Sourcing & Logistics Offering Presentation

Transcription

1 Sourcing & Logistics Offering Presentation Practice presentation web edition Shanghai, April 2013

2 Contents of the document Sourcing: Approach and selected cases Logistics: Approach and selected cases 2

3 Purchasing and shareholder value Main purchasing goals shall be aligned with Value Creation objectives Main company goals Main purchasing goals Shareholder Value P.F.N. Reduction of financial requirements Reduction of working capital (supplier payments) X1 * SALES Raise market shares Enter new markets Higher specification comformity Wider portfolio of sourced products X2 * EBITDA Reduction of operative costs Reduction of average price paid (sourcing) X3 * EBIT Reduction of amortizations Optimization of make or buy decisions 3

4 Complete Strategic Sourcing offering Through focused initiatives we address all areas of improvement of a Purchasing organization Sourcing assessment Organization redesign Organization development Best Practices Best Perform ances Operational sourcing Sourcing roll-out & interim management 4

5 Sourcing Assessment Leveraging proven methodologies, in very short time we identify areas of improvement ORGANIZATION UNDERSTANDING BUYERS QUESTIONNAIRE SPA METHODOLOGY F/E SOURCING POTENTIAL Purchasing Function Mission and Goals Organization Chart(s) and location(s) GSMM Evaluation Process Coverage Available Tools Spend Breakdown (Categories and SG s) Self evaluation of resources allocated to each and every subprocess Analysis of the net potential benefits generated by the application of each of the 44 sourcing levers for 1 selected SG Evaluation of structural cost advantage of Far East suppliers compared with Italian ones 5

6 Organization redesign We believe in a systematic approach for organization redesign Data gathering & analysis Organization principles definition Organization sizing Organization naming Gap analysis Transition plan definition As is organization mapping Current Organization cost Resources Time allocation Internal best practices Resources background, attitude and skills Keywords Roles Reporting lines External clients Modus operandi Driver analysis Best practice application Category and SG analysis Cost variations Payback Resources assessment Job & role description Evolution scenarios Resources future time allocation Hiring and firing plan Resources training and coaching needs Overall transformation program Internal communication plan Consensus generation Training and coaching plan Responsibility handover plan Resources adjustment plan 6

7 Organization development During organization development we work together with client s resources to adapt and implement methodologies, processes and tools Detailed processes tools and methodologies review and upgrade Resources adjustment support Activity transition plan management Resources training and coaching Ongoing review Strategic, tactical and operational processes and methodologies KPI s Management system Vendor rating Vendor management Sourcing toolbox Internal resources identification and transfer External resources search support New resources introduction and support program Resources outplacement Activities listing Target team member identification Activity Transfer plan definition Plan execution follow-up Formal class training delivery On-the-job coaching Guided tour Assisted driving Ongoing support Long term coaching Regular program reviews and program adjustment Gap closure monitoring 7

8 Operational Sourcing The Operational Sourcing stream of work lasts approximately 5 months and leverages our methodologies and tools proven over a number of projects 4-5 weeks* 4 months ** Phase 1 Phase 2 Phase 3 Project Phase Diagnostic Suppliers selection RFQ and preliminary negotiation Main activities - Interviews with all the category managers to confirm hypothesis formulated in this proposal - Confirm preliminary data integration and analysis - Final selection of categories - In depth understanding of Client s requirements (product, quality, logistics, service level,...) - Data collection about potential suppliers - Definition of a potential suppliers long list and first contact - RFI - Suppliers visits and subsequent short list - Preparation of RFQ documentation - Evaluation/ranking of quotations - Logistics solution development - Preliminary negotiation Main Deliverables - Final selection of categories * Timing will heavily depends on data availability ** Timing will heavily depends on Client s decision process - Potential suppliers database (long list) - Suppliers short list - Evaluation of quotations - Logistics solution - Quotation (before final negotiation) 8

9 Sourcing roll-out & Interim management Sourcing roll out - New supplier qualification - P/# transfer program definition - Tool preparation - Sample production and validation - First batch production and validation - New supplier procurement ramp-up - Old supplier phase-out - Set-up of quality assessment and vendor rating - Definition and management of supplier improvement programs - On-going supplier contract compliancy Interim Management - Daily activities management - Multifunctional Interactions - Manage organizational change - Resources management and long term development - Drive best practice processes, tools and methodologies implementation - Function performance measurement - Function improvement plan implementation 9

