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* Footnote Source: Sources Working Draft - Last Modified 5/7/2006 7:59:25 PM Printed 3/8/2006 9:30:59 AM Copy Exactly from Best-in-class Supply Chain Practices Maximizing your bottom line saving during current global economy meltdown Jerry Nye Jun 13, 2009

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Copy Exactly from Best-in-class Supply Chain PracticesMaximizing your bottom line saving during current global economy meltdown

Jerry NyeJun 13, 2009

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My Goal - Faster, Better, and Together

1. Achieved 3 point market competitive advantage

2. Achieved 2% incremental saving quarter-on-quarter

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Today Manufacturing Environment – Outsourcing or move to low cost region

Mfg Jobs moved to low cost region

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How - Faster, Better, and Together

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Provided Fact Based Solution For Decision Making

My Knowledge and experience

Bilingual Negotiator

Analyze data find out so-What

Fact based analysis

Teardown analysis

Competitive Research & analysis

Market intelligence

Global Experience

Provided Fact Based solution

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My Core Competency

Supply Chain Execution

Cost ModelingMarket IntelligenceStrategic Sourcing Teardown Analysis

Outsourcing Fact-Based Negotiation

Global Sourcing System implementation

Design to Mfg Warehousing Management

Supply Chain Planning and Optimization

Inventory AnalysisDemand and Supply PlanningPlanning and SchedulingDemand Forecasting

Sales & Operations PlanningSupply Chain Network Analysis

Management Consulting + Change Initiation + Change Acceleration

Business Process Analysis + Reengineering

Packaged Systems Integration + Copy Exact Deployment

Supply Chain Change Initiation

Copy Exact Programs Program Initiation

I-Negotiations e-Auctions

Suppliers SelectionBusiness Process Re-

engineering

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The Entrepreneurial Mindset in a current of Uncertainty

• Passionately seek new opportunities

• Pursue opportunities with enormous discipline.

• Pursue only the very best opportunities

• Focus on execution, specifically fast adaptive execution

• Engage the energies of everyone in my domain

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What is Best In Class?

Real Time & On Demand

Growth & Profitability

Cost & Service

Supply Chain Value

Best in Class Supply Chains Excel at the

Supply Chain “Compulsories” AND

Enable Their Company to Grow

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Best-in-class supply chain leadership measured by..

• Apple • Dell • Procter & Gamble • IBM • Cisco • Nokia • Wal-Mart • Samsung • PepsiCo • Toyota

Supply chain performance •Inventory turns 25%•Return on assets 25%•Trailing 12-months growth 10%

The opinion poll •AMR Opinion 20% •Peer Opinion 20%

AMR CriteriaAMR Criteria

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Drive to best-in-class by

Liquidity

Profitability

Growth

1. Optimizing the physical structure

2. Integrating the information and financial flows creating end-to-end value

3. Enhancing cash, cost and customer satisfaction positions

4. Focus on the excellent execution

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1. Optimizing the physical structure 

Distribution Centers &

SubsidiariesIn-transit

Plant WIP

PlantRaw

EMS/ODM

InventoryHubbing

Supplier-owned

Inventory“Hubbing”

In-transit

SupplierInventorySpecific

ForYour

company

SourceMakeDeliver

In-transit

ManagedInventory

KeyCustomerInventory

inChannel

Service

Support

Engineering

Finance

Go To Market Supply ChainDemand & Supply

BalanceDemand Supply

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2. Integrating the information and financial flows

Distribution Centers &

SubsidiariesIn-transit

Plant WIP

PlantRaw

EMS/ODM

InventoryHubbing

Supplier-owned

Inventory“Hubbing”

In-transit

SupplierInventorySpecific

forYour

company

SourceMakeDeliver

In-transit

ManagedInventory

KeyCustomerInventory

inChannel

Service

Support

Physical Flow

Information Flow

Financial Flow

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3. Enhancing cash and cost

DSO

Days Sales Outstanding (DSO)

The average number of days

that the receivable sits on the

books

DIO

Days Inventory Outstanding (DIO)

The average length of time in days

between inventory coming on and off

the books

DPO

Days Payables Outstanding

The average length of time in days

between receipt of goods and payment

for them

+ - CCC

Cash Conversion Cycle

The average length of time in days between receipt of raw materials and collection of payment for

finished goods

“Get Cash Quicker”

“Have Less Inventory”

“Pay Appropriately”

“Cash is King”

DSO + DIO - DPO

[Quarter-end Receivables]

[Quarter-end Revenue] / 90

[Quarter-end Inventories]

[Quarter-end COGS] / 90

[Quarter-end Payables]

[Quarter-end COGS] / 90

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4. Excellent execution measured by

• Material Savings %• Conversion Cost %• Cost of Poor Quality %• Inventory Turns• Accounts Payable Days

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Copy Exactly – Fast adaptive best-in-class Supply Chain Practices

Market Intelligence

Cost Modeling

Re-structure initiative

Fact BasedNegotiation

Inventory analysis

Re-structure initiative

More …

Setup negotiation target

Teardown analysis

Supply market update

Market deflation

Cost modeling

Market intelligenceA

B

D

C

TeardownAnalysis

E

My DeliveryMy Commitment

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MeasurementTriangulation

Market Intelligence –Provide triangulation measurements tool kit

A1

AbsoluteCompetitiveness

(AC)

Procurement Competitive

Advantage (PCA)

MarketIntelligence

Specific point-in-timecomparison with

competitor

Buying effectivenessVersus market price change

Validates or refutesPCA and AC

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Market Intelligence –Speedup market intelligence provider selection

