APPENDIXES



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Surviving Supply Chain Integration: Strategies for Small Manufacturers APPENDIXES

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Surviving Supply Chain Integration: Strategies for Small Manufacturers This page in the original is blank.

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Surviving Supply Chain Integration: Strategies for Small Manufacturers APPENDIX A Survey: Characteristics of Small Manufacturers Appendix A contains a copy of the survey the committee sent to small and medium-sized manufacturing enterprises and a summary of the results.

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Surviving Supply Chain Integration: Strategies for Small Manufacturers NATIONAL RESEARCH COUNCIL COMMISSION ON ENGINEERING AND TECHNICAL SYSTEMS BOARD ON MANUFACTURING AND ENGINEERING DESIGN Office Location: Harris Building, Room 262 2001 Wisconsin Avenue, N.W. Phone: (202) 334-3129 FAX: (202) 334-3718 rrusnak@nas.edu Mailing Address: 2101 Constitution Avenue, NW Washington, DC 20418 June 16, 1998 Dear Survey Participant: On behalf of the National Research Council, I want to thank you for your participation. The objective of this survey is to determine what you think is important to satisfy your customers and to be a supplier for companies using modern supply chain management methods. This information will be used in conjunction with inputs from large companies to determine the most important attributes of good suppliers. Based on this analysis, the strategies will be developed for helping you to obtain needed capabilities. We are not asking for your identity in the survey so you can be assured that your input is anonymous. In addition, we will only be using compiled data in our analysis, so individual results will not be revealed. Inputs should be sent directly back to this office. Electronic response is strongly preferred (RRusnak@NAS.edu). Again I want to thank you for your contribution. We anticipate that the ultimate results of this study will be used to assist you in becoming a first rate supplier and expanding your business. Sincerely, Robert M. Rusnak Study Director

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Surviving Supply Chain Integration: Strategies for Small Manufacturers SURVEY FACTORS FOR SUCCESS IN SUPPLY CHAINS NATIONAL RESEARCH COUNCIL Characteristics of Respondent Industry ________ ________ (SIC) Sales ________ No. of employees Primary product(s) ________ ________ Build-to-print or other ________ % of sales from top three customers ________ ________ ________ List the SIC codes of top three customers ________ ________ Questions: 1. What percentage of your business transactions with your customer is done electronically? 2. To what extent do your top three customers share their future product and technology plans with you? Insert number to reflect level: 1 2 3 4 5 never       always

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Surviving Supply Chain Integration: Strategies for Small Manufacturers Customer 1 ____ Customer 2 ____ Customer 3 ____ 3. Do you have the following capabilities?   (Now) (Near Future) SPC ________ ________ CAD ________ ________ CAM ________ ________ MRP ________ ________ ISO/QS ________ ________ HAZMAT ________ ________ 4. How would you characterize your relationship with your top three customers? Insert number to reflect level: Insert number to reflect level: 1 2 3 4 5 adversarial       full partner Customer 1 ____         Customer 2 ____         Customer 3 ____         5. What critical factors or new capabilities would improve your success as a supplier? Insert number to reflect level: 1 2 3 4 5 not important       very important Payment terms ____ Customer recognition program ____ Sharing of cost data ____ Sharing of objective performance data ____ Early involvement in customer product development ____ Production forecast ____ Financing ____

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Surviving Supply Chain Integration: Strategies for Small Manufacturers Others _________________   _________________   _________________   _________________

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Surviving Supply Chain Integration: Strategies for Small Manufacturers SURVEY RESULTS There were 99 completed questionnaires, one of which was from a very small enterprise whose owners and employees only participate in the company on a part-time basis. The data from this company was not included in the database. Hence, the total sample size is 98. TABLE A-1 General Characteristics Question Number of Responses Mean Median Standard Deviation Annual sales ($ million) 82 34.9 7.7 111.3 Number of employees 95 226.7 75.0 514.8 Sales to top three customers as a percentage of total sales 86 42.4 34.3 25.8 Percentage of transactions with customers performed electronically 96 11.4 2.0 17.4 Extent to which customers share product and technology plans (1 [low] to 5 [high]) 97 2.8 3.0 1.1 TABLE A-2 Capabilities of SMEs Capability Number of Respondents Percentage with Capability Now Percentage Planning to Develop Capability Total (Percent) SPC 98 55 12 67 CAD 98 74 1 75 CAM 98 47 11 58 MRP 98 43 16 59 ISO/QS 98 41 35 76 HAZMAT 98 48 7 55

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Surviving Supply Chain Integration: Strategies for Small Manufacturers TABLE A-3 Relations with Top Three Customers Number of Responses Mean Median Standard Deviation 98 3.7 3.7 0.6 Scale: 1= adversarial; 5 = full partner TABLE A-4 Factors That Would Improve Probability of Supplier Success Factors Number of Responses Mean Median Standard Deviation Improved payment terms 96 2.8 3.0 1.3 Better customer recognition programs 94 2.6 3.0 1.1 More extensive sharing of cost data 96 2.4 2.0 1.2 More extensive sharing of performance data 95 3.5 4.0 1.2 Earlier involvement in product development 95 4.1 5.0 1.1 More extensive sharing of production forecasts 94 3.8 4.0 1.2 Better financing 93 2.4 2.0 1.3 Scale: 1 = not important; 5 = important TABLE A-5 General Characteristics of Subsamples Question (averages) Large SMEs Small SMEs Dispersed Customer Base Concentrated Customer Base Number of respondents 41 41 43 43 Annual sales (millions of dollars) 65.4 3.5 47.5 14.5 Number of employees 390.5 40.7 300.1 121.5 Sales from top three customers as a percentage of total sales 34.8 42.3 19.5 65.6 Percentage of transactions with customers performed electronically 10.9 13.2 7.5 15.4 Extent to which customers share product and technology plans (1 [no] to 5 [yes]) 3.1 2.4 2.8 2.7

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Surviving Supply Chain Integration: Strategies for Small Manufacturers TABLE A-6 Capabilities of Large and Small SMEs   Percentage with Capability Now Percentage Planning to Develop Capability Capability Large SMEs Small SMEs Large SMEs Small SMEs Number in sample 41 41 41 41   66 44 10 12 SPC 88 59 0 0 CAD 56 37 10 7 CAM 59 22 15 17 MRP 54 22 27 44 ISO/QS 59 39 7 5 HAZMAT TABLE A-7 Capabilities of SMEs with Dispersed and Concentrated Customer Bases   Percentage with Capability Now Percentage Planning to Develop Capability Capability Dispersed Customer Base Concentrated Customer Base Dispersed Customer Base Concentrated Customer Base Number in sample 43 43 43 43  SPC 44 63 14 9 CAD 72 70 0 2 CAM 49 47 12 7 MRP 42 47 19 14 ISO/QS 35 44 49 21 HAZMAT 47 49 5 9

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Surviving Supply Chain Integration: Strategies for Small Manufacturers TABLE A-8 Success Factors in Subsamples Average importance of factors (based on scale of 1 to 5) Large SMEs Small SMEs Dispersed Customer Base Concentrated Customer Base Number of respondents 41 41 43 43 Average relationship with top three customers 3.7 3.7 3.6 3.7 Payment terms 2.5 2.9 2.4 3.0 Customer recognition programs 2.4 2.6 2.5 2.5 Sharing of cost data 2.4 2.3 2.2 2.6 Sharing of performance data 3.4 3.3 3.3 3.3 Early involvement in product development 4.0 3.9 4.0 4.0 Sharing of production forecast 3.9 3.5 3.4 3.9 Financing 2.0 2.4 2.2 2.4