrast to courses of instruction and

seminars, work process-oriented continuing

education is tailored to the specic needs of

employees and enterprises. Operative actions

are central to the qualication process. Expe-

rience, knowledge and methods are inte-

grated in a targeted fashion. The development

of skills that directly affect the capacity of

staff to perform in their roles is particularly

fostered. These include personal, social and

methodological skills along with self-manage-

ment and the capacity to reect on learning.

Employees themselves shape how and what

they learn at work, but with learning process

support, and support from specialist advisers.

Continuing education integrates learning and

work in the form of authentic, company-spe-

cic projects and workow.

Integration of skills, human resources

and organisational development

The individual development of skills and the

learning processes in an enterprise are closely

related. Introducing work process-oriented

continuing education is a step on the path

towards becoming a learning organisation.

This demands and promotes a new culture

of learning with comprehensive support for

continuous and lifelong employee learning.

As such, change processes affect more than

company training. They also impact on the

processes of value creation in the enterprise.

Figure 77: Process-oriented development of specialist staff

(Copyright ZVEI)

Enterprise

Development

Organisational

Development

Skills

Development

Staff

Development

Work Processes

Superiors/

Staff

106

4.4 Conclusion on education and train-

ing in supply chain management

Supply chain management is performed by

people, not by tools. Flexibility, speed and

efciency in a global environment can only

be achieved and boosted further with high-

ly-trained competent staff. As such, well-or-

ganised human capital development is an

investment in the future for any enterprise.

The themes which are currently seen as high

priorities in the area of SCM have been pre-

sented in the format of one-page guides.

The necessity of covering supply chain man-

agement issues comprehensively in initial

and continuing education and training has

also been dealt with in depth. Three com-

pany examples have shown different forms of

organising company education and training

at different levels: apprenticeship training,

academic study, advanced vocational train-

ing modules and other forms of initial and

continuing education and training should

all increasingly integrate and apply process-

oriented education and training (or, better

still, work process-oriented continuing educa-

tion) as a further step on the pathway towards

becoming a learning organisation.

107

5.1 Participating companies and individuals

Editorial team and group leaders

Hans Ehm

• InneonTechnologies offers semiconductors and system solutions

in the areas of energy efciency, mobility and security. Inneon has

26,700 employees worldwide and reported sales of € 3.843 billion for

the 2013 scal year (running to the end of September).

• Principal Supply Chain Management

30 years of professional experience, supervisory board member at

camLine Holding AG, supply chain management lectures at universi-

ties, member of European Leadership Team at the Supply Chain Council

(since 2012 also chairperson).

Lars Pötzsch

• Harting develops, manufactures and sells electrical and electronic

connectors, device terminations, network components and factory-pre-

fabricated cable assemblies for signal, power and data transmission in

industrial plants. Harting employs 3,815 people. Sales in the scal year

2013 (running to the end of September) totalled € 484 million.

• Manager Global Supply Chain Processing

Within the area of Global Supply Chain Management, Lars Pötzsch is

responsible for the systematic development of the supply chain, with

the aim of continuing to optimise the ow of material and information

across separate plants.

Manuela

Zeppin

• InneonTechnologiesoffers semiconductors and system solutions

in the areas of energy efciency, mobility and security. Inneon has

26,700 employees worldwide and reported sales of € 3.843 billion for

the 2013 scal year (running to the end of September).

• Senior Manager Operations Corporate Supply Chain Logistic

Customs

16 years of professional experience, including 7 in supply chain man-

agement. Head of Central Customs from March 2012 onwards. Also a

member of the ZVEI working group ‘Customs’.

Tom Effert

• Kostal develops and manufactures technologically advanced elec-

tronic, electromechanical and mechatronic products for major industrial

enterprises, including in particular all leading automotive manufactur-

ers worldwide and their suppliers. The global Kostal group has 15,000

employees at 38 locations in 17 countries on three continents and

generated total revenue of € 1.973 billion in 2013.

• Director Production Control, Procurement Disposition

17 years of professional experience in the automotive electrical systems

sector in a range of logistics and production roles.

Simon

Geisenberger

• Osram Opto Semiconductors is a subsidiary of Osram GmbH, one

of the world’s leading manufacturers in the illumination sector. Osram

Opto Semiconductors is headquartered in Regensburg, Germany, and

offers solutions based on semiconductor technology in the areas of

illumination, sensing and visualisation.

• Initiator Supply Chain Management Academy

Multiple years of international professional experience in the area

of continuing training in enterprises. Responsible for setting up and

expanding the Osram Opto Supply Chain Academy.

5 Appendix

108

Klaus

Neuhaus

• Sanmina is a world-class EMS provider with an impressive global foot-

print. In the scal year 2013, the enterprise generated revenue of 5.92

billion USD with 44,000 employees at 75 locations in 25 countries. As

an international EMS enterprise, Sanmina offers a comprehensive port-

folio of services encompassing innovative product design and product

engineering, the entire manufacturing process, test solutions, logistics

and post-manufacturing services.

• Customer Supply Chain Manager

With years of experience in purchasing and supply chain management

for various automotive and aerospace customers.

Dirk Rimane

• Functional safety is the promise made by Sasse Elektronik – an enter-

prise in the EBE Group – to the customers the enterprise realises product

ideas for. Sasse Elektronik is an engineering, manufacturing, and ser-

vices partner for devices which must meet high standards of safety and

reliability. The primary focus of the company is on the area of medical

technology. Sasse Elektronik understands the ideas and problems of its

customers and nds reliable solutions for people, machines and users.

