© MMXVII IndustryStar Solutions LLC

How to Create Competition to Drive PerformanceBOOM: Session Code: IAWilliam Crane | Founder & CEO | IndustryStar Solutions LLC

05/23/17 3:45 – 4:45pm ET

Rapid Outsourcing in a Boom Economy

+1 248 404 8249 industrystarsolutions.comwilliam.crane@industrystar.comMBA, BS, CPSM, Black Belt

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Why is rapid outsourcing critical in a booming economy?

© XXVII IndustryStar Solutions LLC

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Why is Rapid Outsourcing Critical in a Booming Economy?

What to Outsource?

4 Actions to Achieve Rapid Outsourcing Success

3 Models for Rapid Outsourcing

Q&A

What We are Going to Accomplish

© XXVII IndustryStar Solutions LLC

Cost Skills Risk Speed Innovation

• Cost Reduction

• Avoid Major

Investments

• Improve Financial

Ratios

• Realize Variable

Cost Structure

(hedge against bust)

• Improve Quality

• Improve

Performance

• Acquire Additional

Capacity

(capacity gets tight with

growth)

• Focus on Core

Competency

• Improve Flexibility

• Leverage

Expertise

(lower expansion risk)

• Accelerate

Processes

• Expedite Product

Commercialization

(capture new sales)

• Launch New

Disruptive Products

• Launch a New

Strategic Initiative

• Tap Into

Innovation

(leapfrog competition)

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Why is Rapid Outsourcing Critical in a Boom Economy?5 Main Drivers

© XXVII IndustryStar Solutions LLC

5© XXVII IndustryStar Solutions LLC

What to Outsource?Noncore Activities of The Firm

Goods Services Tasks

• Components

• Modules

• Products

• Customer Research

• Engineering

• Staffing

• Industrial Design

• Product Development

• Procurement

• Production Control

• Supplier Quality

• Contract Manufacturing

• Warehousing

• Order Fulfillment

• Logistics

• Etc...

• Process Development

• Identifying Suppliers

• Qualifying Suppliers

• Quoting Suppliers

• Plant Audits

• Onboarding Suppliers

• Transitioning Suppliers

• Supplier Management

• Supplier Ratings

• Cost Reduction

• Shipment Track & Trace

• Prototype Development

• Etc...

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1. Locate Strategic Partner, NOT Vendor, & Align Incentives

2. Establish Core Competencies, Business Model & Case

3. Attain Detailed Plan (Cost, Scope of Work, Timeline, Staff, & Bios)

4. Track KPIs & Continuous Improvement to Drive Performance

4 Actions to Achieve Rapid Outsourcing SuccessSmooth Transitions & Improve Supply Performance

© XXVII IndustryStar Solutions LLC

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Technology Commercialization FrameworkTM or similar

frameworks can be effectively leveraged to outline

support for all (services) or a portion (tasks) of your

company’s needs enhancing

outsourcing performance.

Technology Commercialization FrameworkTM

© XXVII IndustryStar Solutions LLC

Strategy

Creation

Supply Base

Building

Commercial

Optimization

Supplier

Onboarding

Product

Launch

Network

Connecting

Execute &

Sustain

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Technology Commercialization FrameworkTM

Key Steps for Rapid Outsourcing Success

Develop

Sourcing

Strategy

Create

Scope of Work

Decide If/What

to Outsource

(Non Core)

Identify Potential

Supply Partners

Qualify Potential

Supply Partners

Quote Potential

Supply Partners

Negotiate

Contract

Plan

Transition

Sign

Contract

Develop RFP

with Scope of

Work

Finalize

Performance

KPIs

Hold Kickoff

Meeting

Monitor

Performance

KPIs

Program

Manage

Transition

Complete

Transition

© XXVII IndustryStar Solutions LLC

Outline Firm

Desired Core

Competency

Strategy

Creation

Supply Base

Building

Commercial

Optimization

Supplier

Onboarding

Product

Launch

Network

Connecting

Execute &

Sustain

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Developing a Sourcing StrategyUpfront Investment In Time & Resources Is Key to Long-term Success

Develop

Sourcing

Strategy

Create

Scope of Work

Decide If/What

to Outsource

(Non Core)

