Assurance in uncertainty -logistics insight asia september 2012
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For purchasers and suppliers who increasingly share vital information and resources, their relationship has evolved from mere transactions into a working business relationship.
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Count the ways distribution centers add value 2nd--supply chain digital septe...
N RESPONSE TO THE “NEW Normal”, the business
landscape has changed fundamentally; tomorrow’s
distribution environment will be different, but no less
rich in possibilities for those who are looking for ways
to add value. With new trends and an “e-volution” in
moving and storing materials comes the inevitable need
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One of your major functions is to negotiate the best terms and price for the materials and services your organization needs to operate. This complex task requires knowledge, tact, superior communication skills, and a solid game
plan!
But few people understand that 90% of all negotiations
take place before the involved parties even get to the bargaining table. Collaboration is “in” and compromise is “out” for successful negotiators.
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Count the ways distribution centers add value 2nd--supply chain digital septe...
N RESPONSE TO THE “NEW Normal”, the business
landscape has changed fundamentally; tomorrow’s
distribution environment will be different, but no less
rich in possibilities for those who are looking for ways
to add value. With new trends and an “e-volution” in
moving and storing materials comes the inevitable need
to reconceive how we operate our distribution centers
to stay competitive. Outdated philosophies not based
on the “New Normal” may prevent us from recognizing
and integrating some of the new ways the distribution
facility or DC can add real value to our operations.
The State of 3PL Industry
A report on 3PL Industry analysis based on 3PL Survey 2008 and connecting to current trends.
Innovation in the Supply Chain (Distribution)
Best practice points for all stakeholders in the pharmaceutical sector.
Applying the powers of observation to supplier visits -mmg news letter octobe...
Guidance on how to conduct an on-site supplier visit.
The Artful Application of Collaborative Negotiations with Providers
Fortune favors the prepared mind—”luck” in negotiations is actually the result of hard work and good planning. This presentation is for those who seek some collaborative negotiation skills that can be applied for success.
One of your major functions is to negotiate the best terms and price for the materials and services your organization needs to operate. This complex task requires knowledge, tact, superior communication skills, and a solid game
plan!
But few people understand that 90% of all negotiations
take place before the involved parties even get to the bargaining table. Collaboration is “in” and compromise is “out” for successful negotiators.
Learn how to make collaboration one of your best negotiating assets and reduce your anxiety as you assume a negotiation comfort level.
Help employees meet great expectations -mh&l august 2012
Warehouse workers don’t do the same task the same way each and every time. Observing what really happens on the floor is key to developing good performance standards. Every warehouse manager has likely heard “What
gets measured gets done.” Measuring and
monitoring operations are key to managing an
efficient, productive facility. Therefore, developing and
implementing an employee performance expectations
program shouldn't be taken lightly.
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landscape has changed fundamentally; tomorrow’s
distribution environment will be different, but no less
rich in possibilities for those who are looking for ways
to add value. With new trends and an “e-volution” in
moving and storing materials comes the inevitable need
to reconceive how we operate our distribution centers
to stay competitive. Outdated philosophies not based
on the “New Normal” may prevent us from recognizing
and integrating some of the new ways the distribution
facility or DC can add real value to our operations.
A shift in sourcing strategies by mary seigfried -inside supply management ma...
Low-cost-country sourcing became popular decades
ago, but many supply managers found it to be a shortterm
strategy, says Thomas L. Tanel, C.P.M., president
and CEO of CATTAN Services Group, Inc. in College
Station, Texas. Now supply management professionals
are turning to best sourcing, which Tanel says also is
referred to as best-country sourcing or value-country
sourcing.
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The 3PL contract cycle can be managed just like any other outsourced services procurement, and has four distinct
segments that we will call the four S: Source, Solicit, Select, and Secure. Proper execution of each segment is essential to developing and maintaining successful 3PL relationships.
Three Steps for Reducing Total Cost of Ownership in Pumping Systems
Electricity usage costs have become an increasing fraction of the total cost of ownership (TCO) for industrial pumping systems. In fact, energy cost represents 40% of the TCO of a typical pump. It is possible to reduce the electrical consumption by at least 30% through appropriate energy management practices while reducing the maintenance cost. This paper explains how to reduce TCO with a limited investment.
The Art of Planning and Writing Specifications and Requirements
One of the most difficult tasks that purchasers face is converting user or internal customer needs to new specifications and requirements. For most, it’s easier said than done, while others simply dread the thought of constructing a Statement of Work. Failure to develop a properly defined scope of work, specification, or requirement may mean the solicitation will need to be abandoned and repeated with corrections. Purchasers who are involved in putting together specifications, requirements, or SOWs need to be aware that it is worth the investment, time, and effort to create a high quality outcome. Thus, it is important that purchasers understand the importance of good specifications and requirements, as well as their contractual and practical significance.
This presentation will offer you practical techniques, tools, and process methods for constructing effective specifications, requirements, and SOWs.
Key areas of focus that will be discussed in this workshop are:
Internal customer or user needs
The importance of a scope of work
SOWs and work requirements
The Statement of Work
Writing specifications and requirements
The Art of Planning and Writing Specs and Requirements--ISM 2010 Tanel
One of the most difficult tasks that purchasers face is converting user or internal
customer needs to new specifications and requirements. For most, it’s easier said than done,
while others simply dread the thought of constructing a Statement of Work. Failure to develop
a properly defined scope of work, specification, or requirement may mean the solicitation will
need to be abandoned and repeated with corrections. Purchasers who are involved in putting
together specifications, requirements, or SOWs need to be aware that it is worth the
investment, time, and effort to create a high quality outcome. Thus, it is important that
purchasers understand the importance of good specifications and requirements, as well as
their contractual and practical significance. This proceeding will offer you practical techniques,
tools, and process methods for constructing effective specifications, requirements, and SOWs.
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This executive briefing will help purchasing and supply professionals better understand their transportation and 3rd party logistics needs and develop sourcing strategies to fulfill those needs. Part II of two parts.
The session will focus on three topics. First, the terminology and economic basics of transportation and 3rd party logistics will be discussed. Next, alternate transportation/3rd party logistics strategies will be discussed. This topic will include a discussion of the advantages and disadvantages of private and for-hire alternatives. The final topic will identify and discuss alternative sourcing strategies when using for-hire transportation and 3rd party logistics services.
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Topics that will be addressed include spend analysis, categorizing the best opportunities for sourcing group profiles, Porter’s Five Force Model and Sourcing Grids, establishing sourcing group portfolios and supplier portfolios, using the proper RFX format for sourcing, and making strategic sourcing the focal point for supplier negotiations. Participants will view “good practice” examples of the above.
If you find yourself “walking the tightrope” with a strategic sourcing initiative or an ongoing effort, you’ll get valuable information in developing your sourcing strategy. With our five phase approach, we will discuss the following “how to”:
1. Develop sourcing strategies differentiated by expenditure category and based on market dynamics.
2. Deeply involve end-users in sourcing for knowledge and buy-in.
3. Apply a rigorous sourcing approach that examines internal needs against supply market options to find the lowest total cost.
4. Challenge specifications and usage patterns to ensure that each expenditure is providing the best value for the company.
5. Identify, analyze, select, and negotiate with strategically advantaged suppliers, not just the ones with the lowest price today.
This presentation will conclude with a presentation review that can refine your understanding of the factors, tools, and guidelines you need to make your sourcing process more effective and more profitable for your organization.
CSCMP 2014: Dr. Robert C. Lieb 2014 3PL Provider CEO Perspective
Dr. Bob Lieb, professor of supply chain management at Northeastern University, is author of the 21st Annual Survey of Third-Party Logistics Provider CEOs, sponsored by Penske Logistics The studies revealed that 3PL CEOs are confident about the current state and future revenue growth of their companies and the regional 3PL industries. The annual surveys, which this year included the CEOs of 27 of the world's largest 3PLs, found that approximately 75 percent of the companies involved in the surveys were profitable in 2013. North American and Asian-Pacific CEOs forecasted three-year company growth of 10.77 percent and 16.2 percent, respectively. European CEOs forecasted 8.33 percent growth over the same period.