• ChiefOperationsOfcer

18 years of professional experience in the areas of materials and pro-

duction management, enterprise management, process and project man-

agement. Six Sigma Greenbelt. Extensive practical experience as a lean

expert. Lectures at higher education and other institutions on the topics

of lean management, lean organisation, and process management.

Daniel Geiger

• Siemens (Berlin and Munich) is a global powerhouse in electronics and

electrical engineering, which operates in the elds of industry, energy

and healthcare as well as providing infrastructure solutions, primarily

for cities and metropolitan areas. In the scal year 2013 (running to

September 30, 2013), revenue from continuing operations totalled

€ 75.9 billion. At the end of September 2013, Siemens had around

362,000 employees worldwide on the basis of these continuing opera-

tions.

• Graduate in Business Engineering

Team leader within the Components and Vacuum Technology Division

business unit of Siemens Healthcare, with responsibility for the ‘Deliver’

process.

Ernst

Kastenholz

• Zollner Elektronik provides its customers with technology and devel-

opment expertise across a range of sectors and the necessary process

depth along the entire value chain. Zollner has grown organically and

established itself among the top 15 enterprises in the EMS services

sector worldwide. Standardised equipment and processes are deployed

at all 17 international locations, all of which conform to the same high

standards of quality, exibility and security.

• Director Supply Chain Management

Computer science graduate with 26 years of professional experience

in IT, production, logistics and SCM. Member of BVL, BME and the

MAT Label working group. Speaker and consultant in various contexts.

Deputy leader of ZVEI SCM project, leader of the task group for talent

development and training in the areas of Supply Chain Management

and logistics.

109

Christian

Schober

• Schober Unternehmensentwicklung is a consultancy specialising

in Supply Chain Management and logistics that offers and implements

solutions in the areas of transport management, warehousing, produc-

tion and hospital logistics throughout Europe. The team of consultants

is committed to optimising supply chain costs measurably while also

boosting quality indicators.

• Senior Consultant and Entrepreneur

35 years of experience in the transport business, managerial position

with DACHSER, graduate in transport management and operations, pro-

prietor at SCHOBER since 1998. Accredited consultant with RKW, DtA/

KfW, LfA. Member of BVL, AMMPL, WBU, LCS and the transport com-

mittee of the Munich/Upper Bavarian CCI. Also active as a lecturer and

trainer, various specialist publications.

Michael Ginap

• Avineo – balancing supply chains has been offering tailor-made

solutions for optimising the performance of client supply chains in

diverse sectors since 2005. Avineo applies an individual ‘learn to

do-it-yourself’ approach and supports companies as a partner with diag-

nostics, training, coaching and expert counselling in the eld of Supply

Chain Management and Customer Service Excellence – from strategic

planning through to implementation support.

• Founder and Owner

Over 30 years of experience in logistics and Supply Chain Manage-

ment, lecturer at universities in the eld of supply chain management,

member of European Leadership Team at Supply Chain Council (former

chairperson) and SCOR

Instructor.

In addition to the working committee, the

following persons and companies have been

involved in various working groups:

Martin Eitler

Advantest Europe

Alessandro Bonara

ASM Assembly Systems

Volker Sindel

ASM Assembly Systems

Christof Blumenröther

Belden Electronics

Dr. Hans-Jürgen Springer

Belden Electronics

Erwin Stöckinger

cms Electronics

Artur Kreus

Electronic Service Willms

Detlef Potthoff

Elmos Semiconductor

Ludwig Krieger

Epcos

Markus Hühn

Escha Bauelemente

Sascha Reitz

Escha Bauelemente

Torsten Schmid

Geutebrück International

Michael Kraft

Göhre

Bodo Eilken

Inneon Technologies

Christoph Hurek

Ingenieurbüro Weiss

Michael Kaps

ITT Cannon

110

Özer Kürekci

Lacroix Electronics

Thomas Jacob

Mazet

Patrick Stieb

Mektec Europe

Paschasia Bisscho

Melexis Technologies

Ellen Rombouts

Melexis Technologies

Anett Sauerwald

Melexis Technologies

Manuela Dobesch

Osram Opto Semiconductors

Dr. Volker Kuckhermann

Philips Technologie U-L-M Photonics

Christoph Hron

Productware

Marco Balling

Productware

Nicolai Dortmann

Rittal

Roland Glück

Schweizer Electronic

Michael Frosch

Siemens

Stefan Klinke

STMicroelectronics Application

Andre Kremsreiter

Sumida Components & Modules

Martin Hamberger

Sumida Components & Modules

Markus Herckner

Sumida Lehesten

Eric Weimer

TQ-Systems

Stefanie Falk

TTTech Computertechnik

Stella Hofbauer

Tyco Electronics AMP

André Schlesiger

Wago Kontakttechnik

Manuel Uphoff

Wago Kontakttechnik

Jörn Schiller

Weidmüller

Jürgen Ostheimer

Wika Alexander Wiegand

Sebastiano Marsala

Wisi Communications

Edda Ulpkeit

X-Fab Semiconductor Foundries

Rudi Köhler

X-Fab, Dresden

Marius Rieger

ZVEI

Karlheinz Müller

ZVEI

111

5.2 List of abbreviations

Abbriviation Meaning

2D Two-dimensional

8D report Eight disciplines problem solving method

A.TR Customs document used in trade between EU members and Turkey

AAZ German for ‘Arbeitsablauf-Zeitanalyse’ (MTM Methods-Time Measurement)

ADR

European Agreement concerning the International Carriage of Dangerous

Goods by Road (Accord européen relatif au transport international des

marchandises Dangereuses par Route)

