Transcript Supply chain management in Regal Marine

Supply chain management in Regal
Marine
Some concepts:
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Purchasing: many firms >50% of the sales dollars on
purchasing materials needed to make products. In Regal
Marine, 60% of sales are for purchases
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Supply Chain management: more than seeking lowest prices, it
is the careful management of upstream activities that procure
materials, transform and enter products in the factory, and
deliver products to customers.
Supply Chain management
Why is it so important for Regal Marine?
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Cost control
Reduce their daily raw material inventory to about 22
days.
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16.8 times a year
they do daily, monthly and annual production forecast for
suppliers distribution lists, helping suppliers reduce their
cost
on time deliveries: exactly what we need when we need it
deliver on a weekly basis for use that particular week
Techniques (1)
Partnering:
Key partnership suppliers which have shown a commitment to
quality, product availability, reducing total cost, helping us
mantain low inventory levels
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Expects from suppliers:
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continous improvement process
innovation, technology and development
we be part of the process
we provide their avenue for getting their products in, getting
them tested
first class distributor, best in class products
Techniques (2)
2. Buying group with other boat manufacturers
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American boat builder's association: ABA combining volumes
of the 12 independent boat companies across united states
to achieve higher purchase quantities, enable to buy at better
volume levels
pricing advantages
Techniques (3)
3.
Key vendors
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Meet with designers to discuss material innovation
Supply items directly to the assembly line so no inventory is mantained
(ownership or title to the items not cast to regal marine until the boat is
finished, this delay of title passage is a technique to reduce cost)
Supplier comes on a weekly basis, take orders form production line, and two
days later deliver orders right back to roduction line. This has elliminated nonvalue added man-hours.
Network of distributors to properly display boats at boatshows
First class dealers, must be mature, must be able to represent their product
well
Dealers know that by representing your high quality product, they will be
profitable and have profit margins which will serve them in their business
They are very critical in deciding who becomes a Regal dealer:
They look at marketshare data and customer satisfaction so they know how
well they have taken care of their customers, as their customers will become
our customers.
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Supply Chain Management in Regal
Marine
Single largest component that they buy:
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Engines for the boats: spend 14 million dollar a year on
engines
= 719 000 dollars a day
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They have a 14-day inventory: if they can reduce it 1 day,
they can reduce lot of cost
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They can reduce it through supply chain management.