SUPPLY CHAIN SERVICES: GLOBAL EXPANSION (MEXICO)

SUPPLY CHAIN SERVICES:

GLOBAL EXPANSION (MEXICO)

SUPPLY CHAIN SERVICES: GLOBAL EXPANSION

BACKGROUND

EWA was engaged to develop and implement a Mexican supply chain footprint strategy, to identify and qualify local suppliers, evaluate options for assembly operations, identify 3rd party logistics providers, negotiate tax incentives, hire local senior management and evaluate existing DCs.

SUPPLY CHAIN SERVICES: GLOBAL EXPANSION

APPROACH

Define Project Objectives and Requirements

- Align on opportunities, volume requirements, cost targets

Deploy Formal Process & Develop Core Elements for Analysis

- Identify Products to be outsourced – one product was 48% supplied from China to US
- 80% of component spend can be supplied from Mexico
- Labor & Logistics savings favored Product Assembly in Mexico – faster than In-House

ID Potential Suppliers and Obtain Analytical Data

- Identified component suppliers within Mexico
- Interviews and factory visits to develop supplier “short list”
- Suppliers provided detailed proposals with pricing, QC control plans, price breaks for increased volumes, samples for performance testing
- Same process for identifying & qualifying Assembly and Packaging contractors

Hands-On Implementation

- Negotiations conducted with suppliers to finalize
  - Cost, payment terms, projected productivity improvements, forecasting lead times
  - Sharing of productivity/volume benefits, Inventory stocking requirements
- Negotiations conducted with contractors to finalize cost and value-added services:
  - Provide incoming QA inspection and manage supplier returns
  - Monitor and expedite deliveries from suppliers
  - Assemble and Package product & shipment to customers or distribution centers

SUPPLY CHAIN SERVICES: GLOBAL EXPANSION

RESULTS

(Outsourced Product Line)

- Cost Reduction
  - Reduced inventory vs China ($21MM cash) and shorter lead times, better cash flow
  - Cost reduced 5% ($6MM) vs sourcing from USA, with potential for additional reductions
  - Eliminated tariff impact
- Other Benefits
  - Quick set-up
  - Low cost to implement
  - Good access to suppliers for USA-based QA and technical staff
  - Good quality outsourced assembly and packaging
  - Elimination of 2 DC’s from proximity to Western USA customers
  - Stable trade environment

Timely Topics To Drive Growth.

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OUR CLIENTS

accessdata

Adler Pelzer Group

Accuride

aseptia

alliance

amercable

americhem

anisa

calient

corning

chemco

climate-master

curtiss-wright

federal-signal

greenheck

flexco

gore

hilite

HJ-Baker

Icee

mascoat

merichem

micromeritics

nanotex

oerlikon

plasticolors

rudolf-group

silfex

sweco

tile-shop

tedia

titeflex

weber

SUPPLY CHAIN SERVICES: SUPPLY CHAIN ASSESSMENT

SUPPLY CHAIN SERVICES:

SUPPLY CHAIN ASSESSMENT

SUPPLY CHAIN SERVICES: SUPPLY CHAIN ASSESSMENT

BACKGROUND

An Asia-Pacific manufacturing operations of a global chemical company was struggling to make on-time deliveries, carried excessive inventories, and had excessive freight and logistics expenses (primarily from expedited shipments). EWA was engaged to identify operational problems and to develop/implement corrective actions to improve logistics & supply chain processes.

SUPPLY CHAIN SERVICES: SUPPLY CHAIN ASSESSMENT

APPROACH

Onboarding & Alignment

- Gain thorough understanding of client’s overall business, markets, manufacturing operations, current supply chain, and logistics network

Model current state of client’s supply chain and logistics operations

- Current logistics network
- Process assessment
- Determine customer requirements
- Organization structure analysis

Analysis to identify required changes and potential opportunities

- Performance
- Voice of Customer
- Processes
- Organization Design

Develop recommendations and action plan

- Short term actions
- Medium term actions

Hands-on implementation

- Interim Supply Chain Manager
- Develop RFP for logistics services
- Implemented significant organizational changes
- Support transition of new organization & process (bi-weekly project implementation meetings)

SUPPLY CHAIN SERVICES: SUPPLY CHAIN ASSESSMENT

RESULTS

(Outsourced Product Line)

- Savings achieved through rate negotiation & reduction in expedited shipments
  - Carriers were consolidated & outbound logistics processes were improved, with 15% reduction in freight costs
- Improvements were made to forecasting & planning generated the expected results
  - Inventories were reduced by nearly half, generating US$MM cash
- Customer service levels improved dramatically
  - On-time deliveries improved to > 90%
- Organization stabilized & capabilities improved