Effective Collaboration in the New Normal
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Transcript of Effective Collaboration in the New Normal
© 2010. Ariba, Inc. All rights reserved.
Effective Collaboration in the New Normal
Panel Members:BBVA Compass – Amanda FrithSonoco Products – Jennifer RobertsReed Elsevier – Scott Meiser
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Agenda
• Opening Comments• BBVA Compass – Amanda Frith• Sonoco Products – Jennifer Roberts• Reed-Elsevier – Scott Meiser• Panel Discussion• Wrap up
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Managing Supplier Information and PerformanceAmanda Frith – VP of Supply Chain ManagementBBVA Compass
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Company Overview
• BBVA♦ Madrid, Spain♦ Francisco González (Executive
chairman), José Ignacio Goirigolzarri (President and COO)
♦ $785 Billion in Assets♦ 7,600 Branches♦ 30 Countries♦ 105,000 Employees♦ www.bbva.com
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• BBVA Compass♦ Founded 1964 as Central Bank
by Harry Brock♦ Jose Maria Garcia Meyer,
Chairman & US Country Manager
♦ Manolo Sanchez, President♦ HQ Birmingham, AL♦ 14,000 Employees♦ 741 Branches♦ 15th Largest U.S. Bank♦ www.bbvacompass.com
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Challenges• Procurement Consolidation and
Centralization♦ Technology♦ Business
• No Standardization of Required Supplier Information♦ Data only gathered at time of bid.♦ No central repository for existing or
potential supplier data• Transformation and Reporting
Requirements♦ BBVA Global Supplier Certification
Standards♦ Access to supplier data for
Corporate Purchasing
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• No Enterprise-Wide Supplier Performance Management Program♦ Manual Process ♦ Only Technology Suppliers♦ Limited Supplier Risk Management
• Lack of a Complete Critical Supplier List♦ Define “Critical”♦ Large number of suppliers
fragmented among business units♦ Identify Critical Suppliers and
monitor performance• Audit Findings
♦ April 30, 2010 Deadline
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Solution
• Ariba Supplier Performance Management♦ Electronic Registration and Certification Process♦ Electronic Supplier Performance Management Process
• Implementation♦ Three Months♦ Two Employees♦ Identified and Completed Scorecards on top 35 suppliers
in two weeks
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Results
• Supplier Certification♦ Centralized repository of supplier information♦ Formal approval process for suppliers♦ Better supplier risk management♦ Compliance with BBVA Group Certification Policy
• Supplier Performance Management♦ Automated and scalable process♦ Electronic surveys♦ Centralized repository♦ Identification of “at risk” suppliers♦ Standardized key performance indicators
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Key Takeaways
• Identify Your Organization's Goals ♦ Risk management♦ Communication of strategic objectives♦ Better decision making♦ Supplier alignment
• Define Process♦ Create Consistent Metrics (KPIs) and Measurements ♦ Define roles and responsibilities♦ Create and communicate a review schedule♦ Hold business liaisons and suppliers accountable
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© 2010. Ariba, Inc. All rights reserved.
Managing Supplier Relationships
Jennifer Roberts – Director, Supplier SystemsSonoco Products
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Sonoco Overview
• Founded 1899 in Hartsville, S.C.
• Diversified provider of consumer and industrial packaging and services
• $4.1 billion in sales• 300 plants in 35 countries,
17,500 employees• Products sold in 85 countries
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Sonoco OverviewConsumer Packaging
Flexible PackagingRigid Paper
Ends and ClosuresRigid Plastic
Packaging ServicesService CentersPoint-of-Purchase
Global Tubes and Cores Protective PackagingIndustrial Products
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Challenges in Managing Suppliers
• How many suppliers should you manage?• What percentage of spend should you manage?• Does it make sense to scorecard all suppliers?• Managing and Measuring Service Suppliers
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Results in Managing Suppliers
• Developed process for determining if a supplier should be managed
• Determined if supplier was a scorecard or business review supplier
• Determined if supplier was global or needed to be managed regionally
• Developed process for rolling out globally and determining supplier involvement
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Key Takeaways: Managing Suppliers
• Not all suppliers need to be ‘scorecarded’• More important to manage supplier reviews than worry
about getting a supplier score• Review suppliers in program annually
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Managing Supplier Performance and Risk
Scott Meiser, Director of Sourcing and Performance ManagementReed Elsevier
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Who is Reed Elsevier?• A world-leading publisher and information provider targeting the science and
medical, legal and risk management, and business to business sectors♦ Parent company to:
– Lexis Nexis– Elsevier– Choicepoint– Reed Business Publications– Reed Exhibitions
♦ 2009 Revenues: £6,071m/€6,800m ($8.9B)• Our Procurement Profile:
♦ $3.2 billion in spending across 100,000 suppliers♦ Distinct business units with varying levels of Procurement acumen
• Procurement Objectives:♦ Deliver Cost Savings while
– Creating a centralized and globalized procurement organization– Implementing Fiduciary Controls & Risk Mitigation where none existed– And enhancing the Employee Experience
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What is Supplier Management to Reed Elsevier?
