Excerpts of the Presentation by Mark Gallagher- Formula 1 Owner and Importance to Supply chain

Formula 1.

They produce only 6 cars per year. Out of which 2 to 4 cars only race per year. And other 2 cars are spare and stand by.

Specification of Cars produced including Bill of Materials of components changes from week to week – from race to race – and year to year. That gives the clear indication of challenges to Procurement and the Supply Chain – where one cannot have spares in stock.

Myth.
Unlike what is in media, formula1 is not full of money, luxury, comfort, etc – it’s also not about Sponsors, advertisements, or even the racing – the driving factor is not these.

Formula1 is all about parties, show themes, glamour, about celebrations post races, supply chain is only logistics and that’s all easy assigned to sponsored airlines hotels etc.

Formula 1 is also a highly regulated market – due to risks – HSE and Country Regulations – Legalities – because its risky –

Formula 1 Value driver is IP (Intellectual Property) rights to Innovations in the Car they race and the engines they use. They test in formula 1 and then keep innovating it. The time for fault analysis, rework, innovation, redesign, supply, install and ready to race is only the time between two races – from whichever country to the next race whichever country its in. It’s all about supply chain.

There is a mission control centre almost like NASA in UK where every millionth of second of the race is controlled, monitored, with the sensors and camera inside every critical part of car, in the shoes and helmets of the pit team, etc. It’s all about world of connectivity of data and information on real time that is analysed and actioned by supplier teams, by technology teams, by logistics team, by technical team, etc. It’s a greatest challenge for Innovations, logistics, etc.

There are 8.5 million parts in a racing car. Around 500,000 in the engine alone.
Back in 1990s and 2000s, it was all BOM(Bill of Materials) in paper. Impractical to know what went in, what did not. Today Technology is innovated to capture this on one platform where internal stakeholders, the suppliers, the logistics team and providers, finance, board, etc are all one platform Use of blockchain. Usually all contracts are 3 years. And then renewed.

There are similar processes as every industry have. Budgeting. Financial cost cuts. Supplier evaluation. Sourcing strategies, logistic cost and channel reviews, etc. Once due to finance and a single source challenge, a part was sourced from an alternate supplier saving Euro 3500 per piece per car. And in next three races,two car manufacturers lost engines with loss of millions. That’s source strategy failure.

The pit stop reduced from 30 min in 1980s using 20 technicians. To 1.80 second in recent Brazil 2019 race using 60-70 technicians in pit. The challenges are risks. Technician risks, car risk, pit risks, etc analysed using sensors and technology inside cars, technician sensors etc and every risk is addressed giving confidence. And this confidence translates to performance. 36 tasks or checks in 1980s. And now same 36 tasks in 1.8 seconds.!

Inside pit all are equal in uniform, in work role, responsibility and accountability. That’s supplier and stakeholders alignment and relationship management strategy with SLA, KPIs etc addressed on a supply chain operations basis.

Same ordinary people doing extra ordinary jobs – due to addressing risk and enhancing performance backed by technology based confidence. “Monitor and Address the Risks head on to deliver performance”

For any reason if you don’t participate in a race because the engine part is not arrived or any other reason, the franchise is lost from formula 1 ( *stock out/downtime cost*.) You cannot race again. The cost of Innovations and Technology supplies of now and future plus the loss of reputation cannot be imagined or estimated.

Review meetings where the fault is addressed then and there. 1 hour before race. And 1 hour after race where every of those 60 engineers technicians with control room team on video, car owners, car drivers too attend. Every reason leading to failure is addressed. Drivers are shown at what angle they turn cars at different angles, what fuel ignition they use and when they trigger, what each part failed to perform. And these are addressed innovated before the next race. Even if it’s a trial race for public of final to the next race in new venue or new country.

Schumacher won all races in the year for 5 years because he individually used to be available in each review. And if a part had under performed, he insisted to have a meeting with the Supplier,the technician who produced that particular part – within 24 hours. And he followed up to establish root cause, its remanufacturing , any innovation of design of defect.

