sourcing and materials management presentation
DESCRIPTION
Sourcing and Materials ManagementTRANSCRIPT
Procurement and Materials Management
MGT 4333.01
Kelsey HolmesNate Landreth
Sean McDermottJeremy Carter
April 26, 2010
SOURCING
Sourcing
Sourcing Stages
Examples• Recreational Boating
Industry• CEVA Logistics
Summary
Sourcing
Sourcing Stages
Examples• Recreational Boating
Industry• CEVA Logistics
Summary
Sourcing Stages
Discovery Evaluation Selection Development
Management
Discovery StageHelps buyers determine potential suppliers
Supplier web sitesSupplier information
filesSupplier catalogsTrade Registers &
DirectoriesTrade JournalsPhone DirectoriesFilling of Mailing
PiecesSales PersonnelTrade ShowsCompany PersonnelOther Supply
Management Departments
Professional Organizations
Discovery Evaluation Selection Development Management
Evaluation Stage3 Questions
Is the supplier strategically important?
Is the product or service being purchased considered strategic?
Are there other short-term alternatives available?? ??
Discovery Evaluation Selection Development Management
Evaluation Stage - Evaluation MethodsSupplier SurveysFinancial Condition
AnalysisThird Party
EvaluatorsEvaluation
ConferenceFacility Visits
Capability AnalysisQualityCapacityManagementServiceFlexibilityInformation
Technology
Discovery Evaluation Selection Development Management
Evaluation Stage - Summary
Summary Analysis
Weighted-factor analysisdevelopment of the factors and weightsassign a rating based on the findings
Discovery Evaluation Selection Development Management
Selection Stage
MethodBiddingNegotiationsCombination
Invitation for Bids or Request for Proposal
Discovery Evaluation Selection Development Management
Development StageMost over lookedCan have the greatest impact on the buyerWork together to improve
ProductProcessesQualityCostsProfits
Discovery Evaluation Selection Development Management
Management Stage
Ensures Performance
Analyze and verify capabilities and results
Discovery Evaluation Selection Development Management
Sourcing
Sourcing Stages
Examples• Recreational Boating
Industry• CEVA Logistics
Summary
RECREATIONAL BOATING INDUSTRY
FactsAverage owner’s income is $100,000 a
yearPast Production motto of new boats was to
“build them as fast as possible they would sell”
Industry thought it was immune from the economic swings of “outside market”
Rising cost of livingRecession and less spending
Examples of effect on industryGenmar - Ranger series
28 percent decline between 2007 and 2008other boats lines were down 55 percent from normal
levelsBrunswick manufacturer - Bayliner, Crestliner,
Lund, and Mercury boat motors Half of the factor shut down only ran about 50 percent of it marina operation in
2008National boat sales down 65 percent from the
first quarter of 2009 to the same quarter in 2008
What lead to current boat shortages?Caused by Dealers and Sales Representatives
Assumed people would buy in good and bad markets
Bad forecasting and measurements of inventory needed
Lack of attention to demand, price, quality, cost of the end product
Lack technology advancement used in other industries (SAP)
Lack of feedback from consumers (CRM)Local legislation and environmental regulation
ResultsIncreases production accuracyLess inventory, manufacturer and dealersIncrease ability to meet consumer desires
(customer feedback) Lowers costsMore affordable for consumersIncreases salesIncreases profit margins
Sourcing
Sourcing Stages
Examples• Recreational Boating Industry• CEVA Logistics
Summary
Freight Forwarding
Industry NormsSuppliers are selected based on price,
quality, and availability
Suppliers compete for CEVA’s freight
Guaranteed capacity can help CEVA attain low contract rates
Chinas Supply ProblemFreight forwarders
are competing for limited airline space
Customers demand on time delivery
Airlines can increase rates
Solution
CEVA should consolidate shipments and
guarantee enough capacity every day to
acquire low contract rates with a single
airline into China.
Plan of Action
Accurately forecast demand for future shipments
Consolidate freight at a single location for export
Successfully distribute orders at final destination
Key Competencies for Success
• Communication• Coordination• Cross functional teams• Integration of
purchasing and operations managers
Sourcing
Sourcing Stages
Examples• Recreational Boating Industry• CEVA Logistics
Summary