TAGMfg030811
- 1. Using Technology to speed up the Sourcing & New Product Introduction ProcessRoger Blumberg – Vice President, Business Developmentrblumberg@mfg.com
- 2. Safe Harbor Statement2Our discussion may include predictions, estimates or other information thatmight be considered forward-looking. While these forward-lookingstatements represent our current judgment on what the future holds, theyare subject to risks and uncertainties that could cause actual results todiffer materially. You are cautioned not to place undue reliance on theseforward-looking statements, which reflect our opinions only as of the date ofthis presentation. Please keep in mind that we are not obligating ourselvesto revise or publicly release the results of any revision to these forward looking statements in light of new information or future events. Throughouttoday’s discussion, we will attempt to present some important factorsrelating to our business that may affect our predictions. You should alsoreview our most recent Form 10-K and Form 10-Q for a more completediscussion of these factors and other risks, particularly under the heading“Risk Factors.”
- 3. Release of Harm StatementsStatements made today may not reflect the opinion of TAG Manufacturing Society, Georgia Tech, MFG.com as well as the speaker (me).3
- 4. MFG.com – The FactsFounded in 2000
- 5. Global Company headquarteredin Atlanta, with operations in Shanghai and Paris
- 6. Marketplace available in 7 languages, over 50 currencies
- 7. Serves over 300 manufacturing categories
- 8. Over 200,000 members in 50 countries
- 9. Suppliers pay an annual subscription to participate in the quoting and collaborative process with buyers“One of the 15 companies that will change the world”-CNNMoney.com4
- 10. Technology has vastly changed how business is conducted 5How we NetworkHow we CommunicateHow we stay connectedHow we do comparisonsHow we place orders
- 11. Intelligent Matching is an example of technology creating tremendous efficiency gains6Help in finding the right partner: Socially Help in finding the right partner: Professionally If only the dating websites allowed for references and recommendations from previous boyfriends/girlfriends……..
- 12. Supplier discovery is a critical component to any sourcing strategy you deploy SampleApprove Category StrategyExecutive Approval of Business Case1.4.Analyze CategorySpend5.6.7.ExecuteStrategyCollect and refine data by supplier, BU, pricing, quantityDevelopTransitionand ChangeManagementPlansMonitor /ManageSuppliersConduct negotiations (RFP, auction, face to face)
- 13. Establish criteria and evaluate suppliers
- 14. Determine savings, investments, risks
- 15. Develop recommendation2.DevelopSourcingStrategyDetermineBusiness Req’sCollect specifications, service level requirements and volume forecasts
- 16. Develop process to monitor savings and compliance
- 17. Develop plan to transition to new suppliers
- 18. Develop implementation plan for demand management opportunities
- 19. Develop change management plan3.Assess SupplyMarketsCollect supplier data
- 22. Cost drivers
- 23. Segmentpurchases
- 25. Develop negotiation technique approachInformation on current suppliers is primarily found inside the organization…Individual RolodexAccounts Payable FilesMailing ListsPurchasing Files Personal RelationshipsInternal RFI
- 26. Current and Past SuppliersSupplier CatalogsCompetitors’ SuppliersSearch the InternetSupply MarketsSupplier DirectorySearches for new Suppliers vary greatly based on bandwidth and sourcing competencyComplete research is key to a successful strategic sourcing campaign!
- 27. Cost Estimator Vs. e-SourcingCost Estimator Toole-Sourcing ToolReal Time Response
- 28. Identify parts with greatest cost savings
- 29. Examine re-design opportunities to maximize cost savings
- 30. Evaluate lower cost manufacturing and sourcing alternatives
- 31. Slower but more fact based (committed) pricing
- 32. Gives potential suppliers the opportunity to make design recommendation
- 33. Gives you an opportunity to see how large of a supply market you have before starting production10Cost Estimator tools reside in Engineering, e-Sourcing tools are in Strategic Sourcing and Supply Markets straddle both organizations
- 34. Examples by CategoryCost EstimatorE-Sourcing11Supply MarketsNote: Not an exhaustive list
- 35. A Quick Case StudyA Medical Device Manufacture was constantly missing their on-time ShipmentsGoal
- 36. BackgroundPredictable Sales Forecast/Demand (+/- 10%)Mature Product Line with updates every 2 to 3 yearsCurrently not meeting the commitment date to customersResults in customer dissatisfactionResults in lack of trustPotentially losing salesConsumes resources – Customer support & othersMoneyTimeReactive cultureLacking internal trustDisruptions in production schedule & flow
- 37. List of Potential Causes
- 38. Project Key FindingsEngineering spent 1/3 of their time doing sourcing related work including supplier meetings & visits
- 39. Average Engineer made 2x Salary of Sourcing
- 40. Suppliers called on Engineering, not sourcing
- 41. Sourcing team was not embedded in the engineering department
- 42. Majority of the stock outages due to sole source relationships established by the Engineering department
- 43. Engineering did not negotiate with supplier or consider the impact of sole sourcing
- 44. Sourcing did not question the supplier assigned to the part and did not look for alternative solutions15
- 45. What I have learned in Multiple Sourcing EngagementsMost companies still have engineers source for prototypes & first run
- 46. Most engineers have little training on sourcing best practices
- 47. Many engineers actually like to source?
- 48. Companies on e-sourcing tools have contained engineering sourcing
- 49. Forward thinking Companies are now embedding both sourcing and e-sourcing in Engineering 16
- 50. Who is using MFG.com?Engineers
- 52. Sourcing
- 53. Inventors
- 54. Students
- 55. Companies without an IPO who want to source in low cost countries
- 56. Any company looking for a hard to source item17
- 57. A Quick MFG.com Case Study18Very large mining and aluminum producer
- 58. Significant turnover in the sourcing team
- 59. No deep knowledge of this particular category (Charge Bucket)
- 60. Last known supplier of the product is no longer in business
- 61. Only documentation they have is a drawing of the item
- 62. Needed to find a source in under a week
- 63. Interested in global sourcing if the transportation costs made senseThey rapidly found suppliers who could handle their requirements 19
- 64. Detailed supplier profiles reduced their research efforts20
- 65. All Certifications were validated within the MFG.com platform21
- 66. Supplier references were readily available22
- 67. Intellectual property was protected23Electronic Signatures Captured
- 68. Quote volume was significant but not over burdensome24
- 69. They easily evaluated quotes25
- 70. Example of Interesting projects we Assisted with this year26
- 71. Conclusion Asking Engineers to Source is very common but is not adding value in the product development process
- 72. Consider either embedding Sourcing in Engineering or educating Engineering on Sourcing
- 73. Consider Marketplaces and Cost Estimator tools as an alternative to doing nothing or instead of e-sourcing
- 74. Keep an eye out for the trend in which supplier marketplaces and e-sourcing convene27