10 Project example: Electronics Accelerating savings through Asia Sourcing Situation Project Objectives - Mid-size electronics player - 3 Sourcing offices in Asia - Recently merged 2 divisions, each of them with its Asia Sourcing office Results - Develop a complete program based on 3 streams of work : - Operational Sourcing led by BAS on 4 commodities. This stream of work alone involved a team of 6 full time resources - Organizational development impacting Strategy development, Processes, Methodologies, KPI s development - Preliminary technology scouting on 2 main technologies (LCD s and Touch screens) - Rapidly realize savings on selected categories - Improve / accelerate integration of the 3 Asia sourcing offices - Acquire in-depth technological knowledge on key categories - Realized tangible savings on each of the 4 commodities sourced. Savings ranged from 12% to 38% - Developed and communicated new strategy for 6 categories; all category managers developed a strategy review plan - Customized and deployed across the entire sourcing organization a set of methodologies and tools - Changed the way Sourcing is interacting with the rest of the organization 10

11 Project example: Chemicals Complete set-up of the purchasing function Situation Project Objectives - Italian mid size industrial client (~500 Mil Euro turnover) in the chemical sector - Part of a diversified group (public company) - Complete diagnostic and design of a trasformation plan - Setup of the central purchasing organization - On-the job training of the newly formed organization through a complete Sourcing program on 6 categories - Provide to the company an advanced purchasing office to avoid the disadvantage of scale economies Results - The new office has been implenented with the change of 50% of the personnel - New processes and procedures have been implemented, generating savings of >10% - A new IT system for Supplier Relationship management with innovative B2B features has been implemented to support the purchasing function 11

12 Project example: Toys Benchmarking China production competitiveness Situation Project Objectives - A toy creation division of well-known worldwide FMCG company, with half of the items produced in Guangdong, China - Total cost from their Chinese suppliers increased by 70% in last five years, mainly for the increase of labor cost - To decrease the cost, their Chinese suppliers have delocalized their facilities to Guangxi. However, finally they found that the total cost in Guangxi is same as in Guangdong Results - Preparing interview guides - Analyzing other places in China on their meteorological conditions, inter-provincial migration, minimum salary, micro factors, labor supply and logistics situations - Organizing and conducting interviews with entrepreneurs, workers, HR companies - Comparing other Asian countries (political Objectives stability, transparency, economy, labor force supply and other economic factors - Analysis of current manufacturing footprint - Analysis of the real situation of total cost and general labor environment in Guangxi - Identification and comparison of alternative scenarios for future manufacturing locations (in China and in other Asian countries) - Identification and prioritization of alternative places in China with lower total cost and available painting workers - In depth understanding of total cost, workers attitude and availability of painting workers in selected areas in China - Understanding situation in other Asian countries 12

13 Contents of the document Sourcing: Approach and selected cases Logistics: Approach and selected cases 13

14 Logistics and shareholder value Main goals the logistics function shall be aligned with Value Creation objectives Main company goals Main logistic goals Shareholder Value P.F.N. Reduction of financial requirements Reduction of circulating capital K1 * SALES Raise market shares Enter new markets Raise service quality Increase Degree of coverage of the system K2 * EBITDA Reduction of operative costs Reduce the Cost to serve K3 * EBIT Reduction of amortizations Optimization of assets and their utilization (warehouse rotation) 14

15 Supply Chain reference model Areas covered in this document Demand/Supply Planning and Management - Balance resources with requirements and establish/communicate plans for the whole supply chain - Management of business rules, supply chain performance, data collection, inventory, capital assets, transportation, planning configuration, and regulatory requirements and compliance - Align the supply chain unit plan with the financial plan Plan Source* Make* Deliver Return Return Order, Warehouse, Transportation, and Installation Management for Stocked, Make-to- Order, Engineer-to-Order, and Retail Product - All order management steps from processing customer inquiries and quotes to routing shipments and selecting carriers - Warehouse management from receiving and picking product to load and ship product - Receive and verify product at customer site and install - Invoicing customer - Manage Deliver business rules, performance, information, finished product inventories, capital assets, transportation, product life cycle, and import/export requirements Return of Raw Materials (to Supplier) and receipt of returns of Finished Goods (from Customer) - All return defective product steps from authorizing return; scheduling product return; receiving, verifying, and disposition of defective product; and return replacement or credit - Manage Return business rules, performance, data collection, return inventory, capital assets, transportation, network configuration, and regulatory requirements and compliance * 15

