9th September 2010

09:45 Welcome and Introductions Gwynne Richards - O&PF Chairman, Jo Godsmark -

Event organiser

10:00 Logistics Procurement – the FMCG perspectiveMalcolm Pope, Premier Foods

10:30 How Procurement adds value across the Supply Chain Rachel Stretch, M&S

11:00 Logistics Buyer’s toolkit: data that can help youKirsten Tisdale, Aricia

11:20 Coffee

11:40 Logistics Procurement – the 3PL perspectiveBrian McDill, Norbert Dentressangle

12:10 E-tools for Logistics ProcurementJoe Critchley, Trade Extensions

12:45 Panel discussion

13:15 Networking lunch

Rachel StretchHead of Procurement - Logistics

Adding Value through Procurement

9th September 2010

The next 20 minutes…

� Being a Buyer

� M&S

� Our Procurement Team

– The CEO expects

– Tender, Negotiate, Contract

– What we look for…

� Logistics

� Q&A

Being a Buyer…

� 10+ years in Procurement

– Met Police

– Bunzl

– DaimlerChrysler

� Current role: Head of Logistics Procurement at M&S

– £600m p.a

– UK & International

– 3PL

– Freight

– Capital Assets

– Services

� Many many diverse Stakeholders

� Retail timescales often apply!

M&S

� 125 (and a bit…) years old

� Over 21 million customers per week

� 76,000 employees

� 690 UK & 300 International stores

� 2,000 merchandise suppliers globally

Source: www.marksandspencer.com

M&S

� UK No. 1

– womenswear & lingerie

� Growing market share

– menswear, kidswear & home

– 49% of business

� M&S Foods bought by 1 in 2 UK households

– 51% of business

� Plan A

– to become world’ s most sustainable retailer by 2015

The CEO expects….

Importance of Procurement to Overall Business(Response Average; 1 Low, 4 High)

CEO Expectations of the Procurement Organization(Response Average; 1 Low, 4 High)

Cost Reduction

Value Beyond Cost

Cost Reduction Projects

Innovation & Growth Projects

Risk Management Projects

Value Chain Optimization Projects

Sustainability Projects

Impo

rtan

ceD

egre

e of

Val

ue R

ealiz

atio

n

3.1

3.4

3.4

3.1

3.7

3.5

3.7

2.1

2.9

2.7

3.3

2.4

2.5

2.8

PresentFuture

1.1x

1.3x

1.3x

1.5x

1.2x

1.4x

1.3x

Source: A.T. Kearney AEP Study

Procurement: Key Facts

� Annual Spend: £1.5bn

� Centralised Team of 20

� 5x Categories

– Logistics

– IT

– Stores

– Corporate

– Strategy

� Tendering, Negotiating, Contracting

� Report to CFO

� No Mandate

Procurement: Benchmarking

Company Spend (£)

# Buyers

Comments

Lloyds £4.5bn

300 Bringing together 2 major procurement functions – Lloyds TSB & HBOS

Barclays £2.8bn

150 Global Indirect Spend

O2 £2.5bn

60 Direct & Indirect (e.g. handsets, print)

Sainsburys

£2.3bn

50 Goods & Services not for Resale

Royal Mail

£2bn 80 Direct & Indirect

M&S £1.5bn

20 Goods & Services not for Resale

Met Police

£0.8bn

65 Procurement mandated under OJEU

World Class Experience

Why Tender & Contract?

� Benchmarking

� Cost Focus Reputation

� Contract Consolidation

� Challenge (Internal & External)

� Negotiation Insight

� Risk

� Protection

� Clarity

“Bill in Supply Chain sure regrets the day he said to

Procurement ‘Then why don’t you show me how it’s done?”

What makes a great Negotiation?

� Have a Plan!

� Understand Negotiation skills

� Don’t negotiate just on Price

� Get inside their head

� Go Fox Hunting & Manage your Foxes

� Create Win-Win situations

� Create satisfaction

� Be willing to practice

� Recognise Verbal and Non Verbal clues

They got me exactly where I wanted to be

Soft Exposing Giveaways!

When Sales say….

� “My opening offer is……”

� “How about 20 to 25?”

� “We can do it for 50?”

� “The list price is….”

� “We were looking for…”

� “I would be happy with that”

What Procurement hear is….

� And there is more to come…

� Meaning 20

� Or less if you would like?

� The price is negotiable

� Although I don’t expect to get it

� I’m getting a great deal!

Non Verbal Language

You do…..

� Steepling of fingers

� Fast Blinking

� Tilted head, knuckles under chin

� Head scratch

� Hand on back of neck

� Fiddling with glasses

� Specs taken off and put on table

You mean….

� I’m supremely confident

� I’m very alert, or I’m lying

� I’m interested

� I’m uncomfortable with this

� I’m annoyed

Transformation: Logistics

����

3PLs

paid

on

results

Warehouse consolidation International Supply Chain

���� Product handled twice���� 100 sites

���� Product handled once���� 4 sites ���� All Product sent via UK

hub���� Product sent direct to

country of sale

£150m

p.a.

Efficiency Contract Renegotiation

���� Too many trucks���� Lots of manual processes

���� Fewer trucks���� Streamlined processes���� Minimum 3% savings p.a. ���� 3PLs paid more as

costs rise

“To fundamentally rebuild our supply chain, deliver £150m p.a. of savings

and improve service to our customers ”

Adding Value in Logistics Procurement

� Bradford DC

� eComm Negotiations

� Tenders & Contract renegotiations

– Food Logistics

– GM Logistics

– Home Delivery

� Deep Dives

– Transport

– Freight

– International

� £35m savings delivered

– focused on efficiencies & contracts

Bradford: Some Trivia

� 1.1 million sq ft

� First of 4 huge new sites

� 134 Loading Bays

� Serving all M&S stores

� 205 days to construct

� Opened in July 2010

� 1200 employees

Thank You & Questions