1. Breaking the Supply Chain Mergers & Acquisitions

2. The Ailing Economy 61% of M & A fail to achieve expectations

3. Why are M & A’s Disappointing Share Holders? Adverse economic times Adverse economic times Extremely complex Extremely complex Synergy plan lacking Synergy plan lacking

4. Supply Chain Contribution

5. Synergy Focus 1. S G & A 2. Products 3. Market Penetration 4. Plants and Resources 5. Supply Chain – Why?

6. Five Reasons Supply Chain is Last SC Synergies Considered To Be Administrative ComplexPBD Don’t Understand Opportunities Silos

7. Six Critical Success Factors Organization Structure Process Accountability Strategy Development Management Support Metrics

8. Management Support Creating lasting synergies

9. Keys to Management Support Confront cultural boundaries. Confront cultural boundaries. Commit the needed resources. Commit the needed resources. Support decisions for the better of the whole. Support decisions for the better of the whole. Develop company-wide adrenalin. Develop company-wide adrenalin. Provide tools needed. Provide tools needed.

10. Strategy Outside In Look

11. Customer Marketing Customer Engineering Suppliers Purchasing Manufacturing QualityMPS FMEA & Reliability Warranty Feedback Replenishment Demand Planning Configuration Mgt. Production Plans PFMEA NPD Process Source Approval Inventory Agility Make Buy VA/VE Target Costs Strategy Development Supply Chain

12. Strategy External Looks External Looks Where is the marketWhere is the market Where are my plantsWhere are my plants Foreign and Domestic customsForeign and Domestic customs Landscape changes in productsLandscape changes in products Who are our customersWho are our customers What are the customer expectationsWhat are the customer expectations Existing Supply ChainExisting Supply Chain Must be CUSTOMER FOCUSEDMust be CUSTOMER FOCUSED Supply Chain Supply Chain Cost of distribution Logistics/Availability Trade barriers/customs Design integration RPD Value add contribution Built in costs 3-D Rationalization

13. Strategy Internal Looks Internal Looks CulturesCultures ProcessesProcesses SkillsSkills InterfacesInterfaces Resource AllocationResource Allocation Information SystemsInformation Systems Supply Chain Supply Chain Compartmental vs. Team Advanced or developmental Overall knowledge Divergent/Convergent Stress factor Agility

14. 3-D Rationalization Competitive Global Service Quality

15. Organization De-construction& Supply Chain Abyss

16. Centripetal Structure Centralized Supply Chain Division 1 Division 2 Division 3 Division 4 Resistance Lack of empowerment Decisions are slowed Supply chains are broken

17. De-construction Centralized Strategy Continuous Improvement Source Selection Material Acquisition Centrifugal Structure Better performance Still resistance Slightly better execution Often lacks leadership

18. Centralized Strategy & Leadership Decentralized Execution Synergy Approach Division 1 Division 2 Division 3 Division 4 Multi-function selection teams Participation through representation. Rapid decision deployment.

19. Commodity Team Representation Engineering Supplier QA Logistics Sourcing

20. Organization Variation

21. Key to Organization Success Tell me and I will forget, show me and I may remember, involve me and I will care.

22. Accountability

23. Accountability Vs. Responsibility The team must be accountable for the same things.The team must be accountable for the same things. Team must be part of the decision process.Team must be part of the decision process. Performance must be measurable.Performance must be measurable. All parties must be resigned to the target.All parties must be resigned to the target. There must be a plan to support the what.There must be a plan to support the what. Communication of expectations.Communication of expectations. Who What When How

24. Summing Up Clear Strategic Direction Clear Ownership Empowerment Concise Communication Four Keys to High Performance Teams

25. Supply Chain Metrics

26. What happened to measure it – and it will get better? <60% measure supply base. <60% measure supply base. <50% of that measure more than price. <50% of that measure more than price. <50% of that measure more than delivery and price. <50% of that measure more than delivery and price.

27. Typical Corporate Metrics Issues Not all divisions measure performance. Not all divisions measure performance. Not all divisions measure equally. Not all divisions measure equally. Lacks wealth equilibrium. Lacks wealth equilibrium. Division IT systems lack flexibility. Division IT systems lack flexibility. No time to measure. No time to measure. Conversion costs. Conversion costs.

28. Supply Chain Processes

29. 4-Key Processes Make or Break Synergies Source Selection Source Qualification Source Identification Negotiation

30. Objective Selection System

31. Six Key System Components Objective criteria Objective criteria Quantifiable Quantifiable Unbiased appraisal Unbiased appraisal Cross-division participation Cross-division participation Cross-functional participation Cross-functional participation Clear and concise feedback Clear and concise feedback

32. Negotiation Cost Opportunity Model % Opportunity vs. Cost Contribution Margin Mfg. Cost Material Cost Designed In Cost Conversion Costs % Savings Opportunity Immediate Short Term Mid Term Subtract Savings Timing Logistics

33. Summing it Up Organization Structure Process Accountability Strategy Development Management Support Metrics 25 Companies 4 Industries 4 Experiences