Some quotes that Mark made that caught my attention.

Identifying , Monitoring, Facing it head on and solving to close risk leads to performance. And success.

Visibility of Data and Information – managing our Resources & Assets and Driving our Supply Chain is the only and direct source of achieving operational excellence.

Technology and Transformation is continual. If you are not doing this, it means you are stuck and transactional.

Hope is not a strategy. Passion leads to performance.

Reputation Risk cannot be valued and is the most difficult to judge.

What you know need not be what you believe. What you believs may be a myth. Information. Analytics. Is mother of innovation.

Looking Forward

Let’s take a look at the car, specifically let’s look at two parts, the rear-view mirror and the windscreen. The former is used to look back, While the latter is used to assist us in driving forward. The significance of each can be derived from their individual sizes. This is because you do not look back to drive forward. The problem is that many organizations and individuals are living out their objectives and careers, based on the past. Many are crippled by past failures; a business venture that died, a promotion that passed them or an incident of termination. Let’s take this a step further. Many are also crippled by past success, that’s right, past success can become a hindrance. Just because an idea worked in the past does not mean that you do not evolve from it, the dogmatic approach many institutions and individuals have towards ideas whereby they reject anything that does not align with the idea that succeeded in the past is what makes them irrelevant. The past is just that the past, learn what you can from it, and move on, don’t allow it to trap you or hold you back, as living life focused on the past is aborting your own future!
#ProgressingSupplyChain

Creating Value in Procurement and Supply Chain

Despite serious trending challenges in the business environment, Procurement functions constitute a critical part of supply chain management.

Procurement leaders are thus mandated to cultivate value in the procurement function.

Looking at the Procurement Function as:
-a process of translating customer requirements into a selection of highly capable suppliers and to timely, accurately, cost-effectively delivery of high quality, mission critical inputs/goods and raw materials to internal customers.
-a process including assuring the accurate receipt and timely payment of all accrued invoices
and looking at“Value”as having the below 3 vital components:
-All activities in an organization are done right the first time.
-There is a physical transformation of inputs from one stage to another to useful products and services.
-The customers (end users) are willing to pay for the said outputs.

The great benefit of Cultivating Procurement Value lies in the following areas:

1) Meticulous and obsessive Understanding of Customer Requirements:

This is the most critical aspect of the procurement function, as it is the foundation of the function itself. Procurement leaders must understand and align their activities to customer requirements and value creation. Procurement Department Performance Metrics must also be aligned to customer requirements. This alignment ensures customer loyalty and profitability. Does your functions metrics matter to the customers and end users?

2)Alignment with stakeholder and strategic business:

Procurement leadership must assure the alignment of their processes, activities and metrics to their respective corporate objectives. Special care must be taken to understand, collaborate and support the interests and goals of key business stakeholders. Synergies must be identified, leveraged and shaped into effective business models. The realization of these synergies can create tremendous value for businesses if they are aligned with customer requirements. As procurement function have you identified your stakeholder and do you have a stakeholder management plan as part of strategy and not out of crisis?

3)Effective Cost Reduction Mechanisms and Best Practices:

Utilizing a robust Annual Strategic Buying Plan is the most critical element of cost-effective processes. Essential elements of a good buying plan are, alignment to corporate strategy, stakeholder buy-in to the plan, supplier performance management, total cost of ownership tracking, risk management processes, robust innovative technology and benchmarking. Do you have a procurement plan?are they aligned to best practice?how do you measure and track cost savings? Is your department currently engaged in an active cost saving strategy?

4)Assurance of the Ontime and InFull Delivery of High-Quality goods and services:

Continuous and timely acquisition of inputs to be converted into useful products and services is the fundamental purpose or mission of the procurement function. Failure to rise to this challenge will spell certain doom and loss of value and respect for procurement departments. Not to mention hampered operations.