DigitimesIce Alert

CBAMTC VDC

AvicenneEuromonitor

Product Price IndexDatabeans

Purchasing magazineProcurement Strategy

Council

OnesourcesDigitimes

MetalpricesFuji Chimera

IITFleck

BishopCAPSAMR

Custerconsulting Display Research

GartnerIDC

YankeePrismark

ProtelligentPaumanokSEMICOiSuppli

DatabeansIC Knowledge

IC inside Frost and Sullivan

A2

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Market Intelligence –Provide procurement competitive advantage and absolute competitiveness chart

A3

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Cost Modeling –Develop cost model captured key cost drivers

RFQ Should Cost

30% gap

Raw MaterialCost

Overhead

Assembly

Profit

Other

Total

• Warranty costs

x

• Package Shipping

x

• R&D

x

• SG&A

x

x

x

Subtotal Equip. Labor

• Step 1: Front End(SMT)

• Step 2: Board Test

• Step 3: Frame Assembly x

• Step 4: Manual Assembly x

• Step 5: Package Shipping x

• Labor Cost

x

• Factory O/H

x

Material

• Margin x

• Yield

x• Step 5: Unit Test

• Step 5: System Integration Test

B1

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Cost Modeling –Provide comprehensive should-cost model by commodity-specific

B2

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Fact Based Negotiation – Provide fact based negotiation tool kit

To define, develop, and deploy standardized governance, skills, training, career paths, measurements, incentives, and electronic auctioning and

negotiating tools that will maximize procurement savings across the

corporation.

Market intelligence

Value propositions

Goals

Benchmark competitors

Gap analysis

Targets

Scope

Cost

Results

Fit

Existing projects: accepted, canceled or redesigned

High-level business cases

Programs prioritized and scaled

Detailed program design and action plan

Metrics

Set Strategy

Identify Needed Critical

Capabilities

Assess Current

Programs

Select Program Portfolio

DesignImplementation

Plans

Execute and

MeasureResults

DecisionReview

Ph

ases

Ph

ases

Del

iver

able

sD

eliv

erab

les

Decision Review

ProgramManagement

Market intelligence

Value propositions

Goals

Benchmark competitors

Gap analysis

Targets

Scope

Cost

Results

Fit

Existing projects: accepted, canceled or redesigned

High-level business cases

Programs prioritized and scaled

Detailed program design and action plan

Metrics

Set Strategy

Identify Needed Critical

Capabilities

Assess Current

Programs

Select Program Portfolio

DesignImplementation

Plans

Execute and

MeasureResults

DecisionReview

Ph

ases

Ph

ases

Del

iver

able

sD

eliv

erab

les

Decision Review

ProgramManagement

C1

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Fact Base Negotiation –Had been fact to fact negotiation with following supplies

UnitechUnimicron

WusCompeqMultek

Chin PoonNanya

Elec & EltekMerixMflexBYDMFS

GFlexIchia

FoxconnSanyoLishen

Desco TechKonica Minolta

SINCOSamYoung

SilitechDKUIL

SEIWOOTee HwaMemtech

BYDIchia

SunArrowSensetech

SorimJeewooFoxlink

FoxconnACONHiroseMolexSMK

MicronSTM

SONYSamsung LSIOmniVision

KodexMagachip

LarganGESOE-PIN

Asia OpticalMaxellTyco

AmphenolFCI

Yokowa Pansonic

ALPSTopsearch

FoxconnFlextronics

JabilWistronDelta

LiteOnWinteck

AltusSEMCO

Vista PointJabilBYD

LG InnotekTechwinToshiba ALPS

Aurora Optical ChiconyFoxlink

C2

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Re-structure initiative – Provide Tools and Matrices

1. Enterprise wide Tool used by all

2. Corp wide baseline measurement

3. performance comparison

4. Highlighting “best practices”

5. Measure internal performance to the industry

6. Enterprise wide spend data

Business

Operational

Systems

Technology

TOOL

&

MATRICES

1. Process

enhancement

2. e-business

Technology

3. Leadership

Empowerment

4. Skills and Training

5. Metrics and Pay-for-

Performance

Incentives

FOCAL

POINT

D1

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The Secrets for Driving Motorola’s Unprecedented Turnaround in 2002 – My achievement

Making business successful by transforming supply chain initiatives into actions and results – faster, better, and together.

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Motorola Fast Adaptive IBM Best-in-class Supply Chain Practices in 2000 – My Achievement

AbsoluteCompetitiveness

(AC)

Procurement Competitive

Advantage (PCA)

MarketIntelligence

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Motorola fast adaptive IBM - 10X improvement – My Achievement

Phase 1“Foundation”

1994-1995

Phase 2Transforming the

Enterprise1995-1997

Phase 3e-Business1998 - 2002

Phase 4On Demand

2003 -

IBM Spend 8 years on first 3 phase

Motorola spend 3 years

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Fact Based Negotiation Using Cost Modeling - My Achievement

Fact Based

Market intelligence

Value propositions

Goals

Benchmark competitors

Gap analysis

Targets

Scope

Cost

Results

Fit

Existing projects: accepted, canceled or redesigned

High-level business cases

Programs prioritized and scaled

Detailed program design and action plan

Metrics

Set Strategy

Identify Needed Critical

Capabilities

Assess Current

Programs

Select Program Portfolio

DesignImplementation

Plans

Execute and

MeasureResults

DecisionReview

Ph

ases

Ph

ases

Del

iver

able

sD

eliv

erab

les

Decision Review

ProgramManagement

Triangulate Measurement

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Contact Me

Jerry Nye 630-487-9282

[email protected] http://www.linkedin.com/in/jerrynye