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Metal Component Peter Yan Commodity Manager 3 rd Dec 2003

P. Metal Component Peter Yan Commodity Manager 3 rd Dec 2003. Agenda. P. Mechanical Components Team. Mike McKenzie. B. Nusbaum (Fasteners) MAC. A. Shank (Machined Parts) IA. M. Brugger (Stampings) Tools. M. Borglum Process. P. Yan APPO. D. Proffitt HVAC. J. Gwinn ENP.

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Metal Component Peter Yan Commodity Manager 3 rd Dec 2003

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  1. P Metal Component Peter Yan Commodity Manager 3rd Dec 2003

  2. Agenda P

  3. Mechanical Components Team Mike McKenzie B. Nusbaum (Fasteners) MAC A. Shank (Machined Parts) IA M. Brugger (Stampings) Tools M. Borglum Process P. Yan APPO D. Proffitt HVAC J. Gwinn ENP

  4. Mechanical Components Team - Asia Peter Yan Warner Zhu Machined Part Fastener China Tooling Asia Bob Lu Casting China Zul Razali Malaysia Manoj Kulkarni India

  5. Agenda P

  6. Alu. Casting Export Analysis in ChinaPrincipally a Southern Led Export Commodity

  7. Ferr. Casting Export Analysis in ChinaNorthern Lead Export Commodity

  8. Asia Spend in MIN ( Casting )

  9. Aluminum Casting Spend – Year 2003 World - $110 million $23 mil $8 mil $9.9 mil $19mil $6 mil $58 mil $2.2 mil

  10. ADC Spend in Asia by Division > $500,000 $0.8 mil $5 mil $2 mil $3 mil $4 mil

  11. Nanjing Jincheng Shanghai Skyrock Innotek United Metal MMR Ultraform HongDu Oswal Electrics Rico Auto Indimet Sena Tecknicast / Hicom Eng Tek

  12. APPO Preferred Suppliers – ADC

  13. Casting Event thru Reverse Auction ’03-04

  14. Analysis of an ADC Outsourcing EventTransferring > $3 million and > 50 parts EMR Die Cast End Shields • Issues • Closing US Manufacturing Plants • Need for Best Cost Components in Competitive market • Quality, Flexible Suppliers • Solution • Engage APPO in Reverse Auction Event

  15. Results from Reverse Auction CBE 6007Malaysia & China lead Providing Best Landed Cost Solution • Summary • >30 Suppliers Engaged in this Event • 15 Pre- Assessments completed • >100 Competitive Bids • Significant Savings to Emerson • Migration of Parts Beginning to China

  16. CRI Aluminum Piston Quick Source event initialed by Copeland US APPO supported with competent supplier base Total Spend US$5 million Saving > $1.3 ( 25% ) Copeland & APPO working together to ensure smooth implementation.

  17. Actions item Hire new resources for Ferrous casting Looking into ChongQing and North China for more suppliers in casting commodity Link up APPO Quality & Technical support with suppliers.

  18. Agenda P

  19. Machined Parts Spend 2003 World $184 mil $41 mil $18 mil $121 mil

  20. Projects in Progress ’03-’04

  21. FY’04 Machined Parts Reverse Auction Plan $39.8M Identified for Bid $5.6M Identified for QS

  22. Engtek TRS Yuxin PMW Indimet Alpha, Upecca Sameer Champion, Jecmetal Maini Gemsons, Amarsons TNH, Innovalue

  23. APPO Preferred supplier – Machined Part

  24. Going Forward • More suppliers needed to support RA event. • Country manager to identify more suppliers in their region. • Division need to look beyond current supplier base to avoid over capacity problem

  25. Agenda P

  26. Tooling – Asia Spend by Location

  27. Asian Tooling Analysis - Die Cast MoldAnother example of the Asia Opportunity K55 FEA E. END SHIELD 4 Cav. Pace J-VGeTech Die with Spares $99,710 $67,000 4 Sta. Trim Die (Closed & Vent.) 32,890 28,000 Freight 5,600 1,000 Sampling 2,500 incl. Duty / Broker N/A 5,760 Total $140,700 $101,760 Delta $38,940(27.6% ) Lead Time (Wks) Die Cast Die 17 15 Trim Die Finish 4 2 Transit Time (by sea) -- 5 Total Delivery 21 22

  28. Asian Tooling Analysis - Plastic Injection MoldAsia Offers Best Cost Alternatives S58 Dryer Switch Lever L35 288240 TPCUltratechHiTechACE Mold $94,995 $63,600 $49,000 $48,700 Freight 200 1,000 1,500 1,500 Sampling N/A Incl. Incl. Incl. Chrome Incl. 2,500 Incl. 2,500 Duty / Broker N/A3,8162,9402,922 Total $95,195 $70,916 $53,440 $55,622 Delta $24,279 $41,755 $39,573 ( 25.5% ) ( 43.9% ) ( 41.6% ) Lead Time 18-20 12 13 12 Sample/Correct 8 8 4 8 Transit Time ------666 Total Delivery 26 - 28 26 23 26

  29. Tooling Spend by Division – FY’02 –’03 $832 Total Spent $2113 Savings $900 >30% $618 $250 $237 $113 $63

  30. Tooling in Progress 15 tools in WIP Spend – $500,000 Savings - $350,000 @ 30%

  31. THANK YOU

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