Ten(d) To Zero - CIPS · – The key steps - from ten to zero!!! • Guidelines For Scoring – The...

Copyright © 2010 Unipart Group Limited. All rights reserved

Ten(d) To Zero

Derek Thomason – General Manager, Unipart Expert Practices


What I Will Cover

• Introduction to Unipart• Development of the Procurement / Supplier Management Function• Supplier Relationship Management – a One-night Stand?• Background and Benefits of TTZ• The Generic Approach• The Recession! – An Accelerated Approach• Summary• Q&A


10,000 people

Operating in 100 countries

worldwide£1.1b

turnover

Majority owned by employees

We takea long term

view

The Unipart Group – Key Facts

ContinuousImprovement


Third Party Logistics

Manage Demand Chains

Software Development& Licensing

Deliver Benefits for our Clients

Consult

Systems Integration

The Unipart Group – Core Services


The Unipart Way - a philosophy of working, underpinned by a set of tools and techniques that:

share best practice across teamsdrive continuous improvementimprove productivity and competitiveness

The Way We Work


Leading edge practices

Cost Out

Reactive Order PlacingPrice Drift

Proactive Tactical

Price Down

Strategic Procurement

Cost Down

The Four Stages of Development


Supplier Relationship ManagementA One-Night Stand?

Degree of strategic alignment and integrationLOW HIGH

One-night stand

Regular date

Going steady

Living together

Marriage

Competitive leverage

Ongoing bids, tenders and tactical negotiation

Preferred suppliers

Proven track record in quality, delivery and cost. Less frequent bidding

Performance partnerships

Benchmarking is applied to assess value, but there is joint improvement plans and priorities

Strategic alliances

Single sourcing and joint investment strategies. Interdependence is the driving force

Business integration

Total alignment of business competences. Each party plays to its strengths.

Source: Johnson, S., Tinsley Bridge Ltd, ‘Managing change through teamwork’, ISCAN, Sheffield


Background to 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”.

Supports Principle 8 of the Unipart Way

“We build constructive and challenging long term relationships through Ten(d) to Zero”.


A framework consisting of

‘elements’ and ‘levels’

A common way of working across

divisions and with suppliers

A method to make and deliver

a plan

How we work with suppliers to develop common

understanding

A Supplier Relationship

Management toolPart of the

“Unipart Way”

What is Ten(d) To Zero?


TTZ Typical Elements

• E1: Zero Waste• E2: Zero Cost Impact• E3: Zero Quality System Non Conformance• E4: Zero Quality Defects• E5: Zero Delivery Non Conformance• E6: Zero Delivery Failures• E7: Zero Supply Chain Logistics Impact• E8: Zero Business Transaction Costs• E9: Zero Commitment To Service Life Impact• E10: Zero Environmental Impact

Elements are defined according to the direction and needs of the business


TTZ Elements – Global Client

• Element One: Zero Waste• Element Two: Zero Cost Impact• Element Three: Zero Quality System Non Conformance• Element Four: Zero Quality Defects• Element Five: Zero Delivery Non Conformance• Element Six: Zero Delivery Failures• Element Seven: Zero Supply Chain Inventory Impact• Element Eight: Zero Business Transaction Costs• Element Nine: Zero Health, Safety, Security & Environmental Impact• Element Ten: Zero Legal and Trade Non-Compliance Issues

In this case the elements refer to suppliers of Global Freight services to one of our consulting clients


TTZ Levels – Global Client

• Objective– The desired condition for each element

• Approach– The rationale behind the element, the

reason for its inclusion, and the process to be used to achieve the objective

• Definitions– Key terms, tools & techniques used in the

element• The Standard Demonstrated

– The key steps - from ten to zero!!!• Guidelines For Scoring

– The detailed requirements / sources of information against each milestone

1.1.1 Element 6: Zero Delivery Failures

Objective: To achieve a consistent 100% conformance to Company XX delivery requirements. Approach: Success in this area is achieved by Company XX clearly communicating delivery requirements and regularly monitoring delivery performance against defined criteria. Areas of supplier non-conformance will be jointly analysed to identify and eliminate root causes of failure. Key problem-solving tools should be utilised and a formalised process should be developed to monitor corrective actions and subsequent improvements. Definitions Key terms used during this element. o Delivery Performance: Calculation is as follows: (Number of shipments not meeting

requirements / Total number of shipments made in the period) x 100 The Standard Demonstrated

Score Description Evidence (scoring guideline)

10 As an average of all shipments due to arrive in the period, less than 50% are compliant.

Verbal statement required.

9 As an average of all shipments due to arrive in the period, more than 50% but less than 60% compliance has been achieved.

