esc toulon - andres garcia purchasing phase review cornerstones of purchase baseline
TRANSCRIPT
ESC Toulon - Andres GARCIA
PURCHASING PHASE REVIEW
Cornerstones of Purchase baseline
ESC Toulon - Andres GARCIA
Purchasing area : a key mission in the business
Remind of main topics concerning last year
Purchasing involvement into the Tender Vet stage
The Sourcing stage for Purchasing activity
Purchasing missions during the upstream stage
Procurement activity and saving calculation
ESC Toulon - Andres GARCIA
ProcurementStrategy
ProcurementStrategy
ESC Toulon - Andres GARCIA
4Andres GARCIA
Alignment to business strategy and competitiveenvironmentAlignment to business strategy and competitiveenvironment
Commodity specific focusing on value creationCommodity specific focusing on value creation
Managing bought out requirements to “buy less” and “buy for less”Managing bought out requirements to “buy less” and “buy for less”
Leverage supplier relationships to maximise benefits of cost, quality and delivery in both innovation and supplyLeverage supplier relationships to maximise benefits of cost, quality and delivery in both innovation and supply
Efficient and effective planning and co-ordinationof requirements across the supply chain tominimise cycle time in supply and acquisition
Efficient and effective planning and co-ordinationof requirements across the supply chain tominimise cycle time in supply and acquisition
Lowest cost “purchase to pay” from order to deliveryLowest cost “purchase to pay” from order to delivery
Key ProcessesKey Processes
Exe
cutio
nal
Effi
cien
cy
IT and Information - effectiveness - availability
Organisation - skills - structure
Measures of Performance - process - results
Stra
tegy
SourcingObjectivesDefinition
SourcingStrategy
DevelopmentO
pera
tiona
l
Effe
ctiv
enes
s
INFRASTRUCTURE
Inno
vatio
n Supply
eg product introduction
eg continuous improvement
eg time to market eg production schedule
eg prototypes eg direct materials
Requirements Specificationand Management
Supply Base Management
Purchase Demand Planning and Control
Goods and Service Provision
Enabling infrastructure which underpinseffective processes and behavioursEnabling infrastructure which underpinseffective processes and behaviours
Procurement strategy overview
A robust procurement strategy will consider all aspects of the procurement cycle.
ESC Toulon - Andres GARCIA
SupplierSelectionSupplierSelection
ESC Toulon - Andres GARCIA
FLOW-DOW OF THE APPROACH ( from the request to the supplier qualification )
Request from Originator
Do we have a qualified supplier ? . If NO
SOURCING
POTENTIAL SUPPLIER
Financial - SalesAssessment
Quality SystemAssessment
Technical & industrialAssessment
Product Assessment
QUALIFICATION
SUPPLIER QUALIFIED
Supplier Questionnaire
AGREEMENT PHASE
On-site
assessment
ESC Toulon - Andres GARCIA
Supplier selection methodology
Define Evaluation CriteriaDefine Evaluation Criteria
Identify Potential Suppliers ( ‘Long List’ )
Identify Potential Suppliers ( ‘Long List’ )
Screen Potential SuppliersScreen Potential Suppliers
Identify Potential Suppliers ( ‘Short List’ )
Identify Potential Suppliers ( ‘Short List’ )
Supplier Cost and Capability AssessmentSupplier Cost and Capability Assessment
Analyse Assessment ResultsAnalyse Assessment Results
Input into Supplier Measures of Performance
Input into Supplier Measures of Performance
Select SuppliersSelect Suppliers
Model Vendor Relationship & Identify Required Supplier
Characteristics
Model Vendor Relationship & Identify Required Supplier
Characteristics
A structured, standardised and repeatable approach is necessary to give consistency and objectivity to the supplier selection process.
