If you can't read please download the document
Upload
jalila
View
41
Download
0
Tags:
Embed Size (px)
DESCRIPTION
Procurement Plan Client. Place, date Version x. We thank the following people for their constructive input at the interviews: xxx : function Xxx: function. Procurement plan: process. Problem definition and data collection. Wx. Data analysis SiPM. Interviews Stakeholders. - PowerPoint PPT Presentation
Citation preview
Procurement plan: process*Wx+3Wx+2WxWx+1Wx+1Wx
Objectives Procurement PlanScan of current procurement (department)BenchmarkOpportunitiesBarriers to changeOptionsAdviceMission, incl. potential ()StrategyProcurement Organisation structure incl. R&R
*
Process*Step 2: options and advice
Mission procurement department (LT measurabel goals)Strategy to achieve missionOrganisations structure, R&R and function profileShort-term action plan
Executive SummaryMax 3 bullet points (examples)If client does not invest in procurement, they will be outperformed by competitors*There is no procurement department, merely an order departmentxxx
Strategic procurement will lead toComulative DCF of xxx, which will double(?) the current marginImproved risc management by process driven as opposed to current ad-hoc appraochxxx
Current procurementIs operational, not strategic nor tacitcal Manages only 18% of total expenditureLacks essential procurement knowledge and support for new role. There will be external recruitment
* = Status quo scenario*
Copyright 2008 SiPMwww.sipm.com
*INTRODUCTION: METHODOLOGY USED
*SiPM procurement benchmark: main view0%5%10%SavingsTime= 10% net reductionin total expenditure
Benchmark is based on WINS programWorld-Class Innovative Sourcing programYearly Objectives setting in function of long-term planEvolution as opposed to revolution (continuous improvement)Simultaneously, disciplined and ruthless execution of 2 main steps:
*What % of expenditure is being influenced by procurementHow professional do we *1 manage expenditure (people - process - systems, Measured on 8 segments). * 1: throughout the company2. procurement coverage1. Skills
WINS program** 94% of other companies worldwide in catching-up phase
Definitions Procurement process can be splitted into strategic/tactical/operational
*
Copyright 2008 SiPMwww.sipm.com
*INTERNAL ANALYSIS
Scan: Skills and Coverage*1. Skills2. procurement coverage
SkillsStrategic intent
Max 3-5 bullets based on interviewsIn absence of plan, lack of accountability and focus:xxxNo sense of urgencyConservative culture, difficulties with change
Leadership Procurement
xxxXx
*
Support of Tactical procurement process
Mainly ad-hoc, few structureXxx
4. Supplier Selection process
Xxx
*Skills
Supplier relationship management
Xxx
Strategic Cost Management
xxx
*Skills30%70%Here is the prize to be taken. Seems easy but many companies fail.
Current focus
Capital productivity
Xxx
Operational Process
xxx
*Skills
TopicTime spend %Strategy0%Selection process20%Continuous Improvement0%Operational tasks80%100%
*GoldSilverBronzeSkills: summarySummary (max 3 bullets)
Scan: Skills and Coverage*1. Skills2. procurement coverage
x% of turnover is being spent with suppliers*Conclusion:xxx 25%38%xM
xM is relative easy/difficult to manage There are x suppliers x % suppliers x% expenditure *Conclusion/advice:20 leveranciers = 64% uitgaven
xM is relative easy/difficult to manage x categories cover y % of expenditure *Conclusion/advice:
Coverage of total spend*Conclusion:
WINS: combination Skills and Coverage*
Conclusion Internal AnalysisProcurement Client has relative low/high benchmark scorexxx
xxx**: reduction workingcapital, kaizen, performance measurements)
Copyright 2008 SiPMwww.sipm.com
*OPTIONS & ADVICE
*SkillsCoverage0%40%80%BronzeSilverGoldSiPM has developed 3 options
Options*
1. Logistic partner 2. Strategic Procurement 3. Supply Chain leadershipObjectivexxxLowest total costsXxxInnovative netwerk of suppliers: fast TTM, product developmentOutput Procurement will diliver:Xxx Procurement will diliver:Supplier selection and improvementXxx Procurement will diliver:XxxOrganisation HybridXxxTitle: replenisher Central procurement xxx Title: Procurement Manager:Senior buyer Central procurement > 80% of spend via procurement XxxTitle: Director of