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Procurement Success byIntegrated Supplier Relationship Management

EIPM Annual Purchasing Conference, 2nd of December 2005

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We are MANAGEMENT ENGINEERS

Situation

Approach

Case Study

Content

Procurement Success by Integrated Supplier Relationship Management – EIPM Annual Purchasing Conference

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Situation

Approach

Case Study


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MANAGEMENT ENGINEERS are members of an international network of consulting firms and is active worldwideand their international Partners

We are

Offices

Hong Kong

Singapore

Canada

USA

Rockford

São Paulo

Shanghai

China

India

LyonBarcelona

ManchesterRugby

London

England

France

Italy

Spain

Finland

Slovakia

Romania

Iran

Munich

Switzerland

Austria

Ireland Poland

Australia

Portugal

Hungary

South Korea

Japan

SwedenThe NetherlandsBelgium

Denmark

International networkof independent consulting firms

owned by active partners

Consultants for ind. enter-prises and technical, public, and

financial service providers

Consultants with manyyears of experience in industrial

management

Brazil

Düsseldorf

Russia

Czechia

Projects2000 - 2004

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MANAGEMENT ENGINEERS use an integrated approach which consists of four elements– Shaping Competitiveness

We are

Manufacturing

Marketing / Sales

Production networkPlant managementProduction

management

Product/marketstrategy

Sales organisationMarketingSales controllingCustomer relationship

management

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Supply ChainManagement

Sales planningSupply chain

optimizationProcurement processesOrder management

processesDistributionOrganisation

Products /Services

Product structureVariants managementDevelopment processesProduct cost reductionKnowledge management

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In the particularly category “Supply Chain Management” and “Implementation / Realisation Consulting”are regarded as absolute top

Benchmarking of Consultants

We are

Source: IMCS The Institute of Management and Consulting Sciences – Prof. Dr. Dietmar Fink 2003

…………

…………

1 PA CONSULTING GROUP

2 DIAMONDCLUSTER

3 MANAGEMENT ENGINEERS

4 MCKINSEY & COMPANY

5 CELL CONSULTING

Rank Consultant


2 PA CONSULTING GROUP

3 HORVÁTH & PARTNERS

4 OC&C STRATEGY CONSULTANTS

5 CELL CONSULTING

Rank Consultant

Supply Chain Management Implementation / Realisation Consulting

1

MANAGEMENT ENGINEERS2

CELL CONSULTING

2

MCKINSEY & COMPANY

4

ROLAND BERGER STRATEGY CONSULTANTS

5

OC&C STRATEGY CONSULTANTS

Rank Consultant

Technology and Innovation Management Business Process Optimization


2 CELL CONSULTING

3 KURT SALMON ASSOCIATES

4 ROLAND BERGER STRATEGY CONSULTANTS

5 OC&C STRATEGY CONSULTANTS

Rank Consultant

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More than 80 percent of all consultants have had more than five years of professional experience before moving to consulting

Education and Industrial Experience of our Consultants

We are

37%

59%

4%

51%

35%

14%

Eng. plus degree in Bus. Economics /Ind. Engineering

Businessmen /Graduates in Bus. Economics

Engineers /Physicians /Chemists

< 5 years

> 10 years

> 5 years

Experience in Industry before Academic Background

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Situation

Approach

Case Study


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Four decisive trends require a performance increase in the Supplier Relationship ManagementChallenges for the Supplier Relations

Situation

Trends

Reduction of value adding depth

Globalisation ofvalue adding

Reductionproduct life-cycle

Technology change

ChallengesGlobal

Supplier Relations

LocalSupplier Relations

Management of global operating suppliers

Handling of increasing product complexity

Product localisation

Reduced development times

Increase of risk management

Increase of cost management

Receipt of evaluation competence

Increase of process quality

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Characters of Supplier Relations

Situation

: Indirect influence on supplier relations: Direct influence on supplier relations

