Copy Exactly

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Working Draft - Last Modified 5/7/2006 7:59:25 PM
Best-in-class Supply
Chain Practices

Printed 3/8/2006 9:30:59 AM
Maximizing your bottom line saving during
current global economy meltdown
Jerry Nye
Jun 13, 2009
* Footnote
Source: Sources

My Goal - Faster, Better, and Together

1. Achieved 3 point market

competitive advantage

Printed 3/8/2006 9:30:59 AM
2. Achieved 2% incremental saving
quarter-on-quarter
* Footnote
Source: Sources

Working Draft - Last Modified 5/7/2006 7:59:25 PM Printed 3/8/2006 9:30:59 AM
Recently - global economy meltdown

Sources
* Footnote
Source:

Today Manufacturing Environment –
Outsourcing or move to low cost region

Mfg Jobs moved to low cost region

Printed 3/8/2006 9:30:59 AM
* Footnote
Source: Sources

Working Draft - Last Modified 5/7/2006 7:59:25 PM Printed 3/8/2006 9:30:59 AM
How - Faster, Better, and Together

Sources
* Footnote
Source:

Provided Fact Based Solution For
Decision Making

My Knowledge and experience Provided Fact Based
solution

Global Experience

Market intelligence
Competitive Research &
analysis

Printed 3/8/2006 9:30:59 AM
Teardown analysis

Fact based analysis

Analyze data find out so-
What
Bilingual Negotiator
* Footnote
Source: Sources

My Core Competency

Supply Chain Planning Supply Chain Execution Supply Chain Change
and Optimization Initiation
Cost Modeling

Market Intelligence Copy Exact Programs
Inventory Analysis Strategic Sourcing Program Initiation
Demand and Supply Planning
Planning and Scheduling Teardown Analysis I-Negotiations
Demand Forecasting Outsourcing e-Auctions
Sales & Operations Planning Fact-Based Negotiation Suppliers Selection
Supply Chain Network Analysis Global Sourcing Business Process Re-
System implementation engineering
Design to Mfg

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Warehousing Management

Management Consulting + Change Initiation + Change Acceleration

Business Process Analysis + Reengineering

Packaged Systems Integration + Copy Exact Deployment
* Footnote
Source: Sources

The Entrepreneurial Mindset in a
current of Uncertainty
• Passionately seek new

opportunities
• Pursue opportunities with
enormous discipline.
• Pursue only the very best

Printed 3/8/2006 9:30:59 AM
opportunities
• Focus on execution, specifically
fast adaptive execution
• Engage the energies of everyone
in my domain

* Footnote
Source: Sources

What is Best In Class?

Best in Class Supply
Chains Excel at the

Supply Chain
“Compulsories” AND Real Time & On
Enable Their Demand
Company to Grow

Printed 3/8/2006 9:30:59 AM
Growth & Profitability

Cost & Service

Supply Chain Value
* Footnote
Source: Sources

Best-in-class supply chain leadership
measured by..
AMR Criteria

• Apple
Supply chain performance • Dell
•Inventory turns 25% •
•
Procter & Gamble
•Return on assets 25% IBM
• Cisco
•Trailing 12-months growth

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• Nokia
10% • Wal-Mart
The opinion poll • Samsung
•AMR Opinion 20% • PepsiCo
•Peer Opinion 20% • Toyota

* Footnote
Source: Sources

Drive to best-in-class by

1. Optimizing the physical
Profitability

structure
2. Integrating the information
and financial flows
creating end-to-end value
3. Enhancing cash, cost and

Printed 3/8/2006 9:30:59 AM
customer satisfaction
positions
Liquidity Growth 4. Focus on the excellent
execution

* Footnote
Source: Sources

1. Optimizing the physical structure

Engineering

Demand & Supply
Go To Market Demand Supply Supply Chain
Balance

Finance

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Supplier
Key Inventory
Supplier-
Customer Distribution Plant Inventory Specific
Managed Plant owned
Service Inventory In-transit Centers & In-transit Raw EMS/ODM Hubbing In-transit For
Inventory WIP Inventory
in Subsidiaries Your
“Hubbing”
Channel company

Support Deliver Make Source
* Footnote
Source: Sources

2. Integrating the information and
financial flows
Support Deliver Make Source

Supplier
Key
Supplier- Inventory
Customer Distribution Plant Inventory
Managed Plant owned Specific
Service Inventory In-transit Centers & In-transit Raw EMS/ODM Hubbing In-transit
Inventory WIP Inventory for
in Subsidiaries
“Hubbing” Your
Channel
company

