Supply chain management in Regal Marine

Some concepts:

Purchasing: many firms >50% of the sales dollars on purchasing materials needed to make products. In Regal Marine, 60% of sales are for purchases

Supply Chain management: more than seeking lowest prices, it is the careful management of upstream activities that procure materials, transform and enter products in the factory, and deliver products to customers.

Supply Chain management

Why is it so important for Regal Marine?

Cost control Reduce their daily raw material inventory to about 22

days. – 16.8 times a year– they do daily, monthly and annual production forecast for

suppliers distribution lists, helping suppliers reduce their cost

– on time deliveries: exactly what we need when we need it– deliver on a weekly basis for use that particular week

Techniques (1)

1. Partnering:Key partnership suppliers which have shown a commitment to

quality, product availability, reducing total cost, helping us mantain low inventory levels

Expects from suppliers: continous improvement process innovation, technology and development we be part of the process we provide their avenue for getting their products in, getting

them tested first class distributor, best in class products

Techniques (2)

2. Buying group with other boat manufacturers

American boat builder's association: ABA combining volumes of the 12 independent boat companies across united states

to achieve higher purchase quantities, enable to buy at better volume levels

pricing advantages

Techniques (3)

3. Key vendors

Meet with designers to discuss material innovation Supply items directly to the assembly line so no inventory is mantained

(ownership or title to the items not cast to regal marine until the boat is finished, this delay of title passage is a technique to reduce cost)

Supplier comes on a weekly basis, take orders form production line, and two days later deliver orders right back to roduction line. This has elliminated non-value added man-hours.

Network of distributors to properly display boats at boatshows First class dealers, must be mature, must be able to represent their product

well Dealers know that by representing your high quality product, they will be

profitable and have profit margins which will serve them in their business They are very critical in deciding who becomes a Regal dealer: They look at marketshare data and customer satisfaction so they know how

well they have taken care of their customers, as their customers will become our customers.

Supply Chain Management in Regal Marine

Single largest component that they buy:

Engines for the boats: spend 14 million dollar a year on engines

= 719 000 dollars a day

They have a 14-day inventory: if they can reduce it 1 day, they can reduce lot of cost

They can reduce it through supply chain management.