mie solutions presenting automating supplier relationship management

Automating Supplier Relationship Management

David Ferguson

President

MIE Solutions

Evolution Of Sourcing

“Almost 50% of best-in-class enterprises that source strategically using best practice strategic sourcing techniques report more than four times greater procurement cost savings, better supply performance, and greater profitability than industry peers.”

From: Strategic Sourcing in the Mid-Market Benchmark:

The Echo Boom in Supply Management [206],

Aberdeen Group, December 2005

What is Supplier Relationship Management?

Supplier Relationship Management (SRM) involves defining and managing all aspects of supplier relationships, from information sharing and collaboration to sourcing, negotiating and streamlining purchasing activities.

Overview

• Where have we been? Or are we still in the past.

• What is driving this automation?

• Spend Management - Sourcing Value

• Discussion of Supply Side Relationship Management

• Discussion of Buyer Side Relationship Management

Where Have We Been?

1. U.S. Post Office

2. Phone Calls

3. Faxing

4. Email

We started from responses taking days to responses taking seconds

What is Driving Automation?

1. Lean Manufacturing

2. Outsourcing

3. Off-shoring

4. Shorter Product Lifecycles

5. Global Competition

Contract Manufacturing Market Drivers

Market ConsolidationIncreasing

Competition Locally and Internationally

Intensifying Competition

Due to the intensifying competition in the contract manufacturing market, the abilities to drive operational efficiencies and better customer/supplier relationship management will help companies to stay competitive

Better Buyer/Supplier Relationship Management

Intensifying Competition

Improving Operational Efficiencies

Measuring Supplier Value

1. Price Per Unit (PPU)1. Actual Supplier Cost

2. Total Cost Of Acquisition (TCA)1. PPU + Direct Costs

3. Total Cost Of Ownership (TCO)1. TCO + Indirect Costs

4. Total Value Management (TVM)

Measuring Supplier Value

Suppliers need to convey the message of Total Value Management to improve their position among the buyers of the world.

What is E-sourcing?

E-Sourcing products help companies save money on major spend categories through online negotiation with suppliers, either via a reverse auction or an RFX process.

What is E-sourcing?

E-Sourcing products help companies save money on major spend categories through online negotiation with suppliers, either via a reverse auction or an RFX process.

What is a reverse auction?

A reverse auction is a tool used in industrial business-to-business procurement. It is a type of auction in which the role of the buyer and seller are reversed, with the primary objective to drive purchase prices downward.

http://en.wikipedia.org/wiki/Esourcing

Supply Side Automation

Supply side automation is

1. Letting the buyers of the world know you exist

2. Interacting with buyers efficiently

Who Are You?

Prior to receiving an request for quote or purchase order the buyer needs to know you exist!

Create A Website

• You must have a good web presence so potential clients can find you.

• Submit your website to the major search engines, .i.e. Google, Yahoo, Bing

• Submit your website to the industrial directories on the internet.

Yellow Pages?

The yellow pages is not where you advertise in the age of the internet. Buyers look in Industrial Directories For suppliers.

• http://www.thomasnet.com

• http://www.globalspec.com

• http://www.mie-exchange/idir

How To Get RFQ’s

Sales in the age of the internet has changed drastically which opens up many more ways to acquire potential accounts

Lead Generation

• Telemarketing• Industrial Directories• Silent Auctions, Standard Auctions, Reverse Auctions• Google Adwords• Existing Buyers

Telemarketing

A telemarketer is a person who makes outbound calls to prospective buyers of their products or services.

This is not the most efficient method.

Industrial Directories

There are many industrial directories on the web including

http://www.thomasnet.com

http://www.globalspec.com

http://www.mie-exchange.com/idir

Auctions

Existing Buyers

Existing relationships is one of the most affective ways to get new work.

Organizing RFQ’s

Ways to organize• Request For Quote Log• Prioritizing Request For Quotes• Capture Rates

Prioritize

Prioritize Request For Quotes

Capture Rates

Request For Quote Log

Conclusion

• List 3 or 4 bullet points to review the goals/objectives covered– “Let’s take a minute to review the

take-away points of this presentation.”

Questions?

Thanks

Thank you!

David Ferguson / MIE Solutions

dave@mie-solutions.com

(714) 786-6230