Preventing and Managing Supply Chain Disruptions
Supply chains worldwide have been battling various risks and challenges for some time. Each challenge not only threatens to disrupt operations, but also may have a negative financial impact on business performance and prevent an organization from meeting the demands from stakeholders, customers, shareholders, and regulators.
Supply Chain Council members have reported that less than half of enterprises have established metrics and procedures for assessing and managing supply risks and organizations lack sufficient market intelligence, process, and information systems to effectively predict and mitigate supply chain risks. Does this sound like your organization?
f so, supply chain disruptions can be extremely costly. A disruption in your supply chain can cost millions of dollars in lost time, energy and resources. Their effects are both direct (e.g. halting production altogether) and indirect (e.g. on stock values). Taking steps to help reduce supply chain disruption is the only way to avoid these costs.
Proactive discovery and visibility of risks is the key to the prevention and management of supply chain disruptions.
Top 10 Logistics Risks in the Spirit of David Letterman
The simple fact is that in today’s longer, more global supply chains, product moves over greater distances and across more multinational borders than in the more localized supply chains of the past. The coordination and execution required for international shipments has always been a challenge. But now we find that market conditions, security considerations, transportation versus inventory costs of ownership, increasing regulatory and political pressures, and even natural events (such as storms and earthquakes) with increasing frequency and havoc are converging in such a way that it makes the task even more daunting.
Proactive discovery and visibility of logistics risks is the key to the prevention and management of supply chain disruptions. And a key ingredient in managing supply chain disruptions is risk identification; so attend this valuable presentation to find out what the Top 10 Logistics Risks are (in the spirit of David Letterman) that you will be facing in the coming years. Donald Rumsfeld, former US Secretary of Defense quipped in 2002, “Reports that say that something hasn’t happened are always interesting to me, because, as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns-—-the ones we don’t know we don’t know.”
General Gus Pagonis, in charge of logistics during the First Gulf War in 1991 describes it best in his own words, “Logisticians deal with unknowns. They attempt to eliminate unknowns, one by one, until they are confident that they have done away with the possibility of paralyzing surprises.” Are you equipped to succeed in a supply chain world of increasing difficulty and insecurity and multiple interconnected supply chains? Do you have the correct response to a supply disruption in the supply chain and the attendant Top 10 Logistics Risks?
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As noted by Charles Darwin, “It is not the strongest of the species that survives, or the most intelligent that survives. It is the one that is the most adaptable to change.”
Risk management is about having a systematic way of dealing with thin
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When you understand the personal, national, or organizational culture of your negotiation counterpart, then you can seek to align with them and hence gain greater influence. In this presentation, we attempt to bring these patterns of awareness to your attention:
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The genesis of value analysis and value engineering can be traced to similar, parallel developments in the late 1940’s taking place at General Electric Company and Ford Motor Company. As a concept definition: it is the organized and systematic effort and study directed at analyzing the functional requirements of the system, product, equipment, facility, service or project for the purpose of achieving the lowest overall total cost at the best value. This means consistent with the needed performance, reliability, quality, and maintainability.
Join the trend of many purchasing, sourcing, contracting, and supply management organizations who are reaping the rewards of Value Analysis (VA) and Value Engineering (VE) as a practical tool to improve performance and reduce the cost of goods and services. Their experience with cost reduction projects reveals that by merely determining what things cost and documenting cost breakdowns, one can reduce costs 5%. Improving the choice of material, conceptual design, and methods can further reduce cost by another 10%. Finally, developing a better way to perform what a project or a service was originally intended to do, one can save even more—20-30% and beyond!
Not convinced of the critical importance of value analysis/value engineering VA/VE--- then you must not be interested in product enhancement, service concept augmentation, cost reduction, and profit improvement. Those kinds of payoffs don’t come easily, however. Success depends on three things: understanding of the concept by those who will be involved, strong top management support, and enthusiastic team or project oriented direction to get and keep the program rolling.
