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Strategic Sourcing

Strategic Sourcing. Rosemont,IL 16 – 17 Feb 2010. EGS Direct Material Purchases $ 137M FY10. NA $ 83M Europe $ 10M China $ 22M India $20M. Key Performance Indicators. $12M Mexico $3M EE. FY10 – Sourcing Challenges. Keep Net Inflation in check

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Strategic Sourcing

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  1. Strategic Sourcing Rosemont,IL 16 – 17 Feb 2010

  2. EGS Direct Material Purchases $137M FY10 NA $83M Europe $10M China $22M India $20M

  3. Key Performance Indicators $12M Mexico $3M EE

  4. FY10 – Sourcing Challenges • Keep Net Inflation in check • Support both strategic and tactical needs • Localize Supply Base • Simplify Supply Base • Lead Times, Lead Times, Lead Times • Indirect Projects

  5. Key Metals – Inflation Impact

  6. Latest Commodity Numbers Galvanized Steel Forecast FPC $ / Ton

  7. Major Savings Projects

  8. Organization

  9. Organizational Strategies • Monthly Meeting • Review PPV/OTP/Inventory/Quality, Supplier Reductions and Supplier Distress • Review eSourcing Projects • Top 25 Suppliers Performance Reports • Shared Drive • Major Project Timelines & Qualification Plans • Supply Base Reviews Upcoming • Key – consolidate “small spend” suppliers

  10. Supplier Consolidation Plan • 269 Suppliers identified for elimination from FY09 Spend • Key Projects Include • BH Consolidation – 48 • CO/MTY Consolidation – Est. 60 of 423 (205 < $10K in spend) • Distribution – 16 • Springs – 13 • Rubber – 22 (up to 47) • Stampings – 12 (up to 97) • Europe – 26 (up to 34) • Currently at 791 Suppliers through 4 Months • Still 564 “single location suppliers” more opportunities

  11. Current Supply Base supporting 2010 Mexico Operations Atizapan Suppliers Columbus / Birch Hill Suppliers Plants with Job Moves

  12. EGS Mexico – Spend Transition Plan

  13. EGS Mexico – Spend Transition Plan Reducing the Complexity while Localize !

  14. Lead Time Strategies • Localize – North America • Dual Source • Handle Spikes with Local Suppliers • Work with suppliers capable of US held Inventory • Set up Kanban when appropriate • Hold low cost / Long lead time items for K items at suppliers • Set up alternative suppliers and UL listings ahead of time

  15. Lead Time Projects

  16. Indirect Spend

  17. Supply Chain Summary • Team focused on • Savings / Supplier Reduction / Responsiveness • Team now regionalized to support both Strategic and Tactical needs • Team working closely with plant rationalization efforts

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