Previous Work In SE Asia & India
INDIA, MALAYSIA, INDONESIA, THAILAND, KOREA, JAPAN, TAIWAN, VIETNAM, SINGAPORE
Contract Renegotiation
TWO MULTINATIONALS PREPARING COUNTER LAWSUITS, VALUE IN EXCESS OF 226 MILLION US$
Issue
Contract signed and in place between a global supplier of engineered thermoplastics and a large multinational Tier one auto parts supplier. At issue was the price. The contract was tied to a large volume program that had offered a very low price. The tier was using this buy price for all purchases - as they had done for years with this same supplier - only now they were growing exponentially. The engineered thermoplastic company wanted a price increase, wanted to stop the use of this low price for all business.
Status at involvement
Counter lawsuits were in the works and this had been turned over to legal teams as negotiations had broken down.
Step one
We were contacted by the resin supplier. We met with them to gain a clear understanding of the issues, what they needed, what they wanted and what was driving the decision to potentially lose a 30 year customer and a significant volume of business. We asked the Engineered Thermoplastics company for a clear short one paragraph letter authorizing us to act on their behalf to settle matters or go to court. To the customer we were able to present that we had been given full authority with no conditions
Step two
We had both parties agree to suspend legal work and allow us to negotiate. This was based on the understanding that all the investigative work and discussions would be documented and shared in full with both parties should we not be able to resolve the issue.
This would be the basis of the legal teams investigation and discovery so both parties agreed to this.
Step three
We dug in and started our data analysis. Confirmation with both parties was obtained to secure clear and concise understanding of all sales of the engineered thermoplastic and the conversion into parts for various OEM's as well as scrap, rework etc.
We had granular line of site to 100% of the resins use by part, by platform, by plant, by OEM.
Step four
We then sat with the parties independently to discuss future goals, future markets, and where they needed to be next year and in future years. This led to a key understanding for both parties in their need for each other. Neither party would achieve their plans if they were not doing business together
Result
Result was a renegotiation and signing of a new contract with a higher selling price and greater market share. This contract delivered a price increase for the engineered thermoplastic supplier which they needed. The contract also delivered a longer term supply commitment to the tier along with development support to go after new market segments with engineering support and product development to be done jointly with the Engineered thermoplastic supplier. Both parties were happy, both parties avoided a lawsuit which would have taken years and cost $$$$$ Relationships improved and post this agreement the two companies continued to business for years.
Added benefit
As a footnote, there were some internal issues identified for our client Engineered Thermoplastic supplier which they addressed to ensure they did not repeat this issue at other customers around the world.
Sales Training
HELPING A US MULTINATIONAL ENTER SE ASIA
Our task was to help a US premium brand grow in SE Asia. After 11 years of stagnant sales at low margins we were asked to train staff to gain margin, market share and long term customers. We did this and their sales grew over 400% growth in 36 months at more than twice the margin they had been making in the previous 11 years. Our team did in country training, tailored to the specific country. This included sales training seminars, role play exercises, and even some customer seminars to help the team understand how to present value and sell. Seminars were conducted in local languages as well as English. Follow up training and measuring results were conducted post training and seminars to measure success and develop market penetration plans. There was a customer education component as well as the sales training component for this project. In particular in India , one thing a client was very impressed with was the sales team stopped asking for support to lower price and started to gain a premium price.
New Manufacturing plant location
WHERE TO BUILD THE NEXT PLANT?
Our Multinational had three plants globally. One in the USA, one in Germany, and one in China. Sales in SE Asia and India now required a new plant to be built. The question was where. Japan, Korea and India all had equal sales volumes and growth. Thailand, Malaysia, Indonesia, Taiwan were together about the same volume as any one of India, Japan or Korea so where did it make sense to build the next plant. Logistics and freight were critical as all shipments were done via AIR Express. Skilled labour was needed as this was manufacturing of highly engineered products. Our team did a deep analysis of the market potentials for growth, the stability of the country in terms of infrastructure, the labour pool etc. We analyzed costs and future potential issues to help select the best location for manufacturing. We provided a few choices with the SWOT analysis for each along with our recommendations. A plant site was located and we supported the communications to customers (A critical component in SE Asia & India) along with initial planning for the move to local manufacturing from China.