AEB AEB is a leading provider of IT solutions for global trade and logistics

AEO Authorised Economic Operator

AEOC Customs simplications AEO certicate

AEOF Combined Customs Simplications/Security and Safety AEO certicate

AEOS Security and Safety AEO certicate

AGNB

German General Terms and Conditions for Short Distance Hauling (Allge-

meine Beförderungsbedingungen für den gewerblichen Güternahverkehr mit

Kraftfahrzeugen)

AHStG

German Law on General Higher Education (Allgemeines Hochschul-Studi-

engesetz)

AL German export list (Ausfuhrliste)

ANSI American National Standards Institute

ANSI X12

Accredited Standards Committee (ASC) X12 within the American National

Standards Institute

APICS SCC APICS Supply Chain Council

APS Advanced Planning System

APS Advanced Planning and Scheduling Systems

ASN Advanced Shipping Notication

ATLAS

German automated tariff and local customs clearance system (Automatisi-

ertes Tarif- und Lokales Zollabwicklungssystem der dt. Zollverwaltung)

ATLAS_EAS

German automated tariff and local customs clearance system for summary

entry and exit declarations (Automatisiertes Tarif- und Lokales Zollabwick-

lungssystem Eingangs- und Ausgangsmeldungen summarisch)

ATP/AATP Available to Promise/Advanced Available to Promise

AWG German Foreign Trade and Payment Act (Außenwirtschaftsgesetz)

AWV German Trade and Payments Ordinance (Außenwirtschaftsverordnung)

B.A. Bachelor of Arts

BAA

Bavarian Academy on Foreign Trade (Bayerische Akademie für Außen-

wirtschaft)

112

Abbriviation Meaning

BAFA

Federal Ofce of Economics and Export Control (Bundesamt für Wirtschaft

und Ausfuhrkontrolle)

BI Business Intelligence

BICC Best In Class Companies

BIN

German abbreviation for ‘Beteiligten-Identikations-Nummer’, which is a

participant identication code required for ATLAS

BTI Binding tariff information

BZSt German Federal Central Tax Ofce

Capa_PU Capacity per Production Unit

CAx system Computer Aided Design / Manufacturing /... systems

CC Community Customs Code

CE Communautés Européennes

CFR Cost And Freight, shipping terms for seafreight

CIF Cost, insurance and freight paid to named place of destination

CIP Carriage and insurance paid to named place of destination

CMR

Convention on the Contract for the International Carriage of Goods by

Road (French: Convention relative au contrat de transport international de

marchandises par route)

CoC Code of Conduct

CPFR Collaborative Planning, Forecasting and Replenishment

CPT Carriage paid to named place of destination

CRM Customer Relationship Management

CSF

CSF (Computersoftware für Fachanwendungen) is a German provider for

specialist software

C items Items with the lowest consumption value according to the ABC analysis

CIP Continuous Improvement Process

CT Cycle Time

C-TPAT Customs-Trade Partnership Against Terrorism

d/a Documents against acceptance

d/p Documents against payment

DAP Delivered At Place (named place of destination)

DAT Delivered At Terminal (named terminal at port or place of destination)

DCOR

Design Chain Operations Reference Model

DDP Delivered Duty Paid (named place of destination)

DFF Delivery Flow Factor

DFX Design for X

113

Abbriviation Meaning

Dipl. Diploma

ECR Efcient Consumer Response

ECSL European Community Sales List, also known as recapitulative statements

EDI Electronic Data Interchange

EDIFACT

Electronic Data Interchange For Administration, Commerce and Transpor-

tation

EDP Electronic Data Processing

EICC Electronic Industry Citizenship Coalition

ELV End-of-Life Vehicles

EORI Economic Operators Registration and Identication System

ERP Enterprise Resource Planning

ESD Electrostatic discharge

eSTATISTIK.core

Common on-line raw data entry system developed by the German statistical

ofces to automatically report statistical data from ERP systems

EtO Engineer-to-Order

EU European Union

EUR.1

Name of a form used in the movement of goods across national borders

(movement certicate).

EUR-MED

Similar to the EUR.1 form. It is used when goods can only meet the rules of

preference origin by taking into consideration material from Mediterranean

countries not in the EU

EXTRASTAT

System for collecting information and producing statistics on the trade in

goods between countries of the European Union and third countries

EXW Ex works named place

FAMPS Failure Analysis and Maintenance Planning System

FAS Free Alongside Ship (named port of shipment)

FCA Free Carrier (named place of delivery)

FF Flow Factor

FH Universities of Applied Sciences (Fachhochschule)

FMEA Failure Mode and Effects Analysis

FOB Free on Board (named port of shipment)

Form A

Certicate of origin for goods exported from a beneciary country to the

Community

GATT General Agreement on Tariffs and Trade

GDP Gross Domestic Product

GMMOG/LE Global Materials Management Operations Guideline/Logistics Evaluation

114

Abbriviation Meaning

GR Going Rate (throughput)

GTL Global Transport Label

HADDEX

Handbook of German Export Control (Handbuch der deutschen Exportkon-

trolle)

HGB German Commercial Code (Handelsgesetzbuch)

Harmonised System or tariff nomenclature maintained by the World Cus-

toms Organisation (WCO)

ICC International Chamber of Commerce

IDEV Internet-based data collection of the German statistical ofces

IHS Information Handling Services

ILO International Labour Organization

Incoterms

Rules for the use of domestic and international trade terms maintained and

released by the International Chamber of Commerce

INTRASTAT

System for collecting information and producing statistics on the goods

trade between European Union countries

IT Information Technology

JIS Just-in-Sequence

JIT Just-in-Time

K&M

German reference work for export business containing consular and model

rules (Konsulats- und Mustervorschriften)

KVO German Trafc Ordinance (Kraftverkehrsordnung)

KWKG German Law of War Weapon Control (Kriegswaffenkontrollgesetz)

L/C Letter of Credit

LBA German Federal Aviation Ofce (Luftfahrt-Bundesamt)

M.A. Master of Arts

M4SC

This methodology introduced along with the SCOR

model in the mid-90s

has proved to be reliable for the practical analysis and design of supply

chains and can also be used for the strategic coordination of aforemen-

tioned methods thanks to its top-down approach. Only recently, this (pro-

ject) methodology has been expanded to include the ‘Management for Sup-

ply Chain’ (M4SC) concept.

