Innovative Supplier Management: Value Creation in Global Supply Chains

Foreword
Contents
About the Author
List of Abbreviations
List of Figures
List of Tables
1: Supplier Management, Purchasing and Procurement
	1.1	 Classification and Value of Supplier Management
		1.1.1	 Importance of Supply and Value Chains
		1.1.2	 Value Creation and Value Networks
		1.1.3	 Value Chain with Suppliers (Upstream) and Customers (Downstream)
		1.1.4	 Value Chain According to Porter
		1.1.5	 Value Creation and Waste
	1.2	 Types of Waste in the Value Chain
		1.2.1	 Waste Due to Transport
		1.2.2	 Waste Due to Inventory and Stocks
		1.2.3	 Waste Due to Motion and Unnecessary Movements
		1.2.4	 Waste Due to Waiting Times
		1.2.5	 Waste Due to Overproduction
		1.2.6	 Waste Due to Redundant Processes and Over-Processing
		1.2.7	 Waste Due to Defects
	1.3	 Tasks and Delimitation of Supplier Management
		1.3.1	 Tasks of Supplier Management
		1.3.2	 Differentiation of Supplier Management from Classic Purchasing
		1.3.3	 Procurement and Procurement Logistics
	1.4	 Case Study: Sustainable Supplier Management in the BMW Group
	References
		Further Reading
2: Transformation and Cultural Change Towards Innovative Supplier Management
	2.1	 Transformation Requirements in Supplier Management
	2.2	 Supplier Management as a Competitive Advantage for the Company
	2.3	 Keiretsu-Based Supplier Management
	2.4	 Supplier Management as an Initiator of Cultural Change
		2.4.1	 Stories and Myths
		2.4.2	 Symbols
		2.4.3	 Power Structures
		2.4.4	 Organisational Structures
		2.4.5	 Control Systems
		2.4.6	 Rituals and Routines
	2.5	 Culture and Elements of Lean Management in Modern Supplier Management
		2.5.1	 Lean Principles and Lean Management as Part of Supplier Management
		2.5.2	 Change Towards an Open and Creative Enterprise (Chiiku)
		2.5.3	 Leadership in Lean Management (Tokuiku)
		2.5.4	 Mental and Physical Strength in Lean Management (Taiiku)
		2.5.5	 Implementation of Ideas Through Employee Involvement (Yattakoto)
	2.6	 Case Study: Leadership in Toyota Motor Corporation
	References
3: Supplier Management as Part of the Corporate Strategy
	3.1	 Supplier Management as a Strategic Competitive Advantage of Corporate Strategy
		3.1.1	 Strategic Analysis
		3.1.2	 Strategic Selection
		3.1.3	 Strategic Implementation
		3.1.4	 Designing the Strategic Direction: Strategic Pyramid
			3.1.4.1	 Mission and Vision
			3.1.4.2	 Values and Values Concepts
			3.1.4.3	 Generic Goals and Specific Objectives
			3.1.4.4	 Core Competencies
			3.1.4.5	 Strategic Implementation of the Objectives
			3.1.4.6	 Infrastructure
			3.1.4.7	 Performance Review and Execution (Target/Actual Analysis)
	3.2	 Internationalization of Supplier Management
	3.3	 Supplier Management as a Key Role in the COVID 19 Pandemic
	3.4	 Case Study: Siemens and the Selection of Suppliers via SCM Star
	References
4: Phases of Supplier Management
	4.1	 Supplier Management as a Cross-sectional Function: Integration of All Functions
	4.2	 Supplier Strategy
		4.2.1	 Subject Matter and Elements of the Supplier Strategy
		4.2.2	 Supplier Classification
		4.2.3	 Material Group Strategies
		4.2.4	 Make-or-Buy Strategies
		4.2.5	 ABC-XYZ Analysis and Strategies
		4.2.6	 Internationalisation Strategies
		4.2.7	 Sustainability Strategies
