Supply Chain Projects Drive Cost Savings and Service Improvements
1. Projects, Programs andGlobal Initiatives:
Situation: HP had just acquired Apollo Computer which had serious operational issues.
Customers were delaying orders until the last week of Apollo’s fiscal quarter to achieve larger
discounts, driving a highly reactive and cost ineffective order fulfillment process. Apollo was
forced to stock highly configurable workstation products and work round the clock on the last
week of the quarter to reconfigure customer orders to make quarterly revenue expectations.
Action: Led the reengineering of Apollo’s entire quote-to-cash process including order
management, manufacturing and distribution processes. We converted the entire operation
from a build-to-stock to a build-to-order JIT/pull process and culture.
Results: Reduced finished goods inventory by 75%, cycle times by 60% and manufacturing
overhead by 30%.
Situation: 80% of Ford finished vehicles are delivered to the US dealer network via railroad.
The rail transportation process was very slow due to moving through numerous switching yards
as vehicles moved cross country. Average delivery times to the US market was 21 days and
during that time, there was no data available to dealers.
Action: We created a joint venture business with UPS utilizing their special dedicated UPS-
managed cross-country trains to reduced rail lead times. Vehicle delivery status was also visible
to dealers via the UPS package tracking system enabling them to sell vehicles in transit.
Results: Reduced vehicle delivery lead times by 45% in Yr. 1 and 65% by Yr. 3 and enabled
dealers to track and sell vehicles based on delivery status.
Situations: REMEC as a telecominfrastructure supplier had made a number of European
acquisitions over time resulting in a significant share of the supply based located in Europe in
high cost countries such as Finland and Spain.
Action: Led a global initiative to transfer the European supply chain to China including PC
boards and assembly, die casting, machining and plating processes and component distributors
while maintaining strict global quality standards.
Results: Slashed direct material cost by 30% in first year while meeting all customer delivery
and revenue requirements.
Situation: REMEC build its telecom infrastructure products (RF power amps and filters) in 3
offshore internal factories in Costa Rica, Philippines and China. Using traditional plan-to-
procure processes, forecast accuracy was poor and inventory turns were highly non-
competitive.
Action: Led fast track company-wide initiative to implement Vendor Managed Inventory (VMI)
programs for the top 40 suppliers, most being common to all 3 factories. This was especially
challenging given the relative size of REMEC’s spend compared to many of the larger suppliers’
business. We also reengineered the S&OP process to incorporate freeze periods, increase
forecast accuracy and improve business controls.
Results: Reduced inventory by 30% ($30M) and increased forecast accuracy by 40%.
2. Situation: Ford had a large global customs organization (approx. 120 employees in NA and
Europe) that delivered about $2B in duty savings utilizing available trade programs and the
customs services of a leading global freight forwarder.
Action: Led an opportunity to leverage the “best global practices” in the Ford Customs
organization by partnering with a leading trade services software company. We traded the
entire NA and EU Ford customs organization to Vastera in exchange for a pre-IPO equity
position in their company and an ongoing commitment to utilize Vastera as our trade services
partner.
Results: Generated $80M in initial equity, reduced Ford’s annual customs operating cost by 5%
and converted all customs operating expense from fixed to variable cost.
Situation: Stratex Networks (former name of Aviat Networks prior to merger with Harris Corp’s
commercial division) built all microwave products at a contract manufacturer (CM) in Thailand.
In addition to the challenge of being highly configurable products, the contract manufacturer
was also tasked with purchasing all accessory products and consolidating the entire customer
order at the CMsite and shipping complete orders worldwide from Thailand. The entire
process was dysfunctional with poor support of the CM and nearly all shipments being late.
Action: Led an initiative at the CM to reengineer their S&OP and scheduling process for
configurable products, using a more robust master scheduling process incorporating
appropriate freeze periods to their build process. We also transferred a component
configuration process (diplexer tuning) from the supplier to the CM (with appropriate training)
to postpone configuration closer to the final assembly process. Finally, we determined that a
CM was not the right partner to do distribution so we established 2 distribution centers in
Singapore (for Asia market) and Amsterdam (for Europe and Africa markets) using a single
global freight forwarder as our global logistics (warehousing and transportation) partner.
Results: Increased on-time delivery from 54% to 91% into an average of 95 countries each
quarter. Reduced cumulative manufacturing lead time from 6 to 3 weeks. Reduced global
logistics costs by 20% annually and outbound transportation lead time by 1 week. Significantly
increased our service level to the more remote customers in Africa due to dramatically
increased air lift capacity from Amsterdam compared to Bangkok air hubs.
Situation: HP made UNIX workstationsandserversforthe European regionatourGerman
manufacturingoperation. Atthattime,workstationswere inhighdemandandcustomersexpected
relativelyshortleadtimes,under2weeksfromorderto delivery. The workstationswere highly
configurable withaportfolioof nearly2000 products,optionsandaccessories,manyof whichwere
suppliedfromthe US. It onlytookan hour to assemble andtestaworkstation,butdue tothe extensive
productportfolioof lowdemandaccessorieswithlongleadtimes,we hadaverage ordertodeliverylead
timesof 8 weeks…totallyunacceptable toourcustomerbase.