MAPE Mean Absolute Percentage Error

MAT label Standardised material label

MES Manufacturing Execution System

MPS Master Production Schedule

MRP Material Requirements Planning

MRP II Manufacturing Resources Planning

MTM Methods-Time-Measurement

115

Abbriviation Meaning

MtO Make-to-Order

MtS Make-to-Stock

NCTS New Customs Transit System for Europe

Non-BICCS Non-Best in Class Companies

OEM Original Equipment Manufacturer

OTH Technical University of Applied Sciences in Regensburg, Germany

OTIF On-Time In-Full

PBB Polybrominated biphenyls

PBDE Polybrominated diphenyl ethers

PDA Personal Digital Assistant

PDA/MDA Systematic acquisitioin of production and machine data

PDCA Plan / Do / Check / Act = problem solving process

PLM Product lifecycle management

PPC Production planning and control system

REACH Registration, Evaluation, Authorisation and Restriction of Chemicals

REFA

Name of German Association for Work Design/Work Structure, Industrial

Operation and Corporate Development

RoHS Restriction of Hazardous Substances

RosettaNET

Organisation set up by leading information technology companies to dene

and implement a common set of standards for e-business

RPT Raw Process Time

S&OP Sales & Operations Planning

SAP SAP, German software provider

SC Supply Chain

SCM Supply Chain Management

SCOR

Supply Chain Operations Reference Model

SIC Inventory Management

SMAPE Symmetric Mean Absolute Percentage Error

SMI Supplier managed inventory

SRM Supplier Relationship Management

T1/T2 procedure Procedure used for goods moving between the EC and EFTA countries

TPM Total Productive Maintenance

TRG German Transport Law Reform Act

116

Abbriviation Meaning

TSCMS Total Supply Chain Management Costs

TÜV German Technical Inspection Agency (Technischer Überwachungsverein)

UNO United Nations Organisation

VTA Value added tax

VAT reg. no. Value added tax registration number

VDA

German Association of the Automotive Industry (Verband der Automobilin-

dustrie)

VDA label Standardised label developed by VDA

VMI Vendor managed inventory

VWA Verwaltungs- und Wirtschaftsakademie

WebEDI

Web-based (WWW) interface for the electronic data interchange system

(EDI)

WIP Work in Progress / unnished products in production

WCO World Customs Organisation

WSTS Word Semiconductor Trade Statistics

WTO World Trade Organisation

ZSG ZVEI’s service company

ZVEI German Electrical and Electronic Manufacturers’ Association

ZWW

Centre for adult education and knowledge management (Zentrum für Weiterbil-

dung und Wissensmanagement)

117

5.3 Symbols

DCOR

SCOR

Incoterms

5.4 Figures

Figure 1: Supply chains extend from the supplier’s supplier to the customer’s customer

(SCOR

model) (Copyright Osram OS) 10

Figure 2: Development and importance of strategic success factors

Figure 3 and

Figure 4: Supply chain impact (Copyright Figure 3 Wildemann,

Figure 5: Processes within the SCOR

model (Copyright ZVEI) 11

Figure 6: The supply chain is about processes (according to SCOR

) relating

to material, information and value ows. (Copyright Inneon Technologies) 12

Figure 7: Barcodes facilitate quick and easy reading of the corresponding data.

(Copyright Escha) 16

Figure 8: Triggers demanding greater exibility in the electronics industry

(Copyright ZVEI) 19

Figure 9: IC wafer: Semiconductor innovations enable new product launches

and product upgrades in ever shorter time frames. (Copyright X-Fab) 20

Figure 10: Manufacturing strategies in the semiconductor industry

(Copyright Inneon Technologies) 20

Figure 11: Operating points on two different operating curves (Copyright Inneon Technolo-

gies) 22

Figure 12: Delivery Flow Factor (Copyright ZVEI) 23

Figure 13: Risks spring from unlinked supply chains – the bullwhip effect

(Copyright Inneon Technologies) 24

Figure 14: Typical demand distortion along a supply chain

(Screenshot – Copyright Inneon Technologies) 25

Figure 15: It is essential that supply chains are robust. (Copyright ZVEI) 27

Figure 16: Research and development areas signicantly inuence the complexity

of the future supply chain. (Copyright Escha) 28

118

Figure 17: During the planning process it is essential to consider foreseeable

and unforeseeable events to be able to respond directly.

(Copyright Inneon Technologies) 29

Figure 18 and

Figure 19: Transport carrier for wafers and exible 300 mm discs: It is no longer

possible to use traditional carriers in cleanrooms for handling ultrathin

wafers for energy-saving power semiconductors.

