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Roy Anderson
Executive Vice President
MetaProcure
M:. 978.857.3868
Confidential
A Look Back*
1983In a Harvard Business Review article, Peter Kralijc called for the
procurement function to take on a larger and more strategic role in
managing the supply chain
2
2013Sales people in most large companies are being trained to actually
bypass procurement in their customer companies
What is wrong with those sales people?
*blog by Remko van Hoek | 9:00 AM August 2, 2013
Remko van Hoek is the Global Procurement Director at PricewaterhouseCoopers and is based in the Netherlands
Confidential
Questions
Is it harder or easier to do business with Procurement involved?
Walk in the shoes of your Internal Customer
Do the internal customers Avoid us or Seek us out?
Do our goals promote collaboration and partnership?
Are we integrated or segregated from our partners?
Never!
I have to work
with
Procurement?
Presentation on Change
Management with Engineering
and Manufacturing
Confidential
Questions
Is it harder or easier to do business with Procurement involved?
Walk in the shoes of your Internal Customer
Is the RFX a positive or negative experience?
Do the internal customers Avoid us or Seek us out?
Do our goals promote collaboration and partnership?
Are we integrated or segregated from our partners?
Work with your supplier to answer an RFP
Do the questions make sense
Does it match what they are hearing from their end customer
Confidential
Where Did We Come From
Long
term
busin
ess p
lans
Decisio
n Poin
t
Supplie
r Risk
Manag
ement
Supplie
r Innova
tion
Supplie
r Manag
emen
t
Stra
tegi
c Sourc
ing
RFP Purchas
e Ord
er
Invo
ice
3 years 2.5 years 2 years 1.5 Years 1 year 180 days 90 days 30 days 30 days late
The transactional space
Confidential
Where are We Going
Long
term
busin
ess p
lans
Decisio
n Poin
t
Supplie
r Risk
Manag
ement
Supplie
r Innova
tion
Supplie
r Colla
boratio
n
Stra
tegi
c Sourc
ing
RFP Purchas
e Ord
er
Invo
ice
3 years 2.5 years 2 years 1.5 Years 1 year 180 days 90 days 30 days 30 days late
The next generation partner The transactional space
Confidential
Regional Board of Education
A discussion with the CIO, CPO and
Director of IT Sourcing
11
Confidential
Supplier Intelligence*
*Remko van Hoek is the Global Procurement Director at PricewaterhouseCoopers and is based in the Netherlands
12
Confidential
Supplier Intelligence*
13
Building
Partnership
*Remko van Hoek is the Global Procurement Director at PricewaterhouseCoopers and is based in the Netherlands
Confidential
Supplier View of Your Company
A lesson from a Sales Manager
Profits
Customers
Partnership, Drive innovation, Best people, ideas and practices
Loss
Grow or Eliminate
High
Worst
Low
Best
Sub Standard Profitability
Reduce Services
Fair and Reasonable Profits
Low cost customer, Innovation engine
Primed for growth
Partner to Drive TCO
Confidential
Leverage Strategy*
Match your strategy to your leverage
Supplier
Leverage
Buyer Leverage
PartnershipTrouble
NirvanaTransactional
Fast, low cost* Lamar Chesney Former CPO Delta Airlines
High
HighLow
Airline Example
- Airport
- Fuel
- Planes
- Engines
- Labor Union
Focus on moving your leverage to partnership
Drive Innovation
Confidential
Marketing Tactics*Awareness of SCM Strategic Value
16
Skills
*Remko van Hoek is the Global Procurement Director at PricewaterhouseCoopers and is based in the Netherlands
Confidential
Roles
CEO
EPS growth
Top line growth
Profitability
Lower risk
Shareholder
Year over year share price growth
Dividends
17
Confidential
CPO to CEO, Delivering on Expectations
“There is no other single function that has such a broad spectrum of
impact than supply management,”
Robert A. Rudzki, President of Greybeard Advisors
18
Susan Avery, MyPurchasingCenter.com
Confidential
Roles
Supplier
Opportunity
Grow revenues
Long term relationship
Low cost customer
Profitable
Reference-able account
Build unique innovation partnerships
19
Confidential
Innovation Sharing
You’re asking me to innovate and then you’re going to
turn around add the idea to the RFP and share my
innovation with everybody
North America Senior Contacts Manager Major Consulting Firm
What do I get for that?