Data required from supplier delivery performance monitoring system.

8 As an average of all shipments due to arrive in the period, more than 60% but less than 70% compliance has been achieved.


7 As an average of all shipments due in the period, more than 70% but less than 80% compliance is achieved.






Again, this refers to suppliers of Global Freight services to one of our consulting clients


Become the customer of

choice with the supplier

Remove ambiguity and facilitate emotion free discussion

Deliver business benefit for both

parties

Measure performance in a constructive way

Identify cost ‘out’opportunities

Strengthen relationships with

our preferred suppliers

Objectives of Ten(d)-To-Zero


Identification and removal of waste

Structured approach to

performance and contract reviews

Flexibility, modularity and tailored to need

Facilitates continuous

improvement

Consistent approach to relationship

management

Strengthens the two-way

relationships

Benefits of Ten(d)-To-Zero


To SummariseWe Use Ten(d)-To-Zero To …

To go from this to this

FewerOpportunities

Taken

MorePerformance

Problems

MoreOpportunities

Taken

FewerPerformance

Problems


Generic Process Approach

Identify current state

Set durations

and targets

Agree Strategy

Implement Action Plans

Make and Agree

Specific Action Plans

Reflect on Result

Evaluate Actual vs Expected

Impact

Cycle Repeats Until Target is

Achieved

Plan

Do

Check

Act

SelectStrategic Suppliers

Once Target is Achieved, Set

New Target and Repeat

Introducing New Suppliers Continuous Improvement with Existing Suppliers

The process is used to structure the approach and confirms if actions are having the desired effect


How the Relationship Functions

Quality

Logistics

Commercial

Marketing

Engineering

Supply chain

Quality

Logistics

Commercial

Marketing

Engineering

Supply chain

TTZ Programme

IncludingOverall

Facilitationand

Escalation of Concerns

Formal Communication Route at TTZ Review Meetings and Formal Escalation of IssuesInformal Communication Routes for Day to Day Business

Unipart

Unipart Facilitator(Procurement)

Supplier Facilitator

Supplier


Position & launch TTZ programme

Collaborate to problem solve and drive performance improvements

Initiate & manage own problem solving

Sustain performance levels

Use TTZ approach to identify new opportunities & challenges

duration is case by case

Customer-Supplier Relationship Growth+

Supplier Self Reliance

The Journey for our Suppliers

This helps the supplier to understand how their journey will evolve and where they are currently


The Recession!An Accelerated Approach Was Required

• Context– One of Unipart’s Business Units had an urgent requirement to:

• Improve revenue / profit• Reduce working capital• Increase supplier marketing investment

• Solution– Use Ten(d) To Zero principles - but assume starting at ‘zero’ rather than

progressive improvements from ‘ten’– The results and benefits are the same but the journey is quicker (and

not so smooth)


The Accelerated Approach

Identify current state

Set durations

and targets

Agree Strategy

Implement Action Plans

Make and Agree

Specific Action Plans

Reflect on Result

Evaluate Actual vs Expected

Impact

Cycle Repeats Until Target is

Achieved

Plan

Do

Check

Act

SelectStrategic Suppliers

Invite each supplier to achieve a score

of zero in 10 elements against a

series of statements in a

workbook

Using the Creative Problem Solving structure, agree

the actions required to move quickly to zero

Change pointChange

point

Generic Process Cycle Showing Change Points to Accelerate

X X X


Assess what zero looks like

Identify challenges to achieve

Identify solutions

Implement solutions

Confirm zero assessment = desired state

duration is 3 months maximum

Tactical and Immediateto achieve

improvements to revenue / profit, reduce working capital and increase supplier marketing investment

Change point

Change point

Change point

Change point

Change point

Change point

The Accelerated Supplier Journey

Changes: more direct and shorter in duration Starting goal is zero


What We’ve Achieved

• XX% improvement in supplier delivery performance

• YY% reduction in safety stocks

• ZZ% reduction in non value adding activities

• Significant time savings for suppliers in managing the Unipart account

• Improved service levels to the end customer

Plus accelerated approach now adopted across all Divisions


Summary

• Ten(d) To Zero is part of “The Unipart Way”

• TTZ support our business by providing a structured framework forworking with our strategic suppliers

• Our aim is ‘cost out’ not ‘price down’

• The approach works across our businesses and those of our consulting and operational clients

• We believe the results speak for themselves but could not have been achieved without the proactive participation of our suppliers (Thank you)

Ten(d) To Zero - CIPS · – The key steps - from ten to zero!!! • Guidelines For Scoring – The...

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