No wonder that Purchasing magazine for years dedicated an annual issue to its “Value Analysis of the Year” Awards. Why? According to experts, VA/VE can make a difference: simple projects can take anywhere from one day to six weeks to implement with savings up to $2,000; intermediate projects can range from six weeks to six months with savings of $2,000 to $10,000; and complex projects can take six months to six years with savings ranging from $10,000 to $1 million.
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used by the purchaser, despite its simplicity. It is a simple “grid” tool that charts the amount we spend on products or services and the complexity of its acquisition.
Portfolio analysis helps us define our sourcing strategy and the best sourcing techniques to use dependent upon the position on the sourcing grid. It also defines the relationships (supplier positioning) we need to have with our key suppliers and gives us an insight in how the key suppliers may see us in perception model. It allows you to organize your time and
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Many managers see supply chain performance reporting and metrics as a huge time drain that results in a series of uncomfortable conversations and confrontations they would rather not endure. You cannot manage what you cannot measure, and your supply chain is one of the most important functions to manage. The good news is that you’re Logistics and Supply Chain Management people
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more of a challenge than in the past.
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Are you making the most of your (shrinking) space? Tanel says that most companies do consider adding space. “However,” he says, “it is sometimes necessary to review the presently occupied facilities to determine if one can increase productivity by changing the physical and spatial relationships between operations,” he explains. According to Thomas Tanel, president of CATTAN Services, before you can consider making any changes in your current mode of operation, you have to thoroughly understand how your warehouse runs.
Recriminations the need to reevaluate manufacturing offshoring and outsourcin...
It is increasingly popular now for companies to reevaluate offshoring and the outsourcing of manufacturing and other services. Now we hear about onshoring, near shoring and right shoring. Are you dazed and confused? Who’s right and who’s wrong? More importantly, organizations need to do the necessary due diligence as part of their sourcing decision. It has been my contention that in addition to the basic item’s purchase price; we need to seriously
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The 3PL contract cycle can be managed just like any other outsourced services
procurement, and has four distinct segments that we will call the four S: Source,
Solicit, Select, and Secure. Proper execution of each segment is essential to developing and maintaining successful 3PL relationships.
Out with the old, in with the new intra-logistics--mmg news letter 2013
I would like to introduce the concept of Intra-logistics as the new mantra for Materials Management. Intra-logistics is a recent European term that describes the internal flow of materials between different logistics nodes within a company. Conceptually, Intra-logistics includes the set of logistical activities necessary to find, purchase, receive, store, process, issue, and deliver materials.
Count the ways distribution centers add value 1st--supply chain digital augus...
IN RESPONSE TO THE “NEW Normal”, the business
landscape has changed fundamentally; tomorrow’s
distribution environment will be different, but no less
rich in possibilities for those who are looking for ways
to add value. With new trends and an “e-volution” in
moving and storing materials comes the inevitable need
to reconceive how we operate our distribution centers
to stay competitive. Outdated philosophies not based
on the “New Normal” may prevent us from recognizing
and integrating some of the new ways the distribution
facility or DC can add real value to our operations.
A shift in sourcing strategies by mary seigfried -inside supply management ma...
Low-cost-country sourcing became popular decades
ago, but many supply managers found it to be a shortterm
strategy, says Thomas L. Tanel, C.P.M., president
and CEO of CATTAN Services Group, Inc. in College
Station, Texas. Now supply management professionals
are turning to best sourcing, which Tanel says also is
referred to as best-country sourcing or value-country
sourcing.
The 4 S's: For-hire Logistics and Transportation Services
The 3PL contract cycle can be managed just like any other outsourced services procurement, and has four distinct
segments that we will call the four S: Source, Solicit, Select, and Secure. Proper execution of each segment is essential to developing and maintaining successful 3PL relationships.
Three Steps for Reducing Total Cost of Ownership in Pumping Systems
Electricity usage costs have become an increasing fraction of the total cost of ownership (TCO) for industrial pumping systems. In fact, energy cost represents 40% of the TCO of a typical pump. It is possible to reduce the electrical consumption by at least 30% through appropriate energy management practices while reducing the maintenance cost. This paper explains how to reduce TCO with a limited investment.
