贝恩咨询-战略分析工具 (3)ppt课件

1、Sheila DubinValue Managed RelationshipsDecember 1998Author:1After completing this module, you will be able to: Understand VMR concept and applicationArticulate types of cost savings opportunities created by VMRsUse the Bain framework to conduct a VMRRefer to real examples of Bains VMR process and su

2、ccessValue Managed Relationships Objectives2 VMR ConceptVMR Key Success FactorsVMR Sources Of ValueBain VMR ProcessExampleKey TakeawaysAgendaa.tr3 A Value Managed Relationship (VMR) is a full partnership between a customer and a supplier.Its goal is to maximize quality and minimize total system cost

3、s of doing business through collaborative sharing of information and resources.A VMR creates a win/win relationship. VMR Definition4“PartnershipTrue VMR Procurement StrategiesValue Managed RelationshipSole SourceVertical IntegrationCompetitive BidShort-term Contract / SpotLong-term ContractA VMR is

4、one procurement strategy to maximize cost savings and strategic value.What is a VMR?5 A Value Managed Relationship can exceed 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

5、 maintaining long term competitive economics, high quality and efficient deliveryparticipants must share single goal of achieving lowest industry systems costsavings should be shared to provide mutual ongoing incentives to eliminate redundanciesA VMR, when appropriate, exceeds the value of all other

6、 types of relationships.How Does a VMR Work?6Fragmented supplier base, sporadic communicationSingle or small number of suppliers, frequent communicationIn-house supply, communication frequentTraditional Arms Length ApproachVertical IntegrationInvestments based upon manufacturers needsPotential for c

7、ustomized investment in facilities/equipmentMay require investment in weak strategic businessAdversarial bid negotiations to obtain lowest unit priceLong-term commitment focused upon lowest total systems cost using value chain perspectivesFocus driven by internal incentives/ transfer pricesSeparate

8、product designJoint product design and cross functional participationJoint product design often at oddsVMRVMRs can exceed the value of both traditional contracts as well as vertical integration.Strategic Purchasing Optionsa.tr7 High PotentialHighLowHighLowPurchasing volume(relative to total supplier

9、 sales)Value-added / engineered levelProduct redesignMaterial substitutionProduct redesignMaterial substitutionVolume discountSystem cost improvementModerate PotentialVolume discountSome system costNo / Little opportunity (need to cluster)VMRs are most appropriate where high volume and significant v

10、alue added occurs. Medium/low potential Where Are VMRs Appropriate?8Large dollar purchaseHigh level of value-added cost in productFragmentation across many divisions and suppliersClient represents significant part of industry outputIndustry competitive intensity high:capacity utilization droppingcon

11、solidation in progressmany new plants looking for volumehistorical industry price umbrellasVMRs are most effective in large dollar, high value added products.In Which Categories Are VMRs Most Effective?9Consolidate volume in long-term partnershipIncreased pace of innovation leads to strategic benefi

12、ts for bothEnsures continued supply for buyer and capacity utilization for supplierCommitment and scale justifies joint investment in cost savings and R&D/technologyJoint efforts lead to system-wide benefits for bothAdded value leads to more reasons to collaborateA successful VMR will continue to cr

13、eate value as the relationship progresses.Value Cycle10VMRs create value for the buyer. Higher quality and fewer rejectsSuperior servicePartner in joint system cost reductionInnovationTechnological expertisepackage performance improvementsspec consolidationproduct redesign and materials substitution

14、Pricing commensurate with larger, longer volume commitmentsCommitment to continuous improvement of the partnershipValue Of VMRsBuyera.tr11VMRs create value for suppliers. Larger volumes in fewer itemslonger run lengths and fewer set-upshigher capacity utilizationlearning curve benefitsStable long te

15、rm demandSharing in buyers strong commitment to future growthPartner in joint system cost reductionResources and stability to invest in technologyCommitment to continuous improvement of the partnershipValue Of VMRsSupplier12VMRs have averaged 15% to 20% cost savings.Average RangeBain Experience in V

