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LEVERAGE YOUR POTENTIAL FORSUPPLY NETWORK EXCELLENCE
VALUE-DRIVEN SOURCING MANAGEMENT
YOUR LOCAL EXPERTOPERATIONS COMPETENCE CENTER
PROCESS OPTIMIzATIONFOR SOURCING EXCELLENCE
REPOSITION YOURREGIONAL STRATEGY IS YOUR TEAM PREPARED FOR A
SUPPLY NETWORK TRANSFORMATION?
TCO CALCULATION
SUPPLY NETWORK CONTROLLINGAND KPI SETTING
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Faced with constantly changing economic, technological and managerial challenges, corporations of all sizes require efficient and flexible supply network management to drive operational efficiency, create customer value and ultimately maximize profitability.
In order to remain cost competitive, organizations must utilize global sourcing markets, optimize their supply base and manage commodity price volatility. The integration of suppliers and cross-functional teams in a holistic Total Cost of Ownership (TCO) management process is thus of utmost importance. Commodity sourcing markets like China, South East Asia and Central Eastern Europe have evolved into attractive locations for high-tech components in automotive and industrial applications.Digital technologies are transforming traditional business models – with Supply Network Excellence at its center. Data-driven decision-making will have major impacts on supply network processes and employees. Procurement managers of the future will face increasing complexity of digitally embedded processes and dynamics of global sourcing markets. To ensure qualification standards and optimized productivity, talent management implementation is crucial for their supply network transformation process.
EAC is active in key global sourcing markets from Central Eastern Europe to the Far East and South East Asia. With more than 20 years of extensive experience in SCM and purchasing in various industries and along highly complex technology chains, EAC benefits from its holistic understanding of industrial supply clusters, logistics potentials and key trends affecting global supply chains.
PROF. DR. ANDREAS R. VOEGELE UWE HAIzMANNEAC Partner Munich EAC Partner Shanghai
SUPPLY NETWORK TRANSFORMATION
OVERARCHING TRENDS IN DIGITALLY EMBEDDED GLOBAL MARKETSIncreasing complexity and dynamics of global sourcing markets, driven by transformation of traditional processes and digital solutions, boost efficiency while challenging organizations’ talent management
END-TO-END COST OPTIMIzATION
DIGITALREVOLUTION
TALENTTRANSFORMATION
Collaboration with and integration of several tiers of suppliers to ensure process efficiency and increase supply chain visibility. Full supply chain transparency to better understand costs (TCO view) and values involved. Holistic supply network controlling and monitoring combined with KPI cockpit.
Integration of intelligent and advanced analytics for negotiations, utilization of market intelligence and process efficiency improvement. Automation of operational procurement tasks.
Increasing capability requirements towards procurement managers. New qualification requirements arising from digitalization and globalization of sourcing markets. Transformation from operational fulfillment to more value-added tasks.
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CLEAR DEFINITION OF KEY TRANSFORMATION DRIVERSDynamic sourcing markets in a constantly changing business environment require organizations to adapt to new challenges and seek opportunities while improving their supply network and cost postitioning
VALUE-ORIENTED PURCHASING - SUCCESSFUL GLOBAL & DIGITAL SOURCING
n Best Cost Country sourcing (BCC) for global success (e.g. TCO optimization, speed-to-market, currency considerations)
n Make-or-buy assessment
n Integration of digital solutions and analytics to drive process efficiency
n Automation/ outsourcing of operational procurement tasks
n KPI cockpit as management information system
SUPPLY CHAIN MANAGEMENT - TRANSPARENCYTHROUGH PROCESS TRANSFORMATIONS
n Break-up established supplier structure and reduce supplier dependency
n Optimization of global distribution network (incl. logistics service provider, warehouse strategy,
service level, centralized vs. decentralized)
n Supply chain transparency through integration of suppliers and customers in decision making
n End-to-End visibility from supplier to customer as process and cost optimization
n Risk management of global value chain networks
DESIGN2VALUE - PRODUCT ADAPTATION TO MAXIMIzE VALUE
n Product adaption to local requirements through in-depth regional market and customer expertise (e.g. mid-market requirements in China)
n Identification of synergies and balance between high-end and mid-market requirements to improve competitiveness
n Assessment of standardization and material substitution
n Optimization through review of specifications and requi-rements in order to generate cost advantages and avoid future „over-engineering“
TALENT TRANSFORMATION - READINESS FOR CHANGING REqUIREMENTS