The Art of Planning and Writing Specifications and Requirements
One of the most difficult tasks that purchasers face is converting user or internal customer needs to new specifications and requirements. For most, it’s easier said than done, while others simply dread the thought of constructing a Statement of Work. Failure to develop a properly defined scope of work, specification, or requirement may mean the solicitation will need to be abandoned and repeated with corrections. Purchasers who are involved in putting together specifications, requirements, or SOWs need to be aware that it is worth the investment, time, and effort to create a high quality outcome. Thus, it is important that purchasers understand the importance of good specifications and requirements, as well as their contractual and practical significance.
This presentation will offer you practical techniques, tools, and process methods for constructing effective specifications, requirements, and SOWs.
Key areas of focus that will be discussed in this workshop are:
Internal customer or user needs
The importance of a scope of work
SOWs and work requirements
The Statement of Work
Writing specifications and requirements
The Art of Planning and Writing Specs and Requirements--ISM 2010 Tanel
One of the most difficult tasks that purchasers face is converting user or internal
customer needs to new specifications and requirements. For most, it’s easier said than done,
while others simply dread the thought of constructing a Statement of Work. Failure to develop
a properly defined scope of work, specification, or requirement may mean the solicitation will
need to be abandoned and repeated with corrections. Purchasers who are involved in putting
together specifications, requirements, or SOWs need to be aware that it is worth the
investment, time, and effort to create a high quality outcome. Thus, it is important that
purchasers understand the importance of good specifications and requirements, as well as
their contractual and practical significance. This proceeding will offer you practical techniques,
tools, and process methods for constructing effective specifications, requirements, and SOWs.
Buying Transportation and 3rd Party Logistics Services-Part II
This executive briefing will help purchasing and supply professionals better understand their transportation and 3rd party logistics needs and develop sourcing strategies to fulfill those needs. Part II of two parts.
The session will focus on three topics. First, the terminology and economic basics of transportation and 3rd party logistics will be discussed. Next, alternate transportation/3rd party logistics strategies will be discussed. This topic will include a discussion of the advantages and disadvantages of private and for-hire alternatives. The final topic will identify and discuss alternative sourcing strategies when using for-hire transportation and 3rd party logistics services.
CPFR - Model for Supply Chain Co-ordination
Collaborative Planning Forecast and Replenishment is a supply chain management practice for multi-tier co-ordination. This slides incoporate CPFR, Unified Communications, RFID, RTLS and Portal Collaboration technologies to execute advanced CPFR.
Strategic Sourcing: Walking the Tightrope in Developing Sourcing Strategy
This presentation will focus on developing the sourcing strategy as a fundamental and logical process involving the application of tools by skilled, competent, and knowledgeable purchasers. Simply put, our focus will be on the “how to” in developing a sourcing strategy. Are you experienced?
Topics that will be addressed include spend analysis, categorizing the best opportunities for sourcing group profiles, Porter’s Five Force Model and Sourcing Grids, establishing sourcing group portfolios and supplier portfolios, using the proper RFX format for sourcing, and making strategic sourcing the focal point for supplier negotiations. Participants will view “good practice” examples of the above.
If you find yourself “walking the tightrope” with a strategic sourcing initiative or an ongoing effort, you’ll get valuable information in developing your sourcing strategy. With our five phase approach, we will discuss the following “how to”:
1. Develop sourcing strategies differentiated by expenditure category and based on market dynamics.
2. Deeply involve end-users in sourcing for knowledge and buy-in.
3. Apply a rigorous sourcing approach that examines internal needs against supply market options to find the lowest total cost.
4. Challenge specifications and usage patterns to ensure that each expenditure is providing the best value for the company.
5. Identify, analyze, select, and negotiate with strategically advantaged suppliers, not just the ones with the lowest price today.
This presentation will conclude with a presentation review that can refine your understanding of the factors, tools, and guidelines you need to make your sourcing process more effective and more profitable for your organization.