Action: An analysisof 6 months of ordersrevealedthat85% containedonly200 of the 2000 productsin
the total portfolio. The remaining15%of orderscontainedone or more productsfromthe other1800,
each characterizedbysporadic,lowvolume demand. Sowe segmentedourworkstationandserver
productsintoa “Quickship”portfolioof 200 of the highestvolume products,andordersconsisting
exclusivelyof those productswouldbe shippedwithin10days. If any of the other 1800 “boutique”
options/accessorieswere onthe order,the leadtime wouldbe uptothe existing8weeks. Component
inventoryandaccessoriesof the Quickshipproductswere increasedtoenable configurationfromstock
3. to meetthe 10-day leadtime. Thisexpensewasmostlyoffsetbythe significantincreaseinvelocityof
flowthruas leadtimeswere reducedto10 days.
Results: Leadtime forQuickshipworkstationandserverorderswasreducedfrom8weeksto 10 days,
significantlyincreasingcustomersatisfaction. Ultimately,92% of all orderswere enteredasQuickship
orders. Most customerswere willingtotake the Quickshipsystem,setitup,andif theywantedanyof
the boutique accessories,wouldaddona separate orderto be integratedlater.Itwasalsohighly
successful withinthe resellerchannel where theydidmostof the endcustomerconfiguration.
Situation: Aviat Networks (leading provider of microwave communication systems for the
mobile industry) merged with a commercial division of Harris Corporation. The resulting
operation involved 6 contract manufacturers on 3 continents, 2 totally disparate supply chains
and overlap in the organizations.
Action: Led a global initiative to integrate supply chains including reducing from 6 to 2 contract
manufacturers with operations in SE Asia and the US, consolidated the supply base to best-in-
class suppliers and collapsed the organizations into one cohesive team.
Results: Reduced direct material cost by 10% ($28M) in first year and achieved continuing 8-
10% ongoing annual cost reduction. Cut manufacturing overhead by 15% through leveraged
organizations in supply chain and manufacturing engineering.
Situation: HP’s Enterprise Systems Group had a complex and fragmented distribution process
where systemorders were consolidated from multiple suppliers in 39 local country re-
distribution centers and then shipped as complete orders to customers utilizing 50 logistics
service providers. Outbound shipping lead times averaged 16 days and took up to 24 days to
certain countries.
Action: Led a global reengineering initiative developing 2 consolidation centers co-located with
the primary computer factories in Boeblingen, Germany (supplying Europe, Mideast and Africa)
and Roseville, CA supplying the Americas and Asia. Logistics providers were consolidated down
to 3 with one supporting Europe, Mideast and Africa, a second for Latin America and a third for
the US and Canada. Orders were consolidated in their respective hub and shipped complete
direct (door-to-door) to the end customers.
Results: Eliminated 37 local country distribution centers and eliminated 47 logistics service
providers, consolidating to 3 global strategic partners. Reduced average delivery lead times by
75% from 16 days to a global average of 4 days, increased on-time delivery to 98% worldwide
and enabled customers to track the status of their orders via the internet.
Situation: Aquai Technologies (a GreenTech start-up company) needed a comprehensive
business plan to get required financing for prototype manufacturing.
Action: Developed a comprehensive strategic business plan covering a thorough market
analysis and detailed strategies and processes to address market pains. Developed summary
PowerPoint presentation for investors and municipalities.
Results: Business plan and summary PowerPoint were accepted and agreed to by CEO and
Board.
4. Situation: Aquai Technologies (a GreenTech start-up company) needed to source and
manufacture its water conservation products in a low cost country to achieve an acceptable
gross margin in retail markets. The BOM included a PCBA and injection molding components.
Action: Sourced a competitive and high quality injection molding supplier and a small contract
manufacturer to assemble the PC board and end product. The contract manufacturer
specialized in helping start-up companies go to market beginning with lower volumes. Both
companies are located in Bangkok, Thailand.
Results: Supply chain strategy agreed to by CEO and Board.
Situation: Manufacturing Test Division of HP manufactured highly complex printed circuit
board test systems which required a unique forecasting and production planning system to
support the high level of configurability. The new system had extensive requirements and was
running 18 months behind schedule and 50% over budget.
Action: Stepped in to lead project and determined that the requirements were extensive and
continued to change with the schedule delay. Working with user and development teams,
restructured project deliverables to enable a 6 month maximum development time. 20% of
requirements were determined to be non-critical and were eliminated. Identified and resolved
some serious teamwork issues within the development team involving technical disputes over
SW development tools driving needless delays.
Results: Accelerated development and implementation was fully completed within 6 months
with delivery of 80% of original functionality, and once implemented, provided 100% of the
functionality to effectively forecast and plan the test systems.
Situation: HP-Loveland, CO was an 8-division manufacturing site that was implementing a new
site-wide ERP system.
Action: Led the project from requirements definition through implementation for largest
division and developed the user training program for the entire site.
Result: ERP systemwas implemented on schedule with high reviews from users and
management for the user training program.
Situation: Desire to pursue an entrepreneurial passion with a healthcare business opportunity.
Action: Founded SouthCare, Inc., a network of Comprehensive Outpatient Rehab Facilities
(CORF’s) specializing in pulmonary rehab and physical therapy helping patients with Chronic
Obstructive Pulmonary Disease (COPD) dramatically improve their daily life activities and
overall quality of life. Leased and up fitted multiple medical Class A facilities. Marketing to and
partnering with physicians combined with building a highly competent and caring team of
respiratory and physical therapists, grew the business to the largest provider in the greater
Charlotte, NC area.
Result: Grew the business to the number market share in greater Charlotte, NC within one year
to an acquisition target and was ultimately acquired by another medical company.