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Purchasing BPO Overview

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Presentation on theme: "Purchasing BPO Overview"— Presentation transcript:

1 Purchasing BPO Overview

2 Manufacturing & Sourcing in 2020
Table of Contents India Team Service Architecture Solutions Marketing Mix Operating Framework Manufacturing & Sourcing in 2020 2

3 India Team 3 1 person
Ranjith J Devadoss 7 years experience as a Category Manager at Caterpillar Inc.’s Global Purchasing Division – Asia Pacific 6 years of experience as a Certified 6 Sigma Master Black Belt and Qualified Lean Champion cum Black Belt B.E. (Mechanical Engineering), M.S. (Operations Management) Managed and executed 30+ Strategic Sourcing projects as a Regional Internal Lead Consultant for US and European facilities touching various Commodity Groups, with a combined Annual Savings potential of $ 18 Million Multiple Commodity exposure related to Direct Spend Solid India Region Supplier Intelligence and Business know-how Potential to tap 25+ Commodity Sourcing / Manufacturing experts for Projects on an assignment by assignment basis. Ability to scale up or down to manage resource costs India Team Sourcing Program Lead 1 person Commodity Manager / Development Engineer (20 years experience + managed 75 Suppliers) Certified 6 Sigma Green Belt / Qualified Lean Green Belt Well versed in interactions with US and European clients Commodity Manufacturing Process Engineers 6 persons (can be scaled to 15 persons as needed) Expertise across 25 to 30 different Purchasing Commodity types Average experience of 20+ years (Technical + Process Development + Value Engineering space) Certified 6 Sigma Green Belts / Yellow Belts Purchasing Buyers / Development Engineers 3 persons (can be scaled to 8 persons as needed) Average Experience of 15+ years (Capacity Planning, Cost Management, Supplier Development & Certification space) 3

4 Services Architecture
Group A Gears & Power Train Components Machining Hardware PF Metallic (Brass / Aluminum) Heat Treatment & Metal Finishing Group B Steel – Flat Products Sheet Metal Light Fabrication Heavy Fabrication Group C Steel – Bar Products Steel Castings Iron Castings Forgings (Open & Closed) Group D Springs & Bearings Hoses / Rubber parts Tools, Cutters, Dies, Moulds & Patterns Jigs & Fixtures CORE Process Commodity-wise reshaped Sourcing Strategy with a 3 to 7 year outlook Integrated solution to identify and develop Suppliers and Parts End-to-end Program management & delivery Strategic Sourcing Super Project Execution Supplier Intelligence, Evaluation and Selection Supplier Risk Assessment & Management (Financial & Non-financial) Supplier Metrics and Performance Management Supplier Capacity Planning Supplier Tooling & Asset Management Supplier Quality Inspection & Process Audits Component Cost Modeling and Estimation Supplier Relationship Management APQP / PPAP Process Documentation Price Negotiation & E-Auctions Deploying Excellence initiatives (6 Sigma and Lean VS Transformation) Supplier Education & Training Project / Program Management ENABLING / GOVERNING Processes Support infrastructure for Ongoing improvement and management of Supplier processes Supplier conditioning to World-class standards of Excellence (or) to Client norms Change and Issue management at Supplier facilities 4

5 Suite of Solutions 5 Develop a 3 to 7 year
Strategic Sourcing Master Plan (6 Sigma Super Project) Re-sourcing / Development Package Implementation Process Support Infrastructure for Supplier Excellence Full-fledged Local Purchasing Office function Program / Project Management Technology Enablement Develop a 3 to 7 year Transformational Road map Plain components re-sourcing from Source A to Source B Support Enabling & Governing processes Complete Outsourcing of the Purchasing & Supply Chain functions Manage Time, Cost & Resource challenges for the Client’s Supplier focussed initiatives Provide IT solutions for real-time Customer and Supplier collaboration communication & reporting 6 Sigma rigour applied to addressing the Client’s CCRs Project Management rigour in implementation On-the-ground support to drive Supplier Excellence initiatives End-to-end Purchasing support for the India Supply Base On-site support to drive Program completion Supplier Training, 6 Sigma & Lean VST 5

