Lessons Learned: SAP Sourcing 7.0 Ramp-Up Implementation at H.J. Heinz. Bill Durbin and Christopher Yope
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1 [ Lessons Learned: SAP Sourcing 7.0 Ramp-Up Implementation at H.J. Heinz Bill Durbin and Christopher Yope
2 [ Introduction to Heinz Founded in 1869 in Pittsburgh, PA by Henry John Heinz Today, headquartered in Pittsburgh and famous on six continents for its iconic brands With products in more than 200 countries around the world, Heinz is the most global U.S.-based food company The Heinz brand is a $4+ billion global icon Record Sales of $10.7B+ In FY11 Global Spend of $4.5B+ Key Heinz markets North America Europe Asia Pacific Rest of World
3 [ Leading Heinz Brands Around The World
4 [ In This Session Understand how SAP Sourcing fits into Heinz s Global Procurement Strategy Understand the planning and requirements needed to implement SAP Sourcing on premise Hear results delivered and benefits obtained by implementing SAP Sourcing 7 Project Savings Management and Reporting in the tool Improved contract authoring, management, and reporting One single source of truth, globally equivalent Learn best practices when it comes to leveraging Key Users, global rollouts, and SAP Sourcing administration
5 [ Heinz s Path to World Class Procurement Developed our Strategy Invested in our People & Processes Implementing the System Backbone
6 [ What is Keystone? Establish the Foundation Get Capabilities Current with Competition Globally Upgrade & Integrate Business Processes Standardize IS Platform in SAP Drive Visibility, Productivity and Efficiency Platform for Future Growth
7 [ How SAP Sourcing Supports the Procure to Pay Process SAP Sourcing Establish Business Requirement Develop Sourcing Strategy Negotiations / Contracting Place Orders Receive Goods / Services Pay Supplier Manage / Continuously Improve Supplier Relationship Keystone Procure to Pay Benefits Full visibility of spend Proactive compliance via effective workflow and improved buying tools Increased buyer effectiveness through touch less PtP transactions Common and measurable global PtP process Platform to enable global sourcing Standard global metrics and reporting
8 [ Keystone Global Implementations SRM Indirect Procurement US, Europe ECC Direct Procurement Continental Europe E-Sourcing Sourcing, Projects and Contracting North America, Europe, India Indonesia, China, Australia, New Zealand
9 [ SAP Sourcing Scenarios and Landscape Business Scenarios Implemented: RFI RFP RFQ Auctions Project Management Savings Tracking Contract Lifecycle Management Supplier Self Registration Single Global Application SAP Sourcing On Premise (Ramp Up) Better Heinz Infrastructure Fit
10 [ Why Ramp-Up Higher risk, but... Improved user experience at par or better than Legacy Functional Improvements in 7 versus 5.1 Project management ability to integrate our 7-Step Sourcing process and links to all downstream documents RFx improvements including reporting and event management CLM improvements master and sub agreements, generation Vendor management links to our ECC back-end system
11 [ Integration Strategy SAP ECC Replication Standard Materials, Vendors, Currencies, UOMs, Company Codes, Plants, Payment Terms, Incoterms, Purchasing Organizations, Purchasing Groups Custom Adaptor Exchange Rates Worked with SAP to develop Now standard to work with PI SAP SRM Replication Custom program to get vendor master from the SRM standalone locations 11
12 [ Implementation Timeline Blueprint to Go Live in 4.5 months
13 [ Global Roll Out Timing Accelerated Rolled Out Ahead of Global ECC Initial Go Live: July 18 th US and Europe Further successful rollouts: Canada September 2011 Indonesia October 2011 India October 2011 China December 2011 Australia December 2011
14 [ Metrics 300+ people trained 70+ Strategy projects being managed in the tool 300+ Sourcing Projects $1 Billion tendered High level of adoption globally
15 [ Project Management Design Stage 1 Portfolio Analysis Create understanding of the portfolio Stage 2 Business Needs Establish Business Needs: short, med and long term (5 yrs) Stage 3 Market Analysis Understand supply market Stage 4 Strategy Development Agree the appropriate strategy Stage 5 6 Strategy Execution Secure agreement and contract Gate Review 1 Gate Review 2 Gate Review 3 Gate Review 4 Stage Stage 7 Strategy Implement n Effect delivery of the strategy Continuous Portfolio Improvement Ongoing delivery against business needs and our Procurement goals Used the Heinz Global 7 Step Sourcing Process as our Framework Built into the Schedule Tab Templates, Attachments, etc.
16 [ Project Management Details Two types of projects: Strategy At the portfolio level - tomatoes, dairy, resin, energy, etc. Leveraging tool to track compliance Approvals by procurement leadership Sourcing At the market basket level Tie into strategic projects Level at which financial savings are tracked Approvals by procurement finance to ensure integrity of numbers Savings details can be linked to various profit and loss (P&L) buckets 16
17 [ Project Management Workflow Strategy Project Workflow Sourcing Project Workflow
18 [ Project Management Financials Financials Tab the bottom portion of the tab allows the entry of the one-time savings, ongoing savings, and brand allocation. 18
19 [ RFx Design and Details Simplified the RFxs down to 4 options: RFI (General) RFP (General) RFQ (General) RFX with Collaborative Scoring Consolidated our spend categories so that they represent our material groups Enabled us to streamline our reporting / drill down Information / Questions Library Pre-populated with content in order for the buyers to quickly and easily bring in value-added material for their suppliers Able to utilize the daily synced exchange rates for global events in multiple currencies 19
20 [ Auctions Design and Details Leveraged standard SAP configuration for auctions types Created variants when it comes to anonymous or leading bidding Made adjustments to what fields are on the schedule area for simplicity Still allow for flexibility around auction closes Trained out best practice of going from a project into an auction to carry over the relevant data Efficiency in setup
21 [ Contract Lifecycle Management Design/ Details Enabled 4 types of contracts: Indirect Master Agreement Direct Master Agreement Master Service Agreement Confidentiality/NDA Agreement Sub-agreement usage is highly utilized (with subsidiaries) Currently not using the line item functionality Will start when fully integrated with SAP ECC Clauses and templates were loaded prior to go live Workflow Approval is triggered by agreement maximum value 21
22 [ Contract Lifecycle Management Benefits Legacy No Electronic Storage Paper Based Approvals Labor Intensive Audit Process SAP Sourcing Global Repository Electronic Approvals System Generated Audit reports Facilitates Global Master Agreement with a supplier Link in multiple regional sub-contracts With Integration to ECC (future release) One stop shop for authoring, editing, and approvals
23 [ Global Reporting Previously, Heinz did not have an ability to report out data consistently Disparate legacy systems or no system Key metrics are now the same across the globe No longer decided by the region or business unit Single source of truth Key reports include - Stages / Linkages of Strategy and Sourcing projects Procurement Negotiated Savings Sourced spend by supplier / category (based on events) Visibility to sourcing opportunities both regionally and globally 23
24 [ Bolstering Adoption Strong Executive support Usage / training mandates essential One set of globally consistent process The whole Heinz procurement world on same tool / same metrics Regional Administrators Onsite or at least in same time zone Key users Engage early Give them additional training Training Instructor led Simulations
25 [ Lessons Learned Enroll executive support and make sure your program is driven from the top Establish Key User network early Metrics and reporting are big value drivers for the business Ensure users are trained before go live Communicate, over communicate, then communicate some more Value comes from increased visibility of global projects and savings Global Template Build it once, get it globally 25
26 [ ] Thank you for participating. Please remember to complete and return your evaluation form following this session. For ongoing education on this area of focus, visit the Year-Round Community page at [ SESSION CODE:
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