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Strategic Sourcing Consulting

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Presentation on theme: "Strategic Sourcing Consulting"— Presentation transcript:

1 Strategic Sourcing Consulting

2 Develop a Culture of 6 Sigma Process Discipline with TCO focus
02 Our Value Proposition Supply Base Transformation for our Clients by adopting a best-in-class Process approach Superior Value over the term at the right program cost Develop a Culture of 6 Sigma Process Discipline with TCO focus Execution and Governance of a multi-year Supply Base Transformation strategy Competency and Leadership development in Purchasing to deliver greater impact Our Value Proposition

3 Our Firm’s Team capability
03 Lead Consultant has a 13+ year career at Caterpillar Inc.’s Asia office as a Certified 6 Sigma Master Black (Black Belt) Qualified Lean Black Belt & Champion Strategic Sourcing and Cost Reduction Consultant Consulted for Caterpillar’s Asia office and 30+ Strategic Supply partners over the last 8 years in Supply Chain total cost optimization initiatives Industries served are Manufacturing, Automotive, Logistics & Transportation, Heavy Industrials, Energy, etc. Industry Experts for special assignments on call, to deliver superior value and optimize client costs. Our Firm’s Team capability

4 What we are hearing from the Market
04 Total Cost of Ownership is important Purchasing has largest potential for impacting Company costs Split focus – Strategic versus Tactical teams Competitive Demands Organizations harvesting the greatest results from enterprise wide, Strategic Sourcing initiatives will achieve significant Cost Advantage over the competition, and Will have a leaner and stronger Value Chain Evolving new realities Purchasing competency = Competitive advantage Technology is a critical enabler Supplier Collaboration & Management A singular vision for Strategic Sourcing across the Enterprise What we are hearing from the Market

5 Purchased Goods/Services dominate Cost structure
05 Purchased Goods/Services dominate Cost structure

6 Strategic Sourcing’s bottom-line impact
06 Impact of Strategic Sourcing initiatives Strategic Sourcing’s bottom-line impact

7 Strategic Sourcing vs. Tactical Buying - differences
07 Strategic Sourcing (every 3 to 5 years) Supplier Management (every 3 months) Tactical Buying (every day / week) Spend Characterization Supply Market analysis Strategy Development Supply Base re-shaping Cost Model development Negotiation APQP / PPAP Review Supplier performance Manage Supplier relationship Resolve conflicts Monitor Supplier marketplace Capacity planning Cost Reductions / Avoidances Ppm / Cpk / COPQ Volume forecasts Purchase Order placement and Scheduling External Logistics Manage Payables and Invoice grief Supplier Delivery performance Performance Feedback Voice of Business Strategic Sourcing vs. Tactical Buying - differences

8 Strategic Sourcing is evolving
08 Traditional Purchasing Strategic Sourcing Global Supply Management Paradigm Transaction Project Enablement Focus Price, management, Compliance Supplier rationalization, Spend consolidation, Cycle-time reduction, Standardization Balancing Total System Cost; Maximizing shareholder value; Enabling product innovation Reach Local; Many suppliers Multi-regional, Some collaboration with related functions Global; Highly collaborative across the enterprise and visible at executive levels Technology Spreadsheets Auctions, e-Sourcing, Basic optimization Technology enablement across all strategic sourcing processes People Decentralized Buyers Commodity Teams, Center-led or centralized Cross-functional teams Global Strategic Sourcing is evolving

9 Our Strategic Sourcing Roadmap
09 Our Strategic Sourcing Roadmap

10 Deliverables of a Strategic Sourcing project
10 Deliverables of a Strategic Sourcing project

11 Strategic Sourcing benefits - Examples
11 US Postal Service Maintenance & Repair (MRO) 1,000 suppliers down to 2 suppliers Savings of more than $250M Walmart Reduced 500,000 suppliers to 50,000 $17.8B in cost savings over 5 years 95% of spend is with 16,600 suppliers Raytheon Had 27,000 to 45,000 suppliers (estimated) Goal was to reduce by 20% each year Continues to meet supplier diversity goals, even with supplier consolidation Companies doing Strategic Sourcing have seen returns between 20x to 1000x+ on their investments over 3 to 5 years Strategic Sourcing benefits - Examples

12 Strategic Sourcing Training

13 Training Programs - Index
13 Program Target Candidates No. of days 6 Sigma Strategic Sourcing (6SSS Methodology) Training Black Belts + Purchasing Professionals 3 days APQP and PPAP Training Purchasing + Manufacturing + Design Professionals 2 days Total Cost of Ownership Training Purchasing Professionals 1 day Training Programs - Index

14 Training Delivery Suite of Options
14 Delivery Options Client Location Instructor Led (Facilitated – 7+ pax) E-learning (Self Taught – 1+ pax) Printed Books / CDs (Self Taught) Exercises + Real Examples Coaching Support 6SSS Training APQP / PPAP Training TCO Training Primary Option (7+ Belts preferred per Session of Training) Secondary / Low Cost Options (1+ to 5+ Belts preferred per Session of Training ) Tertiary / Mandatory provisions Training Delivery Suite of Options

15 6 Sigma Strategic Sourcing (6SSS) Training
15 Define Understand changing Customer and Business needs Study Category and Supply Market conditions Tap Low Hanging fruits Measure Develop Supplier Evaluation Criteria Identify List of Suppliers through RFI issuance Develop Technical Plan and Cost Models Analyze Tri-analysis - Market, Supplier, Category Issue RFPs and obtain RFQs Select best Supplier / Supply Chain options Improve Negotiate Agreements & develop Supplier Performance Metrics Develop an MGPP for Sourcing Change Develop a Sourcing Matrix Develop an Implementation Plan Control Review and Manage compliance to SP metrics Execute the Implementation Plan Drive Continuous Improvement to bridge SP gaps With our Comprehensive Training Program the Candidates will be able to : Understand the need for change based on Customer, Business, Economic, Commodity concerns etc. Lead multi-disciplinary Teams to reshape the Supply Base base Develop Cost Models and Metrics to manage Suppliers Feel empowered based on facts and data to make changes based on changing face of the market Influence the leaders of support functions needed for project completion 6 Sigma Strategic Sourcing (6SSS) Training

16 16 Advanced Product Quality Planning, APQP, is a structured method of defining and establishing steps and expectations necessary to assure that a product satisfies the customer. The goals of APQP are two-fold : Proactively manage technical risk as products or manufacturing processes are designed or modified Drive collaboration between design and supply chain partners (both internal and external) at the appropriate times Production Part Approval Process, PPAP, consists of two primary elements : Demonstration of APQP or proof of risk mitigation of a design and / or process in support of program objectives This demonstration of proof provides confidence that the requirements and specifications of a product prior to shipment are met Documentation to support the demonstration of product and process conformance to requirements and specifications This documentation details the initial quality level the supply chain has achieved APQP / PPAP Training

17 Total Cost Optimization (TCO) Training
17 Total Cost Optimization (TCO) Training

18 18 E-Mail:,
Phone : / Mobile : Procexcellenz is a premier provider of multi-channel Consulting and Training Solutions for seekers of 6 Sigma, Lean, Stategic Sourcing, Cost Management and Strategy Planning services.

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