Supplier Relationship Management Unipart Expert Practices. March 2013
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1 Supplier Relationship Management Unipart Expert Practices March 2013
2 The Unipart Group Manufacturing Logistics Consulting An introduction
3 12,000 people 1.1b turnover Majority owned by employees 5 principal divisions Operating in 100 countries worldwide Headquartered in Oxford
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6 Webinar Objectives Showcase Enjoy Promote Learn
7 Topics to Cover Unipart Supplier Relationship Management methodology How we decide which suppliers to include How we have implemented our methodology The benefits that we have generated Our lessons learnt some do s and don t s
8 Ten(d) To Zero
9 Background to Ten(d) to Zero The Unipart Group s generic Supplier Relationship Management tool for our strategic suppliers It has been adopted across the group, throughout every division and has been continuously developed over 20 years It supports Principle 8 of the Unipart Way. We build constructive and challenging long term relationships through Ten(d) to Zero. Mission Statement. To develop and continuously improve the Group s partnership with its suppliers, by jointly growing our business through removing waste, improving quality and meeting customer requirements profitably in the shortest possible time.
10 What is Ten(d) to Zero Ten(d) To Zero is a structured and formalised framework and process designed to support improvement and sustainability with our suppliers to better meet our customers expectations It identifies the ten key elements in the relationship with our suppliers which most appropriately supports optimum customer satisfaction - each element has ten points of measurement with defined criteria Each element has a standard structure including Objective, Approach, Definitions, Performance Levels and Guidelines for scoring By working together with our suppliers, we can start to move from an unacceptable score of ten towards a best in class score of zero Each TTZ review delivers a plan with agreed actions, timings and method for progression
11 Objectives and Benefits of Ten(d) to Zero To strengthen business relationships with our preferred suppliers To identify and implement appropriate cost out opportunities To provide a framework to recognise performance To provide a framework for discussing performance To remove ambiguity from expectations and facilitate emotion free discussion To offer continuous improvement to members of our supply chain, in particular, our customers
12 To Summarise. We use Ten(d) to Zero to To go from this to this Fewer Opportunities Taken Fewer Performance Problems More Performance Problems More Opportunities Taken
13 How we approach Ten(d) to Zero Identify Strategic Suppliers Using the Manual, Identify the Supplier s Current situation and the Start Status for All Elements Set Programme Durations and Target Status for Each Element Agree Strategy to Achieve Target Status Plan Make and Agree Specific Action Plans Once Target is Achieved, Set New Target and Repeat Action Reflect on Result Cycle Repeats Until Target is Achieved Do Implement Action Plans Check Evaluate Actual Impact vs Expected Impact Introducing New Suppliers Continuous Improvement with Existing Suppliers The process is used to structure the approach and confirms whether actions are having the desired effect
14 Segmenting the supply base Strategic suppliers should fall into one of the following 3 criteria; Spend or cost importance For example top suppliers equating to 80% spend Criticality of supply and / or risk to supply Key components or services required to allow sale of final product to the end customer or a supplier that is known to have financial difficulties Innovators Those suppliers that add value to their customer through introducing new technologies or products to aid the value of the product / service or the relationship Allows strategic thinking and resources to be focussed, whilst maximising business benefit
15 How the relationship functions Unipart Supplier Quality Quality Supply chain Supply chain Logistics Commercial Marketing Unipart Facilitator (Procurement) Oversee TTZ Programme Including Overall Facilitation and Escalation of Concerns Supplier Facilitator Logistics Commercial Marketing Engineering Engineering Formal Communication Route at TTZ Review Meetings and Formal Escalation of Issues Informal Communication Routes for Day to Day Business
16 The journey for our suppliers Position & Launch TTZ Programme Work together to problem solve and manage performance improvements Initiate & manage own problem solving Sustain performance levels Use TTZ approach to identify new opportunities & challenges Customer-Supplier Relationship Growth + Supplier Self Reliance duration is case by case This helps the supplier to understand how their journey will evolve and where they are currently positioned
17 Some element examples Zero Waste Zero Quality Defects Zero Logistics Non Conformance Zero Supply Chain Impact Zero Transaction Costs Zero Lead Time Zero Range Gaps Each Division selects the 10 most appropriate for their business needs and that of their suppliers
18 Element example progress Obsolescence Transport costs Warranty Overall Range/New product gaps Availability Lead time Marketing and Training support Inventory Transaction costs Commercial disadvantage Win Win - Best practice is a zero score
19 What we ve achieved 47% improvement in supplier delivery performance 40% reduction in safety stocks 25% reduction in non value adding activities Significant time savings for suppliers in managing the Unipart account Improved service levels to the end customer
20 Lessons learnt What Went Well. Executive Sponsorship with internal consulting support; Formal Project Management approach ensured delivery of the key objectives; Formal training sessions helped the division to come up to speed quickly; Help from TTZ Champions in other divisions to support the supplier event; The event was rehearsed a number of times; All documentation and templates are being rolled out across the Group. What Didn t Go So Well. Stakeholder engagement was difficult despite CEO Sponsorship availability of time and number of conflicting priorities; Ensuring the material was wholly aligned to the division was difficult as team members from other parts of the company were doing the work.
21 Implementation do s and don t s Do. Don t. Engage with the suppliers selected early in the process to get their buy-in and input Ensure the programme plan includes handing over the implemented SRM scheme to the business as usual Audit the scheme once it is part of business as usual to ensure the drive to continuously improve is sustained Run lessons learnt sessions so that the process of bringing new suppliers into the scheme is more smooth Ensure every stage is planned in detail and communicated well to the stakeholders Be tempted to include too many suppliers in the initial stages of setting up the programme Just measure metrics take action! Forget to engage with internal stakeholders they are equally important Delay the programme waiting for a system solution most schemes can be initiated with simple reporting functions using existing reports or Excel! Be afraid to start with a small number of key metrics that you can measure, with plans to enhance the number of metrics and their sophistication in the future
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23 Contact details for questions and queries Paula Stevenson Tel: +44 (0) Paul Simlett Tel: +44 (0) Melanie Halstead Tel: +44 (0)
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