In the Driver's Seat...•Leading producer of oils, margarines & industrial fats in the Americas and...

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2014

How To Successfully Drive

Transformation in A Decentralized

Global Company

In the Driver's Seat:

Bunge

Amit SachdevDirector, Global Procurement Center of Expertise and

Transformation Head

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SU MMIT

2014

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Successfully Drive Transformation in a Decentralized, Global Company –

Bunge Procurement Story

Presenter: Amit Sachdev, Global Director Transformation and CoE Head

4 BUNGE PROCUREMENT TRANSFORMATION STORY

Agenda

Background

Where did we came from in Procurement

What started the change

Procurement Transformation Journey – 2011 onwards

Next set of challenges

Lessons Learnt

What could we have done better


• Global leader in oilseed

processing

• Global leader in grain

and oilseed marketing

• 21 mmt sugarcane milling

capacity producing sugar,

ethanol and electricity

• Leader in global trade

and distribution

SUGAR & BIOENERGY

(

• Leading producer of oils,

margarines & industrial

fats in the Americas and

Europe

• Growing oils share in Asia

• Leading corn and wheat

miller in the Americas

FOOD & INGREDIENTS

• Fertilizer production

and sales in Argentina

• Fertilizer port

operations in Brazil

FERTILIZER

NET SALES

$61 B

EMPLOYEES

~35,000

FACILITIES

~400

COUNTRIES

40+

AGRIBUSINESS

Bunge – What do we do: Feed and Fuel the world

We process oilseeds, grains, sugarcane and other agri. commodities to make

products and ingredients with numerous applications for customers worldwide


Where did we come from – Pre 2011

Non Availability of Data

Key issues

Different Procurement

Processes Multiple Systems

Lack of Policy and Procedures

Resources not aligned to support

delivery

Low Spend influence

Local / Regional Market objectives

Benefits capture not a priority

Varying levels of maturity


In addition, a company that is …….

Decentralized

Old School

Trader’s are King

Procurement is

not a Priority


1.62.4

7.0

1.8 3.0

11.3

What started the change – Benchmark in 2010 revealed

significant gaps with best in class

Return on procurement cost (ROI)Savings by total Procurement Operating costs

Bunge

Worldwide 2010

Peer

Group

Best-in

Class

Cost savings as % total spend(Includes cost reduction and cost avoidance)

Bunge

Worldwide 2010

Peer

Group

Best-in

Class

% of Procurement’s influence over spend

77%

48%

18%

86%

74%

63%

87%80% 80%

Direct materials Indirect materials Services

Bunge Peer group World class

Source: Hackett benchmark; internal Procurement analysis

Bunge

Worldwide

Peer

Group

Best-in

Class

35522

142247059

Number of suppliers per Bunge spend


Bunge launched a global Transformation program in 2011 that

included HR, IT, Finance and Procurement

To become best-in-class Procurement Function !!

Become a value added business partner

Fast track delivery and sustainment of $100M in value

Apply standard best practices consistently across Bunge

• Effective in supplier selection and buying

• Efficient in transactions

Influence 85% of Non-commodity spend

Develop deep knowledge of category procurement

Leverage Bunge’s buying power globally

Strongly aligned function from global to local level with the right talent

Upgrade systems to support procurement activities

Procurement Objectives –


Key Areas Description

Procurement

Operating Model

• New operating model – how we should function globally

• Global and Regional Center of Excellence

• Global Category Management for core categories

• Offshore Analytics Center

Generate Value

• Drive benefits (savings / ROI) in excess of $100 MM annually

• Common savings capture methodology globally

• Regular reports out to Bunge Ex Co, CFOs and key stakeholders

Talent

Management

• Align Talent to objectives

• Competencies; assess Procurement leadership and Managers globally

• Global Procurement Academy

• Recognize and Reward, Short & Long term assignments, Succession Planning

Enhance Process

• One ‘best in class’ Procure-to-Pay (P2P) process

• One system globally

• Global Procurement Policy and Procedures

• Global and Regional Process owners

Stakeholder Alignment and Communication

• Communicate and align key internal stakeholders – Leadership, Business Leads, Operations and our own teams

• Measure current perception through customer satisfaction survey - implement an effective communication plan

Focus on five key areas – and doing it well


The Operating Model ensures we can be consistent globally, even though

we continued to be decentralized company

OpCo CFO

Global Proc. Director

Op Co Procurement

Global CFO

Global Category

Management

Major responsibilities:

• Structure Global

agreements, where possible

• Coordinate and share

knowledge between Op Cos

• Vendor Rel. Mgmt.

• Institutionalize TCO


Prioritize and

approve major Proc.

initiatives

Prioritize

Procurement

transformation

Review and

challenge KPI

performance

Talent ManagementMajor responsibilities:

Local sourcing and

Supplier Management

Regional Center of

Expertise

Local operations


Set strategic

direction

Talent Development

Process

Improvements

Spend Analytics

KPI Monitoring &

Reporting

OpCo Proc Director

Procurement Leadership Team

Global Center of

Expertise

Procurement Operating Model

Reporting lines moved from Operations to Finance

One Regional Director did not agree – after a year of aligning,

we had to let him go

Still trying to get the balance right –leader vs. doer

Initially OpCos did not understand the

value; now believe it is a core area


$1,000

$1,200

$1,400

$1,600

$450

$600

$500

$600

2011 2012 2013 2014 P

$1,450

$1,800$1,900

$2,200

2011– 2014 Influenced Spend ($MM)

