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WHAT THE HECK is Supply Chain Management
&Why should I care
(814) 341-0168 [cellular] [email protected]
MiCynManagement Consultancy
Marketing
Demand Planning
A/P
A/R
Supply Chain Management
Strategic SourcingPurchasingOutsourcing
SUPPLY CHAIN
CUSTOMER
Sales Engineering MasterScheduling
OutboundLogistics
Manufacturing/Operations
InventoryControl
ProductionControl
InboundLogistics Receiving Customer
Support
MiCyn THE VALUE CHAIN IS COMPLEX Management Consultancy
Balance Forecasting and
Responsiveness (Agility)
Complexity
Cost Control
Service
Risk Management
Supply Complexity
DemandVolatility
MiCyn THE SUPPLY CHAIN CHALLENGEManagement Consultancy
focuses on integration and partnerships in order to meet customers’ needs on a timely basis, with relevant and high quality products, produced and delivered in a cost-effective mannerprovide AVAILABILITY and COST COMPETITIVENESSoften a “gating” factor for increased growth is the ability of the supply chain to meet increasingly complex and growing customer demandscontrols most of the inventorymanages 60%-70% of the costhelps generate revenue by providing outstanding product availabilitysupply chain levers can be used to free cash reserves from balance sheets rather than depend on restricted credit markets
MiCyn SUPPLY CHAIN MANAGEMENT …Management Consultancy
Accountable for:
1. the right part
2. made with the right process
3. made with the right safety
4. delivered to the right place
5. at the right time (on time delivery)
6. with the right quantity
7. at the right quality
8. at the right price
R8
MiCyn THE RIGHT DOCTRINE (also called R8)Management Consultancy
MiCyn SUPPLY CHAIN MANAGEMENT BENEFITSManagement Consultancy
INCOME STATEMENTHIGHERPROFITS
IMPROVEDCASH FLOW
REVENUEINCREASED throughputOPTIMIZED, reliable suppliersDECREASED line shut-downs & missed revenue opportunities
COSTREDUCED purchased costsIMPROVED on-time deliveryIMPROVED quality
WORKING CAPITAL(cash + inventories + A/R) – Current
LiabilitiesINCREASED inventory turnsREDUCED inventoryIMPROVED payment terms with suppliers
TECHNOLOGYINCREASED use of Purchasing Programs
BALANCE SHEETIMPROVEDCAPITAL INTENSITY
(Invested Capital)
MiCyn SCM TOOL: MATERIALS-PURCHASING MATRIXManagement Consultancy
Reduced inventory 45% for a key customer by linking Purchasing, Inventory and Finance with customer forecasts
MiCyn SCM TOOL: SUPPLY CHAIN FINANCE … a 3rd type of financingManagement Consultancy
An example of a $50 Million manufacturer, $1 Million is added to the bottom line!
A cash flow problem …Prices INCREASE
Prices DECREASE
you raise your prices; your customers threaten to buy from competitors OR you absorb the increases and live with lower margins
your customers demand price reductions and threaten to buy from competitorsAND you reduce your prices by their demanded amount and live with lower margins
The solution … Material Price ModelA consistent and defendable methodology , that allows you to
recover your price increases with the agreementof your customersincrease your prices AND protect your marginsverify you reduced your prices the correct amount, not too muchfully understand your cost drivers, ready for the next contract
MiCyn SCM TOOL: MATERIAL PRICE MODELManagement Consultancy
A manufacturer recovered $25 Million+ over a 1 ½ year period, preventing a loss
Another submitted $1.7 Million in defendable price increases for the next quarter
The process triggered margin analysis for all customers, leading to revised pricing decisionsAnother company purchased better than the market: 15% below the market, providing a competitive advantage in winning new orders
MiCyn MATERIAL PRICE MODEL RESULTSManagement Consultancy
MiCyn RISK MANAGEMENT : ACTIONSManagement Consultancy
MiCyn CHECKLISTManagement Consultancy
Are you …
Yes No
viewing your supply chain as a strategic asset?
continually evaluating which value chain activities are core competencies and outsourcing the rest?
BUYING FOR LESS (Supplier Relationship Mgmt., Global Sourcing)?
BUYING BETTER (Focusing on best value (TCO) instead of low price)?
CONSUMING BETTER (concurrent procurement with design engineering)?
SELLING BETTER (joint selling with suppliers)?
staffing the right people in the right positions - people make policy
detecting and recovering from fulfillment errors automatically, before your customers do?
using a supplier selection & approval process? Formal agreements?
Michael McCracken
A results-driven executive problem-solver with a strong record of improving cash flow. Highly successful implementing Supply Chain Management, Purchasing, Operations, and Strategy improvements.
Primary industries served are oil & gas, industrial machinery, aerospace, automotive, electronics.
Mr. McCracken earned a MBA from Auburn University and a BS Industrial Engineering from Northwestern University.
MiCyn LEADERSHIPManagement Consultancy
