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Single Sourcing

Single Sourcing. Prepared By David Bach Boise State University October 9, 2002. What is Single Sourcing?. Also referred to as Sole Sourcing Definition: Using One Supplier for a Single Component. Objectives of the Training. Learn About Single Source Practices

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Single Sourcing

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  1. Single Sourcing Prepared By David Bach Boise State University October 9, 2002

  2. What is Single Sourcing? • Also referred to as Sole Sourcing Definition: Using One Supplier for a Single Component.

  3. Objectives of the Training • Learn About Single Source Practices • Where Can Single Sourcing Be Applied • How To Set Up Single Source Processes

  4. Welcome • Introductions…

  5. History • Why was this developed? • How did Single Source become popular? • Where does Single Source fit?

  6. Why Single Source • Supplier Reduction • Develop Partnerships with Suppliers • Lower Costs • Increase Quality Improvements

  7. How Did This Become Popular • Need to be able align strategy with suppliers • Improve Communication • Japan Purchasing Practices: World-Class

  8. Where Does Single Source Fit? • Organizations with JIT processes. • Where opportunity for quality improvements exists. • In industries where technology changes rapidly. • In companies looking to gain competitive advantage by reducing suppliers.

  9. Advantages to Single Source • Strategic Partnerships • Opportunity for lower costs • Improved communication • Quality improvement Potential

  10. Disadvantages • Disruption in the Supply Chain… • Labor • Transportation • Pricing • Quality • Needs to be continually monitored • Narrow Focus

  11. Brainstorm • How can Single Sourcing be applied in your organization? • Pros and Cons?

  12. Getting Started Slide 1 of 3 • Supplier Evaluation • Current Suppliers • Target Number of Suppliers • Filters • Address individually • Qualify the Supplier • Criteria

  13. Getting Started Slide 2 of 3 • Enter the Agreement • Contract • Open Lines of Communication • Integrated Systems • EDI

  14. Getting Started Slide 3 of 3 • Continue to Develop Continuous Improvement Processes • Communication • Quality • Cost

  15. Companies That Practice… • Tyco Electronics • Xerox • Toyota • Mercedes Benz • Dell • State University of New York

  16. Real World Example Slide 1 of 3 • Emerson Electric Company • Successful integration of single source agreements for “big buy” materials • Partnered with W.W. Grainger • Approached Emerson • Considered to have “best in class suppliers.”

  17. Real World Example Slide 2 of 3 • Plan roll out considered deliberate • Total integrated supply management at 27 sites. • Potential to save millions of dollars a year. • Reduced Inventories • Streamlined operations

  18. Real World Example Slide 3 of 3 • Increase in Quality • Reduction from 2000 defective parts per million to 200 dppm, in just one plant alone! • Management views as a “powerful competitive weapon.”

  19. Exercise Slide 1 of 2 • Teams • Identify a component that could potentially be a single source item in order to: • Increase Quality, decrease inventory and cost. • Develop the Process

  20. Exercise Slide 2 of 2 • What have we learned? • Does it seem helpful? • Can you and/or your department implement this strategy? Why or Why Not?

  21. Conclusion Slide 1 of 2 • Single Source is a strategic method to set up partnerships with suppliers in order to: • Reduce Inventory • Manage Lower Cost and Price • Increase Quality

  22. Conclusion Slide 2 of 2 • Single Source can be applied in many organizations • Setting up Single Source is a planned and managed process that is ongoing, even after successful implementation.

  23. Works Cited Slide 1 of 1 “Automotive Still Taking Risks with Single Sourcing.” Sep 30, 2002. www.manufacturing.com/news/ kpm/kpm104.html. Avery, Susan. “Emerson’s MRO buying becomes a competitive weapon.” Purchasing, Oct 17, 1996 v121 n6 p38. Emerson Electric Company Web Site. www.gotoemerson.com

  24. Works Cited Slide 2 of 2 Foster, S. Thomas. Managing Quality: An Integrative Approach. Prentice Hall, 2001. McNarmara, James. “Tyco buys electrical technology infrastructure co…” Electronic Buyers ‘News. Nov 27, 2000. p14. Tuttle, Al. “Becoming A Single Source.” Industrial Distribution.Sep 2001. pp 47-49.

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