How and how often do you measure OTIF? Where a complex supply network exists is OTIF measured for top 20% of vendors who account for 80% of deliveries and supplies?

5)A Culture of Continuous Improvement:

A powerful method to cultivate procurement value. All aspects of procurement systems must be continuously monitored and improved. This means that the technology, processes, skills sets, workflows, metrics, suppliers, must be defined, evaluated, analyzed, improved continuously. What continuos improvement plan are you engaged in?

6) The rise of Artificial Intelligence, Robotics andBlockchain

These are all technology that can be leveraged to realize procurement value. How are you exploiting these?

7)Ethical and Green Sourcing

Procurement leaders can add even greater value if they assure that all the goods and services procured, are Eco-Friendly and derived from *Socially Responsible means.* Do you have a sustainable procurement plan?

Procurement excellence-perspective of Robert Monczka-it’s about improving competitiveness.

Initially, procurement excellence was defined as how well you cut costs, with a functional orientation. Excellence was based on how well you performed that function.

Today, it is how the supply base and business characteristics are able to contribute to the overall competitive strategies of the business.This is far beyond cost reduction.

Procurement still needs to focus on basics, such as cost management and contract negotiation While paying close attention to the concepts of speed and agility, especially in terms of the following

-How quickly procurement can respond to changes in customer requirements.

-How quickly it can develop supply bases in regions of the world where their customer base is expanding.

-How quickly suppliers can introduce new technologies if the company itself doesn’t maintain technology as a core competency—that is, finding suppliers that can provide the technologies and have the business capabilities the delivery on the technologies.

These days, it is how the supply base and business characteristics are able to contribute to the overall competitive strategies of the business

Technology component is particularly important. Procurement professionals need to work closely with their engineering people and technology people. Several roles procurement can play here include:

-provide commercial insight and review of the suppliers to identify their capabilities and abilities to deliver on the technologies.

-identify the risks from a business and technology standpoint of doing business with these suppliers.

Procurement must be involved early in the process for new product development specifically in the selection of design, materials, suppliers, and services.

Procurement executives need to raise red flags if there are errors or omissions.

Procurement also needs to work cross functionally to standardize, to the degree possible, the technology and design to simplify the overall supply chain.

All round, Experts agree that collaboration is a key component of business success today. And if senior management doesn’t insist on collaboration both internally and externally, then it is up to procurement itself to initiate it. This means stepping out and begin working with business unit managers on their own, especially if they find they are being asked to respond to continual problems that result from the choice of the wrong technology, the inability of suppliers to deliver what’s expected, or other problems.

What is procurement excellence (perspective of Robert Rudzki)?

Procurement excellence is about understanding corporate leadership’s expectations for the function (regardless of how basic or how advanced these are)and then meeting those expectations.
procurement excellence needs to be defined by the perspective of the senior executives running the company and their expectations for procurement.

Senior executive expectations can take three general forms, from the most basic to the most advanced

Traditional procurement

Focuses on buying, on price and reactive mentality, and on task orientation. In such cases, expectations center on having the right product at the right price at the right time. Most companies, until they reach about $500 million in revenue, operate with the traditional procurement form, which is a tactical buying activity. Senior management just wants procurement to support operations and not allow plant to stop operating. As such, excellence in procurement is defined tactically: Did you get the right stuff at a decent price and delivered to the plant at the right time?

Progressive procurement

Focuses on purchasing, on cost and quality, on an internal consultative focus with business units, and on skillful commodity management (both direct and indirect). The expectations at this level rise to cost reduction, quality and quality improvement, and continuous improvement. This tends to occur when companies are approaching $500 million to $1 billion in revenue-they begin to realize that there may be more that can be done in procurement. At this level, excellence is determined by how well procurement reduces cost, improves quality, and fosters continuous improvement.