16 Our approach to develop the logistic models Main input - Service level requirements - Target volumes (including geographical distribution and seasonality) Logistics model Unit logistic tariffs Production plants Depot - N. of points to be served (WHS and POS) - Delivery frequency WHS Logistic parameters Total logistics costs - Distances covered/timing - POS POS 16

17 Main decisions for each logistic layer Main decisions on logistic indicators Primary distribution (factory-depot) - Number of depots - Transportation means Primary DC Depot management - Stock and space allocation (depot sizing) Warehousing Secondary distribution (DC-C&C/TP) - Depot coverage TP TP management - TP network sizing C&C C&C management - C&C network sizing To-door delivery POS POS Local distribution (to POS) - Deliveries split. DC-POS. TP-POS POS-. C&C 17

18 Project example: Automotive components Supply chain optimization in Italy and Turkey Situation Project Objectives - European leader for Automotive AM and Agricultural OEM wire cables - Optimization of the production planning, management and control of the Turkish plants - Optimization of the Italian logistic hub - Reduction of order response time to improve service level to European customers Results - Reduction of order response time by 50% - Service level improved from 65% to 90% 18

19 Project example: Luxury apparel brand Logistics optimization Situation Project Objectives - Italian industrial client in the luxury sector. - More than employees all over the world mn euros turnover in Redesign of processes for the operative production (raw material to contractors). - Redesign of the distribution (finished goods and merchandising delivered to direct and indirect shops located all over the world). - Planning and development of the new supply chain (warehouse layout and implementation of the new management system). - Automation of operations. - Provide to the company optimized processes in order to implement the supply chain. - Improve the productivity redesigning processes and systems. - Improve the organizational structure. Results - The productivity has been increased of 25% thanks to the introduction of new processes, systems and instruments. - Delivery inaccuracy reduced by 90% - Incresed manageable volumes of 50% compared with the previous structure. 19

20 Project example: Fashion brand Time-to-market reduction for distribution in the USA Situation Project Objectives - Industrial client in the fashion sector (Public company). - Re-definition of import process and distribution strategies in the US market for products manufactured in Italy and China. - Renegotiation of relationships with logistic partners to reduce costs and delivery times. - Reduction of the delivery time. - Reduction of total costs of the process. Results - A new procedure has been designed to reduced by 50% (from 4 to 2 weeks) the standard delivery time. - Furthermore, 25% of transportation costs have been reduced. 20

21 Project example: Pharmaceutical distribution Design and implementation of new logistic hub Situation Project Objectives - Client: pharmaceutical distributor leader in the Italian market - Plan and development of the new logistic hub starting from the definition of specifications and requirements. - Selection of the best localization for structures. - Definition of systems and processes to evaluate the financial sustainability of the initiative. - Provide to the company an advanced and high efficiency logistic hub able to sustain the planned geographical expansion. Results - Construction of a new advanced logistic hub with double throughput capacity - With the new hub, unitary handling costs has been reduced by 40%. 21

22 Project example: Jewelry retailer Development of new high-tech logistic pole Situation Project Objectives - Italian leader in the commercialization of jewelries. Results - Plan, design, build and start-up of the new highly automated logistic hub - Evaluation of requirements. - Blueprint design - Design of the processes - Definition of client service strategies. - Manage the construction - Support the migration from the old to the new hub. - Support the start-up of the new hub. - Maximize the efficiency of the company liabilities to support the ambitious development commercial plan. - Provide to the company optimized processes in order to implement at best the new logistic hub. - Realization of a new logistic hub with performance, efficiency, reliability and precision significatively higher than previous structure. - Costs and problems related to the implementation of the new logistic hub have been minimized. 22

23 Contact details Fortune Gate Unit 3007, N.1701 Beijing West Road Shanghai Tel: Fax: