CEVA s Procurement function: Creating superior value. Simon Boggis FCIPS Chief Procurement Officer

Transcription

1 CEVA s Procurement function: Creating superior value Simon Boggis FCIPS Chief Procurement Officer

2 CEVA in a nutshell Figures for Year Ended, 31 December

3 Balanced sector portfolio Other 7% Energy 6% Automotive 28% Industrial 16% Consumer & Retail 21% Technology 22% 3

4 Strong and diversified customer base

5 CEVA s Procurement function Diverse global team Global team Diverse community of procurement professionals Experienced team with category expertise driving thought leadership and shared best practices Center-led esourcing program and strategy. Rigorous process Five step sourcing methodology Supplier performance management Balanced scorecard (including risk evaluation). Supported by innovative technology Spend Analysis C-GAP esourcing Solutions BAIT savings tracking solution GUARD asset redeployment solution. Category Management: global, regional and local approach Supplier Relationship Management: think globally, act locally Risk Management: assessment, management, monitoring Global Procurement Accredited by Chartered Institute of Purchasing and Supply

6 Market conditions are driving requirements for innovative sourcing solutions More demanding end customers Classic strategic sourcing models are inflexible and in fact limit the options that are on the table Traditional sourcing approaches limit the ability of suppliers to suggest or propose alternatives to a standard specification Requirements for better quality and more adaptive service and products Demand for higher flexibility in operations Ability to foster options and stay flexible taking into account such soft factors as safety, quality, environmental concerns and overall supplier stability

7 Increased complexity of the supply chain Early 2000s supply chain Globalization driving increasing complexity Component standardization allows production to be spread globally to optimize costs Multi-country sourcing with consolidation hubs before shipping to end customers Supply chain control and visibility are critical Compliance to regulations throughout the supply chain Today s supply chain

8 CEVA s esourcing evolution ( ) Number of e-auctions Traditional Sourcing E-Auctions, Online RFX Advanced esourcing Completed Categories Ground Transportation Temporary Labour Office Supplies and Print Packaging Security Fuel Margins Outsourcing Marketing Hardware Warehouse Racking Ongoing Packaging Optimization Intermodal Payroll Transport Modelling: Ground Rail Ocean Air 2008 Limited Experience. 100% of e-auctions supported by Global Procurement. Limited Number of esourcing Champions & 2010 Advancing. 20% of addressable spend covered by esourcing. 51 events conducted in major BUs. esourcing Policy Building Business Unit competency and esourcing confidence. 75 e-auctions completed in 2011 covering over 152 million spend. Global three year esourcing strategy Strategic approach for category esourcing. Increase value proposition for Business Development and Ocean. Accelerate benefits delivery through Advanced esourcing - CombineNet.

9 Where do we want to be in 2013? Objectives esourcing Strategy Implementation Drive maximum value from advanced esourcing solutions (CombineNet) Realize business wide engagement Drive esourcing excellence through organizational capability and impeccable execution Deliverables esourcing integration with analytics tools Business Units self sufficient Reporting of esourcing savings Extended collaboration with functions and operations teams Performance Metrics Penetration of esourcing tools: exceeds 50% of the total addressable spend of the BU projects in the budgets Country esourcing Competencies - at least one proficiency level 1 within four geographical regions (Northern Europe, SEMEA, Americas, Asia Pacific)

10 Complexity High CEVA s strategic approach for category esourcing High complexity and low value/spend initiatives B High complexity and high value/spend strategic initiatives A Advanced e-sourcing Advanced e-sourcing Low complexity and Low value/spend D High value/spend and low complexity initiatives C Traditional e-sourcing Quick Wins/Supplier Margin Reduction Traditional & Advanced e- Sourcing - Maximize Commercial Advantage Low Value/Spend High

11 Why advanced esourcing? Categories Sourced with CombineNet UK Ground Transportation (FTL) 27 million spend, 1,360 Lanes, 42 Suppliers Six sites, 119 starting postcode locations Five percent savings identified The right balance of cost and supply chain value achieved Stronger carrier relationships through system engagement Fast time to market - saved two to three weeks of data crunching Australia and New Zealand Forklift Trucks 237 Forklift leases 20 CEVA sites impacted Suppliers bid on same template structure Comprehensive specifications made possible Enabled packages to provide lower-cost options Supplier feedback enabled Savings TBC. European Pallets Netherlands, Belgium, Germany, France Top 10 pallets with historic volume of 240,000 pallets, Spend million Seven European suppliers engaged Nine percent savings identified - RFX advanced sourcing. Non price attributes captured: min volume, lead time, payment terms. Key Differentiators: Suppliers can add value through expressive, creative and alternative bids (equipment type, transit time, volume offers, discounts, capacity levels, rebates) TCO Modelling rates, accessorial, fuel Flexible RFI - analysis of all KPIs (capacity, service levels, sustainability safety and risk factors Flexible scenario analysis and award optimization - rapidly review the data and compare different possible award outcomes Real time Expressive feedback configurable ways to show suppliers their competitiveness Flexible Training: web-based training for buyers and participating suppliers, comprehensive user guides.

12 Global spend analytics: Transforming data into value

13 The value of data with integrity Challenge Having a single source of the truth for both identifying opportunities and measuring cost reduction success Data Ability to implement and track progress on areas such as working capital, contract compliance and invoice rationalization programs CEVA s Solution Spend analysis - CEVA s C-GAP - the first and the last step of the strategic sourcing process that drives total value Companies that do Spend Analysis save 67% more than companies that do not. Aberdeen Group Benefits Acceleration of Sourcing Initiatives Driving NWC Improvements Supplier rationalization Invoice rationalization Procurement compliance Customer development opportunities

14 Criticality of data integrity: Data that is processed, organized and structured C-GAP ERP ecosystems External Business Risk Data

15 Integrating spend analysis with esourcing: Transport modelling illustration Risk scorecard Working capital Market intelligence Compliance Sustainability Carrier management Scenario building/analytics and optimization enables: Information orchestration to meet desired end state Set-up of agile, scalable solutions to rapidly sense and respond to changes in customer requirements Risk mitigation by managing promotions, demand, seasonal product and early buy opportunities Information visibility to facilitate factbased decisions.

16 Conclusion Procurement professionals assisted with advanced sourcing tools should yield far more than just cost reduction In order to continue to advance the procurement profession and delight customers we must continue: - Doing things better - Pushing the boundaries where we never could do before - Ensure continuous innovation is a catalyst for creating superior value.

17