Printed 3/8/2006 9:30:59 AM
Financial Flow

Information Flow

Physical Flow
* Footnote
Source: Sources

3. Enhancing cash and cost
“Get Cash “Have Less “Pay “Cash is
Quicker” Inventory” Appropriately” King”

DSO + DIO - DPO CCC

Days Sales Days Inventory Days Payables Cash Conversion
Outstanding (DSO) Outstanding (DIO) Outstanding Cycle
The average The average length The average length The average
number of days of time in days of time in days length of time in

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that the receivable between inventory between receipt of days between
sits on the coming on and off goods and payment receipt of raw
books the books for them materials and
collection of
[Quarter-end [Quarter-end [Quarter-end payment for
Receivables] Inventories] Payables] finished goods

[Quarter-end [Quarter-end [Quarter-end
Revenue] / 90 COGS] / 90 COGS] / 90 DSO + DIO - DPO
* Footnote
Source: Sources

4. Excellent execution measured by

• Material Savings %

• Conversion Cost %
• Cost of Poor Quality %
• Inventory Turns

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• Accounts Payable Days

* Footnote
Source: Sources

Copy Exactly –
Fast adaptive best-in-class Supply Chain Practices
My Commitment My Delivery
Market Market intelligence

A
Intelligence
Cost modeling
B Cost Market deflation
Modeling
Supply market update
C Fact Based

Printed 3/8/2006 9:30:59 AM
Negotiation Teardown analysis

Setup negotiation target
D Re-structure
initiative Re-structure initiative

Teardown Inventory analysis
E
Analysis
More …
* Footnote
Source: Sources

Market Intelligence –A1
Provide triangulation measurements tool kit

Buying effectiveness
Versus market price change

Procurement
Competitive
Advantage (PCA)

Printed 3/8/2006 9:30:59 AM
Measurement
Triangulation
Market Absolute
Intelligence Competitiveness
(AC)
Validates or refutes Specific point-in-time
PCA and AC comparison with
* Footnote competitor
Source: Sources

Market Intelligence –
A2
Speedup market intelligence provider selection

Gartner Onesources Digitimes
IDC Digitimes Ice Alert

Yankee Metalprices CBA
Prismark Fuji Chimera MTC
Protelligent IIT VDC
Paumanok Fleck Avicenne
SEMICO Bishop Euromonitor

Printed 3/8/2006 9:30:59 AM
iSuppli CAPS Product Price Index
Databeans AMR Databeans
Purchasing magazine
IC Knowledge Custerconsulting Procurement Strategy
IC inside Display Research Council
Frost and Sullivan

* Footnote
Source: Sources

Market Intelligence –A3
Provide procurement competitive advantage and absolute
competitiveness chart

Printed 3/8/2006 9:30:59 AM
* Footnote
Source: Sources

Cost Modeling –
B1
Develop cost model captured key cost drivers
Subtotal Equip. Labor Material

• Step 1: Front End(SMT)

• Step 2: Board Test
Overhead

• Step 3: Frame Assembly x

30
• Step 4: Manual Assembly x
Other

%
•

ga
Step 5: Package Shipping x
Assembly
p
• Step 5: Unit Test x
Profit • Step 5: System Integration Test
x

• x

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Yield

• Labor Cost
x
Raw • Factory O/H x
Material • Warranty costs
x
Cost • Package Shipping
x
• R&D
x
• SG&A
• Margin x
RFQ Should x
Total
Cost
* Footnote
Source: Sources

Cost Modeling – B2
Provide comprehensive should-cost model by commodity-specific

Printed 3/8/2006 9:30:59 AM
* Footnote
Source: Sources

Fact Based Negotiation C1
–
Provide fact based negotiation tool kit
Decision Decision
Review Review

Phases

Identify Execute
Assess Select Design
Set Needed and
Current Program Implementation
Strategy Critical Measure
Programs Portfolio Plans
Capabilities Results

 Market  Benchmark  Scope  Existing projects:  Detailed  Program
Deliverables

intelligence competitors accepted, canceled program design Management
 Cost
or redesigned and action plan
 Value  Gap

Printed 3/8/2006 9:30:59 AM
 Results
propositions analysis  High-level  Metrics
 Fit business cases
 Goals  Targets
 Programs
prioritized and
scaled

To define, develop, and deploy standardized governance, skills, training,
career paths, measurements, incentives, and electronic auctioning and
negotiating tools that will maximize procurement savings across the
* Footnote
corporation.
Source: Sources

