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SupplyWeaverImprove Your Low Cost Supply Chain Performance
Contents    –   Introduction to SupplyWeaver    –   Low cost supply chain performance improvement model    –   Example eng...
About Us•    SupplyWeaver launched: May 2006                                                                              ...
End-to-end Low Cost Supply Chain Capability     Customer                                                                  ...
Contents    –   Introduction to SupplyWeaver    –   Low cost supply chain performance improvement model    –   Example eng...
What We Do:Improve Your Low Cost Supply Chain Performance                       Supply Chain IT    Client Operation       ...
Client Operation Diagnose                                                           To tackle supply chain challenges, mos...
Supply Base Assessment                                                           Traditional supplier assessments focus on...
Commercial Negotiations                                                           In low cost countries, prices and deals ...
Supplier On-Boarding                                                           By definition your supplier is not fully al...
Supplier Performance Management                                                           Supplier performance management ...
Supply Chain Risk Management                                                           While the benefits of Low Cost Supp...
Supply Failure Recovery                                                           When things went wrong with low cost sup...
Supply Chain IT Assessment                                                           Supply chains often work best in conj...
Contents     –   Introduction to SupplyWeaver     –   Low cost supply chain performance improvement model     –   Example ...
Case Study                               Project Profile   THE BUSINESS CHALLENGE:   • Inconsistency of the product qualit...
Case Study   Case Study                           Project Profile BUSINESS CHALLENGE: • Regular price increase requests fr...
Case Study                            Project Profile THE BUSINESS CHALLENGE • Critical technical and quality issues were ...
Case Study                                         Project Profile  THE BUSINESS CHALLENGE:  Supply failure led to:  • 30%...
Contents     –   Introduction to SupplyWeaver     –   Low cost supply chain performance improvement model     –   Example ...
How To Engage With Us •   We operate on the key principles of:      – Delivering the maximum net benefits to our clients  ...
How To Engage With Us Type of                   Main Activities/Ownership                        Cost Engagement Project B...
SupplyWeaverImprove Your Low Cost Supply Chain Performance     Contact Us :info@supplyweaver.com      Visit Us:www.SupplyW...
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Supplyweaver

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Improve your low cost supply chain performance

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  1. 1. SupplyWeaverImprove Your Low Cost Supply Chain Performance
  2. 2. Contents – Introduction to SupplyWeaver – Low cost supply chain performance improvement model – Example engagements and case studies – Engagement models
  3. 3. About Us• SupplyWeaver launched: May 2006 Americas• Supply Chain Consulting firm specialized in helping clients improve low cost supply chain performance with a strong focus on China• Global coverage with consultants and associates in Asia Pacific, Europe, and Americas, we have worked in 21 countries• In-depth industry experience and supply chain know-how Worldwide Resource &• Blue-chip client base including Future 500 Accessibility Companies & UN Agencies: such as: UNICEF, Tesco, Nokia, BAT, Primark etc. Europe Asia-Pacific
  4. 4. End-to-end Low Cost Supply Chain Capability Customer Supplier • Low Cost supply chain strategies Business • Capacity, Capability, and Compliance (3Cs) • Volume, Variety, and Volatility(3Vs) analysis driven analysis • Programme management of implementation • Process and strategy review • Network optimisation • Diagnostics and benchmarking of • Training and development performance & availability • Risk management • Parameters for accurate category allocation • Training and development { { End-to-End LCCS Strategy to align supply chain partners Strategy Process Relationship Continuous Opportunity Operation Development Alignment Management Improvement Analysis Planning • Existing internal • Category/product • Gap analysis • Objective • Integrated approach• Top down approach processes sourcing strategies • Business case and establishment involves both ends• Identify cost savings • Supplier’s processes • Improvement projects, plan • Guanxi guidelines • Improvement planning• Opportunity ranking • Established SOP lowest hanging fruits • Resource planning • Gap bridging and execution• Prioritise alternative (standard operation • Supplier selection / • Change management • Dispute settlement • Collaboration projects procedures) engagement • Business model • Relationship development• Map, target, plan • SOP implementation strategies • “What if” scenario maintenance • Supplier capability• Benefit projection • Training & • Risk analysis planning • Identify Win-wins improvement development
  5. 5. Contents – Introduction to SupplyWeaver – Low cost supply chain performance improvement model – Example engagements and case studies – Engagement models
  6. 6. What We Do:Improve Your Low Cost Supply Chain Performance Supply Chain IT Client Operation Assessment Diagnose Supply Failure Supply Base Recovery Assessment Low Cost Supply Chain Performance Improvement Model Supply Chain Risk Commercial Management Negotiations Supplier Supplier Performance On-Boarding Management
  7. 7. Client Operation Diagnose To tackle supply chain challenges, most companies are focusing on making changes at the supply end. This often gets them into a fire-fighting situation. Supply Chain Client Operation SupplyWeaver starts the assessment from customer end, diagnose the IT Assessment Diagnose healthiness of supply chain and bring in positive changes to customersSupply FailureRecovery Supply Base strategies and operation. Assessment Low Cost Supply Chain Performance Improvement Supply Chain Model THE ACTIONS INCLUDE CommercialRisk Management Negotiations Checks On Strategy: Do you have the right mix of low cost suppliers, at the Supplier right locations, with the right spend/category for each of them? How well are Performance Supplier Management On-Boarding your local and central procurement team and process structured? Are you buying too much or too little from low cost sources? Are you relying too much on agents (or unaware some suppliers are agents)? Etc. Checks on Operation: Do you have fit for purpose operation procedures for low cost supply chain? Do you analyze 3Vs (Volume, Variety, and Volatility) of your products? Are you giving too much or too little to your suppliers? How clear are your instructions and specifications? How do you manage the risks and do you have a plan B? Etc. Problem Analysis: For specific problems, we analyze the root causes, present solutions and provide suggestions on how to avoid similar issues in the future
  8. 8. Supply Base Assessment Traditional supplier assessments focus on "Can they make it at right price" is becoming inadequate in todays SCM. Promised capacity has disappeared, goods arrived late, disruptions on supply are happening daily Supply Chain Client Operation IT Assessment Diagnose SupplyWeavers evaluation focuses on "Can they manage it?" We alsoSupply FailureRecovery Supply Base measure commercial arrangements and strategies between two companies to Low Cost Supply Assessment avoid potential issues. Chain Performance Improvement Model Supply Chain CommercialRisk Management Negotiations THE ACTIONS INCLUDE Supplier Capability Evaluation: Analyze suppliers ability on material and production Performance Supplier Management On-Boarding planning, inventory management, change management, shop-floor control, supply chain IT utilization, quality control, handling of bottlenecks, etc. Capacity Analysis: Suppliers ability to handle 3Vs (Volume, Variety, and Volatility), the existing capacity utilization, and the potentials for further development. Compliance Assessment: Focus on ethical issues, conformance with customers specific requirements and local rules. Strategy Review: Measure strategic match between two companies, analyze risks, assess suppliers commercial interests, development plan and growth potential.
  9. 9. Commercial Negotiations In low cost countries, prices and deals are often negotiable. The first quotation is just a starting point in most cases. In addition, customers are facing regular price increase requests from suppliers because of the rising costs of raw Supply Chain materials, currency exchange and VAT rebate rate changes, inflation, etc. Client Operation IT Assessment Diagnose Many buyers find it is hard to negotiate back with suppliers and have to acceptSupply Failure price hikes.Recovery Supply Base Assessment Low Cost Supply Chain Performance Improvement Model SupplyWeaver will advise you on commercial negotiations with low cost Supply Chain Commercial Negotiations suppliers and help you to understand the cost increase factors mentionedRisk Management above. Supplier Performance Supplier Management On-Boarding THE ACTIONS INCLUDE Develop Negotiation Tactics: Advice on what should be negotiated, to what extend can you negotiate and how to get the best possible results. Cost Analysis: Analyze the quoted price increase elements, reveal the real impact on cost, and establish how to minimize the increases. Price Mechanism Development: Establish price mechanisms with suppliers acceptance to help you manage price movements. RFQ & Quotation Management: Manage the whole process, evaluate bids, and assist decision making.
  10. 10. Supplier On-Boarding By definition your supplier is not fully aligned to your supply chain. Fixing a problem after it occurs is exponentially more costly. From sample producing process to first order delivery, activities need vigilant management and Supply Chain IT Assessment Client Operation Diagnose established guidelines to ensure the new suppliers can become long term partners.Supply FailureRecovery Supply Base Assessment Low Cost Supply Chain Performance Improvement SupplyWeaver will hand hold your suppliers through the first few order Model Supply Chain Commercial Negotiations cycles to ensure a smooth on-boarding process.Risk Management Supplier Performance Management Supplier On-Boarding THE ACTIONS INCLUDE Order Rationalization: Feed your supplier based on our judgment of their capacity and capability. Carefully consider 3Vs (volume, variety and volatility), often variety and volatility will cause problems Develop SOP (standard operational procedures) with suppliers, give suppliers clear instructions on what to do under each scenario and how to manage changes. Visibility Improvement: Work with suppliers intensively during the initial cycles and give you visibility of what is happening on the shop floor Training: Provide training at both ends to eliminate gaps, match the requirements and enable a mutual understanding.
