Incoterms 2010 printable - · PDF fileThey are now called Incoterm® rules
Analytical Model: Evaluating Incoterm Conversion
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Pratik Yadav Mark Brown Analytical Model: Evaluating Incoterm Conversion Student: Mark Brown, SCM 2019 Student: Pratik Yadav, SCM 2019 Advisor: Bruce Arntzen Sponsor: Large Industrial Conglomorate Lack of active inbound material management at RMDR production sites in Europe & Asia has resulted in: - Limited visibility of material coming into production - Higher inventory stocks -> increased net working capital - Higher transport costs due to limited consolidation opportunities - Limited flexibility to manage unexpected scenarios - Increased risk to the JIT production setup Problem & The Methodology Background Key Question Relevant Literature Initial Results Expected Contribution January 2019 Poster Session BACK TO KIOSK MENU ü Work with the business unit to identify production site as pilot ü Shortlist 3-5 suppliers to run the pilot ü Identify 5-7 products per supplier for analysis - Should an organization try to manage inbound actively? - If yes, then what products should be managed actively? - What are the best in class solutions to manage the inbound operations? - Kumar et al. (2010) Migrating to F type incoterm purchases for greater control of goods - Schneider (2010) Wal Mart case study / benefit of lead time predictability on cash flow ü Mathematical model looking at total cost per product under different incoterm scenarios including variability ü Framework to quantify risk associated with each step ü Incoterm selection per product – C&D vs E&F ü Easy to visualize risk and total cost overview per product ü Pilot for selected categories to validate results DATA ANALYSIS SCOPE DEFINITION RESULTS 0 5 10 15 20 25 30 35 40 45 50 Carrier 1 Carrier 2 Carrier 3 Carrier 4 Carrier 5 Min-Max Lead Time - CN-DE Min Max 30% 59% 11% 0% 10% 20% 30% 40% 50% 60% 70% C/D Incoterms E/F Incoterms Missing Incoterms Direct Material Spend Per Incoterm Category - Template for material buyers to understand inbound savings opportunities with select suppliers and products - Best practices on how to actively manage the inbound operations
Transcript of Analytical Model: Evaluating Incoterm Conversion
Pratik YadavMark Brown
Analytical Model: Evaluating Incoterm ConversionStudent: Mark Brown, SCM 2019
Student: Pratik Yadav, SCM 2019Advisor: Bruce ArntzenSponsor: Large Industrial Conglomorate
Lack of active inbound material management at RMDR production sites in Europe & Asia has resulted in:
- Limited visibility of material coming into production
- Higher inventory stocks -> increased net working capital
- Higher transport costs due to limited consolidation opportunities
- Limited flexibility to manage unexpected scenarios
- Increased risk to the JIT production setup Problem & The Methodology
Background
Key Question
Relevant Literature
Initial Results
Expected Contribution
January 2019 Poster Session
BACK TO KIOSK MENU
ü Work with the business unit to identify productionsite as pilot
ü Shortlist 3-5 suppliers to run the pilot
ü Identify 5-7 products per supplier for analysis
- Should an organization try to manage inbound actively?
- If yes, then what products should be managed actively?
- What are the best in class solutions to manage the inbound operations?
- Kumar et al. (2010) Migrating to F type incoterm purchases for greater control of goods
- Schneider (2010) Wal Mart case study / benefit of lead time predictability on cash flow
ü Mathematical model looking at total cost per product under different incoterm scenarios including variability
ü Framework to quantify risk associated with each step
ü Incoterm selection per product – C&D vs E&F
ü Easy to visualize risk and total cost overview per product
ü Pilot for selected categories to validate results
DATA ANALYSIS
SCOPE DEFINITION
RESULTS
0
5
10
15
20
25
30
35
40
45
50
Carrier 1 Carrier 2 Carrier 3 Carrier 4 Carrier 5
Min-Max Lead Time - CN-DE
Min Max
30%
59%
11%
0% 10% 20% 30% 40% 50% 60% 70%
C/D Incoterms
E/F Incoterms
Missing Incoterms
Direct Material Spend Per Incoterm Category
- Template for material buyers to understand inbound savings opportunities with select suppliers and products
- Best practices on how to actively manage the inbound operations
