Post on 30-Jul-2018
© 2011 SAP AG. All rights reserved. 3
Demand for
Rapid
Productivity
Globalization Sustainability Economic Recovery
Focus on Efficiency
Growing
Supplier Risk
Importance of
Governance
Continued
Focus on Costs
Global Trends are Driving Change in Procurement
Practices
© 2011 SAP AG. All rights reserved. 4
Procurement Executives What does this mean for your business?
How do we continue to identify opportunities
to manage and reduce costs?
How do we maximize spend under
management, for all categories of spend?
How do we optimize contract terms and
enforce compliance?
How do we manage suppliers’ performance
and supply-based risk?
How do we improve our sourcing,
procurement and invoice management
processes?
How do we align our activities to best support
the corporate strategy?
© 2011 SAP AG. All rights reserved. 5
About the Research
Survey Statistics
Approx. 500 Procurement and Supply
Chain Executives responded
82% named Procurement as their core
responsibility (others – supply chain)
71% at Senior Level
Global Reach
47+% Europe
24% USA
11+% Asia / Australia
All Market Sectors Represented
Strong cross-industry representation
33%Annual Revenue Exceeds $10
Billion
46% Annual Procurement Spend in
Excess of $1 Billion
United States of America,
24%
United Kingdom, 21%
Switzerland, 5%
India, 5% Germany, 4%
Netherlands, 4%
Singapore, 4%
South Africa, 3%
Australia, 2%
Other, 28%
CPO - Chief Procurement Officer, 17%
Senior VP / VP or Equivalent,
20% Senior Manager, 34%
Manager, 19%
Other, 10%
© 2011 SAP AG. All rights reserved. 6
What is Procurement Trying to Achieve?
Rank these priorities according to how important
they are to you?
Key Takeaways
Spend Visibility
Remains a top priority (from our
2010 survey results)
Cost AND Quality
Quality control ranked higher
than direct material cost
reductions
Reducing indirect costs still very
highly ranked
Supplier Management
Risk management and
improving relationships equally
ranked
In Two Years
Improving supplier relationships
and maximizing business unit
budgets rise much higher on the
list
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Not important
Somewhat important
Very important
Extremely important
© 2011 SAP AG. All rights reserved. 7
Current Strategies on the CPO Agenda
In light of recent global events, what different
strategies are you adopting or do you plan to adopt?
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Key Takeaways
Internal Collaboration
68% stated they are now working
much more closely with the
business
63% said they are more involved
in strategic decisions
Supplier Risk Mgmt
66% have created new
approaches to supplier risk mgmt
63% are proactive about
commodity mgmt
45% formalized a supplier mgmt
program (in addition to those who
had this already)
New Investments
Over 40% invested in technology
and intelligence
© 2011 SAP AG. All rights reserved. 8
Key Strategies Over the Next Two Years
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2011 2013
Key Takeaways
Talent/Skill Development
41% ranked as extremely
important today
55% ranked as extremely
important in 2013
Shortened/Localized Supply Chains
48% ranked as extremely
important today
62% ranked as extremely
important in 2013
Supplier Collaboration and
Sustainability
Significant increase in focus
expected over coming two years
Procurement Outsourcing
Not highly important for most
organizations at this time or in
near future
Key initiatives ranked as extremely or very important,
now and in 2 years' time
© 2011 SAP AG. All rights reserved. 9
SAP Procurement Portfolio Enables the End-to-End Source-to-Pay Process
Spend
Analytics
Supplier Management
Sourcing Contract
Management
Operational
Procurement
Invoice
Management
Across ALL categories and sources of spending
– direct, indirect, and services
Agenda
Who is Newell Rubbermaid?
Corporate Procurement - Challenges
Indirect Sourcing – The Journey
Enabling Change and Driving Adoption
Results, Benefits, and Key Takeaways
Questions
11
We are a global marketer of consumer and commercial
products that touch the lives of people where they work, live
and play.
Headquartered in Atlanta, GA
Approximately 19,000 employees worldwide
NYSE: NWL
Who Are We?
More than 90 percent of U.S. households
have at least one Newell Rubbermaid product.
12
Our Vision
To be a global company
of Brands That Matter™
and great people,
known for best-in-class
results.