  11. 11. Supplier Performance Management Supplier performance management is a key process to establish a reliable supply network. It involves embracing supplier expertise and aligning it to the buying organizations business need, and, where appropriate, vice versa. Supply Chain Client Operation IT Assessment Diagnose SupplyWeaver will design performance improve program for each supplierSupply FailureRecovery Supply Base and involve client at each and very step. Assessment Low Cost Supply Chain Performance Improvement Supply Chain Model THE ACTIONS INCLUDE CommercialRisk Management Negotiations Establish Measurement: Tailored performance measurement program for Supplier suppliers to stimulate continuous improvement, two-way feedback system Performance Supplier Management On-Boarding leads to actionable plans. Change Management: Set improvement targets, train suppliers on advanced SCM techniques, and work with suppliers to implement changes. Introduce incentive schemes. Cost Reduction: Work with you and suppliers to identify opportunities, such as, collaborative forecasting, better utilization of resources, value engineering, VMI, packaging optimization, and sharing supply chain information, etc. Business Alignment: Improve mutual understanding and create desire to achieve the objectives for joint benefits.
  12. 12. Supply Chain Risk Management While the benefits of Low Cost Supply Chain are apparent, companies are able to reduce the cost of goods, and free-up resources to focus on core value- adding activities. However, these benefits are often accompanied by greater Supply Chain supply chain complexity and exposure to new risks. Client Operation IT Assessment DiagnoseSupply FailureRecovery Supply Base SupplyWeaver has developed an integrated set of diagnostic tools and related Low Cost Supply Assessment services that help clients identify, prioritize and address supply chain risk. Chain Performance Improvement Model Supply Chain CommercialRisk Management Negotiations THE ACTIONS INCLUDE Supplier Risk Assessment: Analyze and provide a list of risk elements of your supply Performance Supplier Management On-Boarding chain, evaluate their potential impact. Using established and tested risk quantification tools to assess the likelihood of their occurrence. Risk Management: Design an appropriate risk-control framework which covers effective risk management, internal/external environment, business objectives, event identification, risk assessment, risk response, control activities, communications and monitoring procedures. Risk Mitigation: Ensuring the proper implementation and continued application of an effective risk-control framework – procedures, training, monitoring and reporting.
  13. 13. Supply Failure Recovery When things went wrong with low cost supply chains, it can lead to catastrophic consequences: stock-outs with soaring air freight bills, complains from customers on quality, damaged corporation image from supply chain Supply Chain ethical compliance failure..... Client Operation IT Assessment DiagnoseSupply FailureRecovery Supply Base SupplyWeaver has helped companies to overcome the supply chain melt Low Cost Supply Assessment down, and recovered the broken supply chains. Chain Performance Improvement Model Supply Chain CommercialRisk Management Negotiations THE ACTIONS INCLUDE Supplier Full Analysis: Detailed problem root cause analysis with the involvement of Performance Supplier Management On-Boarding both ends, address the key issues, and establish recovery strategy. Recovery Plan: Prioritize the issues, re-assign excess work based on the supplier capability and capacity, and implement changes. Emergency Processes: Set up processes to deal with the most imminent business requirements. Get the situation stabilized before further improvement. Supply Base Rationization: Re-assess the supply base structure, add or reduce suppliers according to the operation needs, and form a right mix of suppliers for a healthy supply chain.
  14. 14. Supply Chain IT Assessment Supply chains often work best in conjunction with IT systems. The key to adopt an IT system for low cost supply chain is to increase the visibility of the networks and improve efficiency. Given the use of IT systems involves a Supply Chain multitude of business activities from suppliers to customers, things can go Client Operation IT Assessment Diagnose wrong.Supply FailureRecovery Supply Base Low Cost Supply Assessment SupplyWeaver has worked with both software vendors and industry users, Chain Performance Improvement Model and gained substantial knowledge of how to best utilize IT tools to improve Supply Chain Commercial Negotiations supply chain performance.Risk Management Supplier Performance Management Supplier On-Boarding THE ACTIONS INCLUDE Vendor Profile Analysis: We help you to target shortlisted software vendors for your specific business needs, and provide detailed information on each of them for comparison. Software Assessment: Fully address the Pros and Cons of each software, and guide you through the whole selection process. Implementation Assistance: Help you to find right partner for software implementation, and provide advices on the change of business processes. Supplier Training: We can train your supplier in low cost countries on the software for the acceptance and better utilization.
