Supply Chain Reengineering Vision, Process & Value for Client

Vision Eliminate Process that does not add Value; Reassess ALL Process to maximize that Value Optimize the Balance between Quality & Cost of Handling Materials Strive toward 100% Variable Pricing

Process Identify Key Value Choices Make your Choices Defect Levels -- Cosmetic Criteria -- Supplier Intimacy Target Pricing -- Order to Delivery Turn -- What Segments to change/which to leave alone Make your Choices Set your Supply Chain Strategy to support your Choices Model Key Costs via the Supply Chain Strategy

Process (2) Note on Choices Trade off choices What to include inside the box under the new program model RE: Trade offs – Often require broader enterprise input (e.g., engineering, legal or finance You are basically deciding what to include and what to eliminate in the re-engineered program E.g., Start further downstream & forego supplier mgm’t; Trade offs lead to lost value Foregone opportunities are NOT easily included later Can remodel by product line, regional market, etc. – Good for phasing in, bad for capturing real value

Process (3) Reality Check Apples to Apples Review your current supply chain costs Review the value results of your current supply chain choices Apples to Apples * We can run current cost analysis before the NEW program costs are modeled. This will help set a foundation for “real world” numbers ** Value Results are based upon your customer satisfaction, your product’s rating in the market, quality measurements of your product and of your supplier’s parts, etc.