Example
ESC Toulon - Andres GARCIA
Define evaluation criteriaQUALITY COST DELIVERY TECHNOLOGY MANUFACTURING CULTURE
ITEM SCORE ITEM SCORE ITEM SCORE ITEM SCORE ITEM SCORE ITEM SCORE
Deliveredquality
Price reductionperformance
Age/occurrenceof arrears
Design facilities Manufacturingstrategy
Business &finance planning
Concessions TACperformance
Accuracy ofquantitydelivered
Testing facilities Product/processrange/capability
Projectmanagement
Rejectionresponse
Cost breakdownawareness
Accuracy ofdelivery timing
Manufacturingengineering
Maintenanceand condition offacilities &equipment
Customersupport
In-processrejects (cannotbe reworked)
Cost breakdownavailability
Documentation Design input Housekeeping Procurement
In-processrework
Internal costcontrol
Productioncontrolprocedures
Improvement /innovation
Layout Safety
Scrap cost Material costcontrol
Productioncontrol system
Design changeresponse
Datamanagement andcommunication
Industrialrelations
Quality policyandresponsibility
2nd tier costcontrol
Attitude Performancemeasurement
Absenteeism
Qualityphilosophy
Attitude Work rate/addedvalue
Developmentand training ofemployees
Quality system/proceduresAdherence tosystems andprocedures
QUALITY ITEMS MEASUREMENT ‘SCORE 5’ IMAGE SCORE
Delivered quality PPM customer rejects (i.e. not tospec. or agreed concession)
Less than 250PPM delivered defects.
Concessions No. of concessions accepted inprevious 12 months
There will have been no instances of concessions in the previous 12 months.
Rejection response Level and speed of response There will be a system in place to provide a full, detailed, acceptable responsewith documented corrective action submitted within 14 days of raising of reject.
In-process rejects (cannotbe reworked)
% reject parts produced in-process(goods in to goods out)
Less than 0.5% in-process reject rate.
In-process rework % parts reworked (i.e. nonstandard processing) in-process
Less than 2% total reworked parts.
Scrap cost Cost of scrap, as a % of sales Cost of scrap is less than 1% of total sales.
Quality policy andresponsibility
Level of detail and clarity ofquality policy and responsibilities
An appropriate quality policy should be clearly defined, documented andcommunicated. Responsibility should be clear and divorced from ProductionDept.
Quality philosophy Is the approach taken QA or QC? A quality assurance culture is evident in all aspects of the business, with pro-active preventative action taken to minimise the potential cost of quality failures.
Quality system/procedures Level of detail and clarity ofquality policy and responsibilities
The company should have policies and systems relating to quality which areappropriate and relevant to the business, well defined & documented, and whichare communicated, understood and displayed.
Adherence to systems andprocedures
Level of adherence to existingsystems
Documentary evidence exists to show that all quality systems and proceduresare in-line with policy, are adhered to and are up to date. Manual, policy andany revisions are approved, and all quality assurance/control charts are completeand up to date. Evidence exists to show all employees have been trained in thecompany quality policy.
A structured, multi-faceted assessment methodology is necessary to gain a thorough understanding of true supplier capability.
ESC Toulon - Andres GARCIA
Alternative Suppliers
Non-TraditionalSuppliers
CurrentSuppliers
Screen & Reduce
General Questionnaire
Internal Knowledge
3rd Party Opinion
Etc.
Etc.
Overview Presentation Plant / List brochure
Telephone discussion / Interview“LONG LIST”
“SHORT LIST”
(For detailed cost &capability evaluation)
AlternativeSuppliers
Non-Traditional Suppliers
CurrentSuppliers
Long list pre-screening
There are many sources (both internal and external) of information available for developing a ‘long list’. Pre-screening reduces the resource requirement for detailed assessment.
ESC Toulon - Andres GARCIA
SupplierPerformance
Measurement &Development
SupplierPerformance
Measurement &Development
ESC Toulon - Andres GARCIA
Supplier improvement/development activity can be optimised through selection of those suppliers where greatest opportunity for improvement exists. Criteria can be weighted to reflect current business objectives and goals.