16、MRs13Although the value managed relationship can be sophisticated and complex, the results are quantifiable and simple.100% of volume with one supplier for three yearsUp front price reduction of 7%Guaranteed 9.8% recurrent savings within three yearsCost-based indexed pricing over time50/50 savings s

17、haringPenalties and inspections built-inEtc.VMR Sample Agreementa.tr14 VMR ConceptVMR Key Success FactorsVMR Sources Of ValueBain VMR ProcessExampleKey TakeawaysAgendaa.tr15Over one half of existing partnerships do not meet expectations.This reality increases the need to understand and focus on the

18、key success factorsPartnerships Expectations16Strategy, organization and process must be in place in order to ensure VMR success.Clarity of and agreement on strategy and goalsStrategyAppropriate level of involvement in and across organizationsOrganizationDetailed and structured process for identifyi

19、ng and implementing opportunitiesProcessKey Success Factors17Long term relationships focused on total value are critical strategic issues that must be clearly articulated.VMRs pursued only where appropriateTrue supplier partnershipslong-term relationships with one or few suppliersrelationships at al

20、l organizational levelsextensive two-way information sharingsharing of all savingswilling to address inherent risksFocus on total value-chain, not input pricesuppliers selected based on long-term total valueopportunities identified and captured across entire supply chainKey Success FactorsStrategy18

21、Involvement and cooperation across the organization is critical to success.Senior management direct involvement and ongoing interest/supportCross-functional involvement in scheduling, logistics, design and developmentImplementation driven at grass roots levelClear process championsFormalized structu

22、re and process to perpetuate partnershipKey Success FactorsOrganization19A detailed process must be in place to maximize value and ensure ongoing opportunity identification.Up front identification of opportunities and unique value each partner offersDocumented existence of significant untapped syste

23、ms cost valueRigorous and fact-based supplier selectionExtensive consensus buildingSystems and structures to perpetuate processKey Success FactorsProcessa.tr20Scope of partnership limitednot win/winFocus on price instead of total valuesupplier selection based on pricefailure to consider total system

24、 as source of savingsChosen strategy inappropriate for purchase categoryAn inappropriate strategy can prohibit a win/win relationship.Reasons for Partial SuccessStrategya.tr21Limited senior management participationLittle cross-functional involvementOver-centralized decision making: Not participative

25、/inclusiveAd hoc structure set up to implement strategyPartial success can be caused by senior or line organizational inadequacies.Reasons for Partial SuccessOrganizationa.tr22Lack of internal and external consensus buildingLack of relentless pursuitSupplier selection not rigorous and fact-basedTech

26、nical opportunities not identified up frontLack of systems and structures to perpetuate the processAn incomplete process can also cause limited success.Reasons for Partial SuccessProcessa.tr23 To achieve successful VMRs, there are several areas of potential obstacles to watch out for.Benefits are va

27、gue and unqualifiedno “full potential economics analysis has been developed for both partiesProcess ChallengesAssumptions are made by suppliers that VMRs are a one-time trickCommunication ChallengesWatchoutsConcerns about sharing expense and product informationSufficient communication of the benefit

28、s of change throughout both organizationsThere is a lack of understanding and commitment to changing the way business is doneBenefits of the VMR are split in a lop-sided mannerSKU proliferationNo ongoing value realization agenda has been created and/or no VMR champions are empowered to actOrganizati

29、onal barriers (e.g. multi-divisional companies)Watchouts24 VMR ConceptVMR Key Success FactorsVMR Sources Of ValueBain VMR ProcessExampleKey TakeawaysAgenda25 Improved quality due to reduced variabilityImproved communicationsLonger commitments allow for longer run lengthsPurchasing economiesA strong

30、VMR can capture the value inherent in vertical integration while allowing the client to focus both capital and management resources on its primary business.Example Sources of Value:Primary Sources of ValueVolume/ScaleEconomiesValue Engineering and Quality Improvement System CostReductionTechnology a

31、nd capability sharing to create lowest cost, highest value productJoint determination of potential for:material substitutionreduction of material contentstandardization of materialsJoint identification of redundant/duplicate processes, e.g.quality controlorder processingtransportationengineeringmana