13
Channels & Customers
Specialty Retail
Home Center “DIY”
Office Supply
Commercial
Other
Mass Merchandisers 15
Challenges
General Limited visibility into spending patterns Ability to prioritize procurement initiatives to balance costs, service and risk of supply base Manual sourcing processes
Organizational Become One Global Company Enable centralized sourcing Leverage NWL’s purchasing power throughout the enterprise
Technology Expand the Global Blueprint footprint while hitting implementation, maintenance and release schedules Provide enabling tools to empower the changing organization Extend to integrated sourcing and procurement to drive compliance
16
What’s the Purpose
A look back at where we started
Understand where we are today
Look ahead at the next phase of the “Journey”
17
Five Towers 18
Technology
Leverage enabling technologies to support the process and drive compliance
Process
Achieve change through enhanced processes
People
Centralize management of major categories of spend
Utilize Business Process Champions at the local level to drive change
Data
Make better decisions through use of data
Culture
Respect the challenges of change management
People will do the right thing
… Four years ago … The Environment
» Distributed decision making
▪ 13 “small businesses”
▪ Common belief: Nothing in common across
businesses
▪ “I own decision because I own budget”
▪ Localized SRM
» Little technology assistance
▪ No ERP
▪ Manual transactions + approvals
▪ No consolidated spend data
» Little appreciation for “INDIRECT”
▪ “Buying is easy” … anybody can buy
▪ Impulsive; immediate
▪ Timeliness more important than cost
▪ No (small) dedicated staff in GBUs
Our Role & Activities
» Opportunistic program model
▪ Projects driven by intuition (not data)
▪ Looked for common links into
businesses
▪ COEs were easier to work with than
individual businesses
» Influence service model
▪ Negotiated externally AND internally
▪ Ability to OPT out
» Our “value proposition” was not well
defined or understood
▪ Inflated productivity numbers
▪ No value seen in “process
improvements”
▪ Inconsistent “opportunity cost”
evaluation
19
… Summary…
Four years ago Today Tomorrow
Technology
• Little-to-none
Process
• Manual
People
• Generalists
• Opportunists
Data
• Scarce
• Inconsistent
Culture
• Distributed decision
making
• Independent
• Ignorant
20
… In the last three years …
Added Technology
» Building block: ERP transactions (ECC
6.0/ERM 7.0)
» Added dedicated “E-Sourcing” team
▪ Small but powerful
▪ Good connectivity to CIO / SAP
» Add technology “ingredients”
▪ Introduce / expand catalogs
▪ Develop Portal
▪ SPM 3.0 – Spend analytics (huge game
changer)
▪ Expand inbound EDI
▪ Introduce Contract Repository
▪ Introduce CLM workflow
▪ Introduce RF(x)
Added Process
» Introduced “Procurement Policy”
▪ Still underutilized, but in place
» “Productivity” has taken on new
meaning
▪ Focus on the activities that generate
value
▪ Start looking at “process” as a value
creation (e.g. Serengeti; Fieldglass)
» Introduced / expanded the CBO
▪ Data integrity
▪ Tactical buying
22
… In the last three years …
Added People
» Expanded capacity + capabilities in selected
areas:
▪ E-sourcing / technical capabilities
▪ CBO / tactical buying capabilities
▪ IT sourcing capabilities
Changed the Culture (a little)
» More interaction with user communities
» More interaction with COEs / SMEs
» More interaction with GBUs
▪ A lot more needed
23
… Today in Summary
Four years ago Today Tomorrow
Technology
• Little-to-none
• ERP in place
• Advanced tools
Process
• Manual
• Workflows
• CBO model
People
• Generalists
• Opportunists
• More specialties
• More capabilities
• More capacity
Data
• Scarce
• Inconsistent
• SPM / BEX
• Meaningful
Culture
• Distributed decision
making
• Independent
• Ignorant
• Still OPT out
• More collaboration
• More educated
24
… The next two years … Continue to expand technology
» Use proven technology + tools
» Expand e-transactions
▪ More inbound + outbound EDI
▪ More catalog volume. Today: 26% of
PO’s; Benchmark: > 60%.
▪ Improved catalog functionality
» Better data = better facts = better
decisions
Add Process
» Mandatory CLM and RF(x)
▪ Contract repository (legacy
contracts)
▪ Contract workflow
» Expand use of third party
processes, where it makes sense
» More exception analysis +
improvements
▪ Shrink FB60 transactions
▪ Address (eliminate) ATF
issues
26
… The next two years …
Expand People Capabilities + Capacity
» More attention to data integrity
▪ Better data = better facts = better
decisions
Change the culture
» Expand SRM scale
▪ More preferred vendor “participation”
▪ Centralize SRM
▪ Virtual Buyer
» Attack “COF” (cost of fail)
▪ Use facts / data / reporting
▪ Reduce FB60 populations
▪ Attack ATF processes
27
… Tomorrow …
Three years ago Today Tomorrow
Technology
• Little-to-none
• ERP in place
• Advanced tools
• Sophisticated with
proven technology
Process
• Manual
• Workflows
• CBO model
• Automated
• Center-led
People
• Generalists
• Opportunists
• More specialties
• More capabilities
• More capacity
• More of same
Data
• Scarce
• Inconsistent
• SPM / BEX
• Meaningful
• Our signature
Culture
• Distributed decision
making
• Independent
• Ignorant
• Still OPT out
• More collaboration
• More educated
• High participation
• High collaboration
• Center-led SRM
28
Summary....
