Supply Chain Management At Regal Marine

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Supply Chain Management At Regal Marine

• By
• Burcu KÖR Ebru POLAT

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Regal Marine

• Paul Kuck started the company in 1969 with
  60,000
• Estimate its value at nearly 40 million
• A productive workforce is needed to meet the
  demand for the companys lines
• is one of U.S.s 10 largest power-boat
  manufacturers.

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Regal Marine

• is luxury performance boats to customers
  worldwide
• began exporting its boats in 1976, now sells to
  customers in 45 nations.
• manufactured and sold more than 50,000 boats
  including luxury sport boats, sport cruisers and
  yachts.

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Regal Marine

• Strategy of differentiation constant innovation,
  unique features, high quality.
• the prestigious IMTEC innovation award
• For inhouse quality CAD, high quality molds,
  controls by defect charts rigorous visual
  inspection.
• Parts supplied are as much important.
• Suppliers and relations with them is crucial

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Why is Supply Chain Management Important to Regal

• competes in a multibillion dollar industry
• Need to differentiate its products.
• Differentiation through quality, innovation,
  unique features, up to date technology,
  responsiveness
• Final product quality is bound to suppliers
  products used.
• Huge portion of revenue spent on purchases.

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Supply Chain Issues

• Partner with upstream suppliers of direct
  materials and components
• Suppliers are involved into the product design
  process
• A number of local vendors supply hardware and
  fasteners to the assembly line in JIT
• Regal works with an Orlando personnel agency to
  outsource part of recruiting screening.
• Participation with other boat manufacturers in a
  buying group called the American Boat Builders
  Association

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American Boatbuilder Association

• a coalition of 12 leading independent US boat
  manufacturers
• approximately 5,000 employees in US, with 15
  facilities in 9 states
• produce more than 15 of all the boats above 16'
  built in America
• aim ? to obtain the highest quality materials at
  the lowest possible cost.

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Mission Statement and Goals

• Mission Statement
• Through the collective buying power of its'
  members, we will strive to purchase high quality
  materials at the lowest cost of any boat building
  entity in the United States. We will organize as
  necessary to bring the united voice of the
  independent builder to outside influences such as
  Suppliers, government, and industry associations.

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Goals

• To focus on improving the quality, safety, value,
  and environmental impact of our products
• To share knowledge and best practices among our
  members
• To promote cost-effective solutions and other
  mandated policies and guidelines
• To provide a member forum for the consideration
  of issues that affect the Marine Industry
• To provide a member interface with other industry
  organizations for improving the Marine Industry

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Benefits of ABA

• savings from pooled purchasing and technical
  services for members
• reduced transaction costs for members
• better boat pricing for the buying public
• increased sales and product turns for
  Manufacturers and Suppliers
• a stable source of volume purchasing for Suppliers

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What is expected from suppliers ?

• To be full partners
• Share market research jointly develop products
  and options.
• Select primarily for product development skills.
• Modular processes that lend themselves to mass
  customization.
• Minimize inventory in the chain to avoid
  obsolescence.
• Invest to reduce development lead time.
• Use modular design to postpone product
  differentiation for as long as possible

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What does suppliers expect from Regal ?

• To be readily available and responsiveness
• To become trustworthy
• Instant access to services and information any
  time
• To gather data quickly to deal with changing
  requirements
• Consistent information systems to reach the data

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Other Techniques

• Downstream retail channel relationships
• -retail sales forecasts for production
  planning
• -sales information to find out which boats are
  fast-sellers.
• Work with distribution network
• -boost sales more production of higher
  margin products.

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Challenges to strengthening relationship with
retailers

• communication obstacles
• trust issues
• information systems obstacles
• shortage of human resources

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Outcomes

• With suppliers help
• a product line of 22 boats ranging from
• 14,000 three passenger Rush to the
• 500,000 42-foot Commodore Yacht.
• reduced daily on hand inventory to 22
• days

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Results of Effective Supply Chain Management

• inventory turnover of 16.8 times/year
• eliminated 40 non-value added man hours
• Through economies of scale in procurement,
• Regal is able to navigate against billion dolar
  competitor Brunswick.

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AIM Supply (Regal Supplier)

• provides MRO and production supplies to customers
  in the marine, industrial and automotive
  service/fleet industries
• distribution centers in 10 locations nationwide
• Goal to make customers more successful by
• - supplying them with high-quality products at
  reasonable prices
• - developing reporting systems to show the
  components of their spend
• - identifying opportunities to improve their
  processes
• - eliminating waste
• - keeping our customers competitive

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Martin Clement(director of materials at Regal)
says

• our most strategically aligned supplier.
  Theyre helping us drive out costs. By helping us
  drive out costs, it helps us add value to our
  marketplace

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Boat Tree (Regal dealer)

• Orlando-based boat store
• the largest Regal dealer in the world for 12
  consecutive years
• sells about 400 of Regal boats annually
• Regal ? 40 percent of its entire business

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Joe Pozo (president of the Boat Tree) says that

• "Our success with selling Regal boats is a
  direct result of the high quality of their
  product and their excellent customer service.
  Nobody stands behind their product like Regal."

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Any Questions