Min Max Supplier Management 7 8 10


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MinMax Supplier Management.
Supply Chain Management

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Min Max Supplier Management 7 8 10

  1. 1. MinMax Supplier Management Presented by Jean Toledo
  2. 2. MinMax Supplier Management To fulfill the complete vision without significant sacrifices or trade-offs. Customer Satisfaction Highest Shortest Quality Cycle Time Lowest Cost
  3. 3. MinMax Supplier Management IS IS Supply Chain Management I. Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. II. Supply chain management involves coordinating and integrating these flows both within and among companies, suppliers, customers and partners. III. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed).
  4. 4. MinMax Supplier Management Supply Chain Goal and Objective Management As a solution for a strategic and tactical supply chain management, I would like to present my MinMax Supplier Management . A set of calculations that the buyer controls the turns based on your most recent sales data. Which provides a simple application service that promise to provide part if not all of the SCM calculations (Excel) for companies and their suppliers to be collaborators on inventory turns and inventory levels you can control: the data to upload to your SAP SCM module. • The product flow • The information flow • The financial flow
  5. 5. MinMax Goal and Objective I. Reduce inventory levels: RAW, Supply base and FGI. II. Pull the material only when needed (Demand Pull). III. Greater than 98% on-time delivery of materials, for which I have accomplished using this methology. IV. Manufacturing inventory turns: >52 weeks annually, one and two day turns obtainable. V. Drive and control the desired turns while compiling customer/sales (annual usage) VI. Better Customer, Marketing and Operations collaboration. VII. Control and adjust turns with collaboration with the supply base and customers’ systematically.
  6. 6. MinMax Procurement Benefits I. Gain control of and visibility into the entire procurement lifecycle through rapid engagement of end users, suppliers and partners. II. Encourage user, process, and price compliance with contracts to secure full benefit from negotiated terms. III. Restrict maverick buying and other uncontrolled spending by driving stakeholder compliance with negotiated contracts. IV. Facilitate faster, more effective communication on inventory levels, compliance and collaboration with multiple suppliers, stakeholders and partners. V. Measure sales plans against supply and against performance. VI. Enviable customer satisfaction, within and outside the company.
  7. 7. Today’s typical MRP model I. The “system” (MRP/batch/WO). II. Product design/BOM structure. III. Manufacturing and material handling processes, floor layout, documentation, etc. IV. Manufacturing capacity (trained people, equipment, facilities) vs. Demand. V. Supplier metrics on performance. VI. Policies (backlog, inventory, lot sizes, specials, etc.). VII. Real-life changes (quality problems, specials, cancellations, reconfigurations, ECO, accidents, etc.).
  8. 8. MRP/Batch/WO (Forecast) (Sales) Suppliers Receipts Stockroom POs Forecast Kitting Kitting Kitting MRP Sales Orders Issues Shipment WOs Data Receipts Integration & Final Test Issues Lowest Level Receipts Assembly(ies) Issues WOs Next Level Assembly(ies) (Shipment) Sales Order Fulfillment Sales Order Final Assembly
  9. 9. Current MRP Model Pre-Wired Frame Procurement Shipment 40 days Integration & Final Test 35 days Accumulative Lead-time ~6 to 10 weeks Integration and Final Test Loadlock Assy and Test 8 days Robot Arm Assy 8 days How long does it take to build a Robot Arm Assembly? Robot Arm Procurement Work content ~3 hours 40 days
  10. 10. MinMax Critical Changes in Concept I. Raw material buffers (Kanban)(ABC quantity) Demand Pull vs (MRP) time buffers. II. Stockroom and purchasing (Strategic Suppliers) mentality extends to the production floor. III. Focus is on keeping product moving, not on keeping people busy. IV. Buyers/Suppliers transition from PO/expediting to contract negotiation, forecast/usage reporting and cost reduction.
  11. 11. MinMax Model/Short Cycle Process Forecast/Usage Sales Orders MinMax Report Usage Data (Spreadsheet) Suppliers assimilate Replenish into MinMax Contracts Spreadsheet Buyers Data Kanban Kanban Outline Agreements MRP/ERP Stockroom (not always used) Sales (MinMax Orders Supplier Kanban Kanban Kanban Management) Replenish Replenish Replenish Station Stock Station Stock Station Stock (Kanban Material) (Kanban Material) (Kanban Material) Assembly Kanban Assembly Kanban Assembly Station Station Station Usage (Cell) (Cell) (Cell) Replenish Replenish Kanban size=ABC Order Qty Days of supply/INV. TURNS Shipment (Sequencing) Sales Orders Sales Order
  12. 12. MinMax Excel Spreadsheet Which calculates the following: I. Demand over lead-time II. Safety Stock, you control the Factors III. Re-order Point IV. Yes or No below Re-order Point V. A, B, C, D, etc order quantity (you input qty/turn) VI. Min Inventory in Dollar Value VII. Max Inventory in Dollar Value VIII. Excess Inventory Max in Dollar Value IX. Excess to Annual Usage in Dollar Value X. On-Hand Inventory in Dollar Value XI. Dollars Required to replenish Inventory XII. Annual Forecasted Dollars Spreadsheet available for viewing at interview
  13. 13. MinMax Model/Short Cycle Process Pre-Wired Frame Procurement Shipment 40 days Lead-time under MinMax ~2 days Integration & Final Test ~ 10 days Under MinMax Accumulative Lead-time ~2 Customer is Quoted the ~20 days Loadlock Assy &Test days Manufactured Lead-time ~ 2 to 3 weeks ~1 Robot Assembly Customer is Quoted a Reduced Lead-Time day Robot Arm Procurement 40 days Lead time under MinMax ~5 days
  14. 14. MinMax Open Data Model Collaboration is key to Supplier Partnership I. Integrates sales and operations planning process. II. Sharing this data "Upstream" (with strategic suppliers) and "Downstream" (with company's clients). Collaboration. III. Usage data actuals updated in MinMax Spreadsheet. IV. New MinMax Supply Chain Management.(TQC, short cycle, custom built, highest and consistent Quality Standards. V. Customer lead time can equal manufacturing build rate. VI. Matching forecast and customer’s usage trend, minimizing shortages vs excess inventory, matching/establishing the inventory turns in the forecast model (MinMax Spreadsheet) a Lean Minimum and Maximum inventory levels with turns you drive, daily, weekly, bi-weekly, monthly, etc.