Fact Base Negotiation – C2
Had been fact to fact negotiation with following supplies

Foxconn Micron SINCO Unitech
Flextronics STM SamYoung Unimicron
Jabil SONY Silitech Wus

Wistron Samsung LSI DKUIL Compeq
Delta OmniVision SEIWOO Multek
LiteOn Kodex Tee Hwa Chin Poon
Winteck
Magachip Memtech Nanya
Altus
SEMCO Largan BYD Elec & Eltek
Vista Point GESO Ichia Merix
E-PIN SunArrow Mflex

Printed 3/8/2006 9:30:59 AM
Jabil
BYD Asia Optical Sensetech BYD
LG Innotek Maxell Sorim MFS
Techwin Tyco Jeewoo GFlex
Toshiba Amphenol Foxlink Ichia
ALPS FCI Foxconn Foxconn
Aurora Optical Yokowa ACON Sanyo
Chicony Pansonic Hirose Lishen
Foxlink ALPS Molex Desco Tech
Topsearch SMK Konica Minolta
* Footnote
Source: Sources

Re-structure initiative – D1
Provide Tools and Matrices

1. Process 1. Enterprise wide Tool
Business
used by all

enhancement
T 2. Corp wide baseline
2. e-business F O measurement
O O
Technology C Operational 3. performance
L
3. Leadership A comparison
L & 4. Highlighting “best
Empowerment practices”
P M
4. Skills and Training

Printed 3/8/2006 9:30:59 AM
O Systems A 5. Measure internal
I
5. Metrics and Pay-for- N
T performance to the
R
T I industry
Performance
C 6. Enterprise wide
Incentives E spend data
Technology S

* Footnote
Source: Sources

Teardown Analysis E

22 most popular IP Phone
• Top 5 IP Phone provider

50+ Cell Phone
• Nokia, Samsung, LG ,
Apple, Motorola, and

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other

4 Server
• Sun, HP
* Footnote
Source: Sources

The Secrets for Driving Motorola’s
Unprecedented Turnaround in 2002 – My
achievement
Making business successful by transforming supply chain
initiatives into actions and results – faster, better, and together.

Printed 3/8/2006 9:30:59 AM
* Footnote
Source: Sources

Motorola Fast Adaptive IBM Best-in-class
Supply Chain Practices in 2000 – My Achievement

Procurement
Competitive

Printed 3/8/2006 9:30:59 AM
Advantage (PCA)

Market
Intelligence

Absolute
Competitiveness
(AC)
* Footnote
Source: Sources

Motorola fast adaptive IBM - 10X
improvement – My Achievement

Phase 2
Phase 1 Phase 3 Phase 4
Transforming the
“Foundation” e-Business On Demand
Enterprise
1994-1995 1998 - 2002 2003 -
1995-1997

IBM Spend 8 years on first 3 phase

Printed 3/8/2006 9:30:59 AM
Motorola spend
3 years

* Footnote
Source: Sources

Fact Based Negotiation Using Cost
Modeling - My Achievement

Fact Based Triangulate Measurement

Decision Decision
Review Review

Printed 3/8/2006 9:30:59 AM
Phases

Identify Execute
Assess Select Design
Set Needed and
Current Program Implementation
Strategy Critical Measure
Programs Portfolio Plans
Capabilities Results

 Market  Benchmark  Scope  Existing projects:  Detailed  Program
Deliverables

intelligence competitors accepted, canceled program design Management
 Cost
or redesigned and action plan
 Value  Gap
 Results
propositions analysis  High-level  Metrics
 Fit business cases
 Goals  Targets
 Programs
* Footnote prioritized and
Source: Sources scaled

Avaya fast adaptive Motorola - 10X
improvement - My Achievement

Market Market intelligence
Intelligence
Cost modeling
Cost

Printed 3/8/2006 9:30:59 AM
Supply market update
Modeling
Teardown analysis
Fact Based
Setup negotiation target
Negotiation
Re-structure initiative
Teardown
Analysis Inventory analysis
* Footnote
Source: Sources

Do You Have Playbook and Rapid Initiative
Project Plan?

Printed 3/8/2006 9:30:59 AM
* Footnote
Source: Sources

Contact Me

Jerry Nye
630-487-9282

Printed 3/8/2006 9:30:59 AM
jerry.nye@sbcglobal.net
http://www.linkedin.com/in/jerrynye

* Footnote
Source: Sources

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