Supply Chain and Direct Procurement Overview

Supply Chain and Manufacturing is where we started our practice.  Based on our industry experience of solving problems, we knew we could apply those lessons learned to the industry.   We built our practice with the idea of delivering meaningful results that directly impact a company’s financial metrics.  Our logo speaks to this beginning.  This philosophy remains core to our work today.  The drive to deliver results and positively influence the bottomline is infused in every practice area within Symphony.

Symphony provides a tailored approach with measurable results:

• Select, qualify, and ramp up contract manufacturing partner
• Reduce inventory levels and exposure in the extended supply chain
• Ensure continuity of supply and flexibility to meet unexpected spikes in demand
• Optimize cost structure with contract manufacturers and in key processes
• Negotiate robust contracts that identify and mitigate key risk points in the supply chain
• Identify and address supply chain risk points and inefficiencies
• Deploy Symphony’s unique tools and assessment methodologies combined with seasoned professionals, enabling  us to work with you to create streamlined solutions to your complex problems
• Devise cost-effective, risk-based environmental compliance programs in relation to RoHS, REACH, and Conflict Minerals

Contract Manufacturer Sourcing

Selecting a contract manufacturer (CM or EMS provider) and managing the process of outsourcing requires a great deal of strategic thinking and preparation. Size, location, domain expertise, process capability, and financial health are only a few of the critical criteria that you need to assess before you even send a request-for-proposal (RFP). Your CM relationship is one of the most important supply relationships in your company, and your dependence on this partnership can have a profound impact on your financial performance. The traditional “quote and go” approach does not work well with CMs, and significant due diligence needs to be deployed to select the right manufacturing partner.

Examples of services we can provide:

• Develop strategies to determine the right type of contract manufacturer for your business (size, cost, capabilities, organizational style, etc.)
• Conduct preliminary screening and qualification of various CMs
• Create and submit an RFP/RFQ package using our proprietary tools and approach
• Conduct on-site audits of contract manufacturers using our templates that cover 14 major audit areas
• Negotiate pricing and contract terms using our templates and tools
• Facilitate transition with detailed plans and deliverables
• Establish critical business processes between the OEM and their chosen CM, including process flows and progressive metrics
• Manage NPI programs and launch at the CM

Contract Negotiations

Many companies are faced with the challenge of securing value through supply or manufacturing services agreements without having the sufficient tools, insight, and bandwidth. As a result, deadlines slip, opportunities are missed, contracts are executed with hidden risks, and long-term costs are suboptimal. Symphony can help you avoid these pitfalls. We provide extra bandwidth and expertise to ensure you meet your schedules and deliver a robust contract outlining key business and legal parameters that drive the right behaviors with your contract manufacturers, ODMs, component suppliers, and customers.

Examples of services we can provide:

• Hold discovery meeting with your staff to understand key business issues and the best way to create leverage to achieve the desired results through the supply agreement
• Search, evaluate, and assess potential CMs based on objective criteria with cross-functional participation from key stakeholders
• Develop negotiation strategies with options, risks, alternative paths, and expected outcomes
• Deploy proprietary audit tools for on-site factory audits
• Apply proprietary cost models utilizing regional benchmarks for labor rates, mark-ups, overhead, profit, and gross margins
• Negotiate and redline contracts throughout the negotiation process and until the document is signed. Support the negotiations with proven analytical tools and contract language

Inventory Management

Most OEM companies spend more time reacting to inventory problems than solving the underlying causes. Normally, inventory does not get much attention until it becomes a problem on the balance sheet or in the warehouse.

The key to excelling at inventory management is to understand your supply chain and the risks in advance, so you can preemptively avoid problems before they show up as inventory or an inventory write-off. In a multi-tiered supply chain, you must focus on both inventory on-hand and inventory exposure further upstream in your supply chain. With forecasts fluctuating constantly in the electronics industry, it is important to deploy strong analytical tools to help you respond by balancing supply flexibility and inventory liability.

Examples of services we can provide:

• Review your extended supply chain and provide quantitative assessment on “should-be” inventory levels and current inventory risks
• Deploy our proprietary tools to measure your supply chain exposure in a multi-tiered supply chain
• Assess product availability strategy and inventory risk trade-offs
• Develop solutions to address specific issues internal to your operation or with your CM or supplier
• Provide cross-functional education to raise awareness of issues and solutions
• Provide team coaching to help drive solutions to implementation
• Establish progressive, early warning metrics that give ongoing visibility to inventory risks and improvements

Supply Flexibility

Within almost every product company, you will find people who believe that all would be well “if only we could create an accurate forecast.” While there are steps a company can take to improve accuracy, the reality is that the dynamic nature of the market in most industries makes it nearly impossible to create a flawless forecast. Your other leverage point is to make your supply chain more flexible so you can respond to unforecasted demand.Too often, the path to create “flexibility” involves adding various forms of buffer inventory. This might address the immediate need, but it does not make your company more responsive. In fact, the opposite effect can occur: Burdened with the extra inventory, you cannot respond as quickly to engineering changes, quality issues, or shifts in product mix. Our approach is to build true flexibility versus just buying inventory. We will assess your flexibility and inventory, and devise solutions that enable responsiveness without unnecessary inventory risk.

Examples of services we can provide:

• Perform analysis to provide leaders important information, product availability options and the impact on supply chain exposure, flexibility, and inventory risk
• Use analytical tools to identify high-leverage supply chains and devise strategies to increase flexibility and decrease inventory risks and components, and implement postponement manufacturing strategies
• Develop predictive metrics to show progress and drive long-term structural improvements
• Tailor specific solutions to meet business needs, given the realities of the current supply chain capabilities
• Provide insights into the health of a multi-tiered supply chain by deploying our proprietary “misalignments” metric to assess availability risk
• Provide key contract language and negotiations service to build robust flexibility into important supply agreements, especially for Contract Manufacturing

Supplier Risk Assessment

In a multi-tiered supply chain, your ability to deliver product is put at risk by the performance of its worst supplier. It only takes one part from one supplier to hold you back and impact deliveries to your customers. You can mitigate the risk in your supply chain by addressing the issues before they become full-blown problems.
The key is to have an efficient way to gather data and insights about your extended supply chain, and to convert that information into an actionable plan. By getting ahead of events, you can manage the situation more successfully and avoid those predictable crises. As leaders, we strive to spend less time reacting to problems through advanced planning and execution. The same concept applies to your supply chain.

Symphony has helped companies achieve that ideal by conducting hundreds of on-site and remote supplier risk assessments. We can deploy our proprietary assessment tools to assess your suppliers’ financial and operational health, and help you devise supplier development or alternate sourcing strategies to mitigate these risks.

Examples of services we can provide:

• Assessment of suppliers in key areas like operational readiness, financial strength, and business continuity planning (including information technology disaster recovery)
• Comparison of supplier’s performance in each of these areas to industry standards
• Supplier development and remediation in the risk areas identified
• Implementation of forward-looking, predictive metrics for suppliers to provide early warning of supply chain disruptions
• Drafting and editing of business continuity and disaster recovery plans addressing operational and IT readiness