(Copyright Figure 18 X-Fab / Copyright Figure 19 Inneon Technologies) 31

Figure 20: Deliver process risks quickly lead to quantity and schedule problems that

may incur substantial extra costs.(Copyright Inneon Technologies) 31

Figure 21: Interdisciplinary project teams enable a comprehensive view of the risks

and opportunities along a supply chain. (Copyright Siemens) 33

Figure 22: Symmetric differentiation between the different supply chain

management systems. (Copyright ZVEI) 34

Figure 23: The holistic modelling and planning approach of APS systems is required

for a view beyond company boundaries. (Copyright ZVEI) 35

Figure 24: Supplier management process (Copyright ZVEI) 36

Figure 25: The purpose of a risk classication matrix is to classify risks according

to cause and effect. (Copyright ZVEI) 37

Figure 26: Complete process ow of a PPC system in an ERP landscape (Copyright ZVEI) 38

Figure 27: Extended planning landscape of Inneon (Copyright Inneon Technologies) 39

Figure 28: Difference between conventional and consumption-oriented

supply systems (Copyright ZVEI) 40

Figure 29: From a multiple-stage to single-stage warehousing strategy

(Copyright Leopold Kostal) 42

Figure 30: Organisational integration of risk management in the company

(Copyright ZVEI) 43

Figure 31: Internal communication within the context of risk management

(Copyright ZVEI) 44

Figure 32: The economic relations of companies are intertwined worldwide.

(Copyright Inneon Technologies) 47

Figure 33: It is important for all parties in a global supply chain to be familiar

with the customs regulations of the countries involved.

(containers at customs border – Copyright Calado-fotolia) 48

119

Figure 34: Commodity Classication for Foreign Trade Statistics published by

the German Federal Statistical Ofce. (Copyright Statistisches Bundesamt) 50

Figure 35: Carrying goods when travelling on business requires careful preparation.

(Copyright Inneon Technologies) 53

Figure 36: When collecting information on goods for statistical purposes, differentiation

must be made between intra-Community trade statistics and international

extra-EU trade statistics. (Copyright Inneon Technologies) 54

Figure 37: Several purchasing transactions for the same item (chain transactions)

(Copyright ZVEI) 56

Figure 38: Indirect exports (C = Company) (Copyright Inneon Technologies) 57

Figure 39: Shipping goods requires compliance with the specics and regulations

regarding the different ways

and means of transport. (types of transport – Copyright 3ddock-fotolia) 58

Figure 40: Overview of Incoterms

rules by mode of transport (Copyright ZVEI) 59

Figure 41: Cargo safety is particularly essential when it comes to shipping sensitive

electronic components. (Lorry – cargo ratchet strap –

Figure 42: Sales Planning and Forecasting in the SCOR

model (Copyright Osram OS) 71

Figure 43: Functions affected by sales planning and forecasting (Copyright Osram OS) 71

Figure 44: Customs and international trade in the SCOR

model (Copyright Osram OS) 72

Figure 45: Functions affected by customs and foreign trade (Copyright Osram OS) 73

Figure 46: Simulation-based optimisation in the SCOR

modell (Copyright Osram OS) 74

Figure 47: Functions affected by simulation-based optimisation (Copyright Osram OS) 75

Figure 48: VMI in the SCOR

model (Copyright Osram OS) 76

Figure 49: Functions affected by VMI (Copyright Osram OS) 77

Figure 50: EDI classic and WebEDI in the SCOR

model (Copyright Osram OS) 78

Figure 51: Functions affected by EDI classic and WebEDI (Copyright Osram OS) 79

Figure 52: Tracking and tracing in the SCOR

model (Copyright Osram OS) 80

Figure 53: Functions relevant to tracking and tracing (Copyright Osram OS) 81

Figure 54: Process organisation in the SCOR

model (Copyright Osram OS) 82

120

Figure 55: Functions affected by process organisation (Copyright Osram OS) 83

Figure 56: Shipment guidelines in the SCOR

model (Copyright Osram OS) 84

Figure 57: Functions affected by shipment guidelines (Copyright Osram OS) 85

Figure 58: Consignment in the SCOR

model (Copyright Osram OS) 86

Figure 59: Functions affected by consignment (Copyright Osram OS) 87

Figure 60: Goods labelling in the SCOR

model (Copyright Osram OS) 88

Figure 61: Functions affected by goods labelling (Copyright Osram OS) 89

Figure 62: Kanban in the SCOR

model (Copyright Osram OS) 90

Figure 63: Functions affected by Kanban (Copyright Osram OS) 91

Figure 64: Education, training and skills development pathways in the area of

supply chain management (Copyright ZVEI) 92

Figure 65: Overview of the apprenticeship programmes in electronics manufacturing

with the greatest SCM potential (Copyright ZVEI) 93

Figure 66: Front cover of the ‘Business Process Optimisation and Supply Chain

Management‘ manual issued by the enterprise Zollner Elektronik.

(Copyright Zollner Elektronik) 95

Figure 67: Overview of key academic degree programmes in the supply chain

Figure 68: Overview of the key advanced vocational training courses in the area of

