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Live Learning Center. Solution-Driven Integrated Learning Paths. Make the Most of Your Educational Experience


Academic year: 2021

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Solution-Driven Integrated

Learning Paths

• Educational Sessions

– Lean

– Global Supply Chain

– Basics of Operation Management

– Demand Management, Forecasting, and S & OP – Professional Advancement

– Special Interest Topics

• Plant Tours

• Networking Events/Peer Interaction

• Materials for Sale at the APICS Bookstore

Make the Most of Your

Educational Experience

• Develop a Learning Plan

• Assess your learning needs

• Use teamwork

• Prepare to learn

• Create your own Action Plan

Live Learning Center



Global Supply Chain

Learning Path

Sponsored by:

John Long, CSCP, is the principal consultant and

president of NMT Company LLC. He has 15 years

of success in strategic global sourcing and supply

quality management in North America, Europe, and

Asia-Pacific Rim countries. He is a subject matter

expert in developing processes, plans, and

approaches to generate lucrative international

business opportunities. Long served in the APICS

Tulsa chapter as Vice President of Membership and

Development. He also served as the

Communications Chair of NAPM-Tulsa, which

received the Affiliate of the Year Award in 2008. He

holds a bachelor's degree from Xi'an Jiaotong

University and an MBA from Oral Roberts

University, Tulsa, Oklahoma.

Strategic Sourcing for Optimal

Supply Chain Management

John Long,

President & Principal

Consultant of NMT Company, LLC


Learning Path

Achieving a globally integrated supply chain is a

transformation process and an ongoing journey.

While the voyage is challenging, it can be

fruitful, resulting in rising profitability, enhanced

customer satisfaction, reduced costs, and

heightened competitive advantage—if you

implement strategic sourcing. In this

presentation, you will learn to identify, select,

and maximize resources in emerging markets,

as well as how to connect both sides of the

supply chain for significant progress.

Fragmented Global Supply Chain

What does it look like?



ore time is spent managing the lengthy


rather than leveraging


Confusion regarding objectives

Lack of resources & infrastructure

Disenfranchisement of

cross-functional teams

Overemphasis on cost as sole criteria

Technology constraints

Inconsistent sourcing methodologies



How sourcing can be typically done wrong...

What Is A Globally Integrated Supply Chain Like?




SubcontractWind farmConst/MgmtVegetation Strategy Execution Strategic Sourcing Engineering Design Technology Order Creation Order Planning Order Planning Construction Maintenance Environment Communication SAP Order Execution and Settlement Collaboration



stra·te·gic; adjective(1825)

c :of great importance within an integrated whole or to a planned effect

tac·ti·cal ; adjective(1570)

(1) :of or relating to small-scale actions serving a larger purpose (2) :made or carried out with only a limited or immediate end in view

Fad ; noun(1867)

:a practice or interest followed for a time with exaggerated zeal : CRAZE

In 2000, most firms had < 20% of their annual

spend allocated to global sourcing.

By 2010, it’s estimated that more than half of

firms will have a global spend of > 40%, with nearly

one-fifth of firms spending > 80% of their annual

spend in the global sourcing arena.

What do these Fortune 500 companies have in


IBM ($50bil) Wal-Mart ($9Bil) - Shenzhen

AMAT ($2Bil) – Xi’an

Trade Journal, Magazine, Internet, thought leaders

The launch of the new APICS

Global Sourcing

Workshop Series

in September 2008


Strategic Global Sourcing?

• Are you losing customers to low-cost


• Do you need to improve your bottom line by

leveraging your global presence?

• Do you need to find suppliers in lower cost

countries to help reduce your costs?

• Have you been reluctant to source globally

because of what you have heard about

quality and potential theft of intellectual


• Have you always wondered how business

was conducted in a different country?


Global Supply Chain

Strategy Maps

Developing Global Sourcing Solutions

• Global sourcing

Cost reduction

Quality assurance

Excellence in execution

Cooperation & communication

• Product development

• Project management

What Drives Global Sourcing?

• Growth drivers such as differentiation of products in

terms of affordability, quality, availability, etc.

• Leverage spend global presence-economies

scale – and technology more effectively.

• Organizational directions and business strategies to

position products and services with increased agility.

• Business transformation driven by cost, product

quality, and customer service with global scalability

and flexibility.

• Advantage through reduced price points and enhanced

competition, not ‘just to cut cost’.