Advanced procurement focuses on supply management as a whole on total value and ROI on cross-functional teams, and on external strategies. And, importantly, it has a market orientation. Expectations include total value enhancement on revenues, costs, working capital, and capital expenditures; contributions to risk identification and risk management; and the creation of a strategic advantage for the company. This involves a proactive approach, looking ahead and looking into the marketplace to understand it better, and being more strategic,One role procurement executives can play is to help senior management see the value of evolving from one level to the next.

MICHAEL MASINDE FOR CIPS KENYA SECRETARY

My name is MICHAEL MASINDE CIPS KENYA SECRETARY CANDIDATE

1)I am member of the CIPS and a Bachelor of Arts (2010,UoN) graduate finalizing on my MBA project specializing in operations management (Project area is supply chain Risk management) from the same University.Aside from my CIPS membership , I have over 10 yrs work experience, 8yrs experience being in procurement and supply chain.
I am currently Supervisor,Warehouse and operations at a reputable Health care organization, while also acting as the Manager, Materials Management
I am the organizing secretary for Procurement Students and Professionals Association of Kenya,(PROSPA-K), I have sought to promote the supply chain profession by mentoring and nurturing students and practitioners alike at all levels of the profession.

WHY ME FOR CIPS KENYA SECRETARY?
1)I serve as the organizing secretary for Procurement and supply chain students in Kenya hence very conversant with the duties and requirements of the position

2)WINNING PROPOSAL WINNING TEAM CIPS 2016 AWARDS -I drafted the proposal that saw PROSPA-K association win the CIPS pan Africa supply management award in the category: *Best People development initiative* This was because of the mentorship and free sharing of knowldge,skills,experiences and challenges in supply chain groups that started among students and professionals in Kenya.You cann verify this at:

http://www.cipsafricaconferenceandawards.com/awards/winners-2016/#section1-6

2) FINANCIAL AND MORAL SUPPORT -Since 2015 when we started PROSPA-K, we have been able to support 15 students from Our group to win CIPS International Bursery which supports needy people with Full membership, exams fee and all books at no fee.

3) INCREASING EXPOSURE-Together with the Prospa-K leadership, we have organized students and professional conferences At National levels, Regional levels and university levels. This has been key in mot just building competency and capacity of students and industry professionals but also increase their individual and proffessional level of exposure.

4) CAPACITY BUILDING-As the Organizing secretary, I have spearheaded members of PROSPA-k to get procurement certification This year February, we paid for 5 members of our groups to be members of Kenya Institute of supply management (KISM) which is our national procurement body and also paid Exam fee for five of our members to start Certified Procurement and supply profession of Kenya(CPSP-K) exams. While this was a PROSPA-K Team effort, my Part involved fund raising and developing eligibility criteria.

5) MORAL SUPPORT/INSPIRATION/MENTORSHIP. Through encouraging our members, many have gone back to school and some worked so well to be promoted at work places.

6) SOCIAL MEDIA AND SUPPLY CHAIN . I am a blogger. I write and share on matters supply chain and procurement. A way to share my experience,expertise and also learn while imporving the overall image of procurement and supply chain. Visit(and also follow) my blog at: http://www.masmic.wordpress.com

7)PRESENTATION-SHARING FOR KNOWLEDGE. During the presentations mentioned organized and mentioned above. I have been a key note speaker. Part of the themes i have covered include : Hazardous materials (HAZMAT) supply chains and Global best practice in supply chain management. These were presented at Moi university.(2016)and Muranga University (2017). Soft copies available on my Linkedin page

8)IMPROVING PROSPA-K

I also developed a survey targeted at prospa-k members that helped in audience and member analysis. This helped prospa-k to respond to the actual needs of members and not perceived needs.

To confirm all the above, you can check the testimonies in these links :

https://lebcal.wordpress.com/2018/06/06/every-supply-chain-graduate-regrets-not-joining-prospa-k-earlier

https://www.linkedin.com/in/s-michael-ba-pgdip-mba-ops-cpsp-cips-89687252

http://www.masmic.wordpress.com

https://m.facebook.com/234048180338542/photos/a.234099880333372.1073741829.234048180338542/234099860333374/?type=3

You can also email the below people and/or reach out to them privately to validate all or any of the above testimonies:

Mollen Atieno,

Lucky manyasa.

