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November17th,2002Speaker:RichardChenVicePresidentofPurchasingFordLioHoMotorCompany,2,1.OpeningRemarks-Exercise2.FordsGlobalPurchasingOverview3.SupplyBaseManagementi.SupplierImprovementMetrics(SIM)ii.ProductDevelopmentAdvancedProductQualityPlanningiii.ProductionSystemsLeanManufacturingiv.MaterialandLogisticsManagementv.CostReduction(ii,iv,vwillnotbecoveredduetotimelimit)4.StrategicPurchasingToolsandProcesses-Exercise5.AnnualCommoditySourcingStrategyReview,PurchasingManagementhomogeneousproducts.,MarketCompetition,77,CompetitiveScale,Monopoly,Oligopoly,DifferentiatedCompetition,PerfectCompetition,5%,70%,25%,ImperfectCompetition,70%ofthetransactionsfallundermarketscharacterizedbyimperfectcompetition.,78,MarketIntelligence,Whatisthemarketcompetition,e.g.pure,monopoly,imperfect?Whatmarketactivityishappening?consolidation,deregulation,newtechnology,etc.Whatisthecurrentmarketsize?Whatisthemarketgrowthrate?Whatsegmentsexistinthismarket?Whatshareinthesemarketsegmentsdoyouhold?,79,SupplierIntelligence,CompanyOwnershipCompanySize:numberofemployees,plantsGrowthRateMajorCompetitorsCompetitiveEdge:price,quality,design?Majorcustomers,percentageofcompanyrevenueManagementPhilosophyRawmaterialcostas%ofCostofGoodsSoldSourceforrawmaterials:makevs.buyQualitySystems,qualitycertifications,qualityrate:PPMDeliveryPerformance:%ontimedeliveryTechnicalPartnership,ProductDevelopmentexperienceNumberofsalesandPDstaff,enoughtomeetcustomersneeds?Capacitymanagement,80,CompetitiveAdvantageMatrix,Doesthebuyerorthesellerhavetheadvantageinthemarket?,81,SupplyPositioning,Supplypositioningallowsyoutosegmentthetotalspendandestablishdifferentobjectivesforeachsegment.Supplypositioningisbasedontwoelements:Relativevalue-purchasevalueasapercentageoftotalspendinthecommoditycategoryRiskofExposureorlevelofcompetition-numberofsuppliersinthemarket,qualitylevel,82,SupplyPositioning,RiskorExposure,High,Low,High,Low,RelativeValue,83,SupplierPreference,Whilesupplypositionisthebuyersassessmentofthevendorsimportance,supplierpreferenceishowthesupplierseesthebuyingside.Howimportantisthiscustomertothecompanysoverallbusiness?1.Relativevalue:thecustomerspurchasevalueasapercentageofvendorstotalsalesaccount2.LevelofAttraction:profitability,easeandfrequencyofcommunication,compatibility,84,SupplierPreference,RelativeValue,LevelofAttraction,High,Low,Low,High,85,TacticalSynthesis,TacticalSynthesisintegratesthetwoperspectivesofSupplyPositioningandSupplierPreferencetocomeupwithpurchasingstrategies.Elementsofconsideration:ContractType/Duration:short-termvs.longtermTransactionManagementInventoryHoldingsRelationshipTypeBidProcess:SingleBid,OpenBidRiskLevelAction,86,TacticalSynthesis,16,13,15,4,10,1,3,12,14,11,2,20,5,6,8,7,9,17,18,19,89,AnnualCommoditySourcingStrategyObjectivesProcessActions,90,Objectives,TogetcompanycrossfunctionsconsensusSystematicmethodTobuildalong-termstrategicpartnershipSublimationofstrategicintentSyntheticcombinationofAPQPandmanufacturesiteassessment,91,Process,FormCommodity,StrategyTeam,DetermineShortTerm,&LongTerm,Requirements,EvaluateSuppliers,(Current&Proposed),Commercial,Quality,Delivery,Technology,IdentifyPreferredSuppliers,Source,Re-source,Consistentwith,CommodityStrategy,Review&Revise,Annually,Buyer,Leader,Leader,STA,Engineer,Design,Engineer,Plant,Representative,Other,92,93,EvaluateSuppliers(Current&Proposed),ProvideatoolforsupplierclassificationandselectionIdentifyareasforimprovementConveyFordexpectationstothesuppliers,94,TechnologySupplierstechnologicalleadershipinthecommoditytheyprovide.Includesthesuppliersuseofhightechmanufacturingprocesses,andtheirdesign,researchanddevelopmentcapability.,EvaluateSuppliers(Current&Proposed),95,QualityThesuppliersabilitytoconsistentlydeliverhighqualitypartsthatworkeffectivelyintheassemblyand/ormanufacturingoperation,andmeet,orexceed,allwarrantyrequirements.Measuresofquality:R/100orR/1000=Rejectsper100or1000partsproducedTGW=ThingsgonewrongPPM/PPB=PartspermillionorPartsperBillionrejectedIRs=IncomingRejectedpartsshippedintotheusingplant,EvaluateSuppliers(Current&Proposed),96,Commercial:Supplierscostcompetitivenessandresponsiveness.Costcompetitivenessreferstothesuppliersabilityto:MeettargetpricesRespondwithRFQpricesat,orbelow,theircompetitorspricesReducepricesthroughproductivityimprovementsResponsivenessreferstothesuppliersabilityto:RespondtoRequestforQuotations(RFQs)bythespecifieddateRespondto,andresolve,qualityanddeliveryproblems,EvaluateSuppliers(Current&Proposed),97,Delivery:Suppliersabilitytorespondquicklyandcorrectlytoreleaserequirements,neitherundershippingnorovershipping.Anefficientmanufacturingprocessincreasesthesuppliersabilitytoperformintheareaof:,EvaluateSuppliers(Current&Proposed),Fo
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