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ImprovingSupplyChainManagementRelationshipsMarySimmermanVicePresident,MaterielApril23,2003Acquisition&LogisticsExcellenceConference2Copyright2003NorthropGrummanCorporationAgendaIntroductionsSupplierManagement–WhatDoesItMean?TheDefenseBusiness–What’sDrivingtheTransformation?Northrop’sModel–“StrategicRelationships,StrategicAlliances”KeySuccessFactorsFutureVision–WhereDoWeGofromHere?QuestionsandAnswers3Copyright2003NorthropGrummanCorporationMarySimmerman,VP,MaterielOverseeDomesticandInternationalProcurementandSubcontractManagementVP,SupplierManagementandProcurementatBoeingSpaceandCommunicationsCo-LeadSupplierMgmt.ProcessCouncilatBoeingPastLifeatNorthropinAdvancedSystemsDivisionandGrummanAerospaceSMEforMaterialOperationsofBoeingAirliftandTanker1998MalcolmBaldridgeAwardMBA,KellerGraduateSchool,BAinBusinessMgmt.,UniversityofPhoenix4Copyright2003NorthropGrummanCorporationCost-BasedAdversarial“Vendor”“TugofWar”Non-EvaluativeShort-TermEvent-BasedCollaborationJointinvestmentSophisticatedEvaluationToolsLong-TermFocusContinuousimprovementTruePartnershipsQualityIssuesPoorCommunic.TQM6SigmaMetricsIntegratedSystemsNewTech.SCMFocusPastPresentSupplierManagement–WhatDoesitMean?5Copyright2003NorthropGrummanCorporationWhatDoWeMeanToday?AFormalProcessbyWhichSuppliersAreEvaluatedandCategorizedbyTheirAbilitytoAddValuetoOurBusinessViaInvestment,CollaborativePlanning&Design,Risk-SharingandProductEnhancementSupplierManagementIsEnablingRelationshipswithProvidersofGoodsandServicesto:–AttainBusinessObjectives–ExpandBusinessOpportunities–Reduce/TransferBusinessRisks6Copyright2003NorthropGrummanCorporationMarketShareSignificantlyEnhancedrevenueBenefitsfromSupplierManagementNewProducts/ItemsBroaderNameRecognitionReducedCostsNewDistributionChannelsNewCustomersWhyManageSuppliers?60-70%ofWhatWeBuildIsProcured!CustomerSatisfaction7Copyright2003NorthropGrummanCorporationIndustryConsolidationWarTacticsCulturalIssuesEnhancedCommunicationsWeaponsTechnologyTheGenesisTheDefenseBusiness–What’sDrivingtheTransformation?“IntegratedNetwork”TruePartnerships“Systems,Services,Support”PrecisionWeapons&“Real-Time”CommunicationsGoalsCollaboration8Copyright2003NorthropGrummanCorporationTheNorthropModel–SupplierEngagementPossessTechnologyThatWouldBeBeneficialtoOurFutureBusinessAspirationsAlignwithOurFutureStrategies(e.g.NHA,JIT)HaveR&DExpendituresThatAreRelevanttoTechnologiesWeBelieveAreGapsinOurPortfolioSelectPotentialStrategicPartners(Industry/Geography)withCharacteristicsThatWouldBeCriticalDifferentiatorsforUsinFutureCompetitions(e.g.Skills,PoliticalStrengths,Technologies)9Copyright2003NorthropGrummanCorporationTheNorthropModel–HawkeyeCaseStudyIssues:RadarApproach&TeamSolidifiedWithintheNavy(NAVAIR,OPNAV,CNO,ASN)NavyFundingProfilestoSupportRMPSD&DandPostMultiyearProductionRMPSD&DProposalSubmissioninJuneandContractAwardbyDecemberFY2004NTEProductionProposalSubmissioninNovemberandAACAwardbyDecember(3Hawkeye2000Aircraft)Strategies:PreserveFY2003BudgetforSD&DandProductionandPreservationinPOM-04ContinueHawkeye2000andAdvancedHawkeye/RMPAdvocacyCampaignsWorkwiththeCustomerforPostMYPProductionViaAffordabilityOptions–FY2004-2005(Hawkeye2000)–FY2006-TBD(RMPLS/TAMD)HawkeyeIndustryTeamTactics:LeveragetheStrengthofa“Team”inUSN,OSD,CongressandtheMediaPropagate“ValueofRMP”asHighestPriorityofAdvocacyCampaignStress“ValueofHawkeye2000/CEC”toNear–termFleetOperationsDevelopAffordabilityPostureonRMPSD&DandPostMultiyearProductionTargetKeyOPNAVFlagsPromoteTeamAccomplishmentsStrategicIntent:JointMarketingoftheE-2CHawkeyeandUSNAEW&CRoadmap10Copyright2003NorthropGrummanCorporationTheNorthropModel–F-35CaseStudyStrategicIntent:CollaborativeDesignandEngineeringwhilepursuing“BestValue”Issues:CostcontainmentiskeyfortheprogramInvestmentstructurerequiressourcingstrategyforparticipatingcountriesRFB/RFQare“model”basedDesignandproductionspecsareevolvingasthebidprocessprogressesStrategies:ExploittechnologieswhichsupportcollaborativedesignandengineeringtoaddressweightandconfigurationchallengesEmploy“ePMO”fordocumentanddatasharingforglobalteamDeploycommonengineeringstandards(CATIA)F-35GlobalTeamTactics:DevelopedJSL“VirtualPMO”forglobalprojectmanagementsupportBalance“bestvalue”andcollaborativeengineeringcapabilitiestomeetcostanddesignchallengesDevelopspecificincentivesforteamtoaddresscenterfuselageandweightchallenges.11Copyright2003NorthropGrummanCorporationContinuousReviewProcessBasedonPerformanceMeasuresReflectingTotalCostofOwnershipMustBeinPlacetoProvideOngoingMonitoringoftheSupplier'sEffectiveness–“PlatinumSource”CaseStudyKeySuccessFactors–SupplierRelationshipManagement12Copyright2003NorthropGrummanCorporationKeySuccessFactors–SupplierRelationshipManagement,PlatinumSource13Copyright2003NorthropGrummanCorporationKeySuccessFactors–SupplierBenefits14Copyright2003NorthropGrummanCorporationKeySuccessFactors–SupplierRelationshipManagementSuppliers/ContractorsAreSelectedStrategically,withaLong-TermFocus,RatherThanHistoricShort-Term,Trans
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