General characters of supplier relations

Supplier Relation

Process oriented characters of supplier relations

Supplier Customer

Origin of contracts Model of procurement co-operationProcess of tendersPrice negotiationsForm of contracts

For direct goodsFor indirect goodsFor services

Supplier Base Vertical intensityof co-operation

Material group Horizontal intensity of co-operationGeographical

structureNumber of suppliers

Integration in developmentDegree of adding

value

Degree of standardisationDegree of volume

bundling

PartnershipService provider

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A number of signs indicate an insufficient Supplier Relationship Management Signs of insufficient Supplier Relationship Management (SRM)

Situation

Performaceof SRM

Numerous contact partners forthe supplier

Highinternal

adjustmentcosts

Risks not fully known

Insufficient transparency of contract situation

Highshare of

missing partsto SOP

High shareof delayed productlaunches

High share of missingparts in theseries

Highquality costs

Supplier

Product Process

Deadlines Costs

0 Start of production(SOP)

Share of products with missing parts

t

Vol.

Launchingdate

t

100%

Products with missing parts

Costs

Contract §Master?Global?Frame?Single?

___________________________________

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Quality

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Integrated Supplier Relationship Management is a holistic approach to sustainable increase supplier performance and secure of material supply

Integrated Supplier Relationship Management (ISRM)

Situation

ISRM

Supplierperformance

Strategy

Processes and methods

Personnel

Structures

Supplier strategy

Efficient processes

Performancemeasurement

Know-how / skills

Management capabilities

Responsibilities

Competencies

Strategybased

Success oriented

SustainableRealisable

Availability

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Market groupstrategy

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Situation

Approach

Case Study


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4Contract management5

Terms of deliveryTerms of paymentFrame/skeleton contractsResponsibilities and accessGrade of fulfillment and controlling

P2P1 t

The procurement strategy is the basis for all supplier relationship management activitiesIntegrated Supplier Relationship Management – Approach

Approach

RFP: Request for ProposalRFQ: Request for Quotes

TCO: Total Cost of OwnershipSET: Supplier Evaluation Tool

Supplier evaluationSupplier selection

Supplier integration and development

2 3

Procurement strategy1

Mat

erial

gro

up st

rate

gySupplier strategy

Strategy description

Impa

ct

on

res

ult

s

Supply risk

Mar

ket

po

wer

Time

Contracts Geography

RelationshipsOrganization

Dimensions

Supplier performance

Market researchMaterial group / suppliers strategyCriteria and profileMarket informationRFP/RFQ, comparison of quotes

Evaluation criteriaSupplier questionnairesEvaluation procedure

Logistic coordinationTechnology and coachingPerformance measurement

Lo-gistics

Quality

Technology

TCO

Requested supplier profile

Selected supplier

Criteriarules

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Following the evaluation, the suppliers will be allocated to the portfolio segments.The strategy to be applied will be deduced from this

Approach

Strategy


Mar

ket p

ower

of t

he s

uppl

iers

25 50 75 1000

25

50

75

100Critical suppliers Core suppliers

Uncritical suppliers Lever suppliers

Core suppliers:Partnerships

Make compromisesPromote stability of the relations

Exclusive contractsCounter purchases

Lever suppliers:Use opportunities

Powerful influenceActive price and conditions policyPromotion of competitionShifting of risks to the suppliers

Critical suppliers:Emancipation

Procurement market researchSeek substitution goodsNew solutions for functionsEnter co operationsReduce suppliers

ANS

MESSERKNECHT-MEISTER

ISS SYSTEMS

EVANS & SUTHERLAND

SILICON

GRAPHICS

CONCURRENT

COMPUTER

DIGITAL

EQUIPMENT

Area corresponds tobuying volumes

EXAMPLE

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Procurement Strategy – Approach1

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The supplier strategy is derived specifically from the positioning in the portfolio

Approach

Material group: Machines and tooling

Sub-group: Tooling for plastic parts

Suppliers: STAMPI, RATHGEBER, SCHMIDT, KELLERMANN, PROCAM, FAIST, FORMCONSUL, INOTEC

Total volume: 13 mill. €

Geographic focus

Supplier relationships

Procurement organization

Contract design Timing perspective

Use of local and global procurement markets

2 active suppliers Quality assurance agreement Active supplier management BenchmarkingDevelopment partnerships

Early involvement of procurement Target price design Coordination of main suppliers

Frame agreement with defined cost-saving clauses and know-how protection

Medium to long-term contracts (3 - 5 years)

High

Low

Low High

Mar

ket

pow

erof

the

supp

liers


B

A

Focus on local / regional procurement

Search for system / module suppliers Exploiting volume effects Active pricing policy

Automated processing e-Catalogues

Frame agreement with system/module suppliers

Short-term Adjustments possible during course of year

A

B

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Procurement Strategy – Example1

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The supplier selection consists of four steps in order to select the most suitable suppliers

Approach

RFP: Request for ProposalRFQ: Request for Quotes

TCO: Total Cost of Ownership

Develop-ment

Sales

Qualityassurance

Pro-duction

Procure-ment

Teamdecision

Common decision processbased on procurement strategy

Potential suppliers & potential markets

Supplier selectionand evaluation

Identificationof most poten-tial suppliers

Evaluation ofprocurementmarkets

Identification offavourable procure-ment markets basedcategory strategy

I

II

III

IV

Specifica-tion ofdemand

Political andeconomicalcriteria

Supplierrequirements,killing criteria

Specificperformanceprofile

RFQ/RFP andcomparison ofquotes

Pre-selectionof suppliers

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Supplier Selection2

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The evaluation of suppliers consists of two major steps and aims a suitable supplier basis

Approach

Enrichment of current supplier basis

Determination of most suitable supplier profile(“best fit” profile)

Definition of activities for supplier development and integration

Objectives

Definition of required supplier profile

Evaluation of suppliers

Expertise Technology

Infrastructure

Costs

SizeSales

Capacity

Risks

Selectedsuppliers

Currentsuppliers

Supplierselection

in

out

Activities

Quotes and currentperformance

Evaluation of suppliers

Comparison of currentprofile with target profile

1

2

3

1

2

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Supplier Evaluation3

Qua

lity

Logi

stic

s

TC

OT

echn

olog

y

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The evaluation of suppliers while performing shows the gap between actual performance and “best fit” profile

Approach

0 = low performance4 = high performance

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Supplier Performance and Potential

Define actions for im-prove-ment

Faultlessness of delivered product / serviceTechnical reliability of product / serviceQuality assurance systems and audit resultsCo-operation and communicationTotal cost of ownership (TCO)Price transparencyPrice reduction behaviourDevelopment know-howManufacturing know-howProcess know-howCo-operation and communicationDelivery timeDelivery reliabilityDelivery flexibilityCo-operation and communication

1.11.21.31.42.12.22.33.13.23.33.44.14.24.34.4

Quality

TCO

Technology

Logistics

1

2

3

4

7.57.57.57.56.76.76.78.88.88.88.83.83.83.83.8100∑

Criteria Weight(%) 0 1 2 3 4

Best fit supplier material group I

XXX

X

XX

XX

XXX

X

Supplier AXSupplier BBest fit supplier

Supplier Evaluation – Example3

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The Supplier Evaluation Tool converts the data of the input sheets and best fit into diagrams for each supplier

Approach

Input of detailed supplier assessment data

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Supplier Evaluation – Tool (Example EXCEL screenshots)3

X

Level

10% 77

35% 50

B 15% 50

C 40% 50

Level

A

B Series Supplier

C Supplier to be qualified

D Supplier to be substituted

Supplier Rating Rating DetailsYear Points

Supplier Assessment

Global

Site-specific

531. Quality

2. TCO

2004 66

2005 B

3. Technology

Supplier name

Xxxxxxxxxxx-Xxxxxxxxxxxxxx

Definition

Supplier site Xxxxxxx , xxxxxxxxxx 2003 35

Supplier code xxxxx

Name X. Xxxxxxxxx

4. Logistics

Organization Rating LevelsPrepared by Checked by Distribution Points

Date 01.01.2005 02.01.2005 25-49

Xxxxxxxx 0-24

Preferred Supplier

Category Xxxxxx 50-74

Site(s) Xxxxxx

Xxxxxxxxx,Xxxxx ,

Xxxxxxxxx

75-100

0

25

50

75

1001.1 Financial situation

1.2 Liability and contracts

1.3 Purchasing terms and conditions

1.4 Transparency of costs

1.5 Possibility of countertrade

1.6 Risk-management

2.1 Reliability in delivery

2.2 Planned Logistics

2.3 Physical Logistics

3.1 Development Process

3.2 Production process

4.1 Quality -management

4.2 Handling of complaints

4.3 Environmental management

Supplier XAverage

COMPANY

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Approach

Based on a consistent supplier development strategy the supplier integration forms the basement for the most suitable fulfillment of market demands

Major Objectives

Stages of Supplier Integration

Key supplier selection


Standard Supplier Demand planning

Contract draft

Exchange ofknow-how

Preferred Supplier IT/WWW-Integration

Strategic development targets

Increase development involvement

Partnership

Supplier Strategy

Increase Efficiencyof order process

Assessment of supplier integration

No. of supplier

Proc. Vol.

100%95%80%

A B C

Fulfillment of demand withoptimal quality leveldecreased costsshortened development

cycleshigher flexibility

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Supplier Integration and Development – Approach4

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Approach

Supplier integration means aiming at a long-term partnership with considerable savings on both sides

PreparationPhase 0

Targetwithin two

yearsIT/WWW-Integration

Involvement indevelopment

Potential strategicdevelopment

Joint continuousimprovement

“Partnership”

Global masteragreement

Involvement in supply /demand planning

Involvement in QA

Know-how exchange

“Collaboration”

Letter of intent

Local call-ups


“Understanding”

Vision

Dataanalysis

Key supplierselection

Definition ofintegration targets

Formation ofthe team

3 - 4 months 4 - 6 months 6 - 10 months

Supplier integrationPhase 1 Phase 2 Phase 3

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Supplier Integration and Development – Example4

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Approach

Supplier integration means close partnership at an early stage of development

Willingness ofclose technological cooperation

Prerequisites

Traditionalprocurement

Modernprocurement

Research &development

phase

Supplier SupplierCustomer Customer

Willingness of close logistical cooperationon high quality level

Productionphase (Techno-logy / logistic)

Willingness ofcost transparency on both sides

Procurement /sales phase

Insufficientfulfillment of market

requirements

Adequatefulfillment of market

requirementsSupplierDevelopment

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Supplier Integration and Development – Partnerships4

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Approach

A partnership-oriented supplier / customer relationship turns out with advantages on both sides

Customer’s Advantages Supplier’s Advantages

Supplierintegration

Optimized quality level

Decreased price level

Shortened lead-times

Decreased stocks

Increase of reliability

Activation of innovation potentials

Suitable competitive positioning

Higher margins

Higher volumes

Long-term contracts

Optimization of quality, costs andtime-cycles

Know-how transfer

Demand planning

Reliability and growth

Higher margins

Win WinSituation

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Supplier Integration and Development – Win Win Situation4

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Approach

The Supplier Development Report describes the assessed weaknesses of each supplierwith detailed actions, responsibilities and date due

