04/08/2023 1

KEY SUPPLIER ACCOUNT

MANAGEMENT

Presented By:-

Group No. - 3

04/08/2023 2

KEY SUPPLIER ACCOUNT MANAGEMENT The Key Account Management(KAM)

concept is about developing and building long-term relationships between business partners, resulting in a win-win situation for both parties.

KSAM team SRM

04/08/2023 3

FEATURES OF KSAM

Single sourcing Self-inspection Supplier up gradation initiatives Participation in suppliers business Codesign and comakership

04/08/2023 4

TYPES OF KSAM

Pre-KSAM Early KSAM Mid KSAM Partnership KSAM Strategic KSAM

04/08/2023 5

CHECKLIST FOR IMPLEMENTING KSAM

Top Management Support Product that is critical to the very

survival of the company Product that witnesses upheavals Long term perspective Willing and co-operative suppliers

04/08/2023 6

IMPLEMENTING KAM-THE PROCESS

Identify key and critical products. Evaluate the current suppliers. Appoint a KA team Account intelligence Create smooth communications channels Identify key areas of co-operation and support Set goals and objectives for each account Growth strategy for each account Service delivery strategy development Synergy effects Methods for documenting KAM results

04/08/2023 7

SUPPLIER MANAGEMENT AT

SEIMENS

04/08/2023 8

ELEMENTS OF SUPPLIER MANAGEMENT SYSTEM

Supplier Qualification: Consists of suppliers compliance with

mandatory minimum requirements

Individual risk profile of suppliers leading to “Ready for business status”

The product-specific qualification and focuses on the suppliers abilities to manufacture/provide a defined product/service and includes onsite audits and product release processes.

04/08/2023 9

CONTD..

Supplier evaluation- Includes 16 mandatory corporate standard criteria, classification ranges from "Outstanding" to "Poor".

Strategic Evaluation The Strategic Evaluation focuses on the

supplier’s compatibility with strategic, future-oriented requirements.

includes five standard categories: Business collaboration, Operational Competence, Integration, Compliance and Business Continuity.

04/08/2023 10

CONTD…. Supplier Development-

Ensures suppliers’ compliance with Siemens' requirements

Applied at least annuallyCorrective actions are jointly definedCorrective actions have to be documented and

controlled on the corporate-wide mandatory supplier platform "click4suppliers"

04/08/2023 11

SUPPLIER PERFORMANCE EVALUATION MEASURES-

SCOR(SUPPLY CHAIN OPERATIONS REFERENCE)

04/08/2023 12

SCOR

Developed by Supply Chain Council. Will help managers measure the process

performance of their value chains and create efficiencies to ensure competitive advantages.

Compiles all business processes, performance measurement and best practices associated with all phases of satisfying customer demand.

SCOR spans all customer interactions, all physical material transactions and all market interactions.

04/08/2023 13

5 MANAGEMENT PROCESSES OF SCOR MODEL

Demand Supply Planning and Management

Balance resources with requirements and establish plans for the whole supply chain.

Align the supply chain unit plan with the financial plan.

Sourcing stocked, MTO and ETO products

Schedule deliveries , receive ,verify and transfer products. Identify and select supplier sources when not per-determined,

as for ETO product. Manage business rules, Assess supplier performance and

maintain data.

PLAN

SOURCE

04/08/2023 14

CONTD…

MTO, MTS and ETO Production execution

Finalize engineering for ETO product Manage rules, performance, data, WIP, equipment and facilities,

transportation, production network etc.

Order, Warehouse, transportation and installation management for stocked , MTO and ETO

All order management steps from processing customer enquiries and quotes to routing shipments.

Warehouse Management Invoicing customer

Deliver

Make

04/08/2023 15

CONTD.. Return of raw materials

and receipt of finished goods All return defective product steps from source. All return maintenance, repair and overhaul

product steps from source. All return product excess steps from source.

Return

04/08/2023 16

STRENGTHS AND POTENTIALS OF THE MODELS

Capacity to project both duration and costs.

Improved communication between operation areas.

Improvement of operating results. Reduction of expenses for IT in terms of

minimizing system customizations.

04/08/2023 17

WEAKNESSES AND LIMITATIONS

Still in evolutionary condition and remains subject to changes.

Does not include or describe every business activity within the supply chain.

04/08/2023 18

APPLICATION OF SCOR AT INTEL

Known by “Intel SCOR Best Known Model(BKM)”

Realization of “Inadequate business model”

Formation of teams to identify problems

Initial aim was to identify improvement potential in customer service.

04/08/2023 19

ADVANTAGES OF IMPLEMENTING SCOR

Documentation of supply chain and the measures for improving the Supply Chain's processes.

Identification of short-term improvements.

Ensuring support on the part of the business areas and executives and identification of responsibility

04/08/2023 20

SUPPLIER RELATIONSHIP MANAGEMENT AT MAHINDRA & MAHINDRA AUTOMOTIVE SECTOR

Automotive Sector & Farm Equipment Sector Group is worth Rs 6195 crore Company originated in 1946, Automotive division in

1994 Began producing LCVs in 1965 M & M enjoys a market share of 50 % in utility

segment

04/08/2023 21

WHAT ARE THE FACTORS WHICH CONTRIBUTED TO SCORPIO’S SUCCESS FROM A SOURCING

PERSPECTIVE ?

Strong supply Chain

Supplier Relationship

Unique Supplier Initiative

04/08/2023 22

SUPPLY CHAIN

Strong supply Chain capable of tolerating 200% demand variation.

