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Copy Exactly from Best-in-class Supply Chain PracticesMaximizing your bottom line saving during current global economy meltdown
Jerry NyeJun 13, 2009
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My Goal - Faster, Better, and Together
1. Achieved 3 point market competitive advantage
2. Achieved 2% incremental saving quarter-on-quarter
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Recently - global economy meltdown
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Today Manufacturing Environment – Outsourcing or move to low cost region
Mfg Jobs moved to low cost region
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How - Faster, Better, and Together
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Provided Fact Based Solution For Decision Making
My Knowledge and experience
Bilingual Negotiator
Analyze data find out so-What
Fact based analysis
Teardown analysis
Competitive Research & analysis
Market intelligence
Global Experience
Provided Fact Based solution
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My Core Competency
Supply Chain Execution
Cost ModelingMarket IntelligenceStrategic Sourcing Teardown Analysis
Outsourcing Fact-Based Negotiation
Global Sourcing System implementation
Design to Mfg Warehousing Management
Supply Chain Planning and Optimization
Inventory AnalysisDemand and Supply PlanningPlanning and SchedulingDemand Forecasting
Sales & Operations PlanningSupply Chain Network Analysis
Management Consulting + Change Initiation + Change Acceleration
Business Process Analysis + Reengineering
Packaged Systems Integration + Copy Exact Deployment
Supply Chain Change Initiation
Copy Exact Programs Program Initiation
I-Negotiations e-Auctions
Suppliers SelectionBusiness Process Re-
engineering
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The Entrepreneurial Mindset in a current of Uncertainty
• Passionately seek new opportunities
• Pursue opportunities with enormous discipline.
• Pursue only the very best opportunities
• Focus on execution, specifically fast adaptive execution
• Engage the energies of everyone in my domain
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What is Best In Class?
Real Time & On Demand
Growth & Profitability
Cost & Service
Supply Chain Value
Best in Class Supply Chains Excel at the
Supply Chain “Compulsories” AND
Enable Their Company to Grow
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Best-in-class supply chain leadership measured by..
• Apple • Dell • Procter & Gamble • IBM • Cisco • Nokia • Wal-Mart • Samsung • PepsiCo • Toyota
Supply chain performance •Inventory turns 25%•Return on assets 25%•Trailing 12-months growth 10%
The opinion poll •AMR Opinion 20% •Peer Opinion 20%
AMR CriteriaAMR Criteria
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Drive to best-in-class by
Liquidity
Profitability
Growth
1. Optimizing the physical structure
2. Integrating the information and financial flows creating end-to-end value
3. Enhancing cash, cost and customer satisfaction positions
4. Focus on the excellent execution
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1. Optimizing the physical structure
Distribution Centers &
SubsidiariesIn-transit
Plant WIP
PlantRaw
EMS/ODM
InventoryHubbing
Supplier-owned
Inventory“Hubbing”
In-transit
SupplierInventorySpecific
ForYour
company
SourceMakeDeliver
In-transit
ManagedInventory
KeyCustomerInventory
inChannel
Service
Support
Engineering
Finance
Go To Market Supply ChainDemand & Supply
BalanceDemand Supply
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2. Integrating the information and financial flows
Distribution Centers &
SubsidiariesIn-transit
Plant WIP
PlantRaw
EMS/ODM
InventoryHubbing
Supplier-owned
Inventory“Hubbing”
In-transit
SupplierInventorySpecific
forYour
company
SourceMakeDeliver
In-transit
ManagedInventory
KeyCustomerInventory
inChannel
Service
Support
Physical Flow
Information Flow
Financial Flow
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3. Enhancing cash and cost
DSO
Days Sales Outstanding (DSO)
The average number of days
that the receivable sits on the
books
DIO
Days Inventory Outstanding (DIO)
The average length of time in days
between inventory coming on and off
the books
DPO
Days Payables Outstanding
The average length of time in days
between receipt of goods and payment
for them
+ - CCC
Cash Conversion Cycle
The average length of time in days between receipt of raw materials and collection of payment for
finished goods
“Get Cash Quicker”
“Have Less Inventory”
“Pay Appropriately”
“Cash is King”
DSO + DIO - DPO
[Quarter-end Receivables]
[Quarter-end Revenue] / 90
[Quarter-end Inventories]
[Quarter-end COGS] / 90
[Quarter-end Payables]
[Quarter-end COGS] / 90
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4. Excellent execution measured by
• Material Savings %• Conversion Cost %• Cost of Poor Quality %• Inventory Turns• Accounts Payable Days
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Copy Exactly – Fast adaptive best-in-class Supply Chain Practices
Market Intelligence
Cost Modeling
Re-structure initiative
Fact BasedNegotiation
Inventory analysis
Re-structure initiative
More …
Setup negotiation target
Teardown analysis
Supply market update
Market deflation
Cost modeling
Market intelligenceA
B
D
C
TeardownAnalysis
E
My DeliveryMy Commitment
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MeasurementTriangulation
Market Intelligence –Provide triangulation measurements tool kit
A1
AbsoluteCompetitiveness
(AC)
Procurement Competitive
Advantage (PCA)
MarketIntelligence
Specific point-in-timecomparison with
competitor
Buying effectivenessVersus market price change
Validates or refutesPCA and AC
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Market Intelligence –Speedup market intelligence provider selection
DigitimesIce Alert
CBAMTC VDC
AvicenneEuromonitor
Product Price IndexDatabeans
Purchasing magazineProcurement Strategy
Council
OnesourcesDigitimes
MetalpricesFuji Chimera
IITFleck
BishopCAPSAMR
Custerconsulting Display Research
GartnerIDC
YankeePrismark
ProtelligentPaumanokSEMICOiSuppli
DatabeansIC Knowledge
IC inside Frost and Sullivan
A2
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Market Intelligence –Provide procurement competitive advantage and absolute competitiveness chart
A3
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Cost Modeling –Develop cost model captured key cost drivers
RFQ Should Cost
30% gap
Raw MaterialCost
Overhead
Assembly
Profit
Other
Total
• Warranty costs
x
• Package Shipping
x
• R&D
x
• SG&A
x
x
x
Subtotal Equip. Labor
• Step 1: Front End(SMT)
• Step 2: Board Test
• Step 3: Frame Assembly x
• Step 4: Manual Assembly x
• Step 5: Package Shipping x
• Labor Cost
x
• Factory O/H
x
Material
• Margin x
• Yield
x• Step 5: Unit Test
• Step 5: System Integration Test
B1
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Cost Modeling –Provide comprehensive should-cost model by commodity-specific
B2
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Fact Based Negotiation – Provide fact based negotiation tool kit
To define, develop, and deploy standardized governance, skills, training, career paths, measurements, incentives, and electronic auctioning and
negotiating tools that will maximize procurement savings across the
corporation.
