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ImprovingSupplyChainManagementRelationships,MarySimmermanVicePresident,Materiel,April23,2003,Acquisition&LogisticsExcellenceConference,2,Copyright2003NorthropGrummanCorporation,Agenda,IntroductionsSupplierManagementWhatDoesItMean?TheDefenseBusinessWhatsDrivingtheTransformation?NorthropsModel“StrategicRelationships,StrategicAlliances”KeySuccessFactorsFutureVisionWhereDoWeGofromHere?QuestionsandAnswers,3,Copyright2003NorthropGrummanCorporation,MarySimmerman,VP,Materiel,OverseeDomesticandInternationalProcurementandSubcontractManagementVP,SupplierManagementandProcurementatBoeingSpaceandCommunicationsCo-LeadSupplierMgmt.ProcessCouncilatBoeingPastLifeatNorthropinAdvancedSystemsDivisionandGrummanAerospaceSMEforMaterialOperationsofBoeingAirliftandTanker1998MalcolmBaldridgeAwardMBA,KellerGraduateSchool,BAinBusinessMgmt.,UniversityofPhoenix,4,Copyright2003NorthropGrummanCorporation,Cost-BasedAdversarial“Vendor”“TugofWar”Non-EvaluativeShort-TermEvent-Based,CollaborationJointinvestmentSophisticatedEvaluationToolsLong-TermFocusContinuousimprovementTruePartnerships,QualityIssues,PoorCommunic.,TQM,6Sigma,Metrics,IntegratedSystems,NewTech.,SCMFocus,Past,Present,SupplierManagementWhatDoesitMean?,5,Copyright2003NorthropGrummanCorporation,WhatDoWeMeanToday?,AFormalProcessbyWhichSuppliersAreEvaluatedandCategorizedbyTheirAbilitytoAddValuetoOurBusinessViaInvestment,CollaborativePlanning&Design,Risk-SharingandProductEnhancement,SupplierManagementIsEnablingRelationshipswithProvidersofGoodsandServicesto:AttainBusinessObjectivesExpandBusinessOpportunitiesReduce/TransferBusinessRisks,6,Copyright2003NorthropGrummanCorporation,MarketShare,SignificantlyEnhancedrevenue,BenefitsfromSupplierManagement,NewProducts/Items,BroaderNameRecognition,ReducedCosts,NewDistributionChannels,NewCustomers,WhyManageSuppliers?,60-70%ofWhatWeBuildIsProcured!,CustomerSatisfaction,7,Copyright2003NorthropGrummanCorporation,IndustryConsolidationWarTacticsCulturalIssuesEnhancedCommunicationsWeaponsTechnology,TheGenesis,TheDefenseBusinessWhatsDrivingtheTransformation?,“IntegratedNetwork”TruePartnerships“Systems,Services,Support”PrecisionWeapons&“Real-Time”Communications,Goals,Collaboration,8,Copyright2003NorthropGrummanCorporation,TheNorthropModelSupplierEngagement,PossessTechnologyThatWouldBeBeneficialtoOurFutureBusinessAspirationsAlignwithOurFutureStrategies(e.g.NHA,JIT)HaveR&DExpendituresThatAreRelevanttoTechnologiesWeBelieveAreGapsinOurPortfolioSelectPotentialStrategicPartners(Industry/Geography)withCharacteristicsThatWouldBeCriticalDifferentiatorsforUsinFutureCompetitions(e.g.Skills,PoliticalStrengths,Technologies),9,Copyright2003NorthropGrummanCorporation,TheNorthropModelHawkeyeCaseStudy,Issues:RadarApproach&TeamSolidifiedWithintheNavy(NAVAIR,OPNAV,CNO,ASN)NavyFundingProfilestoSupportRMPSD&DandPostMultiyearProductionRMPSD&DProposalSubmissioninJuneandContractAwardbyDecemberFY2004NTEProductionProposalSubmissioninNovemberandAACAwardbyDecember(3Hawkeye2000Aircraft),Strategies:PreserveFY2003BudgetforSD&DandProductionandPreservationinPOM-04ContinueHawkeye2000andAdvancedHawkeye/RMPAdvocacyCampaignsWorkwiththeCustomerforPostMYPProductionViaAffordabilityOptionsFY2004-2005(Hawkeye2000)FY2006-TBD(RMPLS/TAMD),HawkeyeIndustryTeam,Tactics:LeveragetheStrengthofa“Team”inUSN,OSD,CongressandtheMediaPropagate“ValueofRMP”asHighestPriorityofAdvocacyCampaignStress“ValueofHawkeye2000/CEC”toNeartermFleetOperationsDevelopAffordabilityPostureonRMPSD&DandPostMultiyearProductionTargetKeyOPNAVFlagsPromoteTeamAccomplishments,StrategicIntent:JointMarketingoftheE-2CHawkeyeandUSNAEW&CRoadmap,10,Copyright2003NorthropGrummanCorporation,TheNorthropModelF-35CaseStudy,StrategicIntent:CollaborativeDesignandEngineeringwhilepursuing“BestValue”,Issues:CostcontainmentiskeyfortheprogramInvestmentstructurerequiressourcingstrategyforparticipatingcountriesRFB/RFQare“model”basedDesignandproductionspecsareevolvingasthebidprocessprogresses,Strategies:ExploittechnologieswhichsupportcollaborativedesignandengineeringtoaddressweightandconfigurationchallengesEmploy“ePMO”fordocumentanddatasharingforglobalteamDeploycommonengineeringstandards(CATIA),F-35GlobalTeam,Tactics:DevelopedJSL“VirtualPMO”forglobalprojectmanagementsupportBalance“bestvalue”andcollaborativeengineeringcapabilitiestomeetcostanddesignchallengesDevelopspecificincentivesforteamtoaddresscenterfuselageandweightchallenges.,11,Copyright2003NorthropGrummanCorporation,ContinuousReviewProcessBasedonPerformanceMeasuresReflectingTotalCostofOwnershipMustBeinPlacetoProvideOngoingMonitoringoftheSuppliersEffectiveness“PlatinumSource”CaseStudy,KeySuccessFactorsSupplierRelationshipManagement,12,Copyright2003NorthropGrummanCorporation,KeySuccessFactorsSupplierRelationshipManagement,PlatinumSource,13,Copyright2003NorthropGrummanCorporation,KeySuccessFactorsSupplierBenefits,14,Copyright2003NorthropGrummanCorporation,KeySuccessFactorsSupplierRelationshipManagement,Suppliers/ContractorsAreSelectedStrategically,withaLong-TermFocus,RatherThanHistoricShort-Term,Transaction-Based.OrganizationMustCommittheResourcestoDevelopMutuallyBeneficialRelationship.DemandsonSuppliersRequiringCapitalInvestmentsNecessitatestheSharingofPlansandSchedulesUtilizeSuppliersAsaKnowledgeSourceandShareBenefitsofExpandingIntoNewMarkets,AssessingValue-BasedOpportunities,DiscoveringNewCostSavings,andExtendingCurrentFunctionalities,15,Copyright2003NorthropGrummanCorporation,KeySuccessFactorsSupplierRelationshipManagement(Cont),InvolveKeySuppliersinLong-TermStrategicAlliances,WhereSpecificCapabilitiesMayNeedtoBeDeveloped.MWBEsMayBeaGoodSourceforThis.AlignSuppliers,IR&DtoTechnologyMaps,16,Copyright2003NorthropGrummanCorporation,BusinessPartners,World,EnterpriseGroup,SAPR/3,BusinessWarehouse,OrderEntry,ILS,CS,Financials,HR,Fulfillment,.,E-Procurement,StrategicEnterpriseManagement,Portal,.,ExtendingScope(NewDimensions&Add-Ons),COLLABORATION,Internet,Extranet,Intranet,ENTERPRISE,KnowledgeWarehouse,SupplierRelationshipMgt,CollaborativePLM,APO,CRM,CustomerRelationshipMgmt,MFG,QA,Procurement,Billing,Complete,IESIII/IV,FoF,KeySuccessFactorsTechnologyBlueprint,17,Copyright2003NorthropGrummanCorporation,Direct,Indirect,SupplierCollaboration,Management,Improvement,SpecificationDevelopment,Supplier/Part/CategoryMasterDataDetailedCostElementDefinition/Measure