CSCMP 2014: Dr. Robert C. Lieb 2014 3PL Provider CEO Perspective
Dr. Bob Lieb, professor of supply chain management at Northeastern University, is author of the 21st Annual Survey of Third-Party Logistics Provider CEOs, sponsored by Penske Logistics The studies revealed that 3PL CEOs are confident about the current state and future revenue growth of their companies and the regional 3PL industries. The annual surveys, which this year included the CEOs of 27 of the world's largest 3PLs, found that approximately 75 percent of the companies involved in the surveys were profitable in 2013. North American and Asian-Pacific CEOs forecasted three-year company growth of 10.77 percent and 16.2 percent, respectively. European CEOs forecasted 8.33 percent growth over the same period.
Preventing and Managing Supply Chain Disruptions
Supply chains worldwide have been battling various risks and challenges for some time. Each challenge not only threatens to disrupt operations, but also may have a negative financial impact on business performance and prevent an organization from meeting the demands from stakeholders, customers, shareholders, and regulators.
Supply Chain Council members have reported that less than half of enterprises have established metrics and procedures for assessing and managing supply risks and organizations lack sufficient market intelligence, process, and information systems to effectively predict and mitigate supply chain risks. Does this sound like your organization?
f so, supply chain disruptions can be extremely costly. A disruption in your supply chain can cost millions of dollars in lost time, energy and resources. Their effects are both direct (e.g. halting production altogether) and indirect (e.g. on stock values). Taking steps to help reduce supply chain disruption is the only way to avoid these costs.
Proactive discovery and visibility of risks is the key to the prevention and management of supply chain disruptions.
Top 10 Logistics Risks in the Spirit of David Letterman
The simple fact is that in today’s longer, more global supply chains, product moves over greater distances and across more multinational borders than in the more localized supply chains of the past. The coordination and execution required for international shipments has always been a challenge. But now we find that market conditions, security considerations, transportation versus inventory costs of ownership, increasing regulatory and political pressures, and even natural events (such as storms and earthquakes) with increasing frequency and havoc are converging in such a way that it makes the task even more daunting.
Proactive discovery and visibility of logistics risks is the key to the prevention and management of supply chain disruptions. And a key ingredient in managing supply chain disruptions is risk identification; so attend this valuable presentation to find out what the Top 10 Logistics Risks are (in the spirit of David Letterman) that you will be facing in the coming years. Donald Rumsfeld, former US Secretary of Defense quipped in 2002, “Reports that say that something hasn’t happened are always interesting to me, because, as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns-—-the ones we don’t know we don’t know.”
General Gus Pagonis, in charge of logistics during the First Gulf War in 1991 describes it best in his own words, “Logisticians deal with unknowns. They attempt to eliminate unknowns, one by one, until they are confident that they have done away with the possibility of paralyzing surprises.” Are you equipped to succeed in a supply chain world of increasing difficulty and insecurity and multiple interconnected supply chains? Do you have the correct response to a supply disruption in the supply chain and the attendant Top 10 Logistics Risks?
Why is logistics risk management in the supply chain so important now? You’ve spent years streamlining operations, reengineering processes, integrating with partners, implementing purchasing, contract management and supply chain systems, and moving production to low-cost, offshore locations. You’ve done all of this in order to get a global supply chain that really works. Finally, you can take a deserved rest, right? Unfortunately, the answer is no-—-you must learn to continuously adapt to a volatile, uncertain, complex, and ambiguous logistics environment!
As noted by Charles Darwin, “It is not the strongest of the species that survives, or the most intelligent that survives. It is the one that is the most adaptable to change.”
Risk management is about having a systematic way of dealing with thin
Tips on Negotiating better in Cross-Cultural Relationships
Nowadays, organizations of all sizes search for suppliers on a global level. International competition, foreign suppliers, and global sourcing may become a danger, but they may also create huge opportunities to develop your business. The increasingly global business environment requires purchasers to approach the negotiation process from the global business person’s point of view.
When you understand the personal, national, or organizational culture of your negotiation counterpart, then you can seek to align with them and hence gain greater influence. In this presentation, we attempt to bring these patterns of awareness to your attention:
Cross Cultural Communications and Negotiations
Hall’s Context, Chronomics, and Proxemics
Hofstede’s Five Key Elements of Culture
Paralanguage and Tips on Negotiation Better
So what?...you say. Given that cultural differences exist, the issue becomes how do they influence negotiations. Even though language molds thinking, other cultural classifications have a pervasive effect on how the world is perceived, how the self is experienced, and how life is organized.