Market intelligence
Value propositions
Goals
Benchmark competitors
Gap analysis
Targets
Scope
Cost
Results
Fit
Existing projects: accepted, canceled or redesigned
High-level business cases
Programs prioritized and scaled
Detailed program design and action plan
Metrics
Set Strategy
Identify Needed Critical
Capabilities
Assess Current
Programs
Select Program Portfolio
DesignImplementation
Plans
Execute and
MeasureResults
DecisionReview
Ph
ases
Ph
ases
Del
iver
able
sD
eliv
erab
les
Decision Review
ProgramManagement
Market intelligence
Value propositions
Goals
Benchmark competitors
Gap analysis
Targets
Scope
Cost
Results
Fit
Existing projects: accepted, canceled or redesigned
High-level business cases
Programs prioritized and scaled
Detailed program design and action plan
Metrics
Set Strategy
Identify Needed Critical
Capabilities
Assess Current
Programs
Select Program Portfolio
DesignImplementation
Plans
Execute and
MeasureResults
DecisionReview
Ph
ases
Ph
ases
Del
iver
able
sD
eliv
erab
les
Decision Review
ProgramManagement
C1
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Fact Base Negotiation –Had been fact to fact negotiation with following supplies
UnitechUnimicron
WusCompeqMultek
Chin PoonNanya
Elec & EltekMerixMflexBYDMFS
GFlexIchia
FoxconnSanyoLishen
Desco TechKonica Minolta
SINCOSamYoung
SilitechDKUIL
SEIWOOTee HwaMemtech
BYDIchia
SunArrowSensetech
SorimJeewooFoxlink
FoxconnACONHiroseMolexSMK
MicronSTM
SONYSamsung LSIOmniVision
KodexMagachip
LarganGESOE-PIN
Asia OpticalMaxellTyco
AmphenolFCI
Yokowa Pansonic
ALPSTopsearch
FoxconnFlextronics
JabilWistronDelta
LiteOnWinteck
AltusSEMCO
Vista PointJabilBYD
LG InnotekTechwinToshiba ALPS
Aurora Optical ChiconyFoxlink
C2
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Re-structure initiative – Provide Tools and Matrices
1. Enterprise wide Tool used by all
2. Corp wide baseline measurement
3. performance comparison
4. Highlighting “best practices”
5. Measure internal performance to the industry
6. Enterprise wide spend data
Business
Operational
Systems
Technology
TOOL
&
MATRICES
1. Process
enhancement
2. e-business
Technology
3. Leadership
Empowerment
4. Skills and Training
5. Metrics and Pay-for-
Performance
Incentives
FOCAL
POINT
D1
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Teardown Analysis
22 most popular IP Phone• Top 5 IP Phone provider
50+ Cell Phone• Nokia, Samsung, LG ,
Apple, Motorola, and other
4 Server• Sun, HP
E
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The Secrets for Driving Motorola’s Unprecedented Turnaround in 2002 – My achievement
Making business successful by transforming supply chain initiatives into actions and results – faster, better, and together.
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Motorola Fast Adaptive IBM Best-in-class Supply Chain Practices in 2000 – My Achievement
AbsoluteCompetitiveness
(AC)
Procurement Competitive
Advantage (PCA)
MarketIntelligence
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Motorola fast adaptive IBM - 10X improvement – My Achievement
Phase 1“Foundation”
1994-1995
Phase 2Transforming the
Enterprise1995-1997
Phase 3e-Business1998 - 2002
Phase 4On Demand
2003 -
IBM Spend 8 years on first 3 phase
Motorola spend 3 years
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Fact Based Negotiation Using Cost Modeling - My Achievement
Fact Based
Market intelligence
Value propositions
Goals
Benchmark competitors
Gap analysis
Targets
Scope
Cost
Results
Fit
Existing projects: accepted, canceled or redesigned
High-level business cases
Programs prioritized and scaled
Detailed program design and action plan
Metrics
Set Strategy
Identify Needed Critical
Capabilities
Assess Current
Programs
Select Program Portfolio
DesignImplementation
Plans
Execute and
MeasureResults
DecisionReview
Ph
ases
Ph
ases
Del
iver
able
sD
eliv
erab
les
Decision Review
ProgramManagement
Triangulate Measurement
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Avaya fast adaptive Motorola - 10X improvement - My Achievement
Market Intelligence
Cost Modeling
Fact BasedNegotiation
Inventory analysis
Re-structure initiative
Setup negotiation target
Teardown analysis
Supply market update
Cost modeling
Market intelligence
TeardownAnalysis
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Do You Have Playbook and Rapid Initiative Project Plan?
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Contact Me
Jerry Nye 630-487-9282
[email protected] http://www.linkedin.com/in/jerrynye
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