New Victories in Retail Indirect Procurement

Welcome – Thank You for Joining Us

Copyright © 2013. CombineNet, Inc.

Agenda

CombineNet Presenters:

– Jennifer Sikora, VP of Marketing

– Wes Willoughby, VP of Account Management

CombineNet Overview

Retail indirect procurement categories

Retail indirect procurement challenges & case studies:

– Transportation complexities & seasonality

– De-centralized store facilities spends

– Evolving store networks

– Business alignment

Q&A


Bonus Offer: Participants who attend the duration of this webinar will be eligible for CEH credits. They may be applied toward ISM CPSM recertification, CPSD recertification, C.P.M. recertification, and/or A.P.P. reaccreditation program requirements. (Note: ISM does not endorse, certify or sponsor this program or its content.)

CombineNet Company Overview

Established in 2000.

Global: Offices in Pittsburgh, PA; London, UK; Hamburg, Germany. Partners for Latin America, Middle East, APAC.

Customers: Global 2000 spanning CPG, Food & Bev, Retail, Manufacturing, Transportation, and more.

The Company The Technology Customer Value

Capture >2X spend under E-Sourcing management.

Address complex spendswith advanced functionality.

Fast implementation and broad adoption for any type of user.

Nearly 100% see full payback after 1st sourcing event.

Best of Breed Solutions that improve Strategic Sourcing –holding 21 U.S. patents.

Software-as-a-Service (SaaS) delivery model for ease of adoption and scale

Easy integration into your environment to complement existing applications.


CombineNet is used by 10 of the Top 50 retailers in the U.S. and 17 of the Top 200 retailers in the world.

Focused on the Needs of Supply-Chain Driven Global Companies:


http://www.maersk.com/

CombineNet ASAP® for Advanced E-Sourcing

SaaS-based Best-of-Breed product used by sourcing teams and their suppliers.

Speeds, simplifies, and centralizes the creation and management of sourcing events of any size, scale, or complexity.

For any spend category (direct materials, indirect materials, transportation, services).

Complements and enhances existing solutions and processes.

Key Differentiators:

Flexibility and Usability.

Expressive Bidding® and Expressive Feedback support an expressive, collaborative marketplace between buyers and suppliers.

Optimization Engine and Scenario Builder enables rapid and advanced ‘what-if’ analysis. 21 U.S. Patents.

Fast Implementation – 1 ½ day training, quick-start wizards, template uploads, event services enable fast, smooth adoption and immediate ROI.


Key Components of CombineNet ASAP


CombineNet ASAP

RFxpress: RFIs, RFPs, E-Auctions

Category Templates

Create

Expressive Bidding

Expressive Feedback

Bid

Scenario Builder

Bid Optimization

Awarding

Reports & Dashboards

Analyze & Award

Indirect Spend Categories & Retail: CombineNet’s Experience

Facilities Services & Materials Merchandise Displays Transportation

Renovations

Plumbing

Painting

Landscaping

Housekeeping

Trash Removal

Snow Removal

Armored Cars

Maintenance

Electric Utilities

Fixtures

Lighting

HVAC

Security & Alarm Systems

POS Systems

Holiday Décor

Shopping Carts & Baskets

Price Tags

Price Labels

Hangers

Shelving

Racks

Hooks

Signage

Mannequins

Ocean

Ground (FTL, LTL)

Intermodal

Air

Small Parcel

Home Delivery & Assembly

Paper and Packaging Corporate Services

Bags

Gift Boxes/Wrap

Tissue Paper

Shrink Wrap/Films

Folding Cartons

Marketing/Ads

Legal

HR

IT Equipment


3 Major Retail Supply Chain Challenges Impacting Indirect Procurement


Complex, ever-evolving store networks

Store openings & closings New/changing DCs Store format conversions Countless preferences

Seasonality Pressures

Transportation carrier services Store facility services Merchandising displays & signage Marketing spends

Business Alignment

Procurement Transformation Sustainability & reduced waste Supplier diversity & local sourcing

Retail Indirect Strategic Sourcing Solutions

Targeting Complex Spends:

How to better tackle complex transportation requirements

How to effectively aggregate store facilities spends and preferences to gain improved results

Supporting Business Requirements:

How to be more efficient with constantly changing store networks

How to better align with business initiatives (i.e. sustainability, supplier diversity) in the indirect sourcing process


Retail’s Complex Transportation Requirements

Challenges:Size of networksSeasonalitySpecial handling requirementsHome delivery and growth of small parcel (e-business fulfillment) services

CombineNet’s Solution:Scalable solution –manage network in a single sourcing event to increase efficiency and carrier competitionAllow carriers to bid on the pieces they can supportManage & secure capacity – at both the lane level and network levelQualify carriers and conduct scenario analysis


Ocean Sourcing Case Study

Low-cost & growing apparel retailer in Europe with over 250 stores, owned by Associated British Foods (ABF)

Sourcing Ocean cargo shipping from Asia sites to Europe.– China labor costs rising

– Adding new lower-cost sources of supply (Bangladesh, Vietnam, India)

Seasonality required capacity commitments at a competitive price.

3PL’s tool couldn’t handle optimization scenarios.

Results:– 2.5% savings on spend

– CombineNet scenarios run in minutes – handled complex allocations to carriers


250+ stores

100,000 TEUs of annual container volume

$100 million spend

Multiple points of origin across Asia

Case Study Fast Facts

CombineNet also used by parent ABF

Savings of $2.5M

Committed weekly business in exchange for seasonal service

“We are a volume supply chain, so everything has to be low cost…. [CombineNet] enabled us

to say, for instance, this is the carrier you should be able to give freight to from a given

port and at such-and-such rates.”

– Martin White, Supply Chain Director

(Source: SupplyChainBrain, May/June 2012)

Case Study: Truckload

“With more data under one tender event, there was the need to support the process with a strong e-sourcing solution. We chose CombineNet based on its intuitive handling of large data sets, the flexibility in defining tender variables, and the strong analytical engine to assess and visualize different implementation scenarios.”

- Global Category Director for Freight and Fleet

Consolidating Truckload

Using CombineNet ASAP enabled consolidation across multiple regions, creating a better overall picture of what was available for carriers:

– Encouraged carriers to pick and choose which transportation lanes to bid on

– Enabled carriers to leverage their assets to best customer’s needs with Packaged Bids and Conditional Offers

Using CombineNet’s Expressive Feedback provided carriers with guidance on their competitiveness during bidding

2,500 lanes

Mostly Full Truckload

Inbound/Outbound between locations across supply chain

Previously handled as multiple events

8% + savings

Retained 80% of incumbent carriers

Single sourcing event for multiple regions

Key Facts


Store Facilities Spends: Fragmented, De-Centralized Sourcing

Challenges:

Regional and location-specific preferences

Difficult to aggregate using existing technology (size limits, event set-up challenges, etc.)

CombineNet’s Solution:

Centralize/aggregate the spends into single larger-scale event

Collect preferences up-front in the RFI and later use for analysis

Invite regional and national suppliers to bid on the business


Case Study: Retailer Common Area Maintenance

Background:Corporate sourcing group for large, US-based retailer handling all not-for resale purchases.Wanted to improve results in sourcing common area maintenance services (landscaping, snow removal, trash removal, lot sweeping, etc.)

CombineNet Details– Replaced time-consuming

spreadsheet-based approach.– Expressive Bidding allowed suppliers

to submit “package” offers with further discounts.

– Results: 10% savings, reduced sourcing project timeframe by 3 weeks.

800+ stores

18 regions

$20 million+ spend

Analyzed 8 different price points.

Many stakeholder preferences.


10% savings –half from packaged offers

Bid analysis conducted 10x faster

Reduced project time by 3 weeks


“Being able to inject or take out different suppliers in different districts to see where

the savings lie was a huge benefit to our process. We wouldn’t have had the time to consider this without the bid analysis and

optimization speed of CombineNet.”

