© MMXVII IndustryStar Solutions LLC
How to Create Competition to Drive PerformanceBOOM: Session Code: IAWilliam Crane | Founder & CEO | IndustryStar Solutions LLC
05/23/17 3:45 – 4:45pm ET
Rapid Outsourcing in a Boom Economy
+1 248 404 8249 [email protected], BS, CPSM, Black Belt
3
Why is Rapid Outsourcing Critical in a Booming Economy?
What to Outsource?
4 Actions to Achieve Rapid Outsourcing Success
3 Models for Rapid Outsourcing
Q&A
What We are Going to Accomplish
© XXVII IndustryStar Solutions LLC
Cost Skills Risk Speed Innovation
• Cost Reduction
• Avoid Major
Investments
• Improve Financial
Ratios
• Realize Variable
Cost Structure
(hedge against bust)
• Improve Quality
• Improve
Performance
• Acquire Additional
Capacity
(capacity gets tight with
growth)
• Focus on Core
Competency
• Improve Flexibility
• Leverage
Expertise
(lower expansion risk)
• Accelerate
Processes
• Expedite Product
Commercialization
(capture new sales)
• Launch New
Disruptive Products
• Launch a New
Strategic Initiative
• Tap Into
Innovation
(leapfrog competition)
4
Why is Rapid Outsourcing Critical in a Boom Economy?5 Main Drivers
© XXVII IndustryStar Solutions LLC
5© XXVII IndustryStar Solutions LLC
What to Outsource?Noncore Activities of The Firm
Goods Services Tasks
• Components
• Modules
• Products
• Customer Research
• Engineering
• Staffing
• Industrial Design
• Product Development
• Procurement
• Production Control
• Supplier Quality
• Contract Manufacturing
• Warehousing
• Order Fulfillment
• Logistics
• Etc...
• Process Development
• Identifying Suppliers
• Qualifying Suppliers
• Quoting Suppliers
• Plant Audits
• Onboarding Suppliers
• Transitioning Suppliers
• Supplier Management
• Supplier Ratings
• Cost Reduction
• Shipment Track & Trace
• Prototype Development
• Etc...
6
1. Locate Strategic Partner, NOT Vendor, & Align Incentives
2. Establish Core Competencies, Business Model & Case
3. Attain Detailed Plan (Cost, Scope of Work, Timeline, Staff, & Bios)
4. Track KPIs & Continuous Improvement to Drive Performance
4 Actions to Achieve Rapid Outsourcing SuccessSmooth Transitions & Improve Supply Performance
© XXVII IndustryStar Solutions LLC
7
Technology Commercialization FrameworkTM or similar
frameworks can be effectively leveraged to outline
support for all (services) or a portion (tasks) of your
company’s needs enhancing
outsourcing performance.
Technology Commercialization FrameworkTM
© XXVII IndustryStar Solutions LLC
Strategy
Creation
Supply Base
Building
Commercial
Optimization
Supplier
Onboarding
Product
Launch
Network
Connecting
Execute &
Sustain
8
Technology Commercialization FrameworkTM
Key Steps for Rapid Outsourcing Success
Develop
Sourcing
Strategy
Create
Scope of Work
Decide If/What
to Outsource
(Non Core)
Identify Potential
Supply Partners
Qualify Potential
Supply Partners
Quote Potential
Supply Partners
Negotiate
Contract
Plan
Transition
Sign
Contract
Develop RFP
with Scope of
Work
Finalize
Performance
KPIs
Hold Kickoff
Meeting
Monitor
Performance
KPIs
Program
Manage
Transition
Complete
Transition
© XXVII IndustryStar Solutions LLC
Outline Firm
Desired Core
Competency
Strategy
Creation
Supply Base
Building
Commercial
Optimization
Supplier
Onboarding
Product
Launch
Network
Connecting
Execute &
Sustain
9
Developing a Sourcing StrategyUpfront Investment In Time & Resources Is Key to Long-term Success
Develop
Sourcing
Strategy
Create
Scope of Work
Decide If/What
to Outsource
(Non Core)
Identify Potential
Supply Partners
Qualify Potential
Supply Partners
Quote Potential
Supply Partners
Negotiate
Contract
Plan
Transition
Sign
Contract
Develop RFP
with Scope of
Work
Finalize
Performance
KPIs
Hold Kickoff
Meeting
Monitor
Performance
KPIs
Program
Manage
Transition
Complete
Transition
© XXVII IndustryStar Solutions LLC
Outline Firm
Desired Core
Competency
Strategy
Creation
Supply Base
Building
Commercial
Optimization
Supplier
Onboarding
Product
Launch
Network
Connecting
Execute &
Sustain
10
Developing a Sourcing StrategyKey Ingredients to a Successful Strategy
Develop
Sourcing
Strategy
Create
Scope of Work
Decide If/What
to Outsource
(Non Core)
Identify Potential