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Supplier Integration and Development – Supplier Development Report (Example EXCEL screenshot)4

x

Level

10% 44

35% 33

B 15% 55

40% 22

Level

20%

50%

…

…

Quality …

01.01.2006

Logistics EXAMPLE: LTT is insufficient

EXAMPLE: New Logistics -contractor has to be found

EXAMPLE-Meeting 01.03.05

Mr. EXAMPLE 01.08.2005

TCO EXAMPLE: Liability-terms are not accepted

EXAMPLE: New contract has to be approved

EXAMPLE-Meeting 01.03.05

Techno-logy

…

Overall Statusof Development

Status of Action

Due Date

Responsible

35%18.05.05

Responsible at Supplier

01.01.05 Mr Xxxxxx-xxxxx

Agreed on

Action at Supplier

AssessedWeakness

Main Criteria

Target RatingDue Points

01.01.06 B 66

Mr. EXAMPLE

Supplier site

Supplier code xxxxx

Xxxxxxx, xxxxxxxxxx 2003

Current Rating

2004

Year Points

-

Supplier Rating Details

2005 C 331. Quality

2. TCO

Supplier name

Xxxxxxxxxxx-Xxxxxxxxxxxxxx

Supplier Development

Report

Global

Site-specific

3. Technology

4. Logistics

0

COMPANY

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Approach

The implementation of contract management consists of four major steps that aim at a secure and efficient contract handling

Contract standards Procedures / Responsibilities

Controlling Access

Processand

rules

Group-wide access on evaluation and contract data

Centraldatabase

Contract data managementCategorization, classificationRelease monitoringArchives

Risk managementContract analysisMonitoring ofgrade of fulfilmentPerformance-criteria and controlling

Payment termsTerms of delivery (Incoterms)LiabilityGuarantiesSpecific issues

Harmonization of (per sub-category):

Material group portfolioSpecificframe / masteragreements

CostReport

Application

Approval

Contracting

Maintenance

Pro

cure

men

t

Con

trolli

ng

Lega

l

Exp

ert

Fun

ctio

n

….

Rules perSub-category

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Contract Management – Approach5

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Approach

We recommend to differ between two major types of procurement contracts

Corporatemaster agreement

Frame contract

Type Applicable as

General agreement

Value contract

Volume contract

Specific frame contract

Major focus

? Option 1: unspecified goods and services

? Option 2: unspecified volume for specified goods and services

? Definition of standard terms and procedures

? Period-related contract? Specified goods and services, including prices? Value restriction (limit notification)? Standard terms and conditions

? Period-related contract? Specified goods and services? Volume-oriented terms

? Period-related contract? Specified goods and services? Specified volumes and values? Definition of standard terms and conditions

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Contract Management – Definitions5

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Situation

Approach

Case Study


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Benefit of Integrated Supplier Relationship Management

Case Study

Integrated Supplier Relationship Management acts upon product development as well as order processing

IntegratedSupplier

RelationshipManagement

Product development

Order processing

2002 200420032001

Reclamations

4%

IntroductionISRM

Reclamations reducedby approx. 33%

2002 200420032001

Introduction ISRM

Number of missingparts halved

Release of first sample

-4 -3 -2 -1 SOP +1 +2

100%

Materialavailability

-3 -2 -1 SOP +1 +2

100%

New

Old

First sample proportionincreased by 60%

Relative months Relative months

Availability to SOPincreased by 40%

+3

70%

New

Old

-50%Missingparts

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Elements of the Supplier Development Program

Case Study

The specific Supplier Development Program contains five elements

Supplierperformance

Materialavailability

SOP

Risk analysis Reporting

A B C

Organisation structure

Target agreementActual DebitTargets

..........

..........