• Spend analysis – sort out commodities, streamline and map out corporate supply chain solutions

• Organize for the future, opportunistic approach to developing a new supply strategy, obtain business involvement & consensus • Ultimate goals and objectives alignment (the deliverables) • Review historical issues, supplier usage/performance; determine

future items & supplier requirements/expectations; and assess future state against current supplier capabilities

• Cooperation and collaboration within and across organizational boundaries (cross functional) communicating commercial issues • Increases ongoing efficiency and responsiveness of the supply

chain, interaction with supplier partners, identify their capabilities • Negotiation in CAMPish and competitive environments, negotiate

fairly but effectively

• Grow supplier relationships by requiring competitive performance and suggesting goals for continuous improvements

Strategic Sourcing Process

A Consistent Global Sourcing Strategy

Global key suppliers Market trends Supplier capabilities Regional economics Global economics Product trends Competitive analysis

Review historical issues Category Characteristics Specifications Functionality User requirements Criticality to business VA Opportunities Spend Analysis Spend by part/category Spend by region Spend by supplier Spend by business unit Spend by month/year

Total Cost of Ownership Internal costs Supplier costs Economic levers Engineering of product Performance criteria Cost Reduction STRATEGY

Align goals & objectives with reengineering costUnderstand all cost elementsBenchmarking Technical requirements and specs matched to capability Right-source based on criticality Expending global network complexity Reduce uncertainty Prepare for unexpected Risk Risk Risk Yield optimal relationshipCompetitive performance Continuous improvement Rewa rd


…matters more even in

Global Sourcing


Defect In their facility

• Supplier submits to MRB • Parts dispositioned • Supplier corrects • Client builds trust


FindsDefectin US Client’s Mfg. facility

• Client Writes supplier NCR • Parts dispositioned • Client or supplier corrects • Supplier capability questioned

$10,000 Rule of 10’s

Customer of Client finds Defect

at project site


• Client writes SN • War room review • Huge $$ to correct • Supplier recovery


Product Development

• Product assemblies and subassemblies that benefit most from the lower-cost regions due to their time-consuming and labor-intensive nature. • Research, identify, and select international suppliers who are a good match

for your business, offering quality products or services meeting your specifications.

• OEM/Other industrial product specialty and knowledge to align optimal global sources for your custom engineered products.

• Developing a new product takes a broad pool of qualified business partners and suppliers throughout the world, covering a diverse range of industrial/OEM products, components, and assemblies.

• Unexpected events may surprise some, therefore always stand ready to meet them with confidence. For a product based company, transportation lead time is one of the biggest issues in international sourcing. • China - with its accession to the World Trade Organization (WTO), the Holy

Grail of distribution and trading rights is within reach.

• Trial (or pilot run) to identify the kinks before going full-scale. Find creative ways to meet requirements and deadlines and consistently assure a success for every shipment.

Project Management

™ Project scoping includes all details – from tooling requirements to logistics coordination – for a cost-effective and fully managed project. ™ Required tooling and/or machinery developed in Asia is often more cost-effective, such as progressive dies for precision metal stampings or injection molds for plastics.

™ Operation management –the overseas production operation managed to attain full benefit from the labor and cost savings. ™ JIT delivery –from the international supplier factory floor to delivery to Customer the international project can be as seamless as the domestic one.

™ Engineering Coordination –integrate valuable engineering input into overall global sourcing project, adding benefits, reducing cost, and more. ™ Cost Reduction –combine the cost efficiencies to produce results, aligning sourcing requirements with growing network of global suppliers. ™ TQM –quality assurance factors into every detail of the Project Management process.



Lev era ge H L Speed H Transf ormati on Jou rney Business Transformation (not transaction) that requires strategies = Future Cost “Cheap labor” low cost without quality Quality “Quality Process” (Quality at low cost) Efficiency “standardized infrastructure” Continuous Improvements Process Optimization Sustainable Growth Negotiation

(immediate) Tactical(short term)

Strategic (long term)

Transformational (continuous improvements)


Roadmap to Opportunity

Bid buy single transactions Multiple transactions

Work only with operations or supply chain

Collectively work with both supply chain

and operations Strategic relationship proactively

create savings opportunities


Process Improvement

Supply Chain Maturity and Alignment

with Strategy Map

Cost Reduction

Quality Enhancement

Value Propositions

Major Takeaways

Achieving Goals:

Achieving a globally integrated

supply chain

Understanding the Approach:

strategic sourcing

-a tr-ansform-ation process -and -an ongoing journey

Techniques and Applications:

to identify, select,

and maximize resources in emerging markets, as

well as how to connect both sides of the supply

chain for significant progress

Deliver Results:

rising profitability, enhanced

customer satisfaction, reduced costs, and

heightened competitive advantage


New Millennium Technology Company

1801 West El Paso Street

Broken Arrow, OK 74012 USA

Tel: 918-520-0103

Email: info@newmillenniumtechnology.com


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