貝恩戰(zhàn)略分析方法分析方法Vmr018

1、sheila dubin value managed relationships december 1998 author: value managed relationships 2 after completing this module, you will be able to: understand vmr concept and application articulate types of cost savings opportunities created by vmrs use the bain framework to conduct a vmr refer to real

2、examples of bains vmr process and success value managed relationships objectives value managed relationships 3a.tr vmr concept vmr key success factors vmr sources of value bain vmr process example key takeaways agenda value managed relationships 4 a value managed relationship (vmr) is a full partner

3、ship between a customer and a supplier. its goal is to maximize quality and minimize total system costs of doing business through collaborative sharing of information and resources. a vmr creates a win/win relationship. vmr definition value managed relationships 5 “partnership ” true vmr procurement

4、 strategies value managed relationship sole source vertical integration competitive bid short-term contract / spot long- term contract a vmr is one procurement strategy to maximize cost savings and strategic value. what is a vmr? value managed relationships 6 a value managed relationship can exceed

5、the value potential of both vertical integration and traditionally negotiated arms length transactions: a consolidation of purchases to one or few suppliers who are capable of maintaining long term competitive economics, high quality and efficient delivery participants must share single goal of achi

6、eving lowest industry systems cost savings should be shared to provide mutual ongoing incentives to eliminate redundancies a vmr, when appropriate, exceeds the value of all other types of relationships. how does a vmr work? value managed relationships 7a.tr fragmented supplier base, sporadic communi

7、cation single or small number of suppliers, frequent communication in-house supply, communication frequent traditional arms length approachvertical integration investments based upon manufacturers needs potential for customized investment in facilities/equipment may require investment in weak strate

8、gic business adversarial bid negotiations to obtain lowest unit price long-term commitment focused upon lowest total systems cost using value chain perspectives focus driven by internal incentives/ transfer prices separate product designjoint product design and cross functional participation joint p

9、roduct design often at odds vmr vmrs can exceed the value of both traditional contracts as well as vertical integration. strategic purchasing options value managed relationships 8 high potential high low highlow purchasing volume (relative to total supplier sales) value-added / engineered level prod

10、uct redesign material substitution product redesign material substitution volume discount system cost improvement moderate potential volume discount some system costno / little opportunity (need to cluster) vmrs are most appropriate where high volume and significant value added occurs. medium/low po

11、tential where are vmrs appropriate? value managed relationships 9 large dollar purchase high level of value-added cost in product fragmentation across many divisions and suppliers client represents significant part of industry output industry competitive intensity high: capacity utilization dropping

12、 consolidation in progress many new plants looking for volume historical industry price umbrellas vmrs are most effective in large dollar, high value added products. in which categories are vmrs most effective? value managed relationships 10 consolidate volume in long- term partnership increased pac

13、e of innovation leads to strategic benefits for both ensures continued supply for buyer and capacity utilization for supplier commitment and scale justifies joint investment in cost savings and r&d/technology joint efforts lead to system-wide benefits for both added value leads to more reasons to co

14、llaborate a successful vmr will continue to create value as the relationship progresses. value cycle value managed relationships 11a.tr vmrs create value for the buyer. higher quality and fewer rejects superior service partner in joint system cost reduction innovation technological expertise package

15、 performance improvements spec consolidation product redesign and materials substitution pricing commensurate with larger, longer volume commitments commitment to continuous improvement of the partnership value of vmrsbuyer value managed relationships 12 vmrs create value for suppliers. larger volum

16、es in fewer items longer run lengths and fewer set-ups higher capacity utilization learning curve benefits stable long term demand sharing in buyers strong commitment to future growth partner in joint system cost reduction resources and stability to invest in technology commitment to continuous impr

17、ovement of the partnership value of vmrssupplier value managed relationships 13 lab supplies medical supplies flexible packaging gases punches and dyes drinks packaging office supplies sbs folding cartons electrical supplies rigid injection molded plastic products corrugated boxes freight flex packa

18、ging thermoformed parts motors automotive parts molded plastic bottles power equipment products recycled paperboard cartons brick glass oils and lubes chemicals dextrose coal bicycle parts adhesives resins 47% 37% 33% 33% 30% 30% 27% 25% 22% 22% 19% 19% 18% 17% 16% 15% 15% 13% 12% 12% 11% 10% 10% 9%

19、 8% 7% 7% 0% 10% 20% 30% 40% 50% cost savings as a percentage of spending vmrs have averaged 15% to 20% cost savings. average range bain experience in vmrs value managed relationships 14a.tr although the value managed relationship can be sophisticated and complex, the results are quantifiable and si

20、mple. 100% of volume with one supplier for three years up front price reduction of 7% guaranteed 9.8% recurrent savings within three years cost-based indexed pricing over time 50/50 savings sharing penalties and inspections built-in etc. vmr sample agreement value managed relationships 15a.tr vmr co

21、ncept vmr key success factors vmr sources of value bain vmr process example key takeaways agenda value managed relationships 16 partnership not meeting expectations partnership meeting expectations partnership exceeding expectations 0% 20% 40% 60% 80% 100% total partnerships over one half of existin

22、g partnerships do not meet expectations. this reality increases the need to understand and focus on the key success factors partnerships expectations value managed relationships 17 strategy, organization and process must be in place in order to ensure vmr success. clarity of and agreement on strateg

23、y and goals strategy appropriate level of involvement in and across organizations organization detailed and structured process for identifying and implementing opportunities process key success factors value managed relationships 18 long term relationships focused on total value are critical strateg

24、ic issues that must be clearly articulated. vmrs pursued only where appropriate true supplier partnerships long-term relationships with one or few suppliers relationships at all organizational levels extensive two-way information sharing sharing of all savings willing to address inherent risks focus

25、 on total value-chain, not input price suppliers selected based on long-term total value opportunities identified and captured across entire supply chain key success factorsstrategy value managed relationships 19 involvement and cooperation across the organization is critical to success. senior mana

26、gement direct involvement and ongoing interest/support cross-functional involvement in scheduling, logistics, design and development implementation driven at grass roots level clear process champions formalized structure and process to perpetuate partnership key success factorsorganization value man

27、aged relationships 20a.tr a detailed process must be in place to maximize value and ensure ongoing opportunity identification. up front identification of opportunities and unique value each partner offers documented existence of significant untapped systems cost value rigorous and fact-based supplie

28、r selection extensive consensus building systems and structures to perpetuate process key success factorsprocess value managed relationships 21a.tr scope of partnership limited not win/win focus on price instead of total value supplier selection based on price failure to consider total system as sou

29、rce of savings chosen strategy inappropriate for purchase category an inappropriate strategy can prohibit a win/win relationship. reasons for partial successstrategy value managed relationships 22a.tr limited senior management participation little cross-functional involvement over-centralized decisi

30、on making: not participative/inclusive ad hoc structure set up to implement strategy partial success can be caused by senior or line organizational inadequacies. reasons for partial successorganization value managed relationships 23a.tr lack of internal and external consensus building lack of relent

31、less pursuit supplier selection not rigorous and fact-based technical opportunities not identified up front lack of systems and structures to perpetuate the process an incomplete process can also cause limited success. reasons for partial successprocess value managed relationships 24 to achieve succ

32、essful vmrs, there are several areas of potential obstacles to watch out for. benefits are vague and unqualified no “full potential” economics analysis has been developed for both parties process challenges assumptions are made by suppliers that vmrs are a one-time trick communication challenges wat

33、chouts concerns about sharing expense and product information sufficient communication of the benefits of change throughout both organizations there is a lack of understanding and commitment to changing the way business is done benefits of the vmr are split in a lop- sided manner sku proliferation n

34、o ongoing value realization agenda has been created and/or no vmr champions are empowered to act organizational barriers (e.g. multi- divisional companies) watchouts value managed relationships 25 vmr concept vmr key success factors vmr sources of value bain vmr process example key takeaways agenda

35、value managed relationships 26 improved quality due to reduced variability improved communications longer commitments allow for longer run lengths purchasing economies a strong vmr can capture the value inherent in vertical integration while allowing the client to focus both capital and management r

36、esources on its primary business. example sources of value: primary sources of value volume/scale economies value engineering and quality improvement system cost reduction technology and capability sharing to create lowest cost, highest value product joint determination of potential for: material su

37、bstitution reduction of material content standardization of materials joint identification of redundant/duplicate processes, e.g. quality control order processing transportation engineering management functions improved inventory control cross company logistics sharing of transportation and distribu

38、tion operations (e.g., leveraged backhaul opportunities, shared delivery runs) estimate percent of total value created: 25%50%25% sources of value (1 of 2) value managed relationships 27 value engineering and systems cost reduction are most difficult to implement and require the most senior involvme

39、nt. source of valuemethodology difficulty of implementation senior management involvement an open dialogue regarding product design begins to optimize design/cost trade-offs value engineering and quality improvement buyer and supplier jointly examine current methods of interaction and begin to elimi

40、nate redundancies systems cost reduction consolidation of suppliers allows the buyer to negotiate for share of incremental profit volume/scale economics sources of value (2 of 2) value managed relationships 28 disguised example client purchases currentincremental client volume 78% 100% 0% 25% 50% 75

