Procurement Examples: Dr. Stephanie Layne Starling

EV Industry Supply Chain Development: At Electric Vehicle (EV) battery and swapping bay manufacturer Ample, I led in development of the SCM strategy with over 100 improvement projects proposed. Ample like all EV companies faced supply chain shortages largely due to the pandemic but also because of the rapid growth in EV Industry.

Supply Base Rationalization (Raytheon/Aerospace): At Raytheon, I identified roughly 200 partner classification suppliers with about 70% of spend versus 5,800 suppliers with 30% of spend. Understanding the spend breakdown helped Raytheon focus on highest impact suppliers.

Six Sigma Application to Suppliers (Raytheon): Six Sigma Blackbelts in SCM selected nearly 2,000 improvement projects. Average savings per project was estimated at $56,000 or $112,000,000. ( I was the principal PhD that developed the ISC-Six Sigma Program that led to the projects.)

Procurement Involvement in Design (DSC/Electronics): In PCB design worked with Design Engineers towards standardized components which lowered total costs by over $5 per board (1.2 million boards produced).

Software Redundancy Evaluation (Raytheon): Identified identical software licensed by separate divisions across Raytheon. Ex: eliminating a redundancy on inventory software saved $2.7 million/yr.

Wholesaler Bypass (Sopraffino): A flower company did not realize they could order direct. By bypassing the wholesaler, they reduced their costs of materials by 15%+, which made them profitable.

Total Cost of Ownership (Thermal Industries): A extrusion company had been purchasing regrind raw materials based on price. A TCO analysis showed total cost lower with more expensive virgin material.

Negotiations Removed Learning (AT&T): AT&T was overpaying for partner services rendered based on paying a premium after initial development (learning). Analyses were used to lower prices up to 25%.

Time & Materials Negotiations (Montefiore): Required time and materials breakdown for construction suppliers. Breakdowns enabled identifying exploited time estimates and material costs to lower prices.

Capability Analysis Improvement (AT&T): Added capability analysis to supplier selection process for unique (not substitutable) parts. Forced suppliers to improve which lowered AT&T downstream costs.

Supplier Development (Raytheon): Implemented supplier development teams (Six Sigma) to help suppliers reduce costs. Savings were shared 50-50 based on agreed upon charters before changes.

Statement of Work Improvements (Silicon Graphics): Improvements in how company wrote SOWs led to getting more services and better performance from effectively same cost contracts.

Specifications Improvements (Raytheon): Worked with Design to identify where specifications were too tight on some products so additional suppliers could bid or negotiate for contracts. Led to lower costs.

Function Outsourcing (Chevron): Cost/Benefit Analyses of opportunities to outsource fundamental functions reduced FTEs and lowered costs. Accounting services for example were largely outsourced.

Diversity Supplier Development (AT&T): worked to develop systems for developing diversity suppliers (mainly as secondary sources) which opened opportunities for additional government contracts.

Vision Systems Improvements (Finelite): Cost analysis of camera systems in packaging and shipping put in place to have records to combat fraudulent claims of breakage. (This was done at several factories.)

Capital Equipment Improvements (Budweiser): Canning operations was creating errors in fill levels, which resulted in destruction of inventories at times. Improved systems selected that reduced total cost.

Transactional Supplier Bidding (Intuit): Suppliers previously granted renewals without competition had to bid against competitors in reverse auctions, lowering costs as much as 25% on many contracts.

Capital Equipment TCO Reduction (Alcatel): Upgraded PCB production lines with in-process inspection systems which eliminated need for 17 inspectors, as well as large % of rework & scrap. ROI < 6 mo.

Software Upgrade Improves Throughput (Alliance): Procured software that more accurately measured HENG gas in pipelines allowing for 5% increased throughput, which is 12,800,000 x .05 or $640k per day.

International Supplier Qualifying (CSU-East Bay): Previously printed all materials in USA. Analysis and movement to having printing done overseas (Vietnam) lowered costs by 58% with no quality decrease.

Capital Equipment Acquisition (Action Products): Conveyer systems installed in manufacturing facility to replace 2 FTEs for moving materials from one process to another. ROI realized in 3 months.

Life Cycle Cost Reductions (Caterpillar): Life cycle costing analyses of piece parts resulted in identification of which features created greatest rework and scrap, leading to design modifications.

Cutting Equipment Upgrade (Pacific Gold): More expensive upfront costs for higher end meat cutting devices lowered metal fragmentation, increasing safety and lowering total costs (no fragments in foods).

Pallet Total Cost Reduction (Clorox): Moved all facilities from wood to more durable plastic pallets after cost analysis revealed price-wise more expensive plastic pallets had far lower TCO.

Capital Equipment Acquisition (Wente): Winery had capacity issues in peak times. Analyzed alternatives and suppliers via simulation and costs analyses. Improved capacity and lowered costs.

Location Analysis & Move (Intraline): Office and distribution facilities moved from Burlingame to Hayward, California after location cost analysis showed roughly 25% reduction in space costs.

Lighting Infrastructure Analysis (SC Edison): Analysis of converting all lighting towards more efficient systems showed a lower cost of up to 65% in some facilities. (Analysis done with many companies.)

Drop Shipments (Lucent): Instead of having suppliers deliver parts and subassemblies to Lucent warehouses first, designs were modified for drop shipments to end use points for 15%+ savings in costs.

Downtime Savings (Toyota/GM): Analysis of causes of downtime of JIT production line had a cause of Bay Area of traffic. Shifting supply base to closer proximity reduced downtime, improving TCO of parts.

Scrap Resale (SBC): SBC had been paying a 3^rd party do dispose of much of its scrap without realizing it had resale value. Found clients that recycled byproducts of SBC and turned a cost into a profit center.

Modified Transport Bays and Trucks (Sony): Modified transport bays to allow for side loading and procured trailers with sunroofs. Changes improved safety and load time which had been a bottleneck.

Supplier Managed Inventories (Discovery Toys): Shifted some key suppliers over to SMI resulting in reductions in wasteful steps and lower inventory holding and handling costs.

Early Supplier Involvement (Deere): Analysis of benefits of alliances with suppliers led to discovery many could contribute to reducing costs in design processes. ESI savings of 10%+ benefitted all.

Outsourcing of Services (JMC): Documented 80+ process workflows in office building to identify wasteful activities and costs. Made decisions to outsource many internal activities for less annual costs.

Oracle ERP Implementation: Implemented Oracle ERP for use in my SCM programs at CSU-East Bay.