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The Sales Portal

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Title: Slide 1 Author: Jim Bruorton Last modified by: Jim Bruorton Created Date: 10/20/2005 8:17:05 PM Document presentation format: On-screen Show – PowerPoint PPT presentation

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Title: The Sales Portal


1
The Sales Portal
  • A Strategic Marketing Effort To Providing Value
    The Customer Will Pay For

2
SFA Update
3
SFA Update - contd
4
SFA Update - contd
5
SFA Update - contd
6
Total Cost of Ownership
  • A Strategic Marketing Effort To Providing Value
    The Customer Will Pay For

7
Providing Value The Customer Will Pay For
  • It is the mission of tough, informed and
    experienced budget holders and buyers to turn our
    products and services into a commodity,
    eliminating any semblance of unique value we
    provide so that they can buy at the lowest
    price.
  • The TCO progression The features and functions
    duals to the benefits battles to the
    return-on-investment wars.
  • KEMET forward looking TCO model Focus our
    efforts on developing our sales team so they can
    consistently and convincingly provide real
    business value for our customers.
  • Educate on the business improvement our products
    bring.
  • Train on how to articulate that value in a clear,
    concise, and compelling way.
  • Consultants that observe, recommend and
    contribute to our customers success
  • Marketing is responsible for developing strong
    positioning, sales must be at the center of any
    effective positioning process

Source Sales and Marketing Management
8
The Case For Differentiation
  • Prevent the customer from treating our products
    and service like a commodity.
  • Overcome the commodity challenge by knowing what
    the customer is really buying is business
    improvement.
  • Build our case for our product and services as a
    medium to deliver business improvement to our
    customers and distributors.
  • Focus to be on building and sustaining a
    difference that cant be easily commoditized.
  • Develop tools for the sales team that provide a
    layer of real business value for the customer
    beyond what our products and service do.
  • Tools that provide product knowledge, sales
    skills, business improvements our products bring
    and how to articulate that value in clear,
    concise and compelling ways.
  • If we cant explain what were selling (product
    service) how can customers see any benefit? Our
    goal associate a benefit with having our
    product or doing business with our company.

Source Sales and Marketing Management
9
Internal The Process to Establish Differentiation
  • OBJECTIVE Educate customer and distributors in
    the true cost of doing business within their
    model (Total Cost of Ownership) and define what
    is important (WITY) to them, at the same time
    educating them on the value of doing business via
    the KEMET model.
  • Definition of success
  • Customer\Distributor understands
  • Cost associated with platinum grade quality,
    delivery and service, and thus the need for the
    associated piece price premium
  • KEMETs level of expertise in meeting the most
    demanding supply chain solutions
  • Customer Accepts the benefit of KEMET as its
    people and service and without that price is
    meaningless
  • Desire to award us more share
  • Three types of buyers Distribution
  • Management Corporate Management
  • Buyer Branch Management
  • Engineering Inside and Outside Sales
  • Phase 1 Individual meetings with each buyer to
    cover Resonating and Position statements, Deficit
    question, and WITY (3D) with each buyer to
    define What is Important to the
    Customer\Distributor. Afterwards, define common
    ground and differences between buyers.
  • Phase 2 Group meeting with all the buyers.
    Demonstrate KEMETs competence in areas they
    define as important (dollarizing where possible)
    and educating customer on why we believe our TCO
    model saves them money.
  • Phase 3 Define sales strategy for account based
    on results of D-3 discussions.

TCO Must Start At The Top of the organization
10
Total Cost of Ownership WITY
  • Providing Value The Customer Will Pay For

11
Internal Distribution WITY TCO Description
Matrix
12
Automotive Johnny Boan
  • Providing Value The Customer Will Pay For

13
What Is Important To You?
  • GENERAL
  • Quality Reliability
  • Breadth Depth of Products
  • Assurance of supply
  • Maquiladora Transfer
  • Direct Sales Force
  • Customer Service
  • Competitive Price
  • Technical Application Support
  • Samples
  • Payment Terms
  • Cancellation Policy
  • Lead Times
  • EOL support
  • Global Manufacturing Footprint
  • Lean Collaboration
  • Information on Web Site
  • Financial stability
  • AUTOMOTIVE Specific
  • TS-16949
  • AEC
  • Q200 testing
  • PPAP
  • Change Control
  • Automotive testing
  • Conservative designs frozen _at_ qualification
  • Inventory
  • Buffer / Top side
  • 3rd party warehouse
  • Internet based B2B systems
  • Responsiveness
  • Delivery Issues
  • Quality Issues
  • DV and PV support

14
Internal Notes
  • The next slides represent a real TCO exercise
    (with some additions based on our class) we did _at_
    Visteon. In addition to the WITY results, I have
    some examples of the slides we will use _at_ our
    Phase 2 meeting to demonstrate to Visteon why the
    WITY defined in the Phase 1 meeting is best
    supported via the KEMET model.
  • Participants and their position on the Buyers
    Grid
  • Director of Purchasing
  • Inside Influence
  • Purchasing Manager
  • Inside Influence
  • Buyer
  • Economic buyer
  • Then later, the Component Engineer
  • Evaluator User

15
The Process
  • Phase 1
  • Resonating Statement
  • Position Statement
  • Deficit Question
  • WITY (D1)
  • Define criteria (D2)
  • Diagnose motivation (D3)
  • Phase 2
  • Group meeting with all the buyers. Demonstrate
    KEMETs competence in areas they define as
    important (dollarizing where possible) and
    educating customer on why we believe our TCO
    model saves them money
  • Phase 3
  • Develop Strategy

Where should we do the Buyers Grid?
Sort of did this but could have done it much
better.
16
Resonating Statement
  • These are trying times for all of us in the
    AUTOMOTIVE Electronics business (ref. Delphi).
    Performance requirement are increasing as well as
    price pressures.
  • We have a new CEO who has charged us to return to
    profitability and to profitably grow our
    business.
  • To this end we been challenged to be more
    customer centric and sensitive within our ETFB
    philosophy and have re-organized the company to
    drive accountability and responsibility to as
    close as possible to the customer.
  • As long term supplier to Visteon we want to work
    with you to ensure we both are successful.

17
KEMET Way Forward
  • Discussed
  • Priorities
  • Themes
  • New Logo
  • Financials
  • TY-KEC Strategic Alliance
  • EPCOS
  • KEC AUTOMOTIVE model

18
  • What I should have done
  • Added a
  • Position Statement
  • Deficit Question
  • What follows are a possible few examples of these.

19
Example AUTOMOTIVE Position Statement
  • Why should I do business with you?
  • In these trying times, you need an experienced,
    financially strong, supply partner who
    understands your business model to ensure you get
    the components you need, when you need them, and
    that perform to your expectations.
  • So What and What is your uniqueness
  • Our 40 years of experience in this industry as a
    major supplier to 10 of the most demanding
    AUTOMOTIVE manufactures on the planet (including
    your company), supported via our ETBF philosophy
    and direct sales force, make us uniquely
    qualified to support your needs.

20
Example AUTO Deficit Question
  • FACT
  • Delphi has declared bankruptcy.
  • OBSERVATION
  • This event, along with the ever increasing price
    pressures, is creating financial stress
    throughout the supply base, even to the point
    that supply could be interrupted.
  • QUESTION
  • What are you doing to insure your suppliers stay
    financially healthy, and therefore, able to meet
    you requirements?

21
Another Example AUTO Deficit Question
  • FACT
  • Some AUTOMOTIVE Electronic suppliers are
    considering using commercial components as
    opposed to AUTO grade component in an effort to
    reduce costs.
  • OBSERVATION
  • The AUTOMOTIVE grade requirements were created
    due to the higher performance requirements
    associated with AUTOMOTIVE electronics and there
    is a measurable and demonstrated difference in
    the quality and reliability performance between
    commercial and AUTO grade parts.
  • QUESTION
  • How is your company going to handle the walk
    home (or worse) events that WILL occur as a
    result of converting from AUTO grade to
    Commercial grade parts for the piece price
    savings (less than 15) associated with this
    strategy?

22
Copy of Hand Out . . .
23
The Results
Commodity Director (MANAGEMENT BUYER) Buyer Commodity Engineer (TECHNICAL BUYER)
Quality Reliability
Breadth Depth of Product
Assurance of Supply
Customer Service
Competitive Price
Global Manufacturing
EOL support
Responsiveness to Delivery Quality issues
Samples
24
Follow-up Comments
  • Good definition of what Visteon expects of
    supplier.
  • Cannot really eliminate anything entry
    ticket.
  • Some things are non-negotiable, for example
  • Payment terms
  • Cancellation Policy
  • Some things do not matter if we do better, for
    example
  • TS certification
  • PPAP
  • all they want is the fact you have it.

25
Example Slides for Phase 2 Meeting
  • Quality Reliability
  • Assurance of Supply
  • Competitive Pricing
  • Global Manufacturing

26
QUALITY RELIABILITY Ceramic SMD Capacitors
Internal Electrical PPM
AUTO _at_ 0 PPM FYTD
  • KEMET AUTO Grade capacitors are .
  • Built
  • to EIA standards
  • in TS16949 certified factories
  • using conservative designs which are frozen at
    qualification
  • Exposed to an expanded test protocols
  • Are qualified to AEC-Q200 via PPAP
  • Covered under our QOD driven Change Control
    program

27
Assurance of Supply
  • Processes to support
  • Buffer Stock
  • 3rd part warehouse
  • FDM
  • ETBF
  • KMS
  • Cost of line down
  • What is the per hour charge _at_ Visteon when a
    supplier shut down a line?
  • What is the per hour charge to Visteon from a
    Body Assembly plant when you shut down a line?

Customize to particular customer
28
Competitive Pricing Combined (Ta Ce) ASP
Customize to particular customer
15
29
Global Manufacturing Footprint
  • Plants located in North America, Europe, and
    Asia.
  • All plants operate under uniform manufacturing
    and quality system.
  • All plants report to common Business Unit VP (Ta
    or MLCC).
  • All plants certified to ISO/TS169492002.
  • Supported via our regional Distribution Centers

30
Electronic Manufacturing Services
  • Providing Value The Customer Will Pay For

31
EMS Review
  • EMS Value Proposition To provide design,
    product development, supply chain, manufacturing
    and warranty/repair solutions more cost
    effectively, quicker and with more flexibility
    than the OEMs they serve.
  • KEMET Segment Direction
  • To optimize and maximize top line and bottom line
    financial performance.
  • Operating income data HAS to be developed down to
    the KPN level to measure success
  • To SELL our major value propositions with
    CREATIVE solutions in support of the EMS value
    proposition using TCO and Sales Funnel
    concepts
  • Logistics
  • Service
  • Technical Support
  • To REDUCE the cost of doing business within this
    space
  • Account specific initiatives

32
EMS Resonating Statement
The world of the Contract Manufacturer faces huge
challenges ahead - challenges that can and will
drastically affect whether or not your company
achieves its financial and market objectives.
Globalization of the market and your competitors,
increasing demands for flexibility, reduced
profit margins and increasing operating expenses
truly make your job of sourcing passive
components that much more important and even more
difficult and strategic to your future success.
33
EMS Deficit Question
Public records reveal that the erosion of selling
prices in the capacitor industry over the past
four years has exceeded the historical capacitor
experience effect cost reduction curve resulting
in little or no operating margin, the
discontinuation of capital investment, and capped
production capacities and supply in the industry.
Continued dependence on component purchase price
reductions and PPV to drive EMS profit margins in
this environment will not allow the EMS segment
to achieve its financial objectives and will
drive the capacitor supply base away from this
space. What can we do together to avoid this
pending crisis?
34
Current EMS Model PPV Dominant Buying Motive
35
EMS Opportunity TCO/Lean Model
36
EMS Challenge
  • WITY items will vary by account and buyer
  • Some accounts beginning to embrace TCO philosophy
    with metrics
  • Celestica
  • Jabil
  • Solectron
  • Other accounts dont have a clue
  • Flextronics
  • Foxconn/Hon Hai
  • Sanmina/SCI
  • Sourcing decisions at all accounts still heavily
    dependent on PPV
  • Weight is dependent upon where they are on the
    TCO journey
  • Challenge is to
  • Re-focus the Dominant Buying Motive away from a
    primary PPV model to a TCO solution at the
    executive COO/CPO level
  • and establish operating alignment down to the
    metrics/MOPs of the Commodity/Sourcing Manager!

37
EMS WITY
38
Distributor Channel Jim Bruorton
  • Providing Value The Customer Will Pay For

39
The Challenge
  • Position KEMET with a strategy that differentiate
    us to win in the changing face of the global
    distributor business which has the large
    distributors with global footprints driving
    profit from buying not selling and driving a
    demand fulfillment sell and not a Introduction to
    Production sell.
  • How to position KEMET to grow in our most
    profitable channel to market.
  • How to position KEMET for a more quantifiable
    unfair advantage with our KEY Global Distributors
    that allows us to have business plans with teeth.

40
How To Make More as a Distributor
  • Buy Lower
  • Sell Higher
  • Turn Inventory More Often
  • Collect Sooner
  • Pay Later
  • Increase Operating Efficiency \ Lower Costs
    without sacrificing service level

Research
41
Distributors Financial Metrics
  • Cost of Goods Sold - Amount paid by distributor
    for product and freight charges.
  • Gross Margin In Dollars - Difference between the
    price paid by a distributor for a product (cost
    of goods) and the price at which it is sold
    (selling price).
  • of Gross Margin - Selling price minus cost of
    goods divided by selling price times 100.
  • of Mark Up - Selling price minus cost of goods
    divided by cost of goods times 100.
  • Inventory Earns - Gross Margin on sales from
    inventory divided by sales from inventory.
  • Inventory Turns - Cost of goods sold from
    inventory divided by average inventory
    investment.
  • Inventory Earn / Turn Ratio - Inventory earns
    times inventory turns.
  • Gross Margin Return on Inventory (GMROI) -
    Percentage of gross margin times inventory turns
    divided by one minus percent of gross margin.

  • Return on Inventory Investment (ROII) Net
    profit dollars times 100 divided by inventory
    dollars.

Research
42
Going Forward
1 Supplier KEMET Type Products
Grow the Business
Operational Excellence
Financial
Leadership
Grow Faster than The market systematic market
share development Regional Business Strategies
supporting Growth objectives Market
Segment Strategy Military Medical Instrumentati
on Automotive 2nd tier EMS 2nd \ 3rd tier
Easiest to Do Business With Voice of the
distributor RoHs clear roadmap easy To get
information Supply chain mgt. to include Rosetta
Net, EDI for collaborative Forecasting Proactive
market pricing strategy
Profitable growth that is Mutual (many
customers Across product segments) Differentiate
understand Performance metrics for Disty-
share in the gain (GP Growth, ROII)
Solid Channel Strategy User friendly
policies And procedures Build bench
strength Through central quoting Inside sales to
respond To opportunities Best In Class
Strategy Execution Leadership
43
Distribution WITY Whats Important to You Our
Distributor
44
Internal Distribution WITY TCO Description
Matrix
Research
45
Resonating Statement
  • Distributors face many challenges as the supply
    chain has become much more complicated. These
    challenges are having an impact on distributor
    margins. These challenges are only going to
    continue in the future. We have built a good
    value exchange between our two companies over the
    last 20 years that we have been partners in
    business and we have both reaped the benefits of
    that, and I want to make sure I continue to
    provide you what you need so that our partnership
    continues to grow and prosper.

46
Three Level Example
  • Factual Statement - A recent NEDA survey
    shows distributors putting greater emphases with
    Key Suppliers on delivery reliability,
    partnering, and business process improvements to
    assure customer satisfaction and profitability.
  • Observation - I find that the criteria
    used by many distributors is not sufficient to
    assure they get the results they need.
  • Question related to the fact or observation -
    What criteria do you use when evaluating a key
    supplier to assure your companies profitability?

47
Distributor Evaluation of Supplier Profitability
  • Gross Margins GP
  • Inventory Turns
  • Earn / Turns Ratio
  • Gross Margin Return on Inventory Investment
  • Line of Billing (L.O.B.)
  • Profit per L.O.B.
  • Return on Inventory Investment (R.O.I.I.)
  • Terms (cash discount)
  • Allowances (co-op s, returns, price protection)

Gross Margin Average Inventory Investment
Net Profit s X 100 ROII Inventory
48
ROII ROWC - Benefits to Our Distributor
  • You have said that inventory turns is a key
    financial measure of your profitability. By
    partnering together in a collaborative forecast
    model of A class inventory items, you can
    improve your inventory turns by reducing the
    amount of inventory you need on your shelf, -
    thus improve your earns\turns ratio and improve
    your Return On Inventory Investment (ROII) - two
    other key financial measures for you.
  • The challenge for you Mr. distributor is
    selecting a supplier that understand the
    challenge of collaborative forecasting and has
    the flexibility and expertise to create solutions
    to satisfy your needs to improve inventory turns
    and support your long term business vision.
  • We have demonstrated our ability to support the
    most demanding supply chain collaborative
    forecast efforts with our top notch team of
    forecast demand supply chain experts and gives us
    as a business partner to you an opportunity to
    differentiate KEMET in your company.

