You are on page 1of 6


Shirish Kulkarni,
S S Controls
E 15/27, MIDC,
Chikalthana, Aurangabad 431210,
India November 22nd, 2009

Invitation to Supplier Day on December 16th, 2009 at Siemens E T Aurangabad Works

Dear Mr. Shirish Kulkarni,

Siemens Energy Transmission HP & HS hereby invite you to a Supplier Day on Dec. 16th, 2009.
The global downturn of the economy is causing the ongoing reduction of order entries worldwide.
Siemens is not only facing a highly increased cost pressure from its competitors, but in addition,
our customers are asking for price reductions in products and running projects. To get hold of this
critical situation Siemens has already started internal cost reduction programs, which were suc-
cessful but not sufficient to offer competitive market pricing. Therefore we are continuously
investigating our supply chain for cost reduction opportunities.
At the same time, new opportunities from the developments on the raw material markets arose in
2009, resulting from tremendous price drops. This overall economic change continues to impose new
challenges on the whole supply chain. Your company belongs to our preferred suppliers with whom
we are interested in sharing a long-term and successful business partnership. Therefore we ask you
for your suggestions to realize quick cost reduction opportunities in order to secure our future busi-
ness together, achieve “win-win” situations and make sure you will remain part of our supplier pool
in 2010 – and we are looking forward to welcoming you to our Aurangabad Works for this Supplier
Day as per the schedule attached.
We would be pleased if we could achieve our strategic goals for the purposes of solidifying an
intensive and long-term partnership even in these difficult times. Therefore, please understand this
procedure and reply by sending back the appendices on short notice. We hope that we will be
able to master this demanding challenge together and thank you for your support in advance!
With much regards,

Asgar A Godhrawala Daniel Braune

Senior Manager Strategic Purchase Vice President for Strategic Procurement HP

Supplier Day schedule:
Date: December 16th, 2009
Time: 8:30 am – 12:30 pm
Location: Siemens Ltd. Energy Sector Power Transmission Division
E-76 Waluj MIDC Area,
Aurangabad Works
Aurangabad 431136

On this day, you will receive a brief introduction explaining the Siemens business situation globally,
followed by discussions in separate workshops to discuss price and cost reduction opportunities.
Supplier Day Objectives:
• To agree on short-term reduction of costs as a sign of cooperation and performance.
• To identify and work out measures for medium- and long-term reductions of the material and
processing costs.
• To lay the groundwork for further intensive business relations.

As preparation for the Supplier Day please provide the following information to us:
1. Enter name of the participants on return fax (appendix 1: min. 1 person, max. 3 persons).
Please make sure these are persons able to make important, binding decisions and
agreements and return the form by November 25th, 2009.
2. Please enter your cost reduction ideas as well as your offer for immediate price reduction on
the measure sheet (appendix 2). Please use a separate sheet for each measure. Please send
this back to us by November 30th, 2009.
3. Please prepare your cost structure which will include the raw material content as well as the
raw material base. Please return this by November 30th, 2009.

To simplify the communication process, we have established a central contact point for the Supplier
Day. Your contact person will be:

Mr. Sadhan Chandra Roy – Manager Procurement SP
Phone: +91 (0240) 2565226 Mobile: +91 9673990690

Please understand that we need the above requested information in order to allow our Supply Chain
specialists to prepare for the Supplier Day to make it a success for all of us.

Appendix 1
Participation Confirmation, Supplier Day
December 16th, 2009
Mr. Sadhan C Roy
Siemens Ltd. Energy Sector Power Transmission Division
Fax: +91 (0240) 2554007

From (supplier name): S S Controls

We will be participating with the following members:
Name Position Mobile Phone

1. ____________________________________________________________________

2. ____________________________________________________________________

3. ____________________________________________________________________

Fax/E-Mail: Please return by November 25th, 2009

Appendix 2 (Please copy this sheet, Use one sheet for each suggestion)

Measures sheet/Cost-reduction offer for Siemens E T HP/ HS

Topic/Material group/Part: __________________ Supplier: __________________________

Volume: _________________________________ Material-Group:______________________

Initial Situation / Issue:

Solution/ Improvement Ideas / Immediate price reduction in %: Responsible person / To Dos

Potential [%, INR]:

Appendix 3 (Sheet 1 of 2) Checklist Measures Sheet (Examples!)

Function Levers Examples Yes/ Pot. Approach of
No % supplier
Development Early co-operation Apply engineering-solutions
Consider alternative solutions
Avoid double efforts Reducing the time of development
Simultaneous engineering
Better achieving the cost targets through target costing
Avoid special solutions Qualifying of products and suppliers in co-operation with other
Siemens Energy business units to utilize economies of scale
Qualification of commodities with other Siemens Energy business
units to utilize economies of scale
Production Intensify co-operation Improvement of the production process (e.g. Kaizen/Lean)
Reducing the “depth” of production (outsourcing)
Qualification and optimization of processes in co-operation with
other Siemens Energy business units
Transparency of the cost structure
Value chain analysis
Focus on high level of value
creation Ability to become a Siemens preferred supplier
Reducing the number of suppliers in your value chain
Shared responsibility for cost Utilizing lower cost materials
Utilization of common standards
Avoiding of very specific raw material (when other suitable
material exists)
Reduce the thickness of materials
Evaluate less cost suppliers (global sourcing)

Appendix 3 (Sheet 2 of 2) Checklist Measures Sheet (Examples!)

Function Levers Examples Yes/ Pot. Approach of
No % supplier

Logistics Increase of transparency Use of computer based systems, EDI
Implementation of logistics systems like consignation stock, STS
(ship to stock) STL (ship to line), LTL (line to line) und supplier
Measures to evaluate the performance of logistics and logistics costs
Evaluate opportunity to reduce inventory
Better planning by information sharing
Reduction of order management
efforts Frame contracts, delivery schedule, quantity
Pooling of orders
Competition Benchmarking Are you using industry standards?
Your competitive advantage?
Services Comparability Set-up of key data (comparable data)
Implementation of standards
Miscellaneous Material cost reduction programs
Review your cost calculation for redundancies
Use Siemens conditions for your supplier base
Further suggestions 1:
Further suggestions 2: