Supply Chain Optimization

We view the supply chain as a series of strategic and operational events that begin with consumer demand for a product or service and seamlessly incorporate all the necessary process steps to satisfy that demand, including product development, planning, engineering, sourcing, conversion, warehousing, distribution, logistics, and customer service.

Our basic approach typically includes the following tasks:

• Understanding and documenting the current operating systems, tools, resources, and costs;
• Creating value stream maps to visualize how processes function and where the opportunities are;
• Calculating the primary measurements indicating the overall performance of the supply chain;
• Identifying internal and external best practices to improve the current program and project management capability;
• Generating specific skill and development modules (training exercises, blended learning, and computer-based training); and, finally,
• Focusing on what matters most in capturing value and generating results by reinforcing the right behaviors at the point of execution.

Often, in the early stages of an engagement, we’ll help clients define their desired future state in terms of important organizational values, processes, and culture – in other words, create a new vision for their business.

Competing in the 21st century requires a fundamental change in the way companies look at how they plan, source, convert, deliver, and service. That’s why we are frequently engaged to help clients convert from a traditional production-push model to a contemporary customer demand-driven business model. This transformation entails a wide variety of improvement activities, including:

• Conducting a critical evaluation of the market demand for their products and/or services;
• Rationalizing their product offering;
• Planning strategically for global manufacturing capacity;
• Creating an advanced planning and scheduling capability at various levels of operating detail;
• Institutionalizing manufacturing and operational disciplines for optimal productivity;
• Rationalizing their finished goods inventory and distribution network; and,
• Implementing advanced transportation management and optimization.

We recognize that each of our clients faces a different set of circumstances and have a different set of expectations prior to considering any improvement initiative. That’s why we’ll work with you and your team to define a specific project scope and set of deliverables to ensure that we deliver compelling value - whether by transforming your entire enterprise or by optimizing areas you choose.

First and foremost, we help clients rationalize their enterprise-level supply chain processes from a customer demand perspective. This entails identifying specific areas of opportunity and determining the corresponding lost value available for recapture. We then install systems and controls to ensure that corrective actions are prioritized and implemented. Our approach uses tools and techniques to create effective linkages between each supply chain functional area.

How We Do What We Do

Using tried and proven techniques, we examine key aspects of our client’s supply chain to identify areas of waste, inefficiency, and hidden value. This involves creating detailed value stream maps of critical operational processes which are then analyzed in detail to identify nonvalue-added activities, capacity constraints, and resource imbalances. When appropriate, we use these maps to conduct high-level modeling/simulation sessions to help define optimal outcomes whenever applicable.

Then, working with and through client teams to implement process and behavioral changes, we’ll install world class operations management practices to recapture value hidden in the targeted areas of opportunity. Improvements can be compelling and range from reduced time-to-market and significantly lower inventory levels, to substantially greater flexibility and more cost-effective warehousing and distribution. Changes to any or all of these areas can favorably impact your working capital position.

How We’re Different and Better

The Value Proposition

Our reputation has been built on delivering significant returns to our clients in a team-oriented, common sense way. Our value proposition - and our ability to deliver on it - is why our clients re-engage us time and again. We understand and appreciate the importance of cash and cash management in contemporary business management, which is why we focus on five key areas of opportunity:

• Increasing supply chain velocity (order to cash) and overall enterprise throughput;
• Eliminating unnecessary or irrelevant products and services;
• Reducing work-in-process and finished goods inventories (matching production with demand);
• Improving throughput, yields, and asset utilization; and
• Optimizing delivery processes (superior customer service).

USCCG is an active member of The Supply Chain Council and has been engaged in supply chain optimization for many years. (For more information visit The Supply Chain Council website.) We help clients rationalize supply chain requirements; optimize cycle and lead times across the supply chain; implement systems and processes to help manage and control work; develop effective linkages between each of the supply chain nodes; improve customer service; and develop meaningful metrics.

Our services include:

• Automated solutions
• Capacity, distribution, and freight rationalization
• Customer order entry
• Demand management
• Global supply chain metrics
• Greenfield and brownfield expansion and consolidation simulations
• Implementation of SCOR model
• Internal/external value stream mapping
• Inventory management
• Logistics and distribution networks
• Optimization of plant operations
• Product line and customer rationalization
• Purchasing cost reduction modeling
• Sales and operations planning
• Sales forecasting
• Spend management analysis and optimization
• Strategic sourcing
• Supplier certification and quality validation

We incorporate the complementary disciplines of Lean and Six Sigma, where applicable, into every supply chain engagement we undertake as integral parts of the normal optimization process. We use Lean Transformation tools and techniques to identify and eliminate waste, improve processes, and reduce cycle time. We use Six Sigma to benchmark, measure, and track the ’as is‘ against the optimal output of a process.

We believe that the adage that you can't manage what you can't measure has great applicability to the area of spend management, a frequently overlooked opportunity to improve EBITDA in even the best performing companies. The reality is that most companies don't have their total spend completely, or even mostly, under management. More and more, spend management is increasingly viewed as a strategic imperative.

Spend Management Defined
In its simplest terms spend management is all about creating long-term, sustainable savings relative to the acquisition of material and services. This normally entails five key areas of focus:

• Spend Analysis-knowing and classifying what you are spending enterprise-wide;
• Material Specification-understanding what you are buying and why;
• Sourcing Strategy-determining how best to purchase certain classes of materials based on a combination of their uniqueness and criticality to your business;
• Process Effectiveness-eliminating nonvalue activities and unneeded features or services;
• Supplier Management-selecting, orienting, retaining and developing an optimal working relationship with the right vendors.

USCCG's Systematic Approach

We employ a systematic approach to bringing spend under management and implementing identified savings. Our goal is to help you become a world-class procurement organization by reducing the cost of purchased goods and services, enabling processes, collaborating with supplier partners to reduce the cost of doing business, aligning the organization, and providing tools to ensure compliance.

Feasibility Study

We start with a feasibility study during which we'll conduct a category sourcing assessment and an organizational assessment. The purpose of the category sourcing assessment is to uncover all spend within a company and classify it into categories and family groupings. From there we'll analyze outlays, estimate implementable savings, and formulate sourcing strategies by commodity group based on our knowledge of supply markets.

The purpose of the organizational assessment is to benchmark the current procurement organization toward the goal of increasing its overall efficiency. We'll look at the number of people involved, their skill sets, procurement practices and processes, the tools they use, etc., and assess them against our best practices. Frequently, this will lead us to define a high-level future state procurement model, along with a series of steps of how to achieve it, and a list of improvement opportunities to be harvested along the way.

Once these assessments have been completed, we will begin to implement identified saving using a five-phase process.

1. Data Gathering and Preparation
   We start by gathering and preparing data for subsequent analysis. This phase involves systematically determining what is being purchased across the enterprise by whom, at what price, to what specifications, under what terms, from which suppliers, and why. We use custom templates to collect and format the spend history by category and by item. We gather and validate specifications. We review business agreements including payment terms, shipping and freight covenants, and inventory requirements. We'll also identify and evaluate incumbent and recommended suppliers and the bid process.
2. Develop the Supplier Market and Category Strategy
   In this phase we seek to broaden and/or improve the quality of the supplier base. We'll brief and help manage the incumbents, actively recruit and invite new suppliers to bid, respond to their technical questions, and train them on the bidding platform. This entails using outside resources to identify and develop potential suppliers, conducting a formal outreach program, refining and forwarding RFIs and CDAs to elicit basic information and new supplier attributes, and collecting and reviewing financial data to establish their qualifications. At this point we'll determine whether to pursue a sourcing or collaborative strategy for each category based on criticality weighed against a combination of market complexity and supplier availability.
3. Selection
   Once we've identified and vetted the supplier pool, we'll begin the selection process by developing and publishing an RFQ. We'll contact and review the content of the RFQ with suppliers and coordinate answers to their questions, updating the RFQ along the way as/if necessary. Once the bids are in we'll analyze them, check supplier references, review terms and visit top supplier candidates to net down to a pool of semifinalists if not an outright winner. In the former case we may initiate a second round of bidding to determine the finalist.
4. Negotiation
   Having selected a finalist, we will assist you in preparing and submitting a draft contract to them for review. Any differences will be resolved through bi-lateral negotiations and reflected in a final contract for both parties to sign. We may elect to suspend inventory build at this time as appropriate to circumstances.
5. Analyze and Award
   In this final phase, the outcome is communicated to all bidding non-winning suppliers. The winning bidder may be asked to provide sample parts, if appropriate, for testing and approval. Logistics are discussed and finalized and a quarterly review process put into place to ensure compliance.

Value Proposition and Benefits

Businesses face many challenges today including rising materials costs, poor supplier quality and/or delivery performance, SKU proliferation, organizational inertia and resistance, fragmented spend, all of which are exacerbated by an inability to obtain and interpret company-wide information. Under these trying circumstances, USCCG's process provides the structure and tools to achieve material cost reductions.

• Technologies to automate, aggregate, classify, and analyze spend data;
• Discipline to develop, communicate, and execute project plans and planned key events;
• Standardized metrics and summary scorecard;
• Automated supplier registration, improvement plans, and corrective action;
• Cross-functional and divisional teams to leverage category spend and improve processes;
• Enterprise-wide integrated supply management.

Buyers and suppliers alike benefit from improved sourcing. Buyers are able to more accurately determine true market pricing and availability for the goods and services they want or need to purchase. They're able to identify potential new sources, reduce negotiation cycle time, and consolidate procurement among fewer, more strategic suppliers. Suppliers, on the other hand, are able to identify potential new customers, get clear and immediate market feedback on their offerings, and, ultimately, reduce the cost of sales.

Download the PDF

We use contemporary technologies to fortify our improvement efforts, ensuring that the final results are integrated, quality-assured, and easy to use. We also ensure that they remain focused on the prioritized areas based on performance measures we’ll define together.

LINCS®, Our Lean Information Control System, includes tools and software applications that facilitate real-time, fact-based decision-making across the entire supply chain. These are normally custom-configured to a client’s individual needs.

Individual LINCS modules include advanced planning and scheduling, value stream mapping, manufacturing and logistics solutions, time-phased production scheduling, process analysis and management reporting, inventory analysis, and profit optimization tools.

Used alone or in combination, these modules function as a sophisticated decision support tool kit that is adaptable, affordable, easy-to-use, and usually capable of interfacing with existing legacy systems. They offer a compelling value for your investment.

Knowledge Transfer

We believe that when stakeholders are fully involved in the change process, knowledge is transferred, ensuring that the improvements we make together will endure. That’s why we’ll use a team consisting of your people and ours to bring about rapid change for meaningful and lasting organizational transformation. As a result, your whole organization will become smarter, stronger, and leaner, which will enable you to harvest your initial investment in our consulting services several times over.

Optimizing the Whole

Frequently, optimizing the entire supply chain may require sub-optimizing some of its parts. Otherwise, it’s possible to wind up with pockets of excellence that do not work together for the good of the whole organization. We are prepared to work with you, using our supply chain modeling tools, to achieve the optimal cross-functional result for your company.

Evolving Science

In our view, the science of supply chain optimization is not static. New methodologies are constantly being developed and deployed. Similarly, new tools, technologies, and applications are becoming available nearly every day. We are committed to remain in the forefront of our profession for the benefit of our clients and will continue to bring them best-of-breed design, development, and execution.

In the final analysis, it’s always the scope, whether broad or narrow, that will determine the proper strategy, architecture, engineering, and methodology to optimize a specific company’s supply chain.

Each engagement has to be designed to meet the specific needs of our clients, their unique circumstances, history, and desired future state.

We are staffed and equipped to address any and all node(s) of the internal and external supply chain. And for those engagements where the scope may extend beyond our core competencies or resource capabilities, we employ capable alliance partners to assist us in designing and delivering state-of-the-art solutions.

Alliance Partners

Since 1968, we’ve helped hundreds of companies unlock hidden values throughout their organizations using business solutions tailor-made for their individual circumstances. We stand ready, willing, and able to do the same for you. Simply call us at (800) 888-8872 or send us an e-mail at gary.brown@usccg.com to schedule an exploratory discussion with one of our business development executives. There’s no obligation and we’re sure you will find any time you invest in us to be well spent. We look forward to the possibility of assisting you.