		4.2.8	 Digitisation Strategies
	4.3	 Supplier Selection
		4.3.1	 Shifting of Peripheral Competences to Suppliers
		4.3.2	 Minimising Risks in the Selection of Suppliers
		4.3.3	 Criteria and Supplier Selection Matrix
	4.4	 Supplier Evaluation
		4.4.1	 Subject of Supplier Evaluation
		4.4.2	 Selecting the Right Criteria for Supplier Evaluation
		4.4.3	 Supplier Evaluation as a Control Tool in Supplier Management
	4.5	 Supplier Development
		4.5.1	 Object of Supplier Development
		4.5.2	 Strategic Supplier Development
		4.5.3	 Preventive Supplier Development
		4.5.4	 Reactive Supplier Development
	4.6	 Supplier Integration
		4.6.1	 Subject of Supplier Integration
		4.6.2	 Supplier Integration Through Coaching and Collaboration
		4.6.3	 Supplier Integration Through International Purchasing Offices
	4.7	 Supplier Controlling
	4.8	 Case Study: Volvo Opts for In-House Production in the Field of Electromobility
	References
5: Organization in Supplier Management
	5.1	 Supplier Management as a Key Function in the Company
	5.2	 Structure and Process Organisation of Supplier Management
		5.2.1	 Object of the Organizational Plan
		5.2.2	 Line Organisation
		5.2.3	 Project Organisation
		5.2.4	 Divisional Organisation
		5.2.5	 Functional Organisation
		5.2.6	 Matrix Organisation
		5.2.7	 Agile Form of Organisation
		5.2.8	 Virtual Forms of Organisation
	5.3	 Process Organization of Supplier Management
	5.4	 Supplier Management and Digitalization in Indirect Purchasing
	5.5	 Strategic Purchasing in Supplier Management
	5.6	 Operational Purchasing in Supplier Management
	5.7	 Case Study: Global Supplier Management at Bombardier Transportation
	References
6: Competence Requirements in Supplier Management
	6.1	 The Supplier Manager as Interface to the Supplier
		6.1.1	 Changed Framework Conditions Lead to New Competence Requirements
		6.1.2	 The Supplier Manager as Single Point of Contact
		6.1.3	 Growing Internationalisation in Procurement
	6.2	 Networking Ability of Supplier Managers
	6.3	 Regular Development Through Training and Qualifications
	6.4	 Case Study: Risk-oriented Management of Suppliers at the Meyer Werft Shipyard
7: Control Groups and Escalation Levels in Supplier Management
	7.1	 Supplier Management as a Central Control Function
		7.1.1	 Supplier Steering Group
		7.1.2	 Supplier Manager as Central Contact Person
		7.1.3	 Supplier Management Workshops
		7.1.4	 Supplier File
		7.1.5	 Supplier Cockpit
	7.2	 Suppliers’ Day
	7.3	 Supplier Academy
	7.4	 Escalation Levels in Supplier Management
	7.5	 Case Study: Supplier Management at Porsche and the New 911
	References
		Further Reading
8: Lean Methods in Supplier Management
	8.1	 Lean Principles in Lean Management
		8.1.1	 Zero-Defect Principle
		8.1.2	 Drawing Principle
		8.1.3	 Flow Principle
		8.1.4	 Clock Principle
	8.2	 Harmonisation and Levelling of the Production Flow: Heijunka
	8.3	 Yamazumi Diagrams
	8.4	 Intelligent Automation: Jidoka (自働化)
	8.5	 Visualization in Lean Management
	8.6	 Shadow Boards
	8.7	 Andon
	8.8	 Total Productive Maintenance (TPM)
	8.9	 Total Equipment Effectiveness (GAE)
	8.10	 Lean Management on the Spot: Gemba, Genjitsu, Genchi, Gembutso
	8.11	 Focus on Essential Elements: Muda, Mura, Muri
	8.12	 Error Prevention: Poka Yoke
