Optimizing your Purchases and Supply Chain in an International Environment With the support of the European Commission

Facilitator Profile Johan van Hamme (Belgium – 42 years) Owner of Clear Vantage ( Owner of CU-FACTOR ( International Purchasing Executive (Automotive, Engineering, Automation) References: VW Group, Tenneco, Rockwell Multilingual (six European languages)

Services: Reduce overall costs and improve efficiencies Development of Supply Chain Organizations Advanced training sessions in Purchasing Short-term performance screenings Cultural interaction in Business

Expertise: Cost-reduction methodologies Products & services knowledge Change-management Proven concepts Six European languages

References: Volkswagen, Audi, Seat, Skoda Tenneco Automotive Rockwell Automation Accenture

CU-FACTOR CU-FACTOR can help you with … Cultural differences in business Best practices in business culture Preparation of strategies Effective integration in Europe

CU-FACTOR CU-FACTOR … A knowledge center on European business culture Highlights specific in-country characteristics Provides training sessions, personal assistance and a practical “tool-box”

CU-FACTOR CU-FACTOR is focused on … Companies outside Europe European companies expanding cross-border Private individuals

Purchasing Hints « TCO » methodologies most commonly used? Incumbent sourcing: negotiation with current supplier Re-sourcing: switching from current supplier to new supplier for similar range Reverse auctions (on-line bidding process): for higher turnovers with multiple suppliers Standardisation: reduce complexity and leverage scale- effects Value Analysis /Value Engineering (VA/VE): technical review of existing product vs needs

Purchasing Hints « TCO » methodologies most commonly used? Simultaneous Engineering: sharing intelligence amongst suppliers for a final product/service Purchasing pool: combining purchasing needs between different buying companies Cross- functional process improvements via Six Sigma: statistical approach (non-functional) Rebate methodology: periodical credit/ debit as function of turnover vs baseline (stapled %)

Purchasing Hints « TCO » methodologies most commonly used? Clear target setting: define price expectation and response time Payment terms review: potential to stretch terms and to ease the transactional process Operational process optimalisation (lead- times, inventory, on-time delivery, obsolescence) Strong contracts with vendors: creation of well balanced supplier contracts

Purchasing Hints Development of a more « agile » supply chain: Agile: short lead- time & unpredictable demand: « React and Execute » Agility via lead-time reduction across: Supply:strategic sourcing synchronization production co-location Internal:reduce non- value added time reduce complexity postponement Demand:JIT replenishment co- managed inventory data systems integration

« Low cost country » sourcing Pricing –Price differences (Total Cost of Ownership) –Price stability in time Quality –Product quality and technical precision –Product validation means –Total impact when quality not OK –Product durability and warranty

« Low cost country » sourcing Development –Highly engineered products vs. traditional ones –Spin off effects on aftermarket of OE developments –Technical product changes

« Low cost country » sourcing Environment –Legislations (ex. Reach) –Value of confidentiality (NDA Agreements) –Political climate –Financial strength of supply base –Psychological effects due to increasing unemployment in Western countries

« Low cost country » sourcing Indirect costs –Travel costs –Time consumed on: Supplier evaluation and development Tool and product validation Quality assurance Follow- up actions Administration –Warranty costs

Working Together - International Business Culture Page 21 Communication Cultural Influences Company Structure Work Interaction CU-FACTOR presentation v1.0 © 2008 Johan van Hamme

Communication Page 22 Culture Language Knowledge Language Tone Communication Style Handshake CU-FACTOR presentation v1.0 © 2008 Johan van Hamme

Cultural Influences Page 23CU-FACTOR presentation v1.0 © 2008 Johan van Hamme Day StartsDress Style Appearance Value PunctualityLunch/ DinnerGift Habits

Company Structure Page 24CU-FACTOR presentation v1.0 © 2008 Johan van Hamme OrganizationOrientation FlexibilityNetworking Importance

Work Interaction Page 25CU-FACTOR presentation v1.0 © 2008 Johan van Hamme Speed of Trust Program Analysis Decision Making Time to Decide Importance of Rules Style Uncertainty Level