【正文】 Sheila Dubin Value Managed Relationships December 1998 Author: 1 After pleting 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 examples of Bain’s VMR process and success Value Managed Relationships Objectives 2 ?VMR Concept ?VMR Key Success Factors ?VMR Sources Of Value ?Bain VMR Process ?Example ?Key Takeaways Agenda 3 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 costs of doing business through collaborative sharing of information and resources. A VMR creates a win/win relationship. VMR Definition 4 “ Partnership” True VMR Procurement Strategies Value Managed Relationship Sole Source Vertical Integration Competitive Bid Shortterm Contract / Spot Longterm Contract A VMR is 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 arm39。s length transactions: – a consolidation of purchases to one or few suppliers who are capable of maintaining long term petitive economics, high quality and efficient delivery – participants must share single goal of achieving 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? 6 ?Fragmented supplier base, sporadic munication ?Single or small number of suppliers, frequent munication ?Inhouse supply, munication frequent Traditional Arms Length Approach Vertical Integration ?Investments based upon manufacturer39。s needs ?Potential for customized investment in facilities/equipment ?May require investment in weak strategic business ?Adversarial bid negotiations to obtain lowest unit price ?Longterm mitment focused upon lowest total systems cost using value chain perspectives ?Focus driven by internal incentives/ transfer prices ?Separate product design ?Joint product design and cross functional participation ?Joint product design often at odds VMR VMRs can exceed the value of both traditional contracts as well as vertical integration. Strategic Purchasing Options 7 High Potential High Low High Low Purchasing volume (relative to total supplier sales) Valueadded / engineered level ?Product redesign ?Material substitution ?Product redesign ?Material substitution ?Volume discount ?System cost improvement Moderate Potential ?Volume discount ?Some system cost No / Little opportunity (need to cluster) VMRs are most appropriate where high volume and significant value added occurs. Medium/low potential Where Are VMRs Appropriate? 8 ?Large dollar purchase ?High level of valueadded cost in product ?Fragmentation across many divisions and suppliers ?Client represents significant part of industry output ?Industry petitive intensity high: –capacity utilization dropping –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? 9 Consolidate volume in longterm partnership Increased pace 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 RD/technology Joint efforts lead to systemwide benefits for both Added value leads to more reasons to collaborate A successful VMR will continue to create value as the relationship progresses. Value Cycle 10 VMRs create value for the buyer. ?Higher quality and fewer rejects ?Superior service ?Partner in joint system cost reduction ?Innovation ?Technological expertise –package performance improvements –spec consolidation –product redesign and materials substitution ?Pricing mensurate with larger, longer volume mitments ?Commitment to continuous improvement of the partnership Value Of VMRs— Buyer 11 VMRs create value for suppliers. ?Larger volumes in fewer items –longer run lengths and fewer setups –higher capacity utilization –learning curve benefits ?Stable long term demand ?Sharing in buyer’s strong mitment to future growth ?Partner in joint system cost reduction ?Resources and stability to invest in technology ?Commitment to continuous improvement of the partnership Value Of VMRs— Supplier 12 Lab SuppliesMedical SuppliesFlexiblePackagingGasesPunchesand DyesDrinksPackagingOffice SuppliesSBS FoldingCartonsElectricalSuppliesRigid InjectionMolded PlasticProductsCorrugatedBoxesFreightFlex PackagingThermoformedPartsMotorsAutomotivePartsMolded PlasticBottlesPower EquipmentProductsRecycledPaperboardCartonsBrickGl