Selection of suppliers for improvement activity
ITEMScore Weight-
ingSupplier Weighted Score
Str
ate
gic
Im
po
rta
nce
Bu
sin
ess
D
eliv
era
ble
s P
erf
orm
an
ce -
S
up
plie
r R
an
kin
g
Supplier A
Supplier B1 2 3 4 5
Turnover with OEM
% of Supplier Business with OEM
Model Spread
Long-term business prospect
Attitude to supplier development
Current initiative (int’l/other OEM)
Bottom 50%
<10%
1 Only
Possible
Negative
Yes
Top 50%
10%+
Top 30%
20%+
2 or more
Probable
Indifferent
Maybe
Top 20%
30%+
Top 10%
50%+
All models
Yes
Positive
No
15
7.5
5
7.5
10
5
15
15
15
5
100
Quality
Cost
Delivery
Management
Top 10Upper
Quartile
UpperMiddle
Quartile
LowerMiddle
Quartile
BottomQuartile
Top 10Upper
Quartile
UpperMiddle
Quartile
LowerMiddle
Quartile
BottomQuartile
Top 10Upper
Quartile
UpperMiddle
Quartile
LowerMiddle
Quartile
BottomQuartile
Top 10Upper
Quartile
UpperMiddle
Quartile
LowerMiddle
Quartile
BottomQuartile
Supplier C
ESC Toulon - Andres GARCIA
Example of Supplier evaluation Methodology
Data is centralised from purchasing software•Inputs from purchasing (requisition and order)
•Inputs form the goods reception (time) and the goods inspection (quality).
Each month the PSQE analyses an automatic evaluation extracted from the purchasing database
•Impact 1&2 suppliers are noted as follow:–Acceptable
–Conditionally Acceptable
–Unacceptable
ESC Toulon - Andres GARCIA
Supplierevaluation
Rating methodology:
ESC Toulon - Andres GARCIA
Supplier evaluation Results : SUPPLIER QUALITY
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
200301 200302 200303 200304 200305 200306 200307 200308 200309 200310 200311 200312
Month
% o
f s
up
pli
er
Unacceptable
Conditionally Acceptable
Acceptable
ESC Toulon - Andres GARCIA
INDUSTRIAL & PURCHASING COMMITTEE / Strategic Assessment
Global Strategic assessment (max 30)
Non Acceptable <10
>21
ACCEPTABLE 15
AcceptableHihg Performance
11 to 20
0
1
2
31
2
3
4
5
6
7
8
9
10
1. POTENTIAL
Hig
h P
erf
(3
)
Ac
ce
pta
ble
(1
)
No
n A
cc
ep
tab
le (
0)
1 Financial Potential X 32 Quality Assessment X 13 Competitiveness X 14 Innovative Potential X 3
5 Industrial Potential X 1
6 International Capabilities & & Offsets X 1
7 TUS Strategic Interest for the supplier X 38 Internal Improvement Capabilities X 19 Partnership Capabilities with TUS X 0
10 Thales synergy X 1
2. PERFORMANCEPunctuality (based on DGA assesment) P1+P2 (max 20)P1 (Delays in Orders) /(Total of orders) 0%
<5%<20%>20%
P2 (weeks Delays in Orders) /(Total of orders) 0<2<4>4
CF CMS00082
Ponctuality assessment (max 20) P1 P2HIGH PERFORMANCE 16 8 8
40
40
108
Non Acceptable <10
108
Acceptable 11 to 16Hihg Performance >16
Conformity (based on DGA assesment)C1+C2 (max 20)0%
<1%<3%>3%0%
<1%<3%>3%
CF CMS00082
Conformity assessment (max 20) C1 C2ACCEPTABLE 10 4 6
C1 Rejections/Orders
C2 Non conformities
10620
10620
Non Acceptable <10Acceptable 11 to 16
>16Hihg Performance
Global Conformity assessment (max 40)ACCEPTABLE 26
ESC Toulon - Andres GARCIA
INDUSTRIAL & PURCHASING COMMITTEE / Strategic Assessment
Strategic Assessment
0
5
10
15
20
25
30
0 10 20 30 40Performance
Po
ten
tial
Supplier 2
YY
Contractor 1
X4
Z6
Supplier 1
XX
ZZ
X3
Y5
EXAMPLE OF SUPPLIER PERFORMANCE PROCEDURE
PROJECT PROCUREMENT MONTHLY REPORT ( P.P.M. Report )
A strong link between Project Manager / WorkPackage Manager and Purchasing
ESC Toulon - Andres GARCIA
To provide a mechanism for communicating and agreeing the status of suppliers.
