Background & the Client Challenge

The client is a global leader in the design and development of semiconductor components. The Irish site manages global Supply Chain activities, ensuring that global sites and all sub-contractors are performing in accordance with master plans, delivering on-time and in-full, globally.

The challenge facing the client was to build a global platform with a single supplier management process which would guarantee quality, align supply chain demands and realise annual efficiency improvements for the client.

What We Did

3SIXTY’s Head of Process Excellence, Aidan Magner, led the team tasked with delivering on the strategy for Supplier Relationship Management (SRM). Working closely with the Sales & Operations Planning (S&OP) team, the SRM team developed a vision which aligned supplier engagement and S&OP.

We set up and delivered a commodity strategy for the organisation with a focus on building strong and reliable links with the most important suppliers.
Performance Management techniques were implemented across Tier 1 and Tier 2 suppliers. This entailed monthly performance reports and quarterly business reviews.

Central to the success of this project was involving the suppliers. Suppliers were invited to become part of the long-term vision for the organisation. They were brought on a journey to understand how this new platform would be of mutual benefit (both the supplier and our client would share cost savings).

To deliver on this collaboration, we implemented Event-Driven Cost Reduction platforms. This involved each “event” having a cost reduction target and an agreed plan of action based on Lean Six Sigma tools and techniques.

As part of this, the client invested in Lean Six Sigma training (Black Belt & Green Belt) for suppliers, realising the return on this investment would be significant in terms of higher quality and lower cost from these suppliers.

Results

  • 15% (c.$3m per year) year-on-year cost savings realised using Lean Six Sigma tools and techniques

  • 10% (c.$500K) cost reduction from competitive re-bidding of contracts

  • Standardised global approach to Supplier Relationship Management

  • Standardised global approach to Supplier Performance Management (Monthly KPI and Quarterly Business Reviews)

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