Supply Partners
Qualify Potential
Supply Partners
Quote Potential
Supply Partners
Negotiate
Contract
Plan
Transition
Sign
Contract
Develop RFP
with Scope of
Work
Finalize
Performance
KPIs
Hold Kickoff
Meeting
Monitor
Performance
KPIs
Program
Manage
Transition
Complete
Transition
© XXVII IndustryStar Solutions LLC
Outline Firm
Desired Core
Competency
1. Charter
2. Cost Benefit Analysis (Make vs Buy, ROI)
3. Assumptions and Constraints
4. Outsourcing Project Scope Statement
5. Critical Success Factors (KPIs)
6. Communication Plan
7. Work Breakdown Structure
8. Roles & Responsibilities Matrix (RASIC)
9. Resources Plan (Staffing Ramp Up)
10. Sourcing Plan
11. Risk Management Plan
12. Quality Plan
13. Project Schedule
14. Budget
15. Change Management Plan
16. Implementation Checklist
17. Feedback Plan Source: The Black Book on Outsourcing
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1. Projects
2. Turnkey Product Commercialization
3. Supply Chain as a Service (X as a Service)
3 Models for Rapid OutsourcingProduct Commercialization Approaches for a Booming Economy
© XXVII IndustryStar Solutions LLC
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OutsourcingBusiness Model ContinuumVisibility
Control
100% Outsource
100% Insource
1950s
1900s
2000s
Now
Supply Chain as a Service
“X as a Service”
Projects
Business Processes
Technical
Skills
ComponentsModules
Contract Manufacturing
Turnkey Product Commercialization
© XXVII IndustryStar Solutions LLC
Tasks
13
How to Leverage Rapid Outsourcing to Attain Variable Cost Structure?
Projects
© XXVII IndustryStar Solutions LLC
“You must always be able to predict what's next and then have the flexibility to evolve.” - Marc Benioff
14
Developing Sourcing StrategyDetermining Need & Level of Support
© XXVII IndustryStar Solutions LLC
Internal Delivery
Fully Outsourced
Technical Skills Projects
Management Capabilities
Managed Services
Business Processes
Partnered Solution
Sourcing of Capability Deliverables Sourcing of Continuous Services
15
How to Leverage Rapid Outsourcing to Speed Innovation?
Turnkey Product Commercialization
© XXVII IndustryStar Solutions LLC
“The Electric Light Did Not Come From The Continuous Improvement of Candles.” - Oren Harari
Supplier
Tasks CEO Design Engineering
Program
Management Manufacturing
Human
Resources Finance Accounting Marketing Sales IT Supply Chain
Supply Chain Strategy A, R C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I S
Supply Chain Executive Leadership A, R S S S S S S S S S S S
Supply Chain Program Management A, R C, S, I C, S, I A C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I S
Supply Chain Staffing I R
Supply Chain Information Technology (Systems) C,S C,S C,S C,S C,S C,S A R
Purchasing A, R I I I I I I I I I I S
Supply Base Building & Management (RFI) C, S A C, S C, S S S R
Supplier Quoting & Analysis (RFP/Q) C, S C, S A C, S R
Supplier Negotiat ions & PO Issuance A, R I I I I I I S
Plan for Every Part C, S, I C, S, I A C, S, I C, S, I C, S, I R
Production Control A, R I I I I I I I I I I S
OEM Module Build Forecast Management A I I C, S R
Material Planning C, S A R
Components Forecast C, S A R
Inventory Management (Supermarket & Plant) C, S A R
Material Handling (Inbound & Routes & Outbound) C, S A I R
Warehouse/Staging Management C, S A I R
Supplier Quality A, R I I I I I I I I I I R
Supplier Performance (Ratings/Plant Audits) C, S A C, S C, S I I R
Supplier Development C, S A C, S C, S I I R
Lean Six Sigma Quality Management System C, S C, S C, S A R
Logistics A, R I I I I I I I I I I S
Sales & Operations Planning Process A, R C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I S
Shipment Planning & Scheduling C, S A I R
Inbound & Outbound Receiving & Shipping C, S A R
Carrier Management C, S A R
Advanced Shipping Notice for OEM C, S A I R
Dunnage/Rack Management C, S A R
RASIC Key: R = Responsible, A = Approving, S = Support ing, I = Informed, C = Consulted
Customer
16
RASICEffective Tool for Providing Clear Reporting, Approval, & Visibility
© XXVII IndustryStar Solutions LLC
17
How to Leverage Rapid Outsourcing to Reduce Cost Structure?
X as a Service
© XXVII IndustryStar Solutions LLC
“Synergies are not only about cost reduction. Synergies can be access to markets, exchange of products, avoiding overlaps, exchange of best practices.” - Carlos Ghosn
OVERVIEW: Leveraged Supply Chain as a Service to support day to day global
Supply Chain tasks across (Strategy, Procurement, Production Control,
and Supplier Quality) for all new low-volume vehicle program. Support
Tasks included 1) identifying suppliers, 2) quoting suppliers, 3) assessing
suppliers, 4) conducting plant audits 5) maintaining program Sourcing Bill
of Material (Plan for Every Part), 6) Managing component supplier
production schedules, for prototype and production launches.
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PRODUCT: Ford GT
INDUSTRY: Automotive Tier I
SERVICE: Supply Chain as a Service
Case Study: Multimatic Needed a Low Volume Supply ChainLeveraged Supply Chain as a Service to Support Tasks
Cost Reduction Supplier Engagement Flexible Support
$5M+ Component
Savings
Increased from
23 to 297
50% Reduction in
Staffing Costs
© XXVII IndustryStar Solutions LLC
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How SCaaS Works
Supply Chain as a Service looks at work more as a
number of services, processes, and tasks. Similar to
the principles of Agile software development, every task
can be assigned “points” and tasks can be outsourced
to add additional bandwidth.
The same “X as a Service” principle can be applied to
any need of the company.
Results: Lower support costs, attain variable cost
structure, and instant scalability. Supply Chain as a
Service can flex up and down mirroring your company’s
true supply chain needs.
Scale cost effectively and less risky in a
BOOM economy
© XXVII IndustryStar Solutions LLC
SCaaS Value Stream MapExample Day to Day Process Management of Purchasing, Production Control, Supplier Quality & Logistics
© XXVII IndustryStar Solutions LLC
Supplier
Component
Delivery
Finished Module
Supply
Manufacturing
CEO Design Engineering ManufacturingProgram
Mgmt
SalesMarketingAccounting FinanceSupply Chain
Supplier
Component Supermarket
Outbound Logistics
Customer Plant
ITHuman
Resources
1
3
2
4
5
Procurement Support1 Supplier Quality Support2 Supply Chain Executive Leadership 3 Production Control Support 4 Logistics Support 5
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1. Remove Emotion from Make/Buy Decision
2. Treat Supply Partners as Extension of Team
3. Technology Should Follow Processes
4. Start Small With Pilot Projects
5. Differentiate (Models, Processes, etc.)
6. Look Outside Your Industry for Inspiration
7. Select Firms With Proven Experience
8. Align With Firms Different Than Your Competitors
9. Create Mutual Incentive Contracts
10.Institutionalize Periodic Performance Check-Ins at Multiple Levels
© XXVII IndustryStar Solutions LLC
Rapid Outsourcing10 Insights to Realize Value Now
Q&A
© XXVII IndustryStar Solutions LLC
How to Create Competition to Drive PerformanceBOOM: Session Code: IAWilliam Crane | Founder & CEO | IndustryStar Solutions LLC
05/23/17 3:45 – 4:45pm ET
Rapid Outsourcing in a Boom Economy
+1 248 404 8249 [email protected], BS, CPSM, Black Belt
YOUR FEEDBACK IS IMPORTANT
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brief survey.
Survey link:
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