	8.13	 Implementation of an Ideal Working Environment: 3 K Principle
	8.14	 Lean Management as a Consensus-based Basis for Rapid Project Implementations
	8.15	 Health and Safety
	8.16	 Case Study: Implementation of the Lean Production System at Mercedes-Benz
	References
9: Audits and Supplier Analyses
	9.1	 Audits and Quality Management Systems
		9.1.1	 Concept of the Audit
		9.1.2	 System Audits
		9.1.3	 Process Audits
		9.1.4	 Product Audits
		9.1.5	 Control Audits
		9.1.6	 Other Audits
	9.2	 Case Study: 5S Audits in the Berlin-Kindl-Schultheiss Brewery
	References
10: Corporate Social Responsibility (CSR) and Ethics in Supplier Management
	10.1	 Definition of CSR and Ethics
		10.1.1	 4-Step-CSR Pyramid According to Caroll
		10.1.2	 Two-Dimensional Model According to Quazi and O’Brien
		10.1.3	 Core Area Model According to Carroll and Schwartz
		10.1.4	 Sustainability and the Three-Pillar Model
		10.1.5	 Corporate Citizenship (CC)
	10.2	 Megatrends with an Impact on Supplier Management
	10.3	 The Need for CSR in Supplier Management
	10.4	 Maturity Analyses of CSR in Supplier Management
	10.5	 Supplier Development in the Area of CSR
	10.6	 Global Compact Principles
	10.7	 Case Study: Sustainability at VW
	References
		Further Reading
11: Lean Management in the Service Sector
	11.1	 Characteristics of Services
		11.1.1	 Intangible Assets
		11.1.2	 Services Are Not Storable
		11.1.3	 Uniqueness (Heterogeneity)
		11.1.4	 Inseparability
		11.1.5	 Variability
		11.1.6	 Perishability
		11.1.7	 No Ownership
	11.2	 Application of Lean Management to Services
	11.3	 Increasing the Visible Added Value of Services
	11.4	 Case Study: Lean Ordering Process in Japanese Restaurant
	References
		Further Reading
12: Supplier Management for Suppliers with Financial Difficulties
	12.1	 Signs of Financial Difficulties
		12.1.1	 Phases of a Financial Crisis
		12.1.2	 Strategic Crisis
		12.1.3	 Profitability Crisis
		12.1.4	 Liquidity Crisis
		12.1.5	 Insolvency
	12.2	 Recommendations for the Elimination of Financial Difficulties
		12.2.1	 Restructuring
		12.2.2	 Measures to Increase Liquidity
		12.2.3	 Increase in Equity Capital
		12.2.4	 Increase in Long-Term Liabilities
		12.2.5	 Sale of Fixed Assets and Leaseback
		12.2.6	 Factoring
		12.2.7	 Inventory Optimisation
		12.2.8	 Conversion of Debt Capital into Equity Capital
		12.2.9	 Debt Rescheduling
	12.3	 Reorganisation or Restructuring Measures
		12.3.1	 Object of Restructuring
		12.3.2	 Strategic Restructuring
		12.3.3	 Structural Restructuring
		12.3.4	 Restructuring to Improve Profits
		12.3.5	 Financial Restructuring
	12.4	 Tools to Identify Financial Difficulties in Supplier Management
		12.4.1	 Identifying Financial Difficulties
		12.4.2	 Creditreform
		12.4.3	 Creditsafe
		12.4.4	 VDA Rating
		12.4.5	 Dun & Bradstreet
		12.4.6	 Rapid Ratings: Financial Risk Management
	12.5	 Case Study: Insolvency of the Solarworld Company
	References
13: Lean Management in Projects
	13.1	 Lean Project Management
	13.2	 Critical Success Factors in Projects
		13.2.1	 Key Criteria in Projects
		13.2.2 Integration Management
		13.2.3 Scope and Performance Management
		13.2.4 Time and Schedule Management
		13.2.5 Cost Management
		13.2.6 Quality Management
		13.2.7 Human Resources Management
		13.2.8 Communication Management
