Ppt on supplier consolidation

© MAHLEMAHLE Behr India Ltd. 20. März 2014
Consolidationconsistsin groupingtogetherflowsthatare usuallytreatedseparately.
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

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