Kevin okoth Okinda,

Brian mutie,

Laxminarayan.

My main objective to join CIPS KENYA is to contribute to the promotion of CIPS by ensuring that its activities are aligned and responsive not just to the global growth strategy of the institute but also to the regional needs of CIPS members and by extension the profession. My objective will focus not only in effeciently undertaking the secretarial duties required by CIPS KENYA branch but also ensure that CIPS KENYA is recognized as the professional qualification of choice in all countries, by both proffesionals and organizations.
I seek To inspire creativity, innovativeness and inspiration in the BRANCH and seek ways to enable it respond to PSM challenges faced by CIPS MEMBERS in kenya. The future of supply chain (escpecially in building competencies and capacities) is in collaboration.Collaboration between Buyers,between buyers and end users and more so collaboration between institutes like CIPS at a strategic level. This is would be one of the areas I will seek to exploit above and beyond my secretarial duties at CIPS Kenya. How can CIPS Kenya collaborate with various stakeholders to achieve more than its expected?I am particulary excited about the Upcoming collaboration between CIPS and APICS (I hope you knew that was happening!😊 )
Excellence is in the next 5 minutes and every minute I spend as CIPS-Kenya secretary will be in making sure it plays a significant role in achieveing its objectives and yours. In anything that we do, If we are not being the best, doing our best,thinking our best,Then we should not bother.
It would be a great pleasure to work with other CIPS KENYA members and serve CIPS Kenya members. I look forward for your Vote.

Vote Michael Masinde For CIPS Kenya-SECRETARY POST

Top tips for driving value and eliminating operational inefficiency in supply chains (Part 2)

Supply Chain Management professionals may actually not need to to reinvent the wheel. In fact, many proven best practices are there to be implemented. The only issue is how applicable best practices are across numerous dynamics supply chains and how they should be modified and implemented. Top tips include:

Agility to reduce cost and increase flexibility through lean and efficient processes. (Leagile supply chain,very common in healthcare institutions)

Measurement and benchmarking to drive continuous improvement through supply chain costs and capabilities. (if it doesn’t count,don’t count it)

Economic and clinical value chain analysis of supply chain processes (what value is added in the process facilitating flow goods,services,finance and information to the customer)

Focusing on product planning and forecasting especially in the manufacturing/productions oriented supply chains/markets.

Align the supply chain and operations of the business for better decision making. (synergy and synchrony)

The use of highly effective tools like six sigma and lean mapping to ensure an efficient process (or even Lean six sigma)

Trends in how organisations are managing healthcare supply chain functions

Increasing the need and the viguor to improve on operational performance through enhancing and maximising process efficiency.

-Driving cost out of operations and reducing expenses within the supplychain process as a result of economic and healthcare reforms through operations streamlining.

-Becoming more judicious with the resources that we steward.

-Having a comprehensive database and identifying what is the needed information to ensure effective planning and execution within the chain.

-Ensuring the balance and the harmony between quality improvement and the return on investment analysis at the procurement level.

-Considering the development of creative relationships with suppliers and health care providers as a market opportunity.

-Leveraging cross-organisational knowledge throughout the health care organisation to assure engagement

Life,unpredictable

Life is unpredictable and difficult. That is the fundamental truth we all must learn to accept. In that acceptance, lies strength. If it wasn’t difficult, it wouldn’t be worth living. The moment we think we have got a hang of how it all works, the very instant we have figured it all out, life changes. The strength to overcome the challenges posed by life lies within us.