• What Supplier Management is not:♦ “Stand alone” process♦ Static/disjointed scorecards♦ Supplier performance reviews
(unidirectional v. 360o)
• What Supplier Management is:♦ Open dialog ♦ Embedded throughout
Procurement lifecycle♦ 360o relationship review♦ Creating incremental value through
win-win initiatives
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Risk Management Framework• Frequency of Occurrence
♦ During Sourcing♦ During Supplier Management, and♦ On an on-going basis
• Categories of Risk♦ Legal♦ Financial♦ Data Security♦ Business Continuity♦ Social Responsibility/Risk
• Variety of Tools♦ Standard Ariba Content♦ News Feeds♦ Scorecards/Surveys♦ Audits
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Highlight: Standard Ariba Content• Problem: Absent standards, risk categories are evaluated inconsistently from project
to project♦ Prioritization of criteria differs (criteria are either excluded or weighted differently)♦ Evaluations differ (e.g. what is a “bad” revenue number?)
• Problem: Sourcing Experts are expected to be experts in “everything” (financial statement evaluations, IT security risks, business continuity, etc.)
• Solution:♦ Standard content in every eRFx for NDA, Code of Conduct, and Financial and Social Responsibility Risks♦ Simply worded questions for Sourcing Expert results in standard, auto-scored and auto-weighted content♦ Consistent content in eRFx and Supplier Management survey – always evaluating the same♦ Direction to Expert to target grade if “failed”
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Highlight: Standard Ariba Content
…But we tell suppliers what we’re
looking at…
…we have no intention of sharing and
protect BOTH parties…
…And we’re even clear that it is NOT an elimination
criteria BUT NOT PROVIDING IT CAN BE…
• Example: Travel industry segment♦ Nearly every short-listed company “failed” the financial risk segment♦ NOT indicative of poorly run companies but of poor market conditions♦ Engaged in meaningful dialog♦ Agreed to closely review financial data on an on-going basis
“Failed” doesn’t sound “Collaborative”…
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Highlight: Standard Ariba Content
We also have a more-collaborative view of Auctions…
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Highlight: News Feeds
• On-going monitoring of negative news for Preferred Suppliers♦ Lexis Nexis Publisher feeds updated hourly♦ Global news sources♦ Not all news is actionable but provides a starting point for Supplier Relationship Manager♦ Available via e-mail, SharePoint and RSS Feed into Ariba♦ NOT restricted to Procurement users
“…If we could only schedule bankruptcy around Sourcing and Quarterly Reviews…”
• Example:♦ Entity temporarily blocked from doing
business in EU country by regulators♦ Supplier notified customers on Monday♦ But Reed Elsevier knew on prior Friday due
to news feeds
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Highlight: Performance Feedback FROM Suppliers
• Standard section in every Supplier Performance Management survey♦ May not always be positive♦ However, identifies relationship improvement opportunities
Are we a good customer?
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Where are we and what’s next?• Where are we?
♦ Standard content is live in the eRFx process♦ News feeds are live and continue to be refined♦ SPM pilot conducted in 2009
• What’s next?♦ Institutionalize risk framework (on-going)♦ Continued enhancement of risk framework (e.g., anti-corruption) (on-going)♦ Steady state Supplier Performance Management (2010)♦ Supplier Information Management
– Recognizing RFx and Survey responses as supplier knowledge and storing and maintaining via Ariba SIM (TBD – pilot in 2010)
– With an eye on centralization on Supplier information (e.g., including AP data) and standardized workflow sometime in the future (TBD)
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Discussion
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