Capital

Insights

• Influenced Spend: Continues

to increase every year

• Focus on some of the more

difficult areas:

‒ MRO

‒ Business Admin. Services,

‒ Travel

‒ Energy

‒ Logistics

• Savings: 4 – 6% every year

since 2011; cumulative

savings of ~$500 MM

Influence in Indirect spend continues to increase –

resulting in cumulative savings of $500 MM

Total Procurement Spend - $3.0 B

Savings

Operational

$100

$125 $125

$100


Career mapping /

Path

Sourcing and

screening

Enterprise

objectives alignment

and cascading

Rewards and

recognition strategy

Personal

development and

learning plans

Success profile and

competency design

Individual performance

management process

Rewards and

Recognition

program

Rotation and

mobility practices

Interviewing and

selection

Monitoring and

feedback

Rewards and

recognition program

administration

Training

Workforce

Segmentation and

planning

On-boarding and

off-boarding

Succession

planning

Planning & Analytics Talent AcquisitionPerformance

Management

Rewards &

Recognition

Learning &

Development

Leadership

Development

Acquiring, developing, deploying and rewarding talent is fundamental

to our success

Talent Management – Building Blocks

Completed /Ongoing

Underway

Not started

Set up online Proc. Academy – easy

win, teams believe company investing in their development

Recognize top 10 performers; celebrate

their success in Leadership meetings

High performers moved to global or significant projects for short duration

Coaching /

Mentorship

Top 100 Managers assessed by an external firm – received individual

feedback in person


‘One system and One Process’ with strong governance is critical for

effectiveness and efficiency

One Process

• One Global Procure to Pay design

• Localized for tax and business requirements

• Metrics launched to measure efficiency and

effectiveness

Global Process Owner (GPO)

• Global Process owner model for “end-to-end” process

management and governance

• Regional Process Owners to drive execution

MDM and Spend Analytics

• A consistent Material & Vendor Master data

• Uniform taxonomy for Material Master Groups

• Governance

• Solution for spend information and predictive analysis

One System

• SAP / SRM

• Executed in 70% of the countries globally; full

implementation by end of 2015 125 way to buy existed only in North America

Owner works with both Procurement

and Finance

Struggling to get Master Data and Analytics right !


Getting everyone aligned and working towards a common goal has

probably been the most time consuming task

Key Stakeholders in Transformation Journey

Global and

OpCo

Procurement

Team

Business and

Operations

CFOs

ExCo

Many a times we gave up ‘speed’ to get it ‘right’

IT

Businesses still question savings

Influence in Operations up but need further collaboration

Strong alignment with all after three years. However varying levels of maturity

Five Regional CFOs –supportive but different level of Procurement understanding

High dependency; struggling with its own transformation

Supportive but is Procurement a strategic advantage –not sure


1.62.4

7.0

1.8 3.0

11

Benefits captured

Return on procurement cost (ROI)Savings by total Procurement Operating costs

Bunge

Worldwide 2010

Peer

Group

Best-in

Class

Cost savings as % total spend(Includes cost reduction and cost avoidance)

Bunge

Worldwide 2010

Peer

Group

Best-in

Class

% of Procurement’s influence over spend

77%

48%

18%

86%

74%

63%

87%80% 80%

Direct materials Indirect materials Services

Bunge Peer group World class

Source: Hackett benchmark; internal Procurement analysis

Bunge

Worldwide

Peer

Group

Best-in

Class

35522

142247059

Number of suppliers per Bunge spend


We believe it will take us ~5-6 years from the start, to fully transform

and be close to best in class

• Old Ways

• Many Ways

• Low influence

• Manual

• Local objectives

• Spotty talent

• Small savings

Pre Transformation

• Clear governance

• Global and Regional

objectives aligned

• Benefits focused

• Transparent

• Strong talent

• One system

• One process

• Improved data

Wave 1

• Extend influence

• Higher benefits- 2X

• Global

• Data Smart

• Talent driven

• Higher automation

• Shared Services

Wave 2

Pre 2011

Getting Basics Right

Prepare to Excel

Transformation Journey

2011 - 14 2015 - 17

Area of Focus


Lessons Learned – ‘Evolution’ better than ‘Revolution’ sometimes

• Support from the top essential

• Target few areas but do them well –

helps to get everyone focused

• Alignment is key – shared objectives

• Right vs. Speed – Pace of change

should account for company culture

and regional situation / constraints

• Be opportunistic – leveraged Finance

and IT transformation for Process imp.

• Right team is keen to winning

• And celebrate successes …..

Key Lessons

Manchester United – know how to win !!


What would we have done differently

Clear message from the top ‘Procurement provides competitive advantage …’

Over communicated with stakeholders in a language they understand – Executives struggle

with Procurement speak, and Operations Managers find it too Consulting

Aggressively reached out to businesses

Data driven from the start rather than waiting for processes enhancements

Structured approach to learning from mistakes – launched P2P processes in multiple

countries /regions and still struggle every time with system / training / change management


Contact Details:

Company: Bunge

Name: Amit Sachdev

Title: Global Procurement Director

Transformation & Center of Excellence Head

Email: [email protected]

Phone: +1 646 823 2109

mailto:[email protected]

DE

NV

ER FALL

SU MMIT

2014

Session #WS07

In the Driver's Seat:

How To Successfully Drive Transformation in A Decentralized Global Company

Amit Sachdev

Bunge646 823 2109

[email protected]

Speaker:

In the Driver's Seat...•Leading producer of oils, margarines & industrial fats in the Americas and...

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