Professional Documents
Culture Documents
COS Improvement and CR2P Explanation V13
COS Improvement and CR2P Explanation V13
M. DANIEL 10/02/2011
COS Improvement
To be able to evaluate in 2010 the COS improvement for PjS , 2 fields are
important in SAM PjS for Activity to must be well documented :
1) Recurrent Flag :
If it’s YES (in accordance to the Policy Directive on Saving Calculation Rules) the
first Quotation Q1 must be the full previous year WAP ( Weighted Average Prices)
To include in the TIPS : If you don’t fill it for a non recurrent activity ( avoid
blanc or zero value) : COS improvement will be : 0 ; could also enter via
quotation screen : third round of negotiation Q3 : PRICE C )
2) RPIS Proposal :
For a non recurrent activity , the RPIS proposal field must be filled ,in this case
COS improvement = RPIS proposal - Q4 (final quotation = price on the PO)
PDC – Policy Directive on Saving Calculation Rules (1AA 00310 0126 ASZZA)
CR²P SERVICES :
To identify the actions linked to CR2P services for Services external Purchases.
CR²P COMPONENTS :
http://all.alcatel-lucent.com/wps/portal/iframe?LMSG_PAGE=http://esupply.web.lucent.com/staffpath/CRP_files/CR2P/index.html&LMSG_HEIGHT=1800
All the actions that have a 2010 SPEND must be updated with these
new processes :
http://alw.web.alcatel-lucent.com/group/corpurch/usercorner/attfiles/
user_manual_sam_pjs.doc
Q4 = PO Price
The RPIS: Revised Project Income Statement is re-calculated when the tendering
team transferred to the PM team. The RPIS constitutes the baseline for revenues
& Cost and cannot be changed until the achievement of the contract.
The ECPLS : Estimation Completion Profit & Lost Status is calculation at the end
of the Project (but there are Quarterly Outlook Estimation) . The delta between
ECPLS & RPIS constitutes the baseline of NON QUALITY COST.
Pre-award Post-award
avoidance Cost reductions X+Y+Z = Procurement Savings
value
X+Y : Cost Reduction
Best Creditable Offer (Price A) = Q1 (Cost of Sales improvement)
Y: Cost Reduction in plan
Z IPIS (Price B) = Q2
X: incremental cost reductions
Baseline, set during bid phase
over and above the plan
basis for offer submitted
increase VM vs. plan
RPIS PROPOSAL (Price C) = Q3
( REFERENCE MARKET PRICE )
Y
RPIS OFFICIAL
X
time
Do we do a calculation on X
Assumed savings,
already included in RPIS
Pre-award Post-award
avoidance Cost reductions
value
X+Y+Z = Procurement Savings
full previous year WAP(Price A) = Q1
X+Y +Z = Cost Reduction
(Cost of Sales improvement)
Z IPIS (Price B) = Q2
time
Assumed savings,
already included in RPIS
If the status of the activity or YN is not Validated or not Approved or not in the pocket or not in the pipe = 0,
If the status of the activity or YN is Validated or Approved or in the Pocket or in the pipe :
if it’s a YN = Saving in the pipe
if it’s an Activity :
- if RECURRENT FLAG = YES : = Saving in the pipe
- if RECURRENT FLAG = NO : = COS Improvement « in the pocket »
Due tho the difficulty to split the RPIS PROPOSAL of the external Spend of the
Project per activity we have create this field at PROJECT LEVEL
In this case we could calculate the COS Imprt. per project ; but we have the
impossibility to split it per Sourcing country and Council !!!
***************************************************************************************
And we could say that a part of this COS Improvement is the VM of the Cost
of Sales .
10,2%
10,2%
10% 9,3%
10% 9,3%
8,6% 10,2%
8,1% 8,6% 10,2%
8,1%
8%
8%
0%
0% JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
Definition Examples
Types
Negotiation (new price) (same part code, New price for the same part number
same approved suppliers) A1 (already agreed prices excluded)
Qualification of new supplier /part New supplier for existing part number
number (same part code, new supplier) A2
For Services: supplier rationalization.
Material change / evolution (new part Same function (same item), replaced by new
code, new or same supplier) (Redesign) A3 item, new part number
For Services: Delivery transformation. For Services: Unbundle / Outsourcing / Off
Shoring.
New BOM, new supplier e.g. new feature, new
Product change (new design), product mix
architecture
change A4
For Services: InSourcing.
Supplier to be paid in $ i.s.o. €; claim on
Currency split effects ; penalty claims; supplier
supplier claims. A6
Mfg value add (MVA) improvement, reduced
Labor, Efficiency, EMS Savings installation cost, process improvement,
A7 standardization , …