1. June 2012 Industrial Training Council – ITC SMEs Development through National Suppliers Development Programme NSDP NSDP Presented by: ITC Executive Director Mahmoud El-Sherbiny

2. 1.ITC Background 2.NSDP Background 3.NSDP Methodology 4.NSDP Success Stories 5.NSDP ROI 6.Setting the Path – The Way Forward Contents 2

3. ITC was established in 2006 to coordinate and supervise all vocational and technical training activities related to the Ministry of Industry and Trade to increase their efficiency and link them with the real needs of the different industrial sectors, and, ITC was established in 2006 to coordinate and supervise all vocational and technical training activities related to the Ministry of Industry and Trade to increase their efficiency and link them with the real needs of the different industrial sectors, and, maximize the utilization of available resources including, but not limited to, FTTC, SDP, NSSP, TVET as well as supervising training programs of PVTD and any other technical training programs. maximize the utilization of available resources including, but not limited to, FTTC, SDP, NSSP, TVET as well as supervising training programs of PVTD and any other technical training programs. 1. ITC Background 3

4. NSDP is a mechanism to upgrade and modernize local suppliers to major Multi National Companies (MNCs) operating cross- sectoral in Egypt, such as: General Motors, Mercedes, P&G, Unilever, Kraft (Cadbury), Schneider and others. The Programme aims to increase the competitiveness of local suppliers to be listed in the international supply chain and to be accredited supplier to international companies, thus, increasing exports and furthering economic development. 2. NSDP Background 4

5. 3. NSDP Methodology 3. NSDP Methodology Areas of Intervention A Approved Local Suppliers Sustain Quality, Reliability and Cost & Lead-time Reduction B Potential Local Suppliers Enhance and Upgrade their capabilities Achieve Mother company’s Standards C Non-Existing Suppliers Identify suppliers with the required capacity Attract Local and Foreign Direct INVESTMENTS  Provide Technical Assistance and Consultancy  Access to Finance for Required/New Investments 5

6. NSDP services are provided through training, consultancy and technology transfer, to achieve the international standards by implementing an integrated business development program that tackles all business aspects within the organization, putting into consideration the required standards (benchmark model) of the mother company. 3. NSDP Methodology (cont’d) 6

7. Goals Settings: Vision, Mission, Values Strategic Objectives Strategy Map (strategy types) Balance Scorecard & KPIs Strategy Decoding Business Plan & BPD HR: Organisation Restructuring HRM Departmental Plan Action Plans Financial Aspects: Financial management system Cost Accounting WACC balance and leverage Auditing system Corporate Governance Market Research (International, Local) Environmental Scan - PESTLE Analysis Competition Analysis: Porter 5/7 forces, Porter’s 4 corners; CPM; Retail Audit, etc.. Marketing Strategy 4Ps - SIVA Targeted Markets Market segmentation Positioning Pricing strategies Branding Develop Marketing and Exporting capabilities (coaching) CSR activities Trade fairs, Study Tours, Matchmaking, Road shows, etc.. Lean Manufacturing TPM Supply Chain Management Six Sigma 20 Keys Workplace organisation and 5S Quality Systems R&D M&E PR,Legal, others.. Training IT / ERP Strategic Dimension Cost & LT Reduction Marketing Human Capital Development 7

8. Average time for interventions for each supplier is 1 year Average time for interventions for each supplier is 1 year Average cost per supplier is EGP 300,000 (€ 40,000) Average cost per supplier is EGP 300,000 (€ 40,000) Monthly visits and Quarterly audits are carried during the intervention Monthly visits and Quarterly audits are carried during the intervention 4 quarterly visits are granted after concluding the contract to ensure sustainability and identify further continuous improvements interventions 4 quarterly visits are granted after concluding the contract to ensure sustainability and identify further continuous improvements interventions 3. NSDP Methodology (cont’d) 8

9. 4. NSDP Success stories 20 Suppliers achieved global standards 12 suppliers are listed globally 3 suppliers are exporting to GM plant Brazil, Korea and South Africa 7 Suppliers are listed globally 5 suppliers are exporting to Unilever Saudi Arabia, Turkey and Morocco 2 Suppliers are supplying TESCO UK 5 suppliers are exporting to Cadbury Saudi Arabia and Lebanon 5 Suppliers achieved global standards 3 suppliers are exporting to Carrier Saudi Arabia and Spain 9

10. 4. NSDP Success stories (Cont’d) 7 Suppliers achieved global standards 5 suppliers are listed globally 3 suppliers are exporting to VW plant in Italy and Spain 50 Suppliers achieved the required standards in Food Safety and Hygiene 35 suppliers to Chipsy (Pepsi Co.) have been certified against Pepsi Co. standards. 12 suppliers succeeded to increase their productivity by 30 % and cost has been decreased by 40% 10

11. 5. NSDP ROI Total Mother Companies:30 (17 Multi Nationals and 13 Local) Number of suppliers served:400 Value of the contracts:105,000,000 EGP (14 m Euros) 11

12. 5. NSDP ROI – Macro Objectives 12

13. 5. NSDP ROI – Micro Objectives Companies achieved a great leap in their performance which was reflected in their KPIs (some are shown below): Companies achieved a great leap in their performance which was reflected in their KPIs (some are shown below): KPIAverage Progress % Productivity  50% Right First Time RFT  54% Overall Equipment Effectiveness OEE  60% Defective Parts Per Million PPM  50% On time in Full OTIF  60% Inventory turnover  60% Return on Capital employed  60% Number of Recordable Injuries (NRI)  67% Employees turnover  67% Absenteeism  67% 13

14. Apply NSDP methodology to different sectors with the aim of determining the commodities and materials currently imported in order to replace it with locally produced components (Specially Textile and Chemicals sectors) Apply NSDP methodology to different sectors with the aim of determining the commodities and materials currently imported in order to replace it with locally produced components (Specially Textile and Chemicals sectors) Establishing a new business unit to be responsible for providing a suitable atmosphere to facilitate the matchmaking between local suppliers and international companies and vice-versa Establishing a new business unit to be responsible for providing a suitable atmosphere to facilitate the matchmaking between local suppliers and international companies and vice-versa Introducing new mechanism that allows SMEs to apply Lean and Supply chain Concepts in their facilities which will have great positive impact on their performance and increase their competitiveness. Introducing new mechanism that allows SMEs to apply Lean and Supply chain Concepts in their facilities which will have great positive impact on their performance and increase their competitiveness. 6. Setting the Path – The Way Forward 14

15. Thank You Indeed 15