41、% 100% weighted average plant capacity utilization increase of 3.2 times profit fixed costs variable costs industry cost structure incremental client volume 100%100% 0% 20% 40% 60% 80% 100% percent of sales 6% profit improvement relevant plant capacity utilizationincremental margin impact increasing

42、 a suppliers utilization by 22% had a 6% profit impact. volume/scale economiesexample value managed relationships 29 current productprototype a*prototype b*prototype c* 100100 136 94 136 91 121 88 0 50 100 150 indexed cost and quality new designs indexed quality indexed cost value engineering identi

43、fied three new product options that increased quality and reduced cost. *protypes developed jointly with supplier disguised example value engineeringexample value managed relationships 30 before vmr (5 quality control ftes) after vmr (3 quality control ftes) suppliercustomer joint quality control cu

44、stomer direct to packaging operations = qc inspection personnel in this example of systems cost vmr, the supplier and bain client eliminated redundancy and saved 40% of quality control costs. to packaging operations ongoing feedback to vendor systems costs example value managed relationships 31 syst

45、em cost value engineering volume/scale economics 19% 0% 5% 10% 15% 20% percent of total costs overall, this client achieved a 19% cost reduction through the vmr example shown. summary of cost savingsexample value managed relationships 32 123 0% 20% 40% 60% 80% 100% savings captured volume/price savi

46、ngs and some level of value engineering/ quality benefits are realized very early in the relationship additional value engineering savings and system cost reductions are more likely to come later bain experience has found that the value from vmr is developed over several years. years into vmr value

47、engineering and quality improvement system cost reduction volume/price effect typical timing value managed relationships 33 vmr concept vmr key success factors vmr sources of value bain vmr process example key takeaways agenda value managed relationships 34 identify vmr opportunities understand indu

48、stry cost structure select vmr candidates obtain top management commitment identify specific cost reduction opportunities implement vmr opportunities track vmr savings select products for vmr based on purchasing volume and value-added analyze industry economics to develop savings hypotheses analyze

49、suppliers to select best vmr candidates ensure senior management of client and supplier are fully committed conduct analysis to prove hypotheses and quantify savings opportunities formalize relationship and implement opportunities track progress of savings and relationships vmr process value managed

50、 relationships 35 example identify vmr opportunities understand industry cost structure select vmr candidates obtain top management commitment identify specific cost reduction opportunities implement vmr opportunities track vmr savings vmr process value managed relationships 36 this matrix will help

51、 you prioritize which opportunities are most appropriate for a vmr. no/little opportunity (need to cluster) high low lowhigh purchasing volume (relative to total supplier sales) value-added/engineered level product redesign material substitution volume discount system cost improvement volume discoun

52、t some system cost product redesign material substitution moderate potential high potentialmedium/low potential purchasing category priority value managed relationships 37 because the vmr process is lengthy and time consuming, qualitative issues must also be evaluated in selecting where to implement

53、 a vmr. suppliers and client organizations must be willing to work closely together commit management time and effort prioritize success of vmr top management of supplier and client must have authority to cover full scope of vmr balance amount of cost savings with level of sensitivity associated wit

54、h product category purchasing category selection value managed relationships 38 identify vmr opportunities understand industry cost structure select vmr candidates obtain top management commitment identify specific cost reduction opportunities implement vmr opportunities track vmr savings vmr proces

55、s value managed relationships 39 understanding the industry structure validates opportunities that were identified in the first vmr process step. industry cost structure and drivers industry competitive structure industry capacity utilization how suitable is this market and its competitive dynamics

56、for a vmr? how important is the client as a customer in this industry? what is the cost structure of the industry? example questions: who are the key players? what is the industry capacity utilization? what drives this cost structure? how fragmented is the industry? what is the utilization of each p

57、layer? what type of cost savings opportunities might exist? on what factors do key players compete? what drives utilization? understand industry structure value managed relationships 40 identify vmr opportunities understand industry cost structure select vmr candidates obtain top management commitme

58、nt identify specific cost reduction opportunities implement vmr opportunities track vmr savings vmr process value managed relationships 41 vmr partners must be able to perform in the relationship and be a willing partner. potential for low cost position strong technology/quality new product developm

59、ent track record adequate financial resources long term winners capability and willingness to develop a partnership important category for supplier client important to supplier partnerships with other suppliers scale to handle volume parent company support ideal partners supplier prioritization valu

60、e managed relationships 42 initial analysis of the supplier must be conducted to determine potential for being a long-term winner and capability/willingness to develop a partnership. example analyses:size and market share strategy profitability cash flow quality philosophy and implementation technol