1. OMSAN LOJİSTİK

2. Supply in the Logistics Strategy Procurement and Supplier Relationship Management Latin America Logistics Center Logistics Management Series

3. Statistics … “Purchased products and services account for more that 60% of the average company’s total costs. For steel companies that number goes up to 75%; it is 90% in the petrochemical industry. Even at service companies the figure is typically a hefty 35%. Bringing down procurement costs can have a dramatic effect on the bottom line –a 5% cut can translate into 30% jump in profits” — “A Smarter Way to Buy” Harvard Budines Review, June 2001

4. Logistics Master Plan The Logistics Master Plan Synchronises Operations Management with the Strategic Objectives of the Company thorugh permanently assessing performance, improving processes and internal practices, defining infrastrucutre requirements and designing the organisation to support the processes Customer Service

5. Supply in the Logistics Strategy Supply

6. Supply Master Plan Make or Buy Suppliers Policy Integration Procurement Supply Chain Supply

7. Supply Management Dilemmas

8. Which are the Supply Sources that Satisfy our Financial Objectives? Which Sources Satisfy the Service Level that OUR Customers Demand? What is the Supply Sources Mix that Minimises Supply and Inventory Management Costs? What is the Strategic Supply Sources Mix? How can I Evaluate my Supply Sources?

9. Procurement offers the largest opportunities of savings Sources: CRPS, AT Kearney

10. 1. Key Performance Indicators in Supply Costs –Procurement Costs, Procurement Costs by Order Productivity –Orders per man-hour, SKUs by Purchase officer Quality –Supplier Fill Rate –Supplier Satisfaction Index –% Perfect Orders –Supplier Lead Time Variance Response Time –Order Cycle –% of Undelivered Orders

11. Gap Analysis in Supply Supply Processes Include Manufacturing and Procurement For each Product the Company must choose between Make of Buy For the Manufactured Products the Supply Objective is to Efficiently Produce to fulfil Inventory Targets For Purchased Products the Objective is to Efficiently Purchase to fulfil Inventory Targets

12. Supply Management GAP Analysis

13. Supply Chain Evaluation

14. 2. Supplier Certification Programs Purchase Order Fill Rate Comprehensive and Trustable Information –# PO, ID Lines, Boxes, Batch, Exp. Date Automatic Information –ASN´s, VMI, Status Reports Standard Packaging Coming Orders Identification Programming & Performance of On-time Deliveries

15. 3. Suppliers Segmented Policies Groups of Suppliers Groups of Customers Supplier Integration Policy Customer Service Policy

16. Y-Axis Order/run Quantity Total Cost = Ordering Cost + Inventory Carrying Costs Inventory Carrying Costs increase with the size of the order Ordering Cost Decrease with the Size of the order Economic Order Quantities 4. How Much to Buy? EOQ

17. Consolidate Orders: Levering Purchasing Power Centralised Negotiation –Suppliers –Prices and Payment Conditions –Delivery Terms Decentralised Operation Centralised Supplier Certification Logistics Conditions to the Order –Suppliers Fill Rate –Lead Times

18. 5. Strategic Decision of “Make or Buy” Make? Manufacturing Competitive Advantage Intellectual Property Lack of Finished Goods Suppliers Available Infrastructure Buy? Strategic Alliances with Suppliers Marketing & Sales Competitive Advantage Free Technology Products Poor Infrastructure Available

19. Extranet B2B Extranet B2C Order Management Demand Forecasting Interactive Marketing Customer Service Marketing & Sales Quality Systems Management Integrated Forecasting Stock Management Electronic Procurement Supply-Chain Management SuppliersCustomersCompanyManufacturing Distribution Finances Human Resources Intranet B2E Source: Cambridge Technology Partners 6. e-Procurement Opportunities

20. 7. Internal Supply Chain Evaluation

21. 7. External Supply Chain Evaluation

22. Supplier Translator Inventory Translator Planning System Customer Supply Translator Order Processing 855 – Order Recognition 852 – Inventory Activity 8. Integration Initiatives such as VMI – Vendor Managed Inventory

23. 9. Value Chain Organization Strategies for Customer Service Planning Manager Supply Chain Strategic Planning Director Estratégia Strategy Customer Service Manger Traffic Supervisor Value Chain Operations Director Distribution Manager Planning Manager Materials Manager Plant Manager Operaciones Operations End Consumers CustomersDistributionManufacturingSuppliers

24. 10. Supply Chain Information Systems Logility Planning Solutions TM Demand Chain Planning TM Supply Chain Planning TM Resource Chain Voyager TM Demand Planning Inventory Planning Event Planning Replenishment Planning Manufacturing Planning Transportation Planning Demand Chain TM Voyager TM Supply Chain TM Voyager TM Fuente: Logility, Atlanta

25. Supply Chain Integration Initiatives 16 11 9 7 7 6 5 4 3 3 3 3 3 2 1 1 1 05101520 Suppliers Certification Procurement Process Reengineering Continuous Replenishment Programs Purchasing Process Automation Supplier Fill Rate Assessment Critical Information Exchange Vendor Manager Inventory (VMI) Purchase Order Status Order Reception Policies Customer Service Alternatives In-Consignment Inventory Strategic Alliances with Suppliers Coordinated Deliveries Centralized Negotiation and Consolidate Purchasing Product Requirement Optimization Unconventional Suppliers Payment Methods Value Added Analysis Make or Order Evaluation Answers from 47 Companies in Central America