n Changing capability requirements for purchasing manager:
4 Global and intercultural mindset, as well as multilingualism
4 Strategy understanding and capability to think, act and network in an integrated way
4 Understanding of digital concepts
n qualification initiatives to develop globally aligned capabilites
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CASE STUDY - GLOBAL SOURCING EXCELLENCE
REGIONAL SUPPLY NETWORK CHALLENGES & OPPORTUNITIES
INITIAL SITUATION & CHALLENGE
n Supplier base optimization for global high-tech machinery producer to raise competitiveness n Need for sustainable improvement of global cost positioning through value-chain optimization across three streams
KEY RESULTS
n Short-list of suppliers in North & Southeast Asia and Europen Key regional/ country and technical learnings on capability and “best-fit” attractiveness
WHAT EAC DID
n Long-listing of >500 suppliersn Short-listing of pre-selected suppliers incl. RFq process and supplier assessmentn Development of strategic implications n Identification of “best-fit” suppliers
CEE - EUROPE‘S EMERGING SOURCING HUB
OPPORTUNITIES
n One-stop cluster sourcing for primary and secondary processes n Growing share of advanced manufacturing technology and new materialsn Logistical advantages due to proximity to Western Europen Significant cost advantage especially for manual processes
CHALLENGES
n Political and economic risks in non-EU CEE countriesn Cultural and linguistic heterogeneity
CURRENT ATTRACTIVENESS
l Die casting partsl Plastic partsl Household appliancesl Automotive components
FUTURE ATTRACTIVENESS
l Chemicalsl Semiconductor/ vacuum technologyl Aerospacel Electronics
INDIA - UNTAPPED OPPORTUNITIES
OPPORTUNITIES
n Strong growth in all segments (consumer, product, channel) and customization across value chainn Changing regulations and improved supply chain infrastructuren Evolving third-party logistics ecosystem
CHALLENGES
n Inefficient regulatory and clearance processesn Sourcing challenges in certain segments due to material scarcity or underdeveloped infrastructure
CURRENT ATTRACTIVENESS
l Iron & aluminum castingl Plastic partsl Steel & metal weldingl Machine parts
FUTURE ATTRACTIVENESS
l Precision machinery, esp.aerospacel High-end castingl Software/ IT solutions
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CASE STUDY - DESIGN2VALUEINITIAL SITUATION & CHALLENGE
n Growth initiative for global machinery producer in Chinan Price positioning and technology configurations not competitive with local playersn Need for suitable machine concept development for Chinese market
KEY RESULTS
n Development of machine concept (e.g. reverse engineering, standardization)n Sales and service push
WHAT EAC DID
n Cost breakdown of locally produced machines of key competitors and identification of cost improvementn Machine specification catalogue definition based on market needsn Development of Go-to-Market Strategy
SOUTHEAST ASIA - SOURCING HOTSPOTS
OPPORTUNITIES
n High rate of heterogeneity among countries n (Labour) cost advantage compared to Chinan Regional hubs for selected industries, e.g. electronics (i.e. semiconductor), consumer electronics, automotiven Emerging new regions driven by pan-Asian investments, favourable government policies, improving infrastructure and young workforces
CHALLENGES
n Partially low-skilled labour n Lack of sufficient infrastructure
CURRENT ATTRACTIVENESS
l Automotive componentsl Electronics/ Semiconductorsl Basic electronic equipmentl Wood/ agricultural products
FUTURE ATTRACTIVENESS
l Consumer electronicsl Solar equipment
CHINA - SOURCING STAR
OPPORTUNITIES
n Highly developed supplier base across all major industries and commodity groupsn Economic shift from low-cost and heavy industries towards higher valued-added componentsn Rising innovation hub for new products and services – driven by start-up environment and strong government support
CHALLENGES
n Rising labour costs and stricter labour lawsn Increasing competitiveness of local players
CURRENT ATTRACTIVENESS
l Automotive componentsl Electronics/ Semiconductorsl Metal/ steel/ die castingl Chemicals
FUTURE ATTRACTIVENESS
l Robotics/ high-tech machineryl Battery technology (e-mobility)l Renewablesl Electronics/ Sensors
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VALUE ORIENTED PURCHASING & PURCHASING 4.0
Optimization of TCO
Maximization of Flexibility
Minimization of Risks
High Transparency andKPI Cockpit
Controlling Complexity
Make-or-Buy
Big Data
Sustainable Procurement
Standardization
Early Supplier Involvement
Process Optimization
Complex supply networks and new digital solutions drive the demand for optimization – holistic supply chain transparency and process improvement as keys for efficiency boost
FORMER TEAMIndividually centered & operational tasks
FUTURE TEAMDigitally integrated & strategic SC Manager
IMPACT OF SUPPLY NETWORK TRANSFORMATION ON TALENTSupply Network Excellence processes and requirements are changing - is your team ready?
n Cost and delivery focusn Limited procurement leadership capacityn Limited requirements for analytical tasksn Unaware of procurement compliance standards and how to minimize them
n Strong leadership and improved talent capabilityn Profound analytical skills for strategic tasks n “Thinking beyond sourcing” – e.g. active supplier watch listing for strategic movesn Risk and compliance sensitive
n Fulfillment of operational tasks as major part of work tasks n Inefficient deployment of resourcesn Limited transparency of entire supply chain
n Operational tasks are automated n Non-core activities outsourcedn End-to-end integration of all stakeholders
n Digital technology for fulfillment of tasksn No or insufficient data analysis/ intelligence
n Supplier talent and technology integration n Hybrid digital architecturen Technology and analytics solutions
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CONTENT EAC APPROACH
PROCESS AND COST OPTIMIzATIONEnd-to-end cost improvement with optimization of operational tasks (e.g. through automation, digitalization)
ANALYzE & DEVELOP IMPROVEMENT POTENTIALIdentification of improvement potential within purchasing procedures and assessment of traditi-onal processes (e.g. make-or-buy)
CHANGE TO INCREASE PERFORMANCEAdaptation of traditional product design to market requirements (e.g. meeting local requirements, cost optimization)
DEVELOP IMPROVED APPLICATIONAssessment of best-practice (e.g. reverse engi-neering of competition) and concrete identifica-tion of application improvement. Standardization and material substitution analysis
OPTIMIzE SUPPLY NETWORKMost efficient utilization of global sourcing mar-kets while creating transparency along the entire value chain
GENERATE SUPPLY CHAIN TRANSPARENCYEAC regional expertise to identify best sourcing markets/ suppliers and how to integrate them most efficiently
TALENT qUALIFICATION PUSHImproved qualification of Purchasing/ SCM team in order to meet changing requirements (e.g. through digitalization, global sourcing)
GUIDE AND FACILITATE qUALIFICATION INITIATIVESIdentification of qualification gaps and concrete initiatives to close them (e.g. coaching/ work-shops, compliance assessment)
VALUE-ORIENTED PURCHASING/ PURCHASING 4.0
DESIGN-2-VALUE
SUPPLY CHAIN MANAGEMENT
TALENT TRANSFORMATION
EAC SUPPORTAhead of future sourcing trends through strong supply network expertise in all major sourcing regions
EAC EXPERTISE AT A GLANCE
YOUR LOCAL EXPERT IN EMERGING MARKETS SINCE 1992
FUNCTIONAL COMPETENCIESSTRATEGYM&AOPERATIONAL EXCELLENCE
> 80 EXPERTS
OFFICES INMUNICHSHANGHAI MUMBAIMOSCOW
EMERGING MARKETSCHINA INDIASOUTH EAST ASIA NORTH ASIARUSSIACEE
INDUSTRY COMPETENCIESMOBILITYINDUSTRIALSINFRASTRUCTUREENVIRONMENTCHEMICALSHEALTHCARECONSUMER GOODSADVANCED TECHNOLOGIES
EAC – Euro Asia Consulting PartGHeimeranstraße 37 80339 Munich GERMANY
Phone +49 89 [email protected]
EAC – Euro Asia Consulting Sunyoung Centre Rm. 801 - 398 Jiangsu Road 200050 Shanghai CHINA
Phone +86 21 [email protected]
EAC – Euro Asia Consulting Pvt. Ltd.306-310 Peninsula Plaza A/16Veera Industrial EstateAndheri (West) 400053 Mumbai INDIA
Phone +91 22 [email protected]
EAC – Euro Asia Consulting OOOMelnitskiy Per. 1 105120 Moscow RUSSIA
Phone +7 495 [email protected]
PROF. DR. ANDREAS R. VOEGELEPARTNER EAC MUNICHPhone +49 89 [email protected]
UWE HAIzMANNPARTNER EAC SHANGHAIPhone +86 21 [email protected]
EAC MUNICHHEADqUARTERS
EAC SHANGHAI EAC MUMBAI EAC MOSCOW
www.eac-consulting.de
EAC REFERENCES
YOUR EAC EXPERTSFOR SUPPLY NETWORK EXCELLENCE