In the silent chambers of our soul lies a quiet confidence that no matter what, we will overcome this and rise again as a wiser and stronger being. Greater the difficulty, sweeter and grander the victory. Every step down, every pain and hurt that breaks us down can be fuel for our inner fire. It only serves to make us stronger in the long run. And yes, people around that keep us patting, bearing patiently, make the icing on the cake.

Key competencies needed by SCM managers in operations Management(Part II)

​​Competence and Comprehension of Lean Management

Lean operations should be viewed as comprehensive integrated operations strategy that sustains competitive advantage and results in increased returns to all stakeholders.Its a management model sweeping the world and providing the standard against which operations managers must compete. 

According to Operations management; sustainability and supply chain management, Lean management can be thought of as the driving force in a well-run operation, where the customer is satisfied, employees are respected, and waste does not exist.

Through this, SCM managers can Identify and reduce or eliminate waste in all areas of a supply chain. They can also calculate the total system-wide cost of delivering a product or service to the customer.

Lean principles and methodology help SCM managers and professionals to develop systems that allow employees to produce perfect results by educating and sensitizing suppliers to create value for customers by streamlining processes in the value chain and using suppliers whose methods and core competencies will align with lean requirements including developing long-term relationships with them.

When we expound our thoughts to all process and continous improvement activities including 5’s,Kaizen,Gemba Walks, just to mention a few, it means that SCM professionals have the competency to facilitate reducing or entirely eliminating the cost of changing from one product or service to another. This introduces us to the next competency

Competency in Process improvement initiatives like six sigma and 5’s (or is it 6’s?)

Process improvement competency helps in understanding the systematic approach to closing of process or system performance gaps through streamlining and cycle time reduction. It also helps to identify and eliminate causes of below quality specifications (off-spec), process variation, and non-value-adding activities.

A solid grounding in process improvements initiatives (mostly gained from manufacturing sectors) helps to maintain company processes that accord optimum operation whilst enhancing a company’s quality management system.

Supply chain managers are also able to demonstrate their ability to visualize the total process(es) and aid in locating problem areas using process mapping, quality improvement initiatives and visualization tools to locate, quantify and correct root causes of problems.

Every process should be subjected to periodic evaluations. Gains should be realized and noted from process improvements initiatives by establishing key performance measurements and indicators, benchmarking metrics,and initiatives to improve process quality on continual basis.

Competency in Enabling technology application in supply chain and operations-being tech savvy

Supply Managers ought to recognize that continuous process improvement is an accepted way of life in business and that few companies lack a continuing quality or process improvement effort.

Implementing improvement methods, such as business process reengineering, total quality management, six sigma, lean manufacturing, and theory of constraints can play a big role in building effeciency and placing companies in the profitiering track but all this should be done whilst understand that technology and process functionality are interconnected and that each helps transform the other.

Bearing this in mind it would be suffice to say that managers in charge of operations in supply chain should be or work towards being able to build  and initiate process improvements that are enabled and supported by technology.

Competence in Sustainability concept in supply chain-Supply Chain Sustainability

Todays supply chain management role has its work cut out. Comprehension of current industry and government regulations governing and sorrounding sustainability is key.

Engaging on activities that champion SCS (supply chain sustainability) is key for example calculating and seeking to reduce carbon footprint of business processes,incorporating renewable and recycleable raw materials, developing processes that strive to eliminate waste, assembling an effective reverse logistics program,pursuing transportation alternatives that reduce energy àand emissions, using safe and reusable packaging and containerization while also pursuing paperless documentation among many others just to mention few initiatives.

Competency by SCM managers in SCS provides an all rounded comprehension of sustaibability in operations cycle which typically involves convertion of outputs to inputs and recycling of end products and components when possible. 

This competency also enables SCM managers to assist manufacturing engineering in the development of process productivity standards. This involves ability to calculate and determine efficiency, utilization and productivity including nominal and demonstrated productive capacities.

Competency in Supply chain management

This competency enables SCM managers to demonstrate ability to manage a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (a supply chain network)

It also enables understanding that supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.

By Michael Masinde