Identify Potential

Supply Partners

Qualify Potential

Supply Partners

Quote Potential

Supply Partners

Negotiate

Contract

Plan

Transition

Sign

Contract

Develop RFP

with Scope of

Work

Finalize

Performance

KPIs

Hold Kickoff

Meeting

Monitor

Performance

KPIs

Program

Manage

Transition

Complete

Transition

© XXVII IndustryStar Solutions LLC

Outline Firm

Desired Core

Competency

Strategy

Creation

Supply Base

Building

Commercial

Optimization

Supplier

Onboarding

Product

Launch

Network

Connecting

Execute &

Sustain

10

Developing a Sourcing StrategyKey Ingredients to a Successful Strategy

Develop

Sourcing

Strategy

Create

Scope of Work

Decide If/What

to Outsource

(Non Core)

Identify Potential

Supply Partners

Qualify Potential

Supply Partners

Quote Potential

Supply Partners

Negotiate

Contract

Plan

Transition

Sign

Contract

Develop RFP

with Scope of

Work

Finalize

Performance

KPIs

Hold Kickoff

Meeting

Monitor

Performance

KPIs

Program

Manage

Transition

Complete

Transition

© XXVII IndustryStar Solutions LLC

Outline Firm

Desired Core

Competency

1. Charter

2. Cost Benefit Analysis (Make vs Buy, ROI)

3. Assumptions and Constraints

4. Outsourcing Project Scope Statement

5. Critical Success Factors (KPIs)

6. Communication Plan

7. Work Breakdown Structure

8. Roles & Responsibilities Matrix (RASIC)

9. Resources Plan (Staffing Ramp Up)

10. Sourcing Plan

11. Risk Management Plan

12. Quality Plan

13. Project Schedule

14. Budget

15. Change Management Plan

16. Implementation Checklist

17. Feedback Plan Source: The Black Book on Outsourcing

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1. Projects

2. Turnkey Product Commercialization

3. Supply Chain as a Service (X as a Service)

3 Models for Rapid OutsourcingProduct Commercialization Approaches for a Booming Economy

© XXVII IndustryStar Solutions LLC

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OutsourcingBusiness Model ContinuumVisibility

Control

100% Outsource

100% Insource

1950s

1900s

2000s

Now

Supply Chain as a Service

“X as a Service”

Projects

Business Processes

Technical

Skills

ComponentsModules

Contract Manufacturing

Turnkey Product Commercialization

© XXVII IndustryStar Solutions LLC

Tasks

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How to Leverage Rapid Outsourcing to Attain Variable Cost Structure?

Projects

© XXVII IndustryStar Solutions LLC

“You must always be able to predict what's next and then have the flexibility to evolve.” - Marc Benioff

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Developing Sourcing StrategyDetermining Need & Level of Support

© XXVII IndustryStar Solutions LLC

Internal Delivery

Fully Outsourced

Technical Skills Projects

Management Capabilities

Managed Services

Business Processes

Partnered Solution

Sourcing of Capability Deliverables Sourcing of Continuous Services

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How to Leverage Rapid Outsourcing to Speed Innovation?

Turnkey Product Commercialization

© XXVII IndustryStar Solutions LLC

“The Electric Light Did Not Come From The Continuous Improvement of Candles.” - Oren Harari

Supplier

Tasks CEO Design Engineering

Program

Management Manufacturing

Human

Resources Finance Accounting Marketing Sales IT Supply Chain

Supply Chain Strategy A, R C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I S

Supply Chain Executive Leadership A, R S S S S S S S S S S S

Supply Chain Program Management A, R C, S, I C, S, I A C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I S

Supply Chain Staffing I R

Supply Chain Information Technology (Systems) C,S C,S C,S C,S C,S C,S A R

Purchasing A, R I I I I I I I I I I S

Supply Base Building & Management (RFI) C, S A C, S C, S S S R

Supplier Quoting & Analysis (RFP/Q) C, S C, S A C, S R

Supplier Negotiat ions & PO Issuance A, R I I I I I I S

Plan for Every Part C, S, I C, S, I A C, S, I C, S, I C, S, I R

Production Control A, R I I I I I I I I I I S

OEM Module Build Forecast Management A I I C, S R

Material Planning C, S A R

Components Forecast C, S A R

Inventory Management (Supermarket & Plant) C, S A R

Material Handling (Inbound & Routes & Outbound) C, S A I R

Warehouse/Staging Management C, S A I R

Supplier Quality A, R I I I I I I I I I I R

Supplier Performance (Ratings/Plant Audits) C, S A C, S C, S I I R

Supplier Development C, S A C, S C, S I I R

Lean Six Sigma Quality Management System C, S C, S C, S A R

Logistics A, R I I I I I I I I I I S

Sales & Operations Planning Process A, R C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I C, S, I S

