Copyright 2007 HCS Consulting - All rights reserved. 1

Global Supply ChainGlobal Supply ChainThe World is My StoreThe World is My Store

ASQ Customer Supplier DivisionASQ Customer Supplier Division2007 Symposium2007 Symposium

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The Historical ContextThe Historical Context

H. B. H. B. TwyfordTwyford, Otis Elevator, 1915, Otis Elevator, 1915

““A purchasing staff which is entirely A purchasing staff which is entirely unsympathetic with the unsympathetic with the ……needs of the needs of the users of the material will fail to grasp users of the material will fail to grasp one of the most essential thingsone of the most essential things……

They will be dealing with papers and They will be dealing with papers and accounts instead of men and things.accounts instead of men and things.””

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The World Is FlatThe World Is Flat

““The best companies are the best The best companies are the best collaborators. In the flat world, collaborators. In the flat world, more and more business will be more and more business will be done through collaborations within done through collaborations within and between companiesand between companies…”…”

-- Thomas Friedman, Thomas Friedman, TWIF, 2005TWIF, 2005

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Three Flatteners*Three Flatteners*

OutsourcingOutsourcing

OffshoringOffshoring

Supply chainingSupply chaining

*Thomas Friedman, *Thomas Friedman, TWIFTWIF

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OutsourcingOutsourcing

Focus on core Focus on core competenciescompetencies

Have other companies Have other companies execute parts of your processexecute parts of your process

SaraLeeSaraLee, Unilever, General Electric, Unilever, General Electric

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OffshoringOffshoring

Move entire businesses, Move entire businesses, factories, or operations factories, or operations to take advantage to take advantage of lower costsof lower costs

Whirlpool, Proctor & Gamble, Whirlpool, Proctor & Gamble, General MotorsGeneral Motors

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Supply ChainingSupply Chaining

Continuous replenishment of product Continuous replenishment of product from raw material to consumerfrom raw material to consumer

CPFR CPFR –– collaborative planning, collaborative planning, forecasting, and replenishmentforecasting, and replenishment

WalWal Mart, Mart, WalWal Mart, Mart, WalWal MartMart

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TodayToday’’s World Is Differents World Is Different

GlobalizationGlobalization

CommoditizationCommoditization

EE--BusinessBusiness

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2020thth Century Fundamental Century Fundamental Supply Chain SkillsSupply Chain Skills

BasicsBasics DifferentiatorsDifferentiators

Communication

Analytics

Ethics Negotiation

Supplier Relationships

Cost Management

1010

Acquiring SkillsAcquiring Skills

EducationEducation

On the job trainingOn the job training

Learning from suppliersLearning from suppliers

Personal/professional motivationPersonal/professional motivation

1111

6060’’s/70s/70’’ss

Adversarial relationshipsAdversarial relationships

Traveling requisitionsTraveling requisitions

MRPMRP

Quality controlQuality control

USA focusUSA focus1212

8080’’s/90s/90’’ss

Materials managementMaterials management

MRPIIMRPII

OffOff--shore sourcingshore sourcing

Quality assuranceQuality assurance

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9090’’s/Todays/Today

Supplier partnershipsSupplier partnerships

Global sourcingGlobal sourcing

Process control/ISO standardsProcess control/ISO standards

CSCMP and ISMCSCMP and ISM

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Pitney BowesPitney Bowes

Laura Taylor, VP, Global Procurement Laura Taylor, VP, Global Procurement Strategy and OperationsStrategy and Operations

““You canYou can’’t just be a commodity expert. t just be a commodity expert. Project management is a key skill.Project management is a key skill.””

““Strength in basic business Strength in basic business analysisanalysis……someone who has financial someone who has financial acumen and business acumen.acumen and business acumen.””

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Job DescriptionJob Description

Evaluate supplier capabilities and Evaluate supplier capabilities and establish sources for new technologies establish sources for new technologies and in new markets as business and in new markets as business requirements dictate. requirements dictate.

Direct the development and negotiation Direct the development and negotiation of complex agreements with suppliers of complex agreements with suppliers encompassing key program encompassing key program specifications and functional objectives.specifications and functional objectives.

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Cummins EngineCummins Engine

Ignacio Garcia, VP Global Purchasing Ignacio Garcia, VP Global Purchasing and Manufacturing Supportand Manufacturing Support

““We need people to have more business We need people to have more business savvy, an MBA is a requirement.savvy, an MBA is a requirement.

Decisions are being madeDecisions are being made…… not just on not just on traditional supply chain concerns, buttraditional supply chain concerns, but……what kind of business alliance we need.what kind of business alliance we need.””

Copyright 2007 HCS Consulting - All rights reserved. 5

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2121stst Century Century Supply ManagementSupply Management

Continuous improvement in cycle time, Continuous improvement in cycle time, cost, quality, and delivery performancecost, quality, and delivery performance

Rapid product and development changesRapid product and development changes

Increased expectations for purchasing, Increased expectations for purchasing, quality, and suppliers from managementquality, and suppliers from management

Growing reliance on suppliers as part of Growing reliance on suppliers as part of your processyour process

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2020thth Century Century Fundamental SkillsFundamental Skills

BasicsBasics DifferentiatorsDifferentiators

Communication

Analytics

Ethics Negotiation

Supplier Relationships

Cost Management

1919

2121stst Century SkillsCentury Skills

Strategic focusStrategic focus

Ability to utilize a Ability to utilize a global business modelglobal business model

Project management and Project management and crosscross--functional team functional team leadership capabilityleadership capability

AllianceAlliance--building capabilitybuilding capability

EE--business competencybusiness competency2020

Thank YouThank You

For more information, visit:For more information, visit:www.HShieldsConsulting.comwww.HShieldsConsulting.com

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ee--mail Herb Shields at mail Herb Shields at hcsconsnb@aol.comhcsconsnb@aol.com