supply chain management (Copyright ZVEI) 97

Figure 69: Selected continuing education providers in the area of supply chain

management (Copyright ZVEI) 99

Figure 70: Supply chain talent at Inneon: Processes (SCOR

skills), emotional

intelligence, towards customers and suppliers, engineering skills like

operations research and Six Sigma (Copyright Inneon Technologies) 101

Figure 71: Aims of the supply chain academy at Inneon

(Copyright Inneon Technologies) 101

Figure 72: People development at Inneon (as in June 2014,

Figure 73: Overview of the organisation of training areas at Osram Opto

Semiconductors (Copyright Osram OS) 102

121

Figure 74: Example for mapping of SCOR

People Skills at Osram Opto

Semiconductors (Copyright Osram OS) 102

Figure 75: Examples for the exchange of knowledge with third-level institutions

(Copyright Osram OS) 103

Figure 76: Process-oriented learning along the supply chain (Copyright ZVEI) 104

Figure 77: Process-oriented development of specialist staff (Copyright ZVEI) 105

122

5.5 Tables

Table 1: Examples of strategic SCOR

model metrics (Copyright ZVEI) 16

Table 2: Typical supply chain risks (Copyright ZVEI) 32

Table 3: Supply chain checklist (Copyright ZVEI) 45

Table 4: Maximum concentration levels of homogeneous material according

to the German ‚ElektroStoffVerordnung‘ (Copyright ZVEI) 63

Table 5: How strategically important functional SCM role proles map to process

categories in the SCOR

model (Copyright ZVEI) 68

Table 6: How strategically important functional SCM role proles map to process

categories in the SCOR

model (Copyright ZVEI) 68

Table 7: How SCM functional areas map to process categories in the SCOR

model

(Copyright ZVEI) 69

Table 8: Symbols for matching hot spots to areas (Copyright ZVEI) 70

Table 9: Symbols to aid orientation (Copyright ZVEI) 70

Table 10: Sales planning/forecasting target groups (Copyright Osram OS) 71

Table 11: Customs and foreign trade target groups (Copyright Osram OS) 73

Table 12: Simulation-based optimisation target groups (Copyright Osram OS) 75

Table 13: VMI target groups (Copyright Osram OS) 77

Table 14: Classic and WebEDI target groups (Copyright Osram OS) 79

Table 15: Track and trace target groups (Copyright Osram OS) 81

Table 16: Process organisation target groups (Copyright Osram OS) 83

Table 17: Dispatch guidelines target groups (Copyright Osram OS) 85

Table 18: Consignment target groups (Copyright Osram OS) 87

Table 19: Goods labelling target groups (Copyright Osram OS) 89

Table 20: Kanban target groups (Copyright Osram OS) 91

123

5.6 Bibliography

• APICS Supply Chain Council (SCC). (2014). ‚www.supply-chain.org‘.

accessed am October, 1

2013 (footnote 4)

• Becker, T. (2005). ‚Prozesse in Produktion und Supply Chain optimieren‘ (1

Edition). Springer.

(footnote 21)

• Becker, T. (2007). ‚Prozesse in Produktion und Supply Chain optimieren‘ (2

Edition). Springer.

(footnote 17)

• Beckmann, H. (2004). ‚Supply Chain Management: Strategien und Entwicklungstendenzen in

Spitzenunternehmen‘. Springer. (footnotes 3, 18, 20)

• Blecker, T. und Kaluza, B. (2000). ‚Flexibilität – State of the Art und Entwicklungstrends‘.

Springer. (footnotes 2, 8)

• Christopher, M. (1998). ‚Logistic and Suply Chain Management: Strategies for Reducing Cost

and Improving Service‘ (2

Edition). Pitman Publishing. (footnote 1)

• Cohen, S., & Roussel, J. (2013). ‚Strategic Supply Chain Management: The Five Core Disciplines

for Top Performance‘. New York, NY, McGraw-Hill (gure 4)

• Corsten, D. und Gabriel, C. (2004). ‚Supply Chain Management erfolgreich umsetzen: Grund-

lagen, Realisierung und Fallstudien‘ (2

Edition). Springer. (footnotes 24, 38)

• Dumke, D. (2013). ‚Strategische Ansätze zur Risikoreduktion im Supply Chain Netzwerkde-

sign‘. Josef Eul Verlag. (footnote 19)

• Durchholz, J., Klenk, E. und Boppert, J. (2013). ‚Schlanke Logistikprozesse‘. Springer.

(footnote 45)

• Gruber, Dr. Kurt. (2012). ‚Key Note Presentation European Supply Chain Council Conference‘.

Madrid, (Powerpoint slide page 22). (footnote 33)

• Günthner. (2007). ‚Neu Wege in der Automobillogistik: Die Vision der Supra-Adaptivität‘.

Springer. (footnote 9)

• Heiserich, O.-E., Helbig, K. und Ullmann, W. (2011). ‚Logistik: Eine praxisorientierte Ein-

führung‘. Springer. (footnotes 44, 46)

• Hildebrand, W.-C. und Roth, A. (2008). Führungskräfte für die Logistik – Akademische Ausbil-

dung in Deutschland. In ‚Das beste der Logistik‘ (page 69-79). Springer (footnote 76)

• Himpel, F., Kaluza, B. und Wittmann, J. (2008). ‚Spektrum des Produktions- und Innovations-

managements‘. Gabler Verlag. (footnotes 41, 42)

• Hopp, W. J., und Spearman, M. L. (2011). ‚Factory Physics‘. Long Grove, IL, Waveland Press.

(footnote 13)

• Hribernik, K. A., Ghrairi, Z. und Carl, H. (2011). Co-creating the Internet of Things – First

experiences in the participatory design of Intelligent Products with Arduino. ‚IEEE‘ (page 1-9).

(footnotes 36, 43)

• Kajüter, P. (2007). Risikomanagement in der Supply Chain: Ökonomische, regulatorische und

konzeptionelle Grundlagen. ‚Risikomanagement in Supply Chains‘ (S. 13-27). (footnote 30)

• Kersten, W., Hohrath, P., Winter, M. (2008). ‚Risikomanagement in Wertschöpfungsnet-

zwerken: Supply Chain Risk Management‘. Fachhochschule des b Wie Gesellschaft.

