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Supplier Relationship Management • Unipart Expert Practices •
May 2012
An introduction
The Unipart Group Manufacturing Logistics Consulting
12,000 people
Operating in 100 countries
worldwide
5 principal divisions
Majority owned by
employees
Head-quartered in
Oxford
£1.1b turnover
• Showcase
• Enjoy
• Promote
• Learn
Webinar Objectives
• Unipart Supplier Relationship Management methodology
• How we decide which suppliers to include
• How we have implemented our methodology
• The benefits that we have generated
• Our lessons learnt – some do’s and don’t’s
Topics to Cover
Ten(d) To Zero
Copyright © 2010 Unipart Group Limited. All rights reserved
• The Unipart Group’s generic Supplier Relationship Management tool
for our strategic suppliers
• It has been adopted across the group, throughout every division and
has been continuously developed over 20 years
• It supports Principle 8 of the Unipart Way….
– “We build constructive and challenging long term relationships through
Ten(d) to Zero”.
• Mission Statement….
– “To develop and continuously improve the Group’s partnership with its
suppliers, by jointly growing our business through removing waste,
improving quality and meeting customer requirements profitably in the
shortest possible time”.
Background to Ten(d) to Zero
Copyright © 2010 Unipart Group Limited. All rights reserved
• Ten(d) To Zero is a structured and formalised framework and process designed to support improvement and sustainability with our suppliers to better meet our customers’ expectations
• It identifies the ten key elements in the relationship with our suppliers which most appropriately supports optimum customer satisfaction - each element has ten points of measurement with defined criteria
• Each element has a standard structure including Objective, Approach, Definitions, Performance Levels and Guidelines for scoring
• By working together with our suppliers, we can start to move from an unacceptable score of ten towards a best in class score of zero
• Each TTZ review delivers a plan with agreed actions, timings and method for progression
What is Ten(d) to Zero
Copyright © 2010 Unipart Group Limited. All rights reserved
To offer continuous improvement to members of our supply chain, in particular, our
customers
To remove ambiguity from
expectations and facilitate emotion free discussion
To provide a framework for
discussing performance
To provide a framework to
recognise performance
To identify and implement
appropriate cost ‘out’ opportunities
To strengthen business
relationships with our preferred
suppliers
Objectives and Benefits of Ten(d) to Zero
Copyright © 2010 Unipart Group Limited. All rights reserved
To go from this to this
Fewer
Opportunities
Taken
More
Performance
Problems
More
Opportunities
Taken
Fewer
Performance
Problems
To Summarise…. We use Ten(d) to Zero to
Copyright © 2010 Unipart Group Limited. All rights reserved
The process is used to structure the approach and confirms whether actions are having the desired effect
Using the
Manual, Identify
the Supplier’s
Current
situation and
the Start Status
for All Elements
Set Programme
Durations and
Target Status
for Each
Element
Agree Strategy
to Achieve
Target Status
Implement
Action Plans
Make and
Agree Specific
Action Plans
Reflect on
Result
Evaluate Actual
Impact vs
Expected
Impact
Cycle Repeats
Until Target is
Achieved
Plan
Do
Check
Action
Identify
Strategic
Suppliers
Once Target is
Achieved, Set
New Target
and Repeat
Introducing New Suppliers Continuous Improvement with Existing Suppliers
How we approach Ten(d) to Zero
Copyright © 2010 Unipart Group Limited. All rights reserved
• Strategic suppliers should fall into one of the following 3 criteria;
– Spend or cost importance
For example top suppliers equating to 80% spend
– Criticality of supply and / or risk to supply
Key components or services required to allow sale of final product to the
end customer or a supplier that is known to have financial difficulties
– Innovators
Those suppliers that add value to their customer through introducing
new technologies or products to aid the value of the product / service or
the relationship
• Allows strategic thinking and resources to be focussed, whilst
maximising business benefit
Segmenting the supply base
Copyright © 2010 Unipart Group Limited. All rights reserved
Quality
Logistics
Commercial
Marketing
Engineering
Supply chain
Quality
Logistics
Commercial
Marketing
Engineering
Supply chain
Oversee
TTZ
Programme
Including
Overall
Facilitation
and
Escalation
of
Concerns
Formal Communication Route at TTZ Review Meetings
and Formal Escalation of Issues
Informal Communication Routes for Day to Day Business
Unipart
Unipart
Facilitator (Procurement)
Supplier
Facilitator
Supplier
How the relationship functions
Copyright © 2010 Unipart Group Limited. All rights reserved
Position & Launch
TTZ Programme
Work together
to problem
solve and
manage
performance
improvements
Initiate &
manage own
problem
solving
Sustain
performance
levels
Use TTZ
approach to
identify new
opportunities &
challenges
duration is case by case
Customer-Supplier Relationship Growth
+
Supplier Self Reliance
This helps the supplier to understand how their journey will evolve and where they are currently positioned
The journey for our suppliers
Copyright © 2010 Unipart Group Limited. All rights reserved
Zero Waste
Zero Quality Defects
Zero Logistics Non Conformance
Zero Supply Chain Impact
Zero Transaction Costs
Zero Lead Time
Zero Range Gaps
Each Division selects the 10 most appropriate for their business
needs and that of their suppliers
Some element examples
Copyright © 2010 Unipart Group Limited. All rights reserved
0
1
2
3
4
5
6
7
8
9
10
Overall
Range/New product gaps
Availability
Lead time
Inventory
Commercial disadvantageTransaction costs
Marketing and Training support
Transport costs
Obsolescence
Warranty
Win Win - Best practice is a zero score
Element example progress
Copyright © 2010 Unipart Group Limited. All rights reserved
• 47% improvement in supplier delivery performance
• 40% reduction in safety stocks
• 25% reduction in non value adding activities
• Significant time savings for suppliers in managing the Unipart account
• Improved service levels to the end customer
Plus accelerated approach now adopted across all 3 divisions
What we’ve achieved
Copyright © 2010 Unipart Group Limited. All rights reserved
What Went Well….
• Executive Sponsorship with internal consulting support;
• Formal Project Management approach ensured delivery of the key objectives;
• Formal training sessions helped the division to ‘come up to speed’ quickly;
• Help from TTZ Champions in other divisions to support the event;
• The event was rehearsed a number of times;
• All documentation and templates are being rolled out across the Group with the option to take the ‘Accelerated Approach’.
What Didn’t Go So Well….
• Stakeholder engagement was difficult despite CEO Sponsorship – availability of time and number of conflicting priorities;
• Ensuring the material was wholly aligned to the division was difficult as team members from other parts of the company were doing the work;
• Ash prevented some suppliers attending the session.
Lessons learnt
Copyright © 2010 Unipart Group Limited. All rights reserved
Do….
• Engage with the suppliers selected early in the process to get their buy-in and input
• Ensure the programme plan includes handing over the implemented SRM scheme to the ‘business as usual’
• Audit the scheme once it is part of ‘business as usual’ to ensure the drive to continuously improve is sustained
• Run lessons learnt sessions so that the process of bringing new suppliers into the scheme is more smooth
• Ensure every stage is planned in detail and communicated well to the stakeholders
Don’t….
• Be tempted to include too many suppliers in the initial stages of setting up the programme
• Just measure metrics – take action!
• Forget to engage with internal stakeholders – they are equally important
• Delay the programme waiting for a system solution – most schemes can be initiated with simple reporting functions using existing reports or Excel!
• Be afraid to start with a small number of key metrics that you can measure, with plans to enhance the number of metrics and their sophistication in the future
Implementation do’s and don’t’s
Copyright © 2010 Unipart Group Limited. All rights reserved
Contact details for questions and queries
Paula Stevenson
E-mail: paula_stevenson@unipart.co.uk
Tel: +44 (0) 7990 797962
Paul Simlett
E-mail: paul_simlett@unipart.co.uk
Tel: +44 (0) 7841 699250
Melanie Halstead
E-mail: melaniehalstead@sourceandeffect.com
Tel: +44 (0) 7977 153166
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