6 Marketing Mix 6 Geographical Segmentation
Phase 1 – USA / Canada Phase 2 – Europe Industry Segmentation Automobile & Defense Equipment Energy & Power Generation Construction, Mining & Material Handling Equipment Heavy Industries Machine Tool & Equipment makers Targeting Size (Large + Medium + Small companies) Scope (Tap approx. 50% of COGS / Spend for re-sourcing opportunities) Positioning Premier AAA Rated mid-sized Purchasing Services Firm in India Support and Coverage – India Suppliers Resource Plan Chennai based Core Team Floating Hubs (Chennai, Bangalore, Noida, Pune, Coimbatore, Surat and Tata Nagar) 3rd Party Associations Remote Management of Supplier Champions 6

Front End Services Marketing & Securing Orders CRM Onsite Issue Resolution Accounts Receivables Back End Project / Program Management Supplier Performance Management SRM Package / Bid Price Estimation SUPPLY BASE CUSTOMER BASE LOGISTICS & DISTRIBUTION MANAGEMENT Direct 3PL Provider 7

8 Manufacturing and Sourcing in 2020
Study involving 152 respondents in 8 countries Sector spread of the study General Manufacturing (40%) Automotive, Aerospace & Defense (16%) High Tech (20%) Industrials : Chemicals, Steel, Medical Devices (24%) Geographical spread of the study US (18%) & UK (18%) Germany (17%) France (13%) Sweden (12%) Netherlands (11%) India (8%) & China (3%) Dimensions of the study Engineering and R&D Manufacturing Supply Chain & Logistics 8

9 Engineering and R&D Supplier Collaboration
50% predict higher collaboration with Suppliers More collaboration required when Outsourcing is involved 9

10 Engineering and R&D Product Lifecycle Management
25 to 50% levels of product lifecycle shrinkage expected Shrinking lifecycles will put inevitable strain on Supply Chains Supply Chains must be Lean, Responsive and Flexible 10

11 Manufacturing Globalization
Manufacturing will be for Global markets. A shift from manufacturing in one country to multiple countries expected Proximity to raw materials and consumers, labor wage differentials, forex dynamics etc. will be key drivers 11

12 Manufacturing Subcontracting
With 56%, the balance is tipped in favor of subcontractors to help develop products for the future The standardized products will be subcontracted while specific products will be made internally Regular visits or a Local Management Team will remain while IT based Management & Reporting Systems deployment will increase 12

13 Manufacturing Low-Cost Labour
Manufacturing and Sourcing from cost-effective countries will increase despite partial erosion of the labor cost advantage Logistics, distance, travel time, customs regulations, open market issues, accessibility, geopolitical stability and local expertise leadership could also be other determining factors China and India will still continue to be preferred destinations 13

14 Supply Chain & Logistics
Overseas Suppliers An increased reliance on Overseas Suppliers is expected in the future 40% wish to involve and collaborate with Suppliers right from the Concept to the Development process 60% of companies expect to be sourcing from more countries in the future than today Closer relationship management envisaged . Co-location of Suppliers alongside Customers to increase. 14

15 Supply Chain & Logistics
Cost of Commodities General agreement exists that Cost uncertainties or escalations could drive increasing complexity into our Supply Base positioning Given the picture, proactive action to normalize Cost risks will be imperative. 15

16 Supply Chain & Logistics
Coping with complex Supply Chains Deployment of more sophisticated and capable IT or Web based systems will be the global norm to improve real-time information visibility and communication Acute Talent shortage foreseen in the area of Supply Chain management and IT integration 70% predict the overwhelming use RFID technology as a key enabler 16

17 Supply Chain & Logistics
Supply Chain Disruptions Global Supply chains will have a diverse set of attendant risks Companies must be capable of managing Business Risks by recognizing, analyzing and preparing to manage the vulnerabilities Multiple options to mitigate these risks exist. Foresight and relevant action is the key. 17

18 Thank You !! 18

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