Confidential
Segment products and customers and develop individual
supply chain solutions for respective segments
22
“Game-changing” Supply Chain Ideas
Paul Dittmann, executive director of University of Tennessee’s Global Supply Chain Institute
http://www.supplymanagement.com/news/2013/10-supply-chain-trends-to-boost-shareholder-value/#sthash.FYgvQi40.dpuf
Collaborative partnership with suppliers to increase
revenue
Build a documented multi-year supply chain strategy
(The report claims that only 16 per cent of firms have one)
Integrate processes and eliminate silos
Clear metrics to drive performance measurement
Share, link and interpret big data using analytics tools
Confidential
Drive demand management
23
Paul Dittmann, executive director of University of Tennessee’s Global Supply Chain Institute
http://www.supplymanagement.com/news/2013/10-supply-chain-trends-to-boost-shareholder-value/#sthash.FYgvQi40.dpuf
“Game-changing” Supply Chain Ideas
Focus on talent management
Critical competencies to be able to hire top supply chain talent
Global orientation, leadership, business skills and technical
savvy
Deliver outstanding and innovative goods and services,
drive supply chain excellence, create shareholder value
Confidential 24
Paul Dittmann, executive director of University of Tennessee’s Global Supply Chain Institute
http://www.supplymanagement.com/news/2013/10-supply-chain-trends-to-boost-shareholder-value/#sthash.FYgvQi40.dpuf
“Game-changing” Supply Chain Ideas
A fundamental characteristic of a great supply chain is
for an organization to stick to its core competencies and
outsource the rest to world-class service providers
Mind Sets that block change
Not made here
Winner takes all (eat your young concept)
Not in my job description
26
Confidential
Change Enablers
1.Leadership Team
2.Organization /Infrastructure- Category expertise
- Analytics
- OGSM
*Sourcing Interest Group (SIG) Procurement Transformation on the Fast Track: Doing More with Less, February, 2010
Denali Group John Evans Managing Partner, Alpar Kamber Partner
Confidential
Common Language
ObjectivesLong term solution
GoalsDate and Number
Merit Review and Bonus
StrategiesSpecific actions that you take to meet the Objective
MeasuresMeasure the change
Reward the drivers
Give credit to everyone
30
Confidential
Change Enablers
1.Leadership Team
2.Organization /Infrastructure- Category expertise
- Analytics
- OGSM
3.Clear Vision and Mission
*Sourcing Interest Group (SIG) Procurement Transformation on the Fast Track: Doing More with Less, February, 2010
Denali Group John Evans Managing Partner, Alpar Kamber Partner
Confidential
Trip to moon and safely back
Highway system
Rural electrification
Educational system K-12
32
Vision
Confidential
Change Enablers
1.Leadership Team
2.Organization /Infrastructure- Category expertise
- Analytics
- OGSM
3.Clear Vision and Mission
4.Personal Development- Organized internal and external training program
- Give them a place to go
*Sourcing Interest Group (SIG) Procurement Transformation on the Fast Track: Doing More with Less, February, 2010
Denali Group John Evans Managing Partner, Alpar Kamber Partner
Confidential
Change Enablers
5. Data and Information- Accurate, Complete
- Readily available, Actionable
*Sourcing Interest Group (SIG) Procurement Transformation on the Fast Track: Doing More with Less, February, 2010
Denali Group John Evans Managing Partner, Alpar Kamber Partner
Management by Embarrassment
Confidential
Align with the business
Procurement strategy must align with overall business goals
Contribute to the top and bottom lines
Manage risk systematically
The majority use risk-impact analysis, financial risk
management (such as hedging), and disaster planning as ways
to protect against unforeseen threats.
Tailor category strategies
Leading procurement organizations use more advanced toolkits
while more complex categories will require closer collaboration
or even the pursuit of joint advantage with suppliers.
38
Follow the LeadersAT Kearney review of High Level of Procurement Performance
AT Kearney 2011 study on Excellence in Procurement, John Blascovich, Partner, New York
http://www.atkearney.com/procurement/2011-assessment-of-excellence-in-procurement-study-aep/reaserch/-
/asset_publisher/ljnP1Co3LW7d/content/follow-the-procurement-leaders/10192
Best in Class Others
Sourcing 80% 32%
Cost savings 11.80% 3.20%
Align with Business 85% 37%
Impact on Spend 94% 71%
Risk Management 80% 20%
Standardized Data 75% 45%
Spend Visibility 85% 33%
Confidential
Use supplier relationship management
consistently
A structured process drives strategic value”— by
pointing to improvements in innovation and
growth, better managed risk, and vastly
improved supply chains
Adopt technology
The leaders have more control over what they
spend because they have technology that allows
for more visibility into spending. In addition, most
leaders are fully automated—with real-time
access to data—and are miles ahead in
adopting the kinds of technology needed to
support contact management and compliance.
39
Follow the LeadersAT Kearney review of High Level of Procurement Performance
AT Kearney 2011 study on Excellence in Procurement, John Blascovich, Partner, New York
http://www.atkearney.com/procurement/2011-assessment-of-excellence-in-procurement-study-aep/reaserch/-
/asset_publisher/ljnP1Co3LW7d/content/follow-the-procurement-leaders/10192
Confidential
Win the “war for talent”
All 13 firms are at least three times more forward
looking and bold in their approaches to recruiting
and retaining top talent.
Most have sophisticated recruiting strategies,
including establishing relationships with
universities that offer leading supply chains
programs and using summer internship
programs. And they are more systematic in
managing a more diverse and dispersed work
force—using online collaboration technologies
and offering part-time work and flexible hours
40
Follow the LeadersAT Kearney review of High Level of Procurement Performance
AT Kearney 2011 study on Excellence in Procurement, John Blascovich, Partner, New York
http://www.atkearney.com/procurement/2011-assessment-of-excellence-in-procurement-study-aep/reaserch/-
/asset_publisher/ljnP1Co3LW7d/content/follow-the-procurement-leaders/10192
Confidential
Procurement Imperatives
C-Suite seeks you out
Create, enable and develop innovation from the supply base
Radically improved Procurement skills embedded in the LOB
Understand end to end risk in the supply chain ecosystem
Fully utilize cloud based technology and supplier data integration
Focus on value creation that enables organizational success
Be a Change Agent
www.metaprocure.com
Roy Anderson
Executive Vice President
m. 978.857.3868