Structures

Processes

Methods

Personnel

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1 Preventative Supplier

Management

2 3

4

5

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Case Study

The emphasis of preventative supplier management is on product development

Product development Order processing

QG 10 QG 9 QG 8 QG 7 QG 6 QG 5 QG 4 QG 3 QG 2

Concept consulting

Construction consulting

Co-selection of suppliers

Preventative supplier encouragement

Risk analysis

PreparedQG 4

Project-like series preparation

Planning and ImplementationLogistic processes

Process costs for productionsupplier locations / degrees of breakdownProduct concept

Process costs for productionsupplier locations / degrees of breakdownProduct concept

Cooperation in specification workshop product specification moduleSpecification workshop requirement specification moduleSpec. Workshop component product specifications

Cooperation in FMEA designDrawings with relative details

Indication of logistic costs and supplier performance, potential analyses (new supplier.)

Try-out / parallel operation / series /discontinuation

Spec. workshop components requirement specification

Quality Gates

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1 Preventive Supplier Management – Overview

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Case Study

Classification is carried out depending on supplier competence and part complexity

Standard / standard-likparts

Simple parts Complex parts Systems / modules safety -relevant parts

Production of low complexity, simple vendor parts

Production technology

Project competence

Conversion of entire production process to new production technologies

Large deficits in project-like SOP, promotion required from LM C A A A

A new production technology within production is applied

Introduction of series production with problems in changes to basic conditions, e.g. higher vertical integration, new location

C B A A

Introduction of new production systems with proven technology

Introduction of series production so far with few problems C B B A

Application of proven technology

Introduction of series production so far without problems C C B A

Production of low complexity, simple vendor parts

Production of medium complexity, vendor parts of medium degree of difficulty

Numerous production processes required, multi -level supply chain for complex parts

Deviances showed no consequenceson function and / or optical characteristics

Deviances showed no consequenceson function and / or optical characteristics

Deviances showed medium consequenceson function and / or optical characteristics

Deviances showed heavy consequenceson function and / or optical characteristics

Requirement of supplier’s technical know-how

Level of production chain

Requirements of vehicle part- Technical

requirementsFunctional risk material- Opt. requirements

Gap width, colour, etc.

Su

pp

lier

leve

l

Par

ts le

vel

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Risk Analysis – Product development Projects 2

Riskcategories

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Case Study

Parts with the highest savings potential or highest risk have highest priority

I I I

I II II

I II IIIRis

k ev

alu

atio

n

Prioritization to control occurring capacity bottle necks

Savings potential

A B C

C

B

A

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Risk Analysis – Cost-reduction Projects 2

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Case Study

MA: Employees

Reporting takes place monthly and is divided into situation, risks, key figures and measures

Situation

Risks

Keyfigures

Measures

Status December 2003 (Quality Gate 2)

Degree of performance

Risk evaluationScheduling delay

CW

8 7 6 5 4 3 2 1∼ 80%

7 8 9 10 11 12

50%

Process Product

50%

Management involvement on highest level

Weekly talks OEM with supplier on management level

Approx. 80% of parts are basically releasedPreparation processes in the Rougegoutte factory (production processes, QM-methods, logistics) are observed with the required intensity as from CW 48Management of tech. modifications must yet be improved

QSV with supplier unclear (tests, reclamations, reaction times PPM, etc) and in testingHigh risk regarding quality and availability of parts as from SOP

Status January 2004 (SOP)

Degree of performance

Risk evaluationScheduling delay

- CW

8 7 6 5 4 3 2 1∼ 80%

1 2 3 4 5 6

40%

Process Product

30%

Daily coordination of components by analytic team

Weekly talks OEM with supplier on management level

QSV with supplier unclearPreventative supplier encouragement shows no effect among some of 2nd tier suppliersRisk exists regarding quality and availability of parts

Approx. 81% of parts are basically released, material-wise approx. 80% of SNR still open, but acceptable for customerAs of CW 03/03 installation of analytic team consisting of MA from supplier and OEM for the purpose of formulation and implementation of remedial actions for qualitative deficits with high priorityManagement of tech. modifications must still be improved

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Reporting – Project Status 3

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Case Study

The supplier performance cockpit permits a concise overview of the supplier’s current performance and current and planned developments in the collaboration with that supplier