32、gement functionsimproved inventory controlCross company logisticssharing of transportation and distribution operations (e.g., leveraged backhaul opportunities, shared delivery runs)Estimate Percent of Total Value Created:25%50%25%Sources of Value (1 of 2)26Value engineering and systems cost reductio

33、n are most difficult to implement and require the most senior involvment.Source of ValueMethodologyDifficulty of ImplementationSenior Management InvolvementAn open dialogue regarding product design begins to optimize design/cost trade-offsValue engineering and quality improvementBuyer and supplier j

34、ointly examine current methods of interaction and begin to eliminate redundanciesSystems cost reductionConsolidation of suppliers allows the buyer to negotiate for share of incremental profitVolume/scale economicsSources of Value (2 of 2)27Disguised exampleIncrease of 3.2 times6% Profit ImprovementR

35、elevant Plant Capacity UtilizationIncremental Margin ImpactIncreasing a suppliers utilization by 22% had a 6% profit impact.Volume/Scale EconomiesExample28New DesignsIndexed QualityIndexed CostValue engineering identified three new product options that increased quality and reduced cost.*Protypes de

36、veloped jointly with supplierDisguised exampleValue EngineeringExample29 Before VMR(5 Quality Control FTEs)After VMR(3 Quality Control FTEs)SupplierCustomerJoint QualityControlCustomerDirect to packaging operations= QC inspection personnelIn this example of systems cost VMR, the supplier and Bain cl

37、ient eliminated redundancy and saved 40% of quality control costs.To packaging operationsOngoing Feedback to VendorSystems Costs Example30Overall, this client achieved a 19% cost reduction through the VMR example shown.Summary of Cost SavingsExample31 Volume/price savings and some level of value eng

38、ineering/ quality benefits are realized very early in the relationshipAdditional value engineering savings and system cost reductions are more likely to come laterBain experience has found that the value from VMR is developed over several years.Years into VMRValue engineering and quality improvement

39、System cost reductionVolume/price effectTypical Timing32 VMR ConceptVMR Key Success FactorsVMR Sources Of ValueBain VMR ProcessExampleKey TakeawaysAgenda33Identify VMR OpportunitiesUnderstand Industry Cost StructureSelect VMR CandidatesObtain Top Management CommitmentIdentify Specific CostReduction

40、OpportunitiesImplement VMR OpportunitiesTrack VMR SavingsSelect products for VMR based on purchasing volume and value-addedAnalyze industry economics to develop savings hypothesesAnalyze suppliers to select best VMR candidatesEnsure senior management of client and supplier are fully committedConduct

41、 analysis to prove hypotheses and quantify savings opportunitiesFormalize relationship and implement opportunitiesTrack progress of savings and relationshipsVMR Process34EXAMPLEIdentify VMR OpportunitiesUnderstand Industry Cost StructureSelect VMR CandidatesObtain Top Management CommitmentIdentify S

42、pecific CostReduction OpportunitiesImplement VMR OpportunitiesTrack VMR SavingsVMR Process35This matrix will help you prioritize which opportunities are most appropriate for a VMR.No/Little Opportunity(need to cluster)HighLow LowHighPurchasing Volume(Relative to Total Supplier Sales)Value-Added/Engi

43、neered LevelProduct redesignMaterial substitutionVolume discountSystem cost improvementVolume discountSome system cost Product redesignMaterial substitutionModerate potentialHigh potentialMedium/low potentialPurchasing Category Priority36Because the VMR process is lengthy and time consuming, qualita

44、tive issues must also be evaluated in selecting where to implement a VMR.Suppliers and client organizations must be willing towork closely togethercommit management time and effortprioritize success of VMRTop management of supplier and client must have authority to cover full scope of VMRBalance amo

45、unt of cost savings with level of sensitivity associated with product categoryPurchasing Category Selection37Identify VMR OpportunitiesUnderstand Industry Cost StructureSelect VMR CandidatesObtain Top Management CommitmentIdentify Specific CostReduction OpportunitiesImplement VMR OpportunitiesTrack