SC Inspired by TOYOTA Production System, designed and implemented in-house

Pull System Inventory Management where inventory is pulled as per need and requirement

Motto is “sell one-make one” or “consume a part then buy it”

04/08/2023 23

CONTD…

M & M is now capable of delivering the vehicle to customer in 48 hrs

3 years ago pipeline inventory was 3 times the estimated sale. Now on par with actual sales.

04/08/2023 24

SUPPLIER RELATIONSHIP

Partnered with suppliers to get deliveries “on time” “every time” lead to inventory reduction and released working capital.

Suppliers were involved from the conceptualization stage of Scorpio

Suppliers made crucial decisions such as design & engg. of systems, testing, validation, material selection etc.

Black box designing – M&M provides space in the vehicle suppliers designed the product according to their specifications.

04/08/2023 25

CONTD…

Scorpio has 2000 parts supplied by 100 main suppliers and approx. 50 other suppliers.

Most of the suppliers are JIT suppliers

Lead time shrinking for product introductions

04/08/2023 26

BENEFITS TO M&M

Increased outsourcing More trust and hence more outsourcing Today close to 78% of parts come from vendors

Lean supply base Single source for all materials

Systems and module buying Buying an assembly rather than single components Decrease vendor base ,quickens product manufacturing

and reduce cost

04/08/2023 27

CONTD..

Co-design Thakkar Sons- chassis supplier

Proactive Communication Business across commodities Helps reducing supplier base

Reduction in cycle time Supplier involvement from the beginning

04/08/2023 28

UNIQUE SUPPLIER INITIATIVE

Supplier Up gradation

It is better to up grade an existing supplier M&M Supplier Technical Assistance(STA) team with

each supplier Since 18 months 2 crore savings

04/08/2023 29

CONTD..

Supplier satisfaction survey

Gauging and calibrating performance

Mahindrasuppliers.com

Website for suppliers to know details of purchase order, delivery schedule, report on receipts etc.

Saves time –no rigorous phone calls

04/08/2023 30

CONTD..

Cluster programme for ISO certification

M&M needed all suppliers to be ISO certified

Brought 15-20 SMEs and clustered it and brought consultants

Got group discounts and certification.

04/08/2023 31

04/08/2023 32

04/08/2023 33

04/08/2023 34

04/08/2023 35

CASH TO CASH: TOYOTA, INVENTORY MANAGEMENT AND HEIJUNKA

Both Accounting and Supply Chain professionals rely on Cash to Cash (C2C) measures to make processes more efficient and cost-effective.

C2C is generally the number of days it takes to convert the expenses for raw materials into payment for the finished product (1).

Many factors influence this, including inventory management, supplier performance, and collection of accounts receivable. In accounting, C2C is a good measurement of liquidity of the firm.

For supply chain professionals, it measures the efficiency of the entire process, from suppliers, to manufacturing, through to order fulfillment (2).

04/08/2023 36

A COMPANY CAN TAKE THREE ACTIONS TO DECREASE THE C2C CYCLE

Extend average accounts payable

Reduce inventory by reducing the production cycle

Decrease average accounts receivable

04/08/2023 37

INTERNAL STRUCTURE

One organization that has successfully implemented a C2C system is Japanese automaker Toyota. Its operational success is often attributed to the focus on reduction in inventory.

The term Toyota uses for their system is “heijunka”. Translated from Japanese, it means “make flat and level.” In particular, it refers to eliminating spikes in demand, but also creating operational efficiency and reducing overall supply chain costs.

Toyota’s lean operation focuses on the idea of buy one, sell one. Toyota is able to manufacture vehicles in about the same order customers buy them . This adaptability to demand has given Toyota the advantage of carrying the least inventory in the field of Japanese auto manufacturers .

04/08/2023 38

WORKING WITH SUPPLIERS

This concept is one that Toyota uses internally and it also requires of its suppliers to improve the overall C2C cycle.

In the North American auto supply market, suppliers working with Japanese-owned automakers perform at higher levels than those working with U.S. automakers.

Toyota works with U.S. suppliers to teach them the lean manufacturing techniques used in Toyota’s manufacturing facilities (4). These techniques ensure a short amount of time between when Toyota needs an item and when the supplier makes it.

04/08/2023 39

CONTD…

Using small batch production, this short lead-time can be achieved. Rather than running large batches and keeping excess inventory, plants quickly run a small batch and keep inventory low.

For Toyota, this translates to being able to better meet customers’ demands because manufacturing facilities do not have to wait on a particular part before beginning production on a vehicle .

04/08/2023 40

BENEFITS OF HEIJUNKA

Toyota’s improvement in its supply chain benefits the automaker in many ways:

Inventory levels at parts distribution centers have decreased by 53 percent from stocking levels in the 1980s.

Since 1994, the inventory turn of parts in the average dealership has increased from 3.7 to 5.7.

04/08/2023 41

CONTD….

•Toyota dealerships have achieved 20 percent to 40 percent reductions in floor space utilization.

The time spent improving the systems of U.S. suppliers shows results as well.

From 1997 to 2000 alone, supplier on-time delivery increased from 76 percent to 93 percent.

04/08/2023 42

CONTD…..

Sixty-six percent of suppliers on daily order status are able to deliver within five days or less.

While inventory management is an effective way to reduce the C2C cycle, it not only requires efficient manufacturing, but also effective forecasting.

04/08/2023 43

THANK YOU