Purchasing & Business Culture

Optimizing your Purchases and Supply Chain in an

International Environment

With the support of the European Commission

Facilitator Profile

• Johan van Hamme (Belgium – 42 years)• Owner of Clear Vantage (www.clear-vantage.eu)• Owner of CU-FACTOR (www.cu-factor.com)• International Purchasing Executive

(Automotive, Engineering, Automation)• References: VW Group, Tenneco, Rockwell• Multilingual (six European languages)

http://www.clear-vantage.eu/

http://www.cu-factor.com/

Services:

• Reduce overall costs and improve efficiencies• Development of Supply Chain Organizations• Advanced training sessions in Purchasing• Short-term performance screenings• Cultural interaction in Business

Expertise:

• Cost-reduction methodologies• Products & services knowledge• Change-management• Proven concepts• Six European languages

References:

• Volkswagen, Audi, Seat, Skoda• Tenneco Automotive• Rockwell Automation• Accenture

CU-FACTOR

CU-FACTOR can help you with …

• Cultural differences in business• Best practices in business culture• Preparation of strategies• Effective integration in Europe

CU-FACTOR

CU-FACTOR …

• A knowledge center on European business culture

• Highlights specific in-country characteristics• Provides training sessions, personal assistance

and a practical “tool-box”

CU-FACTOR

CU-FACTOR is focused on …

• Companies outside Europe• European companies expanding cross-border• Private individuals

Purchasing Hints

« TCO » methodologies most commonly used?

• Incumbent sourcing: negotiation with current supplier

• Re-sourcing: switching from current supplier to new supplier for similar range

• Reverse auctions (on-line bidding process): for higher turnovers with multiple suppliers

• Standardisation: reduce complexity and leverage scale- effects

• Value Analysis /Value Engineering (VA/VE): technical review of existing product vs needs

Purchasing Hints


• Simultaneous Engineering: sharing intelligence amongst suppliers for a final product/service

• Purchasing pool: combining purchasing needs between different buying companies

• Cross- functional process improvements via Six Sigma: statistical approach (non-functional)

• Rebate methodology: periodical credit/ debit as function of turnover vs baseline (stapled %)

Purchasing Hints


• Clear target setting: define price expectation and response time

• Payment terms review: potential to stretch terms and to ease the transactional process

• Operational process optimalisation (lead- times, inventory, on-time delivery, obsolescence)

• Strong contracts with vendors: creation of well balanced supplier contracts

Purchasing HintsDevelopment of a more « agile » supply chain:

Agile: short lead- time & unpredictable demand:« React and Execute »

Agility via lead-time reduction across:

• Supply: strategic sourcingsynchronization productionco-location

• Internal: reduce non- value added timereduce complexitypostponement

• Demand: JIT replenishmentco- managed inventorydata systems integration

« Low cost country » sourcing

• Pricing

– Price differences (Total Cost of Ownership)– Price stability in time

• Quality

– Product quality and technical precision– Product validation means– Total impact when quality not OK– Product durability and warranty


• Development

– Highly engineered products vs. traditional ones– Spin off effects on aftermarket of OE developments– Technical product changes


• Environment

– Legislations (ex. Reach)– Value of confidentiality (NDA Agreements)– Political climate– Financial strength of supply base– Psychological effects due to increasing

unemployment in Western countries


• Indirect costs

– Travel costs– Time consumed on:

• Supplier evaluation and development• Tool and product validation• Quality assurance• Follow- up actions• Administration

– Warranty costs

Working Together - International Business Culture

Communication

Cultural Influences

Company Structure

Work Interaction

CU-FACTOR presentation v1.0 © 2008 Johan van Hamme

Communication

CultureLanguage Knowledge

Language Tone

Communication Style

Handshake


Cultural Influences


Day Starts Dress StyleAppearance

Value

Punctuality Lunch/ Dinner Gift Habits

Company Structure


Organization Orientation

FlexibilityNetworking Importance

Work Interaction


Speed of TrustProgram Analysis

Decision Making

Time to Decide

Importance of Rules

Style Uncertainty

Level

Purchasing & Business Culture

Technology

Transcript of Purchasing & Business Culture