Learning to communicate and negotiate business across cultural boundaries is paramount as today’s workplace rapidly changes because:
The business environment expands to include various geographic locations and span numerous cultures and,
The United States becomes more multi-culturally and ethnically diverse.
Purchasing & Value Analysis
This presentation is designed to give purchasing, materials, supply management, sourcing, contracting, logistics, acquisition and procurement personnel a process of value measurement to quantify the value of purchased goods or services. Learn how to use Value Analysis to target goods and services where cost can be reduced, performance improved, quality enhanced, non-essentials eliminated, downsized, or consolidated through a step-by-step process of value identification and measurement.
The genesis of value analysis and value engineering can be traced to similar, parallel developments in the late 1940’s taking place at General Electric Company and Ford Motor Company. As a concept definition: it is the organized and systematic effort and study directed at analyzing the functional requirements of the system, product, equipment, facility, service or project for the purpose of achieving the lowest overall total cost at the best value. This means consistent with the needed performance, reliability, quality, and maintainability.
Join the trend of many purchasing, sourcing, contracting, and supply management organizations who are reaping the rewards of Value Analysis (VA) and Value Engineering (VE) as a practical tool to improve performance and reduce the cost of goods and services. Their experience with cost reduction projects reveals that by merely determining what things cost and documenting cost breakdowns, one can reduce costs 5%. Improving the choice of material, conceptual design, and methods can further reduce cost by another 10%. Finally, developing a better way to perform what a project or a service was originally intended to do, one can save even more—20-30% and beyond!
Not convinced of the critical importance of value analysis/value engineering VA/VE--- then you must not be interested in product enhancement, service concept augmentation, cost reduction, and profit improvement. Those kinds of payoffs don’t come easily, however. Success depends on three things: understanding of the concept by those who will be involved, strong top management support, and enthusiastic team or project oriented direction to get and keep the program rolling.
No wonder that Purchasing magazine for years dedicated an annual issue to its “Value Analysis of the Year” Awards. Why? According to experts, VA/VE can make a difference: simple projects can take anywhere from one day to six weeks to implement with savings up to $2,000; intermediate projects can range from six weeks to six months with savings of $2,000 to $10,000; and complex projects can take six months to six years with savings ranging from $10,000 to $1 million.
Practically Applying Sourcing Grids for Risk Management
Purchasing and supply management have never been easy. The past several years have caused many executives and professionals to lose more sleep and gain more gray hair (or lose more hair) than usual; therefore, the next decade requires upgraded skill sets to survive.
Portfolio analysis is one of the most powerful techniques
used by the purchaser, despite its simplicity. It is a simple “grid” tool that charts the amount we spend on products or services and the complexity of its acquisition.
Portfolio analysis helps us define our sourcing strategy and the best sourcing techniques to use dependent upon the position on the sourcing grid. It also defines the relationships (supplier positioning) we need to have with our key suppliers and gives us an insight in how the key suppliers may see us in perception model. It allows you to organize your time and
resources for maximum benefit and it encourages strategic thinking and analysis to reduce cost, add value, and minimize risk.
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In the movie Heartbreak Ridge, Clint Eastwood as Gunny Highway says, “You're Marines now. You adapt. You overcome. You improvise.”
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Supply chain performance reporting and metrics -logistics digest 091112
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The concepts of Just-in-Time (JIT) and Lean have led many to question the continued relevance of Economic Order Quantity (EOQ), whose function is to identify the optimum order with the lowest cost parameter. In response, yes, it is still valid as a basic analytic tool, however, many supply chain industry executives perceive it as “old school” or don’t even know about it. My experience has shown that
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This is a highly concentrated presentation that addresses the differences among price, cost, and TCO; what cost reduction strategies to focus on; and an overview of various techniques, as well as when and where to use them. Faced with excruciating competitive pressures, many senior C-Level executives require maximum effort from every part of their organization to survive. Today, purchasing, acquisition, procurement, contracting, and supply management professionals must be the most progressive cost reduction oriented group in the company.
For many organizations, senior C-Level executives set forth annual purchasing, acquisition, procurement, contracting, and supply management goals that mandate cost reductions. Regardless of the cost savings, avoidances, or containments achieved previously, you are faced with new cost reduction initiatives and objectives.
To make the goal of cost reduction a reality, we cannot focus solely on the price. We must examine the total cost of ownership to your organization, which means moving beyond the organizational environs to include suppliers, internal customers, other allied business functional entities, and external customers. By working both internally and externally with these stakeholders, cost reduction opportunities will become visible.
A typical purchasing, acquisition, procurement, contracting, or supply management professional will help reduce supplier prices and avoid incremental costs. A good purchasing, acquisition, procurement, contracting, or supply management professional will reduce costs by lowering both costs of acquisition and risks of supply. A great purchasing, acquisition, procurement, contracting, or supply management professional will reduce total costs across the board, increase service levels to the internal customer, make a significant contribution to the bottom line, seek value-added opportunities, and help to delight the organization’s customer. This type of professional also balances supply related costs and cycle time for the lowest overall cost, at the best value, while seeking risk optimization rather than risk minimization strategies.
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In an international logistics and warehouse management system, cost-to-cost "trade-offs" available through systems analysis are easy to identify. One example is using premium transportation for small, time-phased purchased lots to reduce inventory investment and lower safety stock. Another might be using a distribution center for freight consolidation or Crossdocking to improve customer service levels and avoid material handling inefficiencies. Yet another might be the use of a blanket agreement (with a rolling forecast) with your supplier. By aligning supplier capacity to your customer schedules and your inventory goals, you gain pipeline visibility through automated order tracking and alerts in addition to lowering costs and raising customer service levels. The overall goal, to achieve a fully integrated logistics approach, is to realize maximum trade-offs among basic functional activities such as warehousing.
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Businesses today must understand that they are competing on the basis of time more than on any other factor. The rigors of international logistics require that you take action to meet your customers’ demand for faster, more frequent, and more reliable deliveries. Your suppliers need to meet increasingly precise inbound schedules. Tomorrow’s customers are more likely to be in another country or continent than they are likely to be from across town, in another state, or in another province. In addition, diverse countries use different formats for weights and other units of measures, as well as many countries and localities have different licensing requirements and charge different duties, value-added taxes (VAT), and fees, which altogether amount to a major content-management challenge for your Global Trade and Logistics IT systems.
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This presentation is designed to take an overview of global supply chain logistics, both in terms of today's supply chain and in the demand flow management process, so you can know how to make the most of this powerful tool. You've probably heard something about these topics. You may even be vaguely familiar with them. But how much do you really know about their strategic importance and the specific benefits you can gain from having a solid understanding of them?
Here's the best way to investigate global supply chain logistics and the impact it can have on your organization. You will have the opportunity to explore a variety of logistics areas , extrapolate their meanings in ways that are appropriate for strategic planning, and apply the techniques needed to make it all work for your organization.
Your business needs and technology are in a constant state of rapid-fire change, but you can count on one thing remaining constant: the need to align logistics strategically with your market needs in order to gain a competitive advantage. This alignment requires building a supply and demand system that truly helps you respond to worldwide changes in sourcing and ever-shifting customer demand. What is the potential effect that global trade management will have on your supply chain? How do you convert digital value inputs into logistics value-added outputs? How can you harness the power of global supply chain logistics as a significant force in the execution of your corporate strategy? How can you gain the information you need to translate abstractions into concrete benefits through supply chain management and continuous flow distribution?
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Companies that make the best use of the basic principles of planning and managing warehouse operations and inventory management have a competitive advantage. Organizations that lack warehouse strategic planning and inventory operational excellence lose profits, market share, cost advantages, and market leadership.
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price and product quality), as well as assessing competitive and market conditions
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[Note: This is a partial preview. To download this presentation, visit:
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Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
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LEARNING OBJECTIVES
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