» In three years, we’ve seen a major shift from “tolerated” to “engaged”
▪ Major technology- and process-enabled changes
▪ Tremendous change in our capabilities + capacity
▪ Modest changes in “culture”
» Change will accelerate
▪ Expecting a tremendous change in our level of sophistication
▪ The INDIRECT sourcing model will evolve from “influence” to more “center-led”
… and it won’t be easy
▪ The business will catch-up through technology, process, people, data and
cultural changes
» It is our role (job) to help the business adjust and accelerate the
savings from INDIRECT
29
Spend Visibility is Critical
31
» High-Level Requirements
▪ Single, global spend analytics platform to gain visibility into indirect and direct materials
▪ Web-based application to enable global collaboration and drive adoption
▪ Ability to slice and dice the data to analyze spending patterns and scenarios
▪ Quick implementation with standard integration to SAP and the ability to leverage existing content
▪ Ability to quickly create ad hoc reports
Technology Plan
32
Supplier
Collaboration
ERP /
SRM
RFx/
Auctions
Contract
Lifecycle
Mgmt
e-Catalogs Spend
Analytics
Technology Key Benefits
ERP/SRM Capture transactions and reconciliation
Automated workflow/approvals
Spend Analytics Base-level information about spend
Exception management and reporting
e-Catalogs & VMI Automated SRM transactions
Targeted vendor usage
RFx/ Auction Automated and structured RFx
Leverage resources and projects
Contract Lifecycle Mgmt Automated workflow and approvals
Formal contract repository with alerts
Supplier Collaboration Automated supplier registration
Scheduling, ASN, e-Invoicing
Scorecard Vendor performance evaluation
Contract governance (performance-based pay)
Technology plan must be aligned to maximize investment and benefits.
33
Managing Change Mobilize and Align Leaders
Obtain alignment on direction and objectives, and outline specific activities
Engage and Communicate with Stakeholders Develop and execute a communications plan to generate a series of memos from the
senior executive team
Validate Functional Readiness Assess key stakeholders’ understanding and readiness for change as well as
identify barriers to change and enablers for success
Align the Organization Deploy a set of methodologies to design future state organizations
Enable Workforce
Understand competencies and capabilities, develop training programs, and develop strategies to attract and retain talent
33
Importance of a Business Process
Champion (BPC) Program
Creates a Global Network of Champions that owns the Global Process Blueprint and technologies to drive ongoing benefits realization
Lives within the Business Units with a high level of central support
Is a key part of the Newell Rubbermaid Business Excellence Program
Certifications are granted as
checkpoints are reached by
Catapult
BPC ActivityChekcpoint
Certification
Input
Each Activity requires an
Input. Inputs are generally
standardized training
Each Input has a built in
check point to validate
learning or application
of activity
Developed Business
Process Champion
BPC Activity
Document Details
Hyperlink
BPC Traits,
Roles and
Responsibilities
Training Activities:
Helps to achieve end results
The End Result;
The Global Network of BPC’s
BPC Program:
Provides infrastructure and support
Small Overhead- Big Pool of Expertise
34
»Understands functional area and acts as a Subject Matter Expert
»Delivers results that affect bottom line and company strategies
»Able to garner project support throughout the business
»Displays energy and passion for the job
»Excites, mobilizes, and influences others
»Understand the importance of working cross functionally
»Builds and maintains working relationships
»Ability to translate technology into real world experiences
The Right BPC Enables Change and Drives Results
Selecting the Right BPC
35
Results 37
Reduction in overall Indirect Spend by between 100-150 basis points
$10 -15mm
Standardized view of Indirect Spend
Standard workflow
UNSPSC
Increasingly standardized processes (CLM, RFx, Catalogs)
Scale, terms (cash flow)
More thought (less impulse or last minute) into local needs and alternatives
Demand destruction and better use of dollars
Creation of sourcing pipeline to drive ongoing achievement of best
value
38
Key Takeaways
A strong change management program can not be
underestimated
Configurability and flexibility are important to enable
adaptation to evolving and changing business needs
Enabling the strategic sourcing process is important to
sourcing more category spend in shorter cycle times
Technology can help to drive standard and repeatable
processes as well as enable collaboration and visibility
Paula Cushing (Newell Rubbermaid) Emily Rakowski
Manager, eSourcing Global Head of Procurement Solutions Marketing
Paula.Cushing@newellco.com emily.rakowski@sap.com
Phone: 770-418-7551 Phone: 202-386-1102