46、VMR SavingsVMR Process38Understanding the industry structure validates opportunities that were identified in the first VMR process step.Industry Cost Structure and DriversIndustry Competitive StructureIndustry Capacity UtilizationHow suitable is this market and its competitive dynamics for a VMR?How

47、 important is the client as a customer in this industry?What is the cost structure of the industry?ExampleQuestions: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 player?What type of cos

48、t savings opportunities might exist?On what factors do key players compete?What drives utilization?Understand Industry Structure39Identify VMR OpportunitiesUnderstand Industry Cost StructureSelect VMR CandidatesObtain Top Management CommitmentIdentify Specific CostReduction OpportunitiesImplement VM

49、R OpportunitiesTrack VMR SavingsVMR Process40VMR partners must be able to perform in the relationship and be a willing partner.Potential for low cost positionStrong technology/qualityNew product development track recordAdequate financial resourcesLong Term WinnersCapability and Willingness to Develo

50、p a PartnershipImportant category for supplierClient important to supplierPartnerships with other suppliersScale to handle volumeParent company supportIdeal PartnersSupplier Prioritization41Initial analysis of the supplier must be conducted to determine potential for being a long-term winner and cap

51、ability/willingness to develop a partnership.Example Analyses:Size and market shareStrategyProfitabilityCash flowQuality philosophy and implementationTechnology applicationImportance of clients business to supplierInitial Supplier Evaluation42 To further determine whether a specific supplier is a go

52、od VMR candidate, evaluate the vendor on a variety of criteria. Quality of ServiceSupplier CommitmentMagnitude of Cost Reduction PotentialLong-Term Leadership PotentialProduct/delivery/systemsGeographic coverageDedication/dependenceInterest in VMRSystems economicsFlexibility of approachCredibility o

53、f plan/resourcesTechnologyScaleFinancialSupplier Evaluation43Partnership Development ProcessIdentify VMR OpportunitiesUnderstand Industry Cost StructureSelect VMR CandidatesObtain Top Management CommitmentIdentify Specific CostReduction OpportunitiesImplement VMR OpportunitiesTrack VMR SavingsVMR Pr

54、ocess44ImplementationSet up partnership management structure and rolloutNegotiationsShare aggregate responsesSupplier Proposals AnalysisReceive responsesInitial Contact with SuppliersDescribe proposed relationshipSelection of supplier(s)Comparative analysisElicit suppliers attitudes on a partnership

55、 with the clientTrain staff to manage process, expand to other areasIdentification of BDP and system cost reduction targetsFollow-up with plant tours, quality checks, etc.Hand over category strategy and volume expectationsThe optimal partnership development process is explicit and clearly articulate

56、d.Partnership Development Process45 Number of Suppliers:OligopolyGiant(s) and ManyFragmentedSole SourceGiant(s) and Few15-3015-302-52-51Supplier Concentration:80% to 6-8 suppliersRest with 10-20 suppliers80% to 1 or 2 suppliersRest with 15-30 suppliersEvenly among suppliers80% to 1 or 2 suppliersRes

57、t with 1-4 suppliers100% to 1 supplierLong term competitive bidsShort term competitive bidsVMRLong term competitive bidsShort term competitive bidsVMRLong term competitive bidsShort term competitive bidsVMRLong term competitive bidsShort term competitive bidsVMRLong term competitive bidsPotential Re

58、lationship Options:A range of supplier configuration options, should be evaluated.Supplier Configuration Alternatives46PeopleIs senior management committed to making this work?Have all organizational, cultural, and skill changes been addressedAre the incentives appropriate to ensure employee commitm

59、ent?Operational ExecutionWhat is the governance structure?How is progress monitored? How will roadblocks be resolved?Is there open sharing of required information?Can all the information systems changes be identified and specifiedHow will switch disruptions be minimized?Partner SelectionWhat is the

60、optimal number of suppliers?Do we really understand suppliers current and future cost position?Has the supplier screen included non-cost parameters?Has the supplier made a realistic commitment?Is the supplier committed to delivering on the agreement?ValueIs this the right input to target for a VMR?i