Ppt on supplier consolidation

© MAHLE MAHLE Behr India Ltd. 20. März 2014

Consolidation consists in grouping together flows that are usually treated separately.

Supplier consolidation&

System update


Overview

Need

Challenges

Activities

Advantage

System update overview

Conclusion

Contents


Overview Supplier consolidation is one of those supply chain management strategies that is fairly easy to understand and just as easy to implement. It involves reducing the vendor base, using the company's economies of scale to lower prices, lowering incoming freight costs, improving quality, strengthening supply agreements, and then using these benefits to define the company's new vendor acquisition criteria. It's a continuous process and one that produces significant cost reductions.



One sources can save your business time and money. Ultimately, this translates to a higher return on your investment, and more money in your pocket.


To reduce organization current no. of the supplier To control and saving cost on the product To increase service level performance To improve quality of the products To increase delivery frequency To improve supplier relationship To stable production schedule Performance evaluation To improve purchasing processes Strong contracts agreements Lower per unit freight cost To increase purchasing power

Need


Long Business Cycle

Identifying Points of possible conflict and Compromise

Measuring Subjective Indicators of Supplier Performance

Sheer Volume of Vendors to Vet

Challenges


Supplier base study CFT meeting with supplier before cost reduction on product RFQ send to the no. of supplier Cost negotiation with the supplier Supplier selection To collect information of buffer stock at existing supplier end To visit at existing supplier for mould condition review Tool movement existing supplier to new supplier Trial plan at new supplier PPAP plan at new supplier end PO released

Activities


Cost savings Time savings Return on investment ( ROI ) Increased buying power Reduced training requirements One familiar interface Less administration and meetings Less risk One support desk Competitive buy-back scheme Quality and performance Increase volume to supplier Supplier evaluation/certification

Advantages





Example of annum cost savings on stationary





An offer An acceptance of that offer which results in a meeting of the minds A promise to perform A promise or payment in some form Terms and conditions

An agreement with specific terms between two or more person or entities in which there is a promise to do something in return for a valuable benefit known as consideration. Since the law of contract is at the heart of most business dealings, it is on of the three or four most significant areas of legal concern and can involve variations on circumstances and complexities.

This type of agreements can be useful in a wide range of business, from supply of raw material in the construction industry to supply of goods to a retailer.


Supplier management agreement

Supplier quality management handbook

Tool agreement

Warranty agreement

Confidential agreement

Purchase terms & conditions

Collect pending sign. Off an agreements from supplier


Planning ahead is easier

Providing security of supply for the buyer and of order for the supplier

Pre-agreed pricing formula – predictable prices

The buyer can get better price in return for the commitment

Less admin- You don’t have to maintain purchase orders over and over again

Advantages


General scope Duration Quality issues Quantities, Forecasts, Orders Pricing Payment Deliveries, Risk & Ownership Claims Termination Force majeure Limit of liability Disputes and law

Some of the basic terms need to include in contract

If the customers taking regularly source products from the same suppliers or if the supplier with some regular customers then it can be often benefit for both sides, to set up a long-term agreement.


Conclusion


Ppt on supplier consolidation

Engineering