Supplier Development Program - UNDP, Pakistan
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The document describes a Supplier Development Program (SDP) run by UNDP Pakistan that aims to strengthen business relationships and competitiveness within supply chains. The SDP is a 10 month program where consultants work with one lead company and up to 10 supplier companies. It involves 6 stages: diagnosis, interaction, implementation plan design, implementation, documentation, and systematization. The goal is to improve supplier performance, increase sales and profits, and build a sustainable model that lead companies can use to develop other suppliers. The program offers training, technical assistance, and subsidies to participating lead and supplier companies.
Supplier Development Program - UNDP, Pakistan
- 1. SUPPLIER DEVELOPMENT PROGRAMME POWERED BY: UNDP, PAKISTAN Building Comprehensive Markets & Generating Equitable Growth M Bilal Khattak SDP Consultant
- 2. CONTENTS What is SDP? Mission &Vision Why SDP? EstimatedTime with Stages Methodology What SDP offers to Lead Company and SupplierCompany? Requirement for ParticipatingCompanies in SDP Cost, support & subsidies for Lead Company & Supplier Companies D EV E L O P M E NT P R O G R A M M ES U P P L I E R
- 3. WHAT IS SDP? D EV E L O P M E NT P R O G R A M M ES U P P L I E R What is Supplier Development? Supplier Development is the process of working with certain suppliers on a one-to-one basis to improve their performance (and capabilities) for the benefit of the buying organization (Lead Company). What is UNDP SDP (Supplier Development Program) ? UNDP Pakistan aims to Implement system through SDP: That transforms the business relationship between a Leader Enterprise (Large and Medium) and its suppliers Enhance the Pakistani economy by strengthening the competitive capacities of different sectors Main Objectives of SDP To increase the social and economic profitability of participating enterprises Promote the incorporation of latest technologies, teamwork, entrepreneurial and associative integration practices in the companies that promote their development and give them a long- term viability.
- 4. SDP MISSION &VISION To Contribute to increased competitiveness and creation of decent work in small and medium enterprises in Pakistan To strengthen value chains, based on the implementation of an efficient methodology To build strategic relationships with supply companies demanding goods and/or services D EV E L O P M E NT P R O G R A M M ES U P P L I E R Become a lead and reference programme in development of suppliers for Pakistan, that helps improve the performance of strategic sectors and generates opportunities by articulating them with the market, through capacity building of small and medium enterprises MISSION VISION
- 5. WHY SDP? D EV E L O P M E NT P R O G R A M M ES U P P L I E R The Supplier Development Programme can: Reduce the Cost: Cost reduction that helps to maintain the suppliers profit margin Resolve Serious Quality issue: Quality improvement that both reduces reject costs and/or increase reliability of buyers goods or manufacturing processes Develop new routes to supply Ensure quality control at supplier locations Increase profitability of all the participants in the chain: Boost Company Sales Develop a product or service not currently available in market place Generate competition for a high price product or service dominating market Improve business alignment between the Lead Company and Supplier Better Policies, Purchasing Practices, Strategy, and trained people to replicate the SDP to the rest of the production chain
- 6. STAGESWITH ESTIMATEDTIME D EV E L O P M E NT P R O G R A M M ES U P P L I E R Promotion & Formalization Stage 1 Stage 2 Stage 3 Stage 4 Implementation & Follow Up Stage Stage 5 Documentation & Systematization Stage 6 Diagnosis Interaction Design Implementation Plan 10 Months Month 8-10 Stage 1 Stage 3 Stage 5 Stage 2 Stage 4 Stage 6 Month 0-1 Month 1-3 Month 3-4 Month 4-5 Month 5-8 S D M WIN WIN
