Taking an objective and fresh look at your sourcing structure, given the recent dynamics in the global marketplace, will realign your sourcing strategy to today's procurement realties. This realignment will have multiple benefits:
Immediate cost reduction
Improved sourcing performance in quality, consistency and speed
A more robust organization to ensure longer term stability
Case Study: Major computer company works with Tompkins to reduce costs while understanding global shipping and China-based sourcing needs. more (PDF)
The current economic turbulence is creating opportunities to reduce your sourcing costs! Product and material sourcing comprise 50-60% of most companies' cost of goods.
Strategic and timely adjustments to the sourcing mix and approach can readily yield savings of 10-20%!
The combination of slowdown in demand, currency fluctuation, erratic oil costs, and chaos among Asian suppliers has changed the competitiveness of many existing sourcing structures.
Many Asian suppliers are going out of business or suffering financially. This tough environment has created an excellent opportunity for disruptive sourcing strategies, which can quickly improve your bottom line.
Tompkins' Asian Sourcing Assessment Process (ASAP) can yield substantial and immediate benefits to your sourcing costs while also aligning your sourcing strategy to the current market realities.
Taking C.O.S.T. Out of Your Asian Sourcing Process
Countries - Make sure you are in the right places.
Asia's landscape has changed dramatically in the last two years in terms of currencies, economics, regulation and infrastructure. Moving product to the right countries, especially if you have not aggressively developed your international sourcing program, can yield immediate benefits of 20-30% on first cost.
Organization - You need the right team with the right processes in the right locations.
Having the wrong people in the wrong places using poor processes is a common deficiency among firms sourcing from Asia. If you are currently working through a middleman, you are probably leaving a lot of money on the table and are not in complete control of your sourcing. Companies can often realize rapid benefits when they get the right team on the ground in Asia that can work seamlessly with corporate resources to optimize cost and speed to market.
Suppliers - The right supplier mix has never been more important. Too many companies today are stuck with an Asian supplier matrix that does not effectively leverage their order book. The wrong suppliers are supplying the wrong products at the wrong prices and terms. At the same time, many Asian suppliers are hurting these days and are willing to find creative ways of working with new customers. Global sourcing initiatives can be transformed through finding new suppliers and implementing effective relationship management with existing suppliers to improve quality, consistency and speed.
Terms - Supplier relationships are changing and need to be managed well. Supplier partnerships are becoming more popular, optimizing processes and benefiting both parties through effective communication and transfer of knowledge and process. Supplier terms are changing as companies move from traditional and ineffective vendor purchasing to more strategic sourcing. Significant short-term benefits can be realized by taking these agreements apart and putting them back together in more advantageous and executable terms.
Key Steps in the Sourcing Assessment
We Deliver
Our Asian Sourcing Assessment Process (ASAP) provides near-term and tangible results in cost reduction and process improvements. We help you:
Reduce costs without disrupting service
Find inefficiencies in the sourcing structure
Realize savings of 10-20%, which begin in as few as 3 months
With more than 20 years of experience helping Western companies conduct business in Asia, Tompkins Associates, through its subsidiary Technomic Asia, has deep experience -- 600-plus assignments in the region. Leveraging this insight to develop real, proven solutions for your sourcing process is one of the many advantages you gain in working with us.
Tompkins Associates' ASAP identifies and addresses your sourcing cost drivers with the right initiatives. You gain lower costs and improved performance. Armed with knowledge of your sourcing needs, we:
Assess the total "basket" of products and commodities that can be sourced from Asia (this is typically much deeper than most companies first think)
Discover and disclose all sourcing activities including sources, processes and documentation
Identify opportunities for new suppliers resulting in significant cost savings
Design and implement a Supplier Relationship Management system to improve performance of existing suppliers
Gain significant savings and control by "going direct" in select opportunities, utilizing in-house resources over "middlemen"
Implement new sourcing and supplier management processes to improve overall procurement function
Business Opportunities
Solutions
Expand or shift Asian sourcing activity
Audit and analyze current spend; identify a "basket" of components/products with attractive Asian sourcing opportunities
Assess current Asian sources using standard criteria (price, quality, on-time delivery, etc.)
Determine which product/components require new sources; build supplier qualification criteria
Identify, qualify and contract with new suppliers
Improve Supplier Relationship Management (sRm)
Assess current supplier's portfolio according to Supplier Alignment Profile "touchpoints,"benchmarking supplier performance against client's expectations and against supplier's assessment of their own performance
Create supplier/client teams to work on specific prioritized touchpoint opportunities and the implementation of real results
Institutionalize the sRm process between client and key suppliers to assure sRm becomes a part of their procurement fiber
Move toward greater "ownership" of Asian sourcing organization
Audit and assess sourcing organization, including direct employees and middleman sourcing organizations
Perform detailed cost assessment and money flows, focusing particularly on costs associated with third-party sourcing resources
Track communication flow and identify bottlenecks
Identify areas where direct sourcing resources might be able to take over from third-party resources
Hire additional sourcing expertise, if necessary
Case Study: Major computer company works with Tompkins to reduce costs while understanding global shipping and China-based sourcing needs. more (PDF)