Supplier: MILLER plc Classification: Series supplier 30.06.2004

Action planning Buyer’s remarks

r Feasibility study on moving pre-assembly to Poland initiated by MILLER plc (Results in week 36)

r Building of additional development capacities being considered

On-time performance (%) Quantity performance (%) Defect ratio (ppm)

Conduct supplier audits

Conclude quality assurance agreement

Auditing pre-suppliersBuilding deadline monitoring

systemSupplier workshop

– order processing

Jones, QA

Williams, PD

SupplierSupplier

Williams, PD

Wk 40

Wk 50

Wk 44Wk 42

Wk 40

1 2 3 4 5 6 7 8 9 10 11 12

2004

Goal: 99%

1 2 3 4 5 6 7 8 9 10 11 12

2004

Goal: 97 %

1 2 3 4 5 6 7 8 9 10 11 12

2004

Goal: 500 ppm

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Reporting – Supplier Performance Cockpit 3

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Case Study

The supplier management reports directly to factory management and structured according to vehicle functions

Logisticsplanning

SupportLocation

Technicalsystems

AssemblyVehicle Driving cab

Material flow SupplierLogistic centre

Transportlogistics Stock receipt

systems Vehicle controls

Logis-tics Quality

Logis-tics Quality

Logis-tics Quality

Serial preparation

Order processing

Serial preparation

Order processing

Serial preparation

Order processing

Disposition

Productionmaintenance

Reclamationprocessing

Functiongroup work

Product andprocess release

Suppliermanagement

Plant Engineering Technical

ServiceProductionVehicles Personnel

Plant management

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Organisation Structure – Local Supplier Management 4

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Case Study

Target agreement contains extensive qualitative and quantitative objectives to the supplier management

Quality

Respective method,Checklist

fully applied

Functio-nality fortry-out

Functio-nality inseries

Met

ho

dR

esu

lt /

Pro

du

ct

Time

Respective method,Checklistapplied on time

Componentavailability for try-out

Componentavailabilityin series

Missingparts ppmStoppagesh

12 months

Product 1

6 months 6 months -10%

Try-out 1 Try-out 2 Try-out 3 Oups Quit Quality topicsNumber of missing parts

Actual DebitProcess release

Actual DebitFirst sample

SNR

4711:

47 n

Project: OLW-T

Supplier:Supplier Manager: H. Meier

Fixed dateStatus

Fixed dateQuestionnaire%

Month 12

Fixed dateStatus

Fixed dateQuestionnaire%

Month 11ProjectNo.

?

?

?

?

80

90

?

?

?

?

70

80

1::n

SOP

Product 2

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Target Agreement – Supplier Manager 5

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Integrated Supplier Relationship Management – Implementation Results

Case Study

Integrated Supplier management processes increase performance for product development as well as order processing

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

18,0

20,0

SOP-9 SOP-8 SOP-7 SOP-5 SOP-3 SOP-2 SOP-1 SOP SOP+1 SOP+2 SOP+3 SOP+4 SOP+5

Rel

ease

of

first

sam

ple

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Monat -7

Monat -6

Monat -5

Monat -4

Monat -3

Monat -2

Monat -1

SOP

Pro

du

ct d

evel

op

men

tO

rder

pro

cess

ing

Num

ber

MA

S /

CB

U

0,2

0

0,1

0,3

0.4

2001 2002 2003 2004 (01-10)

First samplequote to SOP

increased by 60%

Reduction ofvendor parts

reclamation by 33%

NO

. of v

ehic

les,

with

MP

in %

2002

Parts quality

012345678

Missing parts (MP)

2003 2004 (Sept.)

Halving oflogistic missing

parts

'04'03

'96

Mis

sing

par

ts /

vehi

cle

Less than1 missing part / vehicle to SOP

Relative month Relative month

'96'03'04

X_FWE_ME060_051123-34

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