Profit-focused supplier management : how to identify risks and recognize opportunities / Pirkko Östring.

Format:

Book

Author/Creator:

Ostring, Pirkko, 1960-

Contributor:

Ellis D. Williams, College 1865, Endowment Fund.

Language:

English

Subjects (All):

Industrial procurement--Management.

Industrial procurement.

Purchasing--Management.

Purchasing.

Physical Description:

xviii, 238 pages : illustrations ; 24 cm

Place of Publication:

New York : AMACOM, [2004]

Summary:

Supply chain dynamics involve much more than finding the materials you need at a good price. The relationships established with vendors and suppliers are strategic elements of your company's success. As with all alliances, the health of the component players bears directly on the success of the relationship -- and ultimately on your company's productivity and results. It follows, then, that all of your potential partners must be vetted for financial and operational soundness. But how do you do it? If you're not a financial professional, how do you know what numbers to look at in analyzing a supplier's strengths and weaknesses? And how do you then translate those numbers into negotiating points, business decisions, and effective processes?

Profit-Focused Supplier Management answers those questions and many more. Author Pirkko Ostring uses real business examples and a fictional story paralleling the evaluation process to illustrate the importance of careful analysis. Moreover, her clear, step-by-step methodology will help your business establish accurate, repeatable metrics for identifying opportunities and problems with possible suppliers -- before committing the company to less-than-ideal agreements. Profit-Focused Supplier Management also features a full chapter of analysis tools and templates for more effective organization and easier access to comprehensive information. Annotated financial documents from Marconi PLC, Intel Corporation, and Sanmina-SCI Corporation illustrate some of the interpretations that can be drawn from any company's financials. A practical tool for supply chain executives, operations officers, and professionals responsible for maximizing productivity and return through better supply processes, Profit-Focused Supplier Management will be a crucial asset in developing your immediate and long-range supply chain strategy.

Contents:

Part 1 A Strategy for Analyzing Your Suppliers 1

Chapter 1. Why Analyze Your Suppliers? 3

1.1 A Changing Business Environment 3

Wide Range vs. Focused 4

Outsourcing 7

1.2 Supplier Base Management

Daily Activities 8

Supplier Level 9

Supplier Base Level 10

Measurement Systems 13

Quality 14

Case 1 Supplier in Trouble 16

Chapter 2. Choosing Which Suppliers to Analyze 19

2.1 Understanding Risk 19

Objectives of Risk Management 20

Goals and Stakeholders 20

2.2 Risk Categories 21

Credit Risk vs. Supplier Risk 21

2.3 Risk Management 22

Risk Assessment 22

Risk Control 23

Methods and Tools 24

2.4 Classify Your Suppliers and Create a Strategy for Analysis 24

Choose the Type of Analysis 24

Key Suppliers with High Volume 27

A Large Company as a Supplier 27

A Small Company as a Supplier 27

Case 2 Small Supplier, Big Volume 29

Part 2 Components of a Corporate Analysis of Suppliers 35

Chapter 3. Creating a Corporate Analysis 37

3.1 Quantitative Analysis 39

Financial Analysis 40

Forecast 40

3.2 Qualitative Analysis 40

Environment 41

Company and Management 41

3.3 Executive Summary 42

Recommendations 42

Risk Rating 42

Chapter 4. Investigating what is Behind Financial Figures 44

Consolidated Financial Statements 46

4.1 Audits and Annual Reports 47

4.2 Balance Sheet 48

4.2.1 Balance Sheet Structure 49

Classification of Assets 50

Current Assets 50

Noncurrent Assets 51

4.2.2 Liabilities and Shareholders' Equity 54

Current Liabilities 54

Noncurrent Liabilities 56

Shareholders' Equity 56

Balance Sheet Definitions 58

Balance Sheet

Issues for Special Attention 61

4.3 Statements of Income 62

Statements of Income

Issues for Special Attention 72

4.4 Cash Flow Statement 72

Cash Flows from Operating Activities 73

Cash Flows from Investing Activities 74

Cash Flows from Financing Activities 74

Source and Use of Cash 75

4.5 Key Ratios 76

Key Findings: Steps to Increase Risk 92

Key Ratios

Issues for Special Attention 95

4.6 Forecasting 96

Forecasting

Issues for Special Attention 101

4.7 Differences Between U.S. GAAP and IFRS Accounting Standards 101

The Major Differences in Accounting Standards 102

Reasons for Differences in Accounting Standards 102

A Practical Guide to Accounting Differences 105

Case 3 Visit to a Japanese Company Highlights Cultural Differences 107

Chapter 5. Analyzing Qualitative Factors 113

5.1 Environment 114

Country 115

Market 115

Customers 116

Suppliers and Logistics 116

Competitors 116

5.2 Company 118

Strategy 118

Levels of Strategy 118

Company Life Cycle 120

Technology 124

Ownership 127

Corporate Structure 131

Organization 135

Management 136

Acquisitions and Mergers 137

Business Failure 139

Qualitative Factors

Issues for Special Attention 140

Case 4 A Publicly Owned Large Company 144

Case 5 A Small Privately Owned Company with a Complicated Structure 147

Case 6 A Start-Up Company 149

Case 7 A Risk Supplier 154

Chapter 6. Using Analyzing Tools and Useful Templates 161

6.1 Short Analysis

Financial Analysis 161

6.2 Comprehensive Analysis

Corporate Analysis Template 163

Rating 165

Chapter 7. Studying Examples 168

7.1 Short Analysis 168

Example 1 Sanmina-SCI Corporation (U.S.) 168

7.2 Corporate Analysis 169

Example 2 Intel Corporation (U.S.) 173

Example 3 Marconi PLC (U.K.) 181

App. 2 Free-of-Charge Information 201

App. 3 Credit-Rating Agencies 202

App. 4 Online Services 206

App. 5 Banks

Brokerage Reports 207

App. 6 Company Information 208

A. Company Reports 208

B. Annual Report 208

C. SEC Filings 208.

Notes:

Includes bibliographical references (pages 225-229) and index.

Local Notes:

Acquired for the Penn Libraries with assistance from the Ellis D. Williams, College 1865, Endowment Fund.

ISBN:

0814471870

OCLC:

51931128