- 7. HOW DO WE DO IT? D EV E L O P M E NT P R O G R A M M ES U P P L I E R Establish Strategic Line of Action Agree on Activities Set Common Goals Promotion & Formalization Identification of Buying Process Identify Improvement Opportunities Diagnosis Validate Diagnosis Set Priorities Interaction Establish Improvement Plan Establish Work plan & Responsibilities Design of Improvement Plan Implementation of Improvement Plan, Action Plan and Action Lines Implementation Documentation of Results Analysis for possible replicability Documentation & Replicability SDP Comprise of Six Stages 1 3 5 2 4 6
- 8. HOW DO WE DO IT? (CONTINUED) D EV E L O P M E NT P R O G R A M M ES U P P L I E R In order to create a win-win situation through SDP: One orTwo SDP Consultants intervene a Production/Value chain Duration : 賊 10 Months Production/Value Chain 1 Lead Company, (LC) Up-to 10 SupplierCompanies, (SCs) One orTwo SDP Consultants Specialized Consultant (Where Required) Supplier Development Methodology (SDM) is implemented Later the Leader Enterprise continues to implement SDM with rest of supplier(s) in chain. LC SC SC SC SC SC SC SC SC SC SC Value Chain One orTwo SDP Consultants WinWin SpecializedConsultants
- 9. WHAT SDP OFFERSTO LEAD COMPANY AND SUPPLIER COMPANY? Lead Company achieves Develops more reliable suppliers on price, quality, delivery times, services Improves LC productivity by greater performance thanks to reduction of faults and delays Better policies and purchasing practices Flexibility in its supplies Strategy, SDP Manual, and trained people to replicate the SDP to the rest of the production chain Supplier Company achieves Vision and clarity about its sales (it allows investments/ improvement projects) Increases sales and/or profits More competitive prices Improves customer satisfaction: price, time, quality, service,Technical assistance Culture of quality and continuous improvement D EV E L O P M E NT P R O G R A M M ES U P P L I E R ASSC : Assessment System of Supplier Certification Certification itself by Lead Company to its Supplier Companies
- 10. WHAT SDP OFFERSTO LEAD COMPANY AND SUPPLIER COMPANY? (CONTINUED) D EV E L O P M E NT P R O G R A M M ES U P P L I E R LongTerm Corporate Supply (Globally) Certainty Joint Investment Strategic Partners MidTerm Training & Information Communication Technical Assistance ShortTerm DeliveryTime Timely Payment Quality Flexibility Cost Reduction Competitive Price Outcome Levels: SDP investment must show specific Returns. SDP Perspective: Measure Short-term Activity, Mid-term pipeline and Long-term growth Building Trust: Flexible relation and communication, between Lead Company and Supplier Company Information and linkage with support institutions to develop SME卒s
- 11. REQUIREMENT FOR PARTICIPATING COMPANIES IN SDP D EV E L O P M E NT P R O G R A M M ES U P P L I E R Not reluctant to involve different areas/departments of the company Wish to Improve purchase practices and promote Plans of Improvement Timely Delivery of required information for diagnostic, impact assessment and subsidy Legalization: Wish to change/Implement legislation, regulation, systems or procedures Improving environmental performance and sustainability within the supply chain Wish to Implement SupplierCertification System (for Lead Company) Market Access: Have no Links with sustained market and have limited BusinessVision Finances: Limited access to Financial resources and have Poor Financial Controls Operation: Have Low quality products, under-developed process and Non Calculation of Production costs Formation of groups without strong links and Limited distribution of responsibilities
- 12. COST, SUPPORT & SUBSIDIES FOR LC & SCS D EV E L O P M E NT P R O G R A M M ES U P P L I E R Description Small Company Medium Company Large Company No of Employees 10-35 36-99 100+ Productive Assets 2-20 Million PKR 20-40 Million PKR 40 > Million PKR Company Supplier Company Medium Lead Company Large Lead Company Cost of Implementing SDP 135,000 PKR 450,000PKR 900,000 PKR Signing the Agreement Delivery of the Diagnostic Delivery of the Improvement Plan Implementation progress of Improvement Plan (in half). Receiving of the Final Report to satisfaction of the companies Payments that will made against following products 20 % payment at each stage mentioned below: 1 2 3 4 5
- 13. THANKYOU ! UNDP - Supplier Development Program