49
ROII ROWC Goal Metrics
What else do you need to know to be convinced
that you have the right Partner?
Lets set our teams today that will work on
implementing this project and challenge them to
implement a collaborative forecast model of A
Class Items In 90 days.
  • Perceived value and lt Perceived Cost for deciding
    on us
  • 39K in GP s
  • 500K in Net Profit

50
Goals for Next ROII Meeting
  • Agree on implementation timeline.
  • Agree on of business for KEMET on forecasted
    items and time frame.
  • Agree on financial rewards.
  • Investigate next step in efficiency improvements
    against operating expenses to achieve our goal.

51
WITY Scripts for TEAM
  • Providing Value The Customer Will Pay For

52
WITY Scripts Available in the Tool Box
53
(No Transcript)
54
(No Transcript)
55
Total Cost of Ownership Summing Things Up
  • Providing Value The Customer Will Pay For

56
Total Cost of Ownership Summing Things Up
  • No greater commodity sector exist in electronics
    components than passives.
  • The TCO concept suggest that supply managers
    adopt a long-term perspective, not a short-term,
    initial-price perspective, for the accurate
    valuation of buying situations
  • Cost must be examined from a long-term
    perspective and should include elements other
    than initial purchase price.
  • Supply managers must consider the impact of other
    business functions on the valuation of a specific
    purchase.
  • To value a purchase situation accurately, a
    supply chain manager must understand, and
    measure, the cost impact of all the activities
    associated with the purchase. Journal of Supply
    Chain Management
  • Accurate total cost measurements are elusive,
    because most organizations either dont
    understand the calculations or dont have or
    wont share the data necessary for such
    calculations. TCO is hard to measure so we have
    to raise as many supply chain risk as possible
    and sell KEMETs value on what is important to
    the customer.

57
Business Areas Impacted By Supply Chain Risk
Source Aberdeen Group
58
Total Cost of Ownership Summing Things Up
  • We must remember that it is the mission of many
    of todays tough, informed, and experienced
    budget holders and buyers to turn our products
    into a commodity - - - whittling away any
    semblance of unique TCO value that we provide - -
    - so that they can buy at the lowest price.
  • My advise is when you think strategy, think
    about de-commoditizing. Try desperately to make
    products and services distinctive and customer
    will stick with you. Think about innovation,
    technology, internal processes, service add-ons -
    - - whatever works to be unique. Jack Welch
  • Give the customer what they want and a little
    more. Let them know you appreciate them. Make
    good on all your mistakes and dont make excuses,
    apologize. Exceed your customers expectations. If
    you do, theyll come back over and over. Sam
    Walton, founder of Wall-Mart
  • Sales organizations that are overcoming the
    commoditization challenge know that what the
    customer is really buying is business
    improvement. Customers are buying from us for the
    benefits we provide, to make them more money, to
    save them more money, or to put the assets of
    there company at less risk. Sales and Marketing
    Management\Aug. 2005 - - - We must think of our
    products and services as a medium to deliver
    business improvement to our customers and
    distributors.

59
Total Cost of Ownership Summing Things Up
  • So, we plan to focus some of our efforts and
    attention on building and sustaining a difference
    that cant be easily commoditized. Starting with
    sales training using the Sales Funnel Concept,
    product and application training, and providing
    TCO sales tools centered around what is important
    to our customer. Our strategy is to develop our
    sales team so they can consistently and
    convincingly provide a layer of real business
    value to our customers.
  • Our direct sales team will differentiate itself
    by leveraging its experience, network of
    contacts, knowledge of our customers industry
    and an above-average level of business and sales
    savvy.
  • Our TCO sales tools are to help build a real
    differentiation and sales methodology for our
    direct sales team by education them on the
    business improvements our product and services
    bring to our customers and by using the Sales
    Funnel concept of selling how to articulate that
    value in a clear, concise, and compelling way.

60
Total Cost of Ownership
Practice
Practice
Practice
  • A Strategic Marketing Effort To Providing Value
    The Customer Will Pay For
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