		13.2.9 Risk Management
		13.2.10 Procurement Management
	13.3	 Recommendations for Projects
	13.4	 Case Study: Collaboration Between Knorr-Bremse and Continental for the Development of an Automated Driving System
	References
14: Innovation Management as a Key Task in Supplier Management
	14.1	 Innovation Management as a Sub-task of Supplier Management
	14.2	 Strategic Relevance and Attractiveness
	14.3	 Resource Intensity
	14.4	 Future Potential Analysis
	14.5	 Tasks and Fields of Action in Innovation Management
	14.6	 Improvements and Innovations
	14.7	 Social Responsibility as Part of Innovation Management
	14.8	 Innovation Management and Green Marketing
	14.9	 Case Study: Innovations Through Design Thinking at Continental
	References
15: Claim Management and Subsequent Claims in the Event of Default
	15.1	 Claim Management and Subsequent Claim Management
	15.2	 Contractual Recommendations
	15.3	 Defensive and Offensive Claim Strategies
	15.4	 Types of Arbitration
	15.5	 International Arbitration Tribunals
	15.6	 Case Study: Demand Management at Deutsche Bahn and Bombardier
	References
16: Change Management to Supplier Management
	16.1	 Definition of Change Management
	16.2	 Change Management According to Lewin
		16.2.1	 Change in Phases
		16.2.2	 Phase: Unfreezing – Changing, Modification – Freezing
		16.2.3	 The Human Factor Is Decisive
	16.3	 Change Management Curve According to Kübler-Ross
	16.4	 Change Management According to Kotter
	16.5	 Change Management According to McKinsey
		16.5.1	 Description of the McKinsey 7S Model
		16.5.2	 Hard and Soft Factors in Changes
	16.6	 Change Management and Personalities
		16.6.1	 Readiness for the Change to Modern Supplier Management
		16.6.2	 Visionaries and Missionaries
		16.6.3	 Pioneers
		16.6.4	 Active Supporters
		16.6.5	 Opportunists
		16.6.6	 Underground Fighters
		16.6.7	 Open Resisters
		16.6.8	 Emigrants
	16.7	 Dealing with Resistance
		16.7.1	 First Strategy: Analyse Internal Stakeholder Groups
		16.7.2	 Second Strategy: Explain the Background of the Project
		16.7.3	 Third Strategy: Dealing with Opponents Properly
		16.7.4	 Fourth Strategy: Preserving and Developing What Is Good
		16.7.5	 Fifth Strategy: Raising Awareness of the “Valley of Tears”
		16.7.6	 Sixth Strategy: Inform Individually
	16.8	 Case Study: Corporate Culture at Toyota
	References
17: Tools in Supplier Management to Identify Waste
	17.1	 Ishikawa Diagram
	17.2	 Material
	17.3	 Supplier Audits and Workshops
	17.4	 Brainstorming
	17.5	 Pareto Analysis
	17.6	 Correlation Diagram
	17.7	 Network Diagram
	17.8	 Problem Decision Plan
	17.9	 W-Questions
	17.10	 Flow Chart
	17.11	 Pro and Contra Lists
	17.12	 Failure Mode and Effect Analysis (FMEA)
	17.13	 Statistical Process Control
	17.14	 Mind Mapping
	17.15	 Quality Control Chart (QRC)
	17.16	 Portfolio
	17.17	 Tree Diagram
	17.18	 Case Study: Ishikawa Diagram at Porsche
	Reference
18: Outlook and Future Vision for Supplier Management
	18.1	 Supplier Management as a Central Interface in the Company
	18.2	 Automation and Digitalization Trends in Supplier Management
	18.3	 Changing Competence Requirements in Supplier Management
	18.4	 Internationalisation of Value Chains
	18.5	 Case Study: AirSupply and SupplyOn as Integrated Value Creation Systems
	References
19: Glossary