(footnotes 22, 49, 50)

• Kilger, Ch., Müller, A. (2002). ‚Integration von Advanced Planning Systemen in die innerbetrie-

bliche DV-Landschaft.‘ Gabler. (footnote 32)

• Lasch, R. und Janker, C. (2007). ‚Risikoorientiertes Lieferantenmanagement‘. Vahrenkamp

(page 111-132). (footnotes 23, 39, 40)

• Lasch, R., Bogaschewsky, R. und Essig, M. (2011). ‚Supply Management Research – Aktuelle

Forschungsergebnisse 2010‘. Gabler Verlag. (footnote 37)

124

• Lee, H. L. (2004). ‚The Triple-A Supply Chain‘. Harvard Business Review (page 1-10)

• Lee, H. L., Padmanabhan, V. und Whang, S. (1997). ‚The Bullwhip Effect in Supply Chains.

Sloan Management Review‘. (footnotes 14, 15)

• Lu, N. (2004). ‚Plenary Talk‘. ISSCC

• Moore, G. E. (1998). ‚Cramming more components onto integrated circuits. Electronics. Reprint

in Proceedings of the IEEE‘. (page 86(1), 8285). (footnote 5)

• Nienhaus, J., Ziegenbein, A. und Schönsleben, P. (2006). ‚How human behaviour amplies the

bullwhip effect – A study based on the beer distribution game online‘. Produktion, Planing &

Control. Vol. 17, Issue 6 (S. 547-557). (footnote 16)

• Pfohl, H.-C. (2004). ‚Logistikmanagement: Konzeption und Funktionen‘ (2

Edition). Springer.

(footnote 12)

• Rogler, S. (2002). ‚Risikomanagement im Industriebetrieb: Analyse von Beschaffungs-, Pro-

duktions- und Absatzrisiken‘. Deutscher Universitätsverlag. (footnotes 27, 28)

• Schulte, Ch. (2012). ‚Logistik: Wege zur Optimierung der Supply Chain.‘ Vahlen (footnote 35)

• Simchi-Levi, D., Kaminsky, P., Simchi-Levi, E., und Bishop, W. (2007). ‚Designing and Manag-

ing the Supply Chain‘ (3

Edition). McGraw Hill Higher Education. (footnote 10)

• Syska, A. (2006). ‚Produktionsmanagement: Das A – Z wichtiger Methoden und Konzepte für

die Produktion von heute‘. Gabler Verlag. (footnote 47)

• Vahrenkamp, R., und Siepermann, C. (2007). ‚Risikomanagement in Supply Chains: Gefahren

abwehren, Chancen nutzen, Erfolg generieren‘. Erich Schmidt Verlag. (footnotes 25, 31)

• VDA-Projektgruppe Programm- und Produktionsplanung – Forecast (2008). ‚VDA-Empfehlung

5009 (Forecast Qualitätskennzahl: Denition und Anwendung)‘. Frankfurt, Verband der Auto-

mobilindustrie. (footnote 7)

• Wannenwetsch, H. (2005). ‚Vernetztes Supply Chain Management: SCM-Integration über die

gesamte Wertschöpfungskette‘. Springer. (footnote 34)

• Wildemann, Univ.-Prof. Dr. H. (2002). ‚Supply Chain Management‘. TCW Transfer-Centrum.

(gure 3)

• Zhang, G. Q., und Roosmalen, A. c. (2009). ‚More than Moore‘. Springer-Verlag. (footnote 6)

• Ziegenbein, A. (2007). ‚Supply Chain Risiken: Identikation, Bewertung und Steuerung‘. vdf

Hochschulverlag. (footnote 29)

• Zschorn, L., und Käschel, J. (2007). Ein Ansatz zur Quantizierung von auftragsbezogenen

Unsicherheiten in Produktionsprozessen. In ‚Risikomanagement in Supply Chains: Gefahren

abwehren, Chancen nutzen, Erfolg generieren‘. (page 149-160). Erich Schmidt Verlag.

(footnote 26)

125

5.7 Customs and foreign trade guide

(long version)

Introduction

Skills in customs and foreign trade are critical

for enterprises seeking to become or remain

competitive in international markets.

As EU enlargement simplied trade between

EU member states over the last 20 years,

expertise that used to be available in every

company with an international presence

became rare. Now, however, increasing glo-

balisation and the international division of

labour are triggering a sharp and ongoing

increase in the number of business contacts

with ‘third countries’. Handling trade with

these countries expertly is now an essential

component in business success.

Under German law, the export compliance

manager in any company – a member of the

management or executive board – is person-

ally liable for violations of export regulations.

The buck stops with the export compliance

manager: he or she cannot plead ignorance

of regulations or blame problems on misun-

derstandings.

Some of the skills required for tasks relating

to customs compliance and foreign trade are

already present in enterprises – but distrib-

uted over a range of positions and functional

areas. Often, individuals or groups within an

enterprise are not conscious of their own posi-

tion within the supply chain.

It follows that all companies with international

operations must create internal organisa-

tional structures that reect these structures

of personied responsibility appropriately

and respond professionally to the alarming

laxity with which the area of foreign trade is

often handled.

Denition

International trade is the exchange of

goods, services and capital across interna-

tional borders or territories (source: Wikipe-

dia). In Germany, the customs authorities

are subordinate to the Federal Ministry of

Finance and are tasked mainly with the col-

lection of tax in general, the levying of excise

duties in particular, the provision of clear-

ance procedures, risk analysis for the trade in

goods, the enforcement of market regulations

and debt collection on behalf of the Federal

Republic (Source: www.zoll.de).

