Supply chain restructuring and strategy development

1. INTERIM eXECUTIVE
Case Study – Supply Chain Restructuring and Strategy Development
Client Canadian Aerospace Manufacturer
Situation
The client was experiencing a downturn in growth and rising supply chain costs. The
company’s supply chain processes had deteriorated as a result of new product lines,
changes in service expectations from customers, and mergers and acquisitions.
Solution
Conduct an assessment of supply chain processes to identify key business
imperatives. Develop supply chain and sourcing strategy to support company’s
downturn in existing business and entry into new military markets.
Tasks
Define current condition, develop strategic plan, gain approval and implement
• Assess international supplier base to determine viable cost reduction
alternatives.
• Develop sourcing strategy to consolidate international suppliers to reduce landed
cost and improve overall supplier reliability.
• Develop/strengthen sourcing and supplier quality organization and processes to
assess and evaluate new and existing supplier capabilities and capacities, and
perform required audits.
• Develop processes and tools to facilitate the selection process of new global
suppliers and determine landed cost considering purchase cost, logistics, and
regulatory requirements including; import controls, licenses and
permits/certificates, absolute and tariff rate quotas, and anti-dumping and
countervailing duties, import duties, taxes, etc.
• Identify and qualify new international suppliers to leverage spend and reduce
total landed cost.
• Negotiate contracts/long term agreements with selected global suppliers based
on outcome of supplier assessments and landed cost analysis.
• Revise inventory and purchase order management policies to improve corporate
compliance.
• Implement “best practice” supply chain processes and workflows.
• Assess viability of implementing vendor managed inventory (VMI) programs to
reduce inventory investment and working capital.
Results
Executive Management approval to implement recommended strategy
• Restructured and stabilized supply chain strategy and operations to achieve
reductions of 18% in inventory and 15% in operating cost through improved core
processes, focused performance metrics and Vendor Managed Inventory (VMI)
programs.
• Renegotiated supplier agreements during economic downturn and financial crisis
to achieve a $20M reduction in financial exposure, improve payment terms and
cash flow, and stabilize supplier relationships.
• Identified 15% supplier resourcing savings opportunities out of total addressable
spend. Sourcing decisions included trade implications (tax/duty, transfer pricing)
and options to assess feasibility of Foreign Trade Zone or Bonded Warehouse
Structures.
• Developed and implemented international sourcing strategy program to support
international military programs including all governmental regulatory
requirements, Namely, DOD, FAR/DFAR, ITAR, compliance