Shipment Planning & Scheduling C, S A I R

Inbound & Outbound Receiving & Shipping C, S A R

Carrier Management C, S A R

Advanced Shipping Notice for OEM C, S A I R

Dunnage/Rack Management C, S A R

RASIC Key: R = Responsible, A = Approving, S = Support ing, I = Informed, C = Consulted

Customer

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RASICEffective Tool for Providing Clear Reporting, Approval, & Visibility

© XXVII IndustryStar Solutions LLC

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How to Leverage Rapid Outsourcing to Reduce Cost Structure?

X as a Service

© XXVII IndustryStar Solutions LLC

“Synergies are not only about cost reduction. Synergies can be access to markets, exchange of products, avoiding overlaps, exchange of best practices.” - Carlos Ghosn

OVERVIEW: Leveraged Supply Chain as a Service to support day to day global

Supply Chain tasks across (Strategy, Procurement, Production Control,

and Supplier Quality) for all new low-volume vehicle program. Support

Tasks included 1) identifying suppliers, 2) quoting suppliers, 3) assessing

suppliers, 4) conducting plant audits 5) maintaining program Sourcing Bill

of Material (Plan for Every Part), 6) Managing component supplier

production schedules, for prototype and production launches.

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PRODUCT: Ford GT

INDUSTRY: Automotive Tier I

SERVICE: Supply Chain as a Service

Case Study: Multimatic Needed a Low Volume Supply ChainLeveraged Supply Chain as a Service to Support Tasks

Cost Reduction Supplier Engagement Flexible Support

$5M+ Component

Savings

Increased from

23 to 297

50% Reduction in

Staffing Costs

© XXVII IndustryStar Solutions LLC

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How SCaaS Works

Supply Chain as a Service looks at work more as a

number of services, processes, and tasks. Similar to

the principles of Agile software development, every task

can be assigned “points” and tasks can be outsourced

to add additional bandwidth.

The same “X as a Service” principle can be applied to

any need of the company.

Results: Lower support costs, attain variable cost

structure, and instant scalability. Supply Chain as a

Service can flex up and down mirroring your company’s

true supply chain needs.

Scale cost effectively and less risky in a

BOOM economy

© XXVII IndustryStar Solutions LLC

SCaaS Value Stream MapExample Day to Day Process Management of Purchasing, Production Control, Supplier Quality & Logistics

© XXVII IndustryStar Solutions LLC

Supplier

Component

Delivery

Finished Module

Supply

Manufacturing

CEO Design Engineering ManufacturingProgram

Mgmt

SalesMarketingAccounting FinanceSupply Chain

Supplier

Component Supermarket

Outbound Logistics

Customer Plant

ITHuman

Resources

1

3

2

4

5

Procurement Support1 Supplier Quality Support2 Supply Chain Executive Leadership 3 Production Control Support 4 Logistics Support 5

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1. Remove Emotion from Make/Buy Decision

2. Treat Supply Partners as Extension of Team

3. Technology Should Follow Processes

4. Start Small With Pilot Projects

5. Differentiate (Models, Processes, etc.)

6. Look Outside Your Industry for Inspiration

7. Select Firms With Proven Experience

8. Align With Firms Different Than Your Competitors

9. Create Mutual Incentive Contracts

10.Institutionalize Periodic Performance Check-Ins at Multiple Levels

© XXVII IndustryStar Solutions LLC

Rapid Outsourcing10 Insights to Realize Value Now

Q&A

© XXVII IndustryStar Solutions LLC

How to Create Competition to Drive PerformanceBOOM: Session Code: IAWilliam Crane | Founder & CEO | IndustryStar Solutions LLC

05/23/17 3:45 – 4:45pm ET

Rapid Outsourcing in a Boom Economy

+1 248 404 8249 industrystarsolutions.comwilliam.crane@industrystar.comMBA, BS, CPSM, Black Belt

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