  15. 15. Contents – Introduction to SupplyWeaver – Low cost supply chain performance improvement model – Example engagements and case studies – Engagement models
  16. 16. Case Study Project Profile THE BUSINESS CHALLENGE: • Inconsistency of the product quality • Unstable prices • Unreliable delivery performance • High risk of supply instability • Supplier compliance failure • Inefficient logistics network SUPPLYWEAVER RESPONSE: • Process diagnose and supply base assessment • Low cost procurement training • Supplier development and management • Supply network optimization PERFORMANCE IMPROVED: • Effective supplier selection process • Reduced reliance on agents • Outsourcing non-core activities • Establishment of supplier KPIs • Unqualified suppliers were removed • Price mechanism introduction • Optimised routes led to cost saving of $4m/annual
  17. 17. Case Study Case Study Project Profile BUSINESS CHALLENGE: • Regular price increase requests from suppliers because of the rising costs of raw materials (especially on cotton) • Limited control on down stream suppliers, supply reliability is unstable during the peak seasons • Inefficient cost ownerships SUPPLYWEAVER RESPONSE: • Supplier collaboration development • Raw material inventory ownership optimisation • Supply chain IT deployment RESULTS: • Enabled Tesco to work directly with fabric/yarn suppliers • Generated 4-6% savings on annual spends • Significantly supply reliability • More responsive supply chain( average 7 days leadtime reduction)
  18. 18. Case Study Project Profile THE BUSINESS CHALLENGE • Critical technical and quality issues were not well understood by supplier • Supplier’s capacity was not sufficient to cope with volume from the client • A lack of reliable quality control system led to number of quality issues • Suppliers had limited planning ability and were unawareness of the priority SUPPLYWEAVER RESPONSE: • Cause and effect analysis • Supplier capability and capacity development • Hand-hold supplier through initial production runs PERFORMANCE IMPROVED: • Significant improvement on production efficiency and capacity • Supplier was able to catch up schedule within 2 months • The quality reject rate dropped from 20% to 5% • Improved supply chain visibility
  19. 19. Case Study Project Profile THE BUSINESS CHALLENGE: Supply failure led to: • 30% stock-out rate • 44% supplier on time delivery • Huge air freight bills • Broken relationships • Suppliers were in aaverage 72 days behind schedule SUPPLYWEAVER RESPONSE: • Problem analysis and prioritization • Client order & scheduling system adjustment • Supplier and category rationalization • SOP Implementation and re-sourcing RESULTS: • Stock-out was reduced to less than 5% • OTIF improved to 83% • Saving on air bills was over $1M • Solid relationships with suppliers • Replaced 2 suppliers with 3 new competent partners
  20. 20. Contents – Introduction to SupplyWeaver – Low cost supply chain performance improvement model – Example engagements and case studies – Engagement models
  21. 21. How To Engage With Us • We operate on the key principles of: – Delivering the maximum net benefits to our clients – Working openly and transparently – Linking our rewards directly to our performance • We have complete flexibility in our commercial approach, and can offer a range of different options: – Consultancy fee – Percentage of Saving – Annual Service Contact – Mark-up on price of goods • In each case we would propose a performance bonus scheme directly related to our performance across a range of metrics • We can also offer a combination approach or other innovative commercial options
  22. 22. How To Engage With Us Type of Main Activities/Ownership Cost Engagement Project Based Modulised service, to be defined and agreed in Standard day rates Consultant Fee each project with the client in proposals Based on the amount Annual Contract 1. Supplier management category/spend to be (acting as your 2. Quality assurance + managed and supply local sourcing 3. Project management base complexity office) 1.Transaction Management Mark-up on price of Outsourced goods 2. Own all product quality, + Procurement delivery, and associated risks We can also offer a combination approach or other innovative commercial options
  23. 23. SupplyWeaverImprove Your Low Cost Supply Chain Performance Contact Us :info@supplyweaver.com Visit Us:www.SupplyWeaver.com
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