Aims

Aims here fall into two categories: the (once-

off) task of creating the prerequisites for

developing new markets, and the medium/

long-term safeguarding of a cost-effec-

tive, low-risk and high-quality (and there-

fore also high-speed) supply chain.

Potential

• Opportunities to make strategic deci-

sions about entering foreign markets – in

advance,

• avoidance or at least minimisation of

legal risks,

• knowledge of and therefore also consider-

ation (and possibly avoidance or minimi-

sation) of tariff and non-tariff barriers

to trade,

• securing the stability of the supply

chain (for example through transparency,

processes, documentation),

• avoiding time delays (due for example to

customs clearance formalities, processing

of payments, issues with documentation or

labelling),

• reduction of costs (temporary storage

unrelated to transportation, interfaces and

media discontinuity, duration of transpor-

tation, customs and import duties, costs of

nance and risk mitigation).

126

Content

1) Finance

a) Optimised/adapted cash management,

b) export and import nance, including

letters of credit,

c) mid-term and long-term project

nancing,

d) state subsidies or loans.

2) Sales law

a) Preliminary contracts, contract draft-

ing,

b) specic aspects of international con-

tract law,

c) applicable law,

d) evaluation of contractual partners.

3) Pursuit of legal remedies abroad

a) The role of contracts, contract quality,

b) mediation, international arbitration,

c) legal disputes, place of jurisdiction.

4) Delivery and payment terms

a) Payment, trade, and insurance docu-

mentation,

b) (import and export documents for

foreign trade),

c) (customs documents),

d) delivery terms/INCOTERMS

e) payment terms (for example: DP, DA,

LC).

5) Risk management in roreign trade

a) Risk strategy,

b) risk analysis and evaluation,

c) awareness raising,

d) the most important risks: goods, cur-

rency, country-specic, payment and

product liability risks.

6) Foreign trade law, including customs law

a) Foreign trade regulations, e. g. the

German Foreign Trade & Payments

Act, Turnover Tax Act, Combined Heat

and Power Act and WTO/GATT rules,

b) customs law,

c) tax law,

d) mandatory reporting (German For-

eign Trade Statistics Act , Extrastat,

Intrastat, movement of payments and

capital),

e) market regulation.

7) Import and export clearance

a) Import clearance:

i. import procedures,

ii. types of customs tariffs,

iii. contingents,

iv. duties and rating,

v. origin of goods and preferences,

vi. customs procedures (including

partial relief from import duties,

re-exporting etc.).

b) Export clearance:

i. normal export clearance proce-

dures,

ii. customs procedures (for example

T1, T2, TIR, inward/outward pro-

cessing),

iii. export controls (restrictions depend-

ing on countries and goods, dual use,

export list).

Target group:

strategic and operative roles!

Possibilities for meeting requirements –

depends on content (see above)

1), 6)c. und 6)d. enterprise nance

department,

2) und 3) enterprise legal

department,

5) enterprise management,

4), 6)a., b., e. und 7).

Initial vocational training in recognised

occupations

• Management assistant in wholesale and for-

eign trade – specialising in foreign trade,

• foreign trade assistant (supplementary qual-

ication taken alongside an apprenticeship

such as forwarding clerk, open to school

leavers with a university entrance qualica-

tion (Abitur) and a training contract),

• business economist (foreign trade) (supple-

mentary qualication taken alongside an

apprenticeship, open to school leavers with

a university entrance qualication (Abitur)

and a training contract).

127

Advanced vocational training

• Business economist (foreign trade) (taken at

a training centre by students who have com-

pleted a recognised apprenticeship after

leaving school with a university entrance

qualication),

• management assistant for foreign trade,

• bachelor in nancial management.

Institutions of higher learning

• International business administration

and foreign trade,

• various specialist courses – mainly distance

learning,

• for example: IBA International Business

Administration and Foreign Trade at Hoch-

schule Worms,

• (B.A., M.A. and Diploma courses).

Company training

1. On-the-job

Opportunities exist here only in very well-

staffed enterprises. Exchange programmes

across enterprises could possibly be organ-

ised (for example between ZVEI members).

2. Off-the-job

A broad range of seminars and continuing

education options is available. Examples and

providers – the list is incomplete and in no

way intended as a ranking – include:

• Chambers of Commerce and Industry

• Chambers of Commerce

• TÜV Nord, TÜV SÜD

• DAA (Deutsche Angestellten Akademie)

• BVL (Bundesvereinigung Logistik) – Cus-

toms Expert Certicate (three modules deal-

ing with imports, exports and customs).

• HZA (Hamburger Zollakademie) www.

hza-seminare.de

• ZAK (Zoll- und Außenwirtschaftskolleg)

www.zollseminare.de

• AHV (Akademie Hamburger Verkehr-

swirtschaft) www.ahv.de

• BAA (Bayerische Akademie für Außen-

wirtschaft) www.bayerischeakademie.de

• SGD (Studiengemeinschaft Darmstadt,) for

example Foreign Trade and Export Manage-

ment course leading to CCI certicate

Additional notes:

• Former customs ofcers from the middle

and higher grades of the customs service

who are in pre-retirement or wish to switch

to private-sector employment make particu-

larly suitable candidates.

• The ofcial curricula for the qualications

‘Forwarding clerk’ and ‘Bachelor profes-

sional (CCI) of transport management and

operations’ demand only a rough (inade-

quate) knowledge of customs and foreign

trade.

ZVEI - German Electrical and Electronic

Manufacturers’ Association

Lyoner Straße 9

60528 Frankfurt am Main, Germany

Phone: +49 69 6302-0

Fax: +49 69 6302-317

E-mail: [email protected]