– Retailer’s senior sourcing manager

Armored Car Services Case Study

Large retail chain with 1,000+ stores

Traditionally used 3 national suppliers

Using CombineNet, consolidated all regions into single online sourcing event

– Invited nearly 20 suppliers to bid

– Collected additional cost drivers

– Used analytics to look at scenarios that favored incumbents and at increasing supplier diversity

Results:

– 16% savings

– Allocated the business to 7 suppliers


1,000+ stores

92% of stores historically supported by 3 suppliers

Spend size of >$5 million


Invited 20 suppliers to bid

16% savings

Awarded to 7 suppliers

Constantly Evolving Store Networks

Challenges:

Entry into new geographical markets

Store openings & closings

New DCs

New store formats

CombinNet’s Solution:

Enables faster time to market for sourcing events

– RFX templates

– Spreadsheet to e-sourcing event in 6 steps

– Event copy

Quickly add new suppliers / re-bid

Qualification & analysis of new suppliers using RFI and RFP data collected


CombineNet ASAP’s RFxpress™ FeatureStart events from Excel or an existing RFP template.

Our RFxpress Wizard is an “on-ramp” where new users migrate existing Excel-based bid templates into CombineNet ASAP -- in just 6 steps.

If users are familiar with Excel, they can easily adopt ASAP.


Alignment with Corporate Initiatives

Challenges:Improving supplier diversitySupporting sustainability & reduced waste commitments– Local sourcing– “Green” practices

Gaining visibility into the cost trade-offs of business preferences

CombineNet’s Solution:Invite more suppliers to the table to bid on parts of the business– Run scenarios to determine

the optimal mix of incumbents and new suppliers

RFI questions linked to your analysis, which means:– Collect sustainability

requirements from suppliers up-front and analyze later for what-if costing – what is the cost of sustainability?


Easily Creating Your Rules in CombineNet


CombineNet ASAP - Expressive Bidding®Increase collaboration with suppliers to drive savings, innovation and efficiency

Encourage suppliers to express their value beyond price, introduce innovation, and bid to their strengths with multiple Expressive Bidding capabilities in CombineNet ASAP.

RFI/Questionnaire Flexible collection of supplier information for evaluation and assessment of capabilities and risk profiles. RFI responses can be analyzed along with price and non-price factors in award scenarios.

Unbundled Bidding Each item is treated as a separate line item in your RFP, letting suppliers pick and choose the business on which they want to compete.

Alternate Offers Allow suppliers to propose alternates to your item specifications based on their capabilities or production efficiencies: Materials, production processes, service levels, price structures, lead times, equipment, etc.

Non-price Factors Any non-price bid item requested, including capacity, lead times, service levels, inclusive of the RFI.

Conditional Offers If/Then proposals that reflect supplier business strategies, offering volume discounts, rebates or tiered pricing on items based on unit volumes, percentages, or $$ in awarded business, for any combination of items

Package Offers Discounted, Supplier-defined bundles or lots of items based on their business strategies.


CombineNet’s Retail Strategic Sourcing Solutions

Solution of technology + best practices support service

CombineNet’s Strategic Sourcing Solution for Retail:

CombineNet ASAP® – Our industry-

leading best-in-class e-sourcing

platform for creating and managing

online RFIs, RFPs, and e-auction

events. Key features include:

RFxpress

Expressive Bidding®

Expressive Feedback

Scenario Builder

Bid Analysis and

Optimization

Reporting and Dashboards

Retail Best Practices Center –access to

a wide range of best practices solutions

and guidance. Included:

Retail Template Library

Event Start-Up Service

Unlimited RFP Readiness

Reviews

Event Coaching Services

Premium Content

Premium Training

15% Discount on Other

Services


CombineNet’s Solutions Fit a Market Need

70% of our customers already have

sourcing tools from SAP/Ariba, Oracle, IBM, or other procurement suites – but turn to CombineNet to take it to the next level.

CombineNet’s Growth – 2011 to 2012:45% growth in customers.101% growth in sourcing events supported.

Nearly 100% of customers see full ROI on their total contract value

following their first event with CombineNet.

10% savings on average on spend size, with ranges typically 8-40% .


To Learn More…

Visit the Webcast Resources folder to access:

White Paper Case Study LinkedIn Group

Also visit our Website Resources at: www.combinenet.com


http://www.combinenet.com/

http://www.combinenet.com/resource-center/whitepapers/retail-sourcing.php

http://www.combinenet.com/resource-center/casestudies/retail-facility-services.php

Thank You.Questions & Discussion


[email protected]: 412-471-8200

[email protected]@combinenet.com

mailto:[email protected]