To keep the Procurement Manager informed of the key supplier issues on Projects & Bids.
Monthly basis.Sent to the Project & Bid
managers
ESC Toulon - Andres GARCIA
PLAN A.C.E. Achats Compétitifs en Entreprise
Méthodologie d’un Diagnostic Achats, Plan d’amélioration et Mesure de maturité Achat
ESC Toulon - Andres GARCIA
L'entreprise
Politique Achat Organisation Achat
Hommes
Outils
Méthodes Fournisseurs
Qui la pilote ? Achat Amont
Achat Aval
Système d ’information Achat
Politique Fournisseurs
Nécessité de faire un état des lieux dans chaque domaine
Le diagnostic Achat
ESC Toulon - Andres GARCIA
LA DEMARCHE
Le diagnostic du Plan A.C.E. est un outil d'évaluation complet du processus achat et de Proposition d ’amélioration, ainsi que de sa mesure au niveau de maturité. • conçu à l'attention des dirigeants (Comité de Direction, Direction Générale, Responsable achats) des entreprises .• pour leur donner une vision extérieure globale en soulignant les points forts et faibles de l’organisation dans le domaine des achats.
ESC Toulon - Andres GARCIA
Les étapes de la démarche A.C.E.
• prendre en compte les constats ( état des lieux et niveau de maturité)
• communiquer objectivement à l'ensemble de l'entreprise le niveau atteint, les forces et faiblesses
• obtenir le soutien de tous les métiers et niveaux hiérarchiques impliqués
• proposer un plan d'amélioration (temps, ressources) en adéquation avec les orientations stratégiques de l ’entreprise
• mettre en œuvre le plan d'amélioration (suivi par la Direction et mesures de progrès) en l'intégrant aux démarches existantes
• évaluer la progression ( niveau de maturité) par des audits planifiés dans le temps, voire corriger le Plan ACE dans le cas d ’un nouveau contexte de l ’entreprise
ESC Toulon - Andres GARCIA
Le processus achats type de l'entreprise
Processus de management
Processus opérationnels
l ’achat
Moyens et Finalités
Maîtrise des fournisseurs
Maîtrise du processus Achat
Recueillir les orientations
de l ’entreprise
Etablir unePolitiqueAchats
Contribuer à la Compétitivité et
rentabilité de l ’entreprise
Axes de Progrès Achats
cohérentsà la stratégie de
l ’entreprise
Procédures, Instructions,
système d'information,
ressources humaines,
Pratiques Achats
Sélection et évaluation des Fournisseurs,
Cotation fournisseurs,
marketing achat
Maturité de la fonction achat,
mesures des gains et des
‘ non dépenses ’
Reporting, outils de mesures de performances Achat
Définir les orientations stratégiques
Établir un budget et un plan opérationnel
Contrôler la performance
ESC Toulon - Andres GARCIA
La dimension achat est systématiquement intégrée dans les décisions de l'entreprise
Expertise achat est reconnue et participe au business
Intégration du processus achatsdans les processus de l'Entreprise
Répétabilité du processus achats - Gestion de projet basique
Approvisionner - Gérer le quotidien
NIVEAU 5
NIVEAU 4
NIVEAU 3
NIVEAU 2
NIVEAU 1
Les niveaux de maturité
ESC Toulon - Andres GARCIA
La phase d ’accompagnement achat
Préoccupations critiques achats de l'entreprise
Nouveaux enjeux :- coûts des achats- coût de la fonction- ...
Nouvelles organisations etnouveaux processus/outils :- nouveaux processus- EDI interne / externe- Réduction des fournisseurs- Partenariats ...
Démarche A.C.E.
- Formatqualitatif et quantitatif de la fonction achats
de l'entreprise
- Plan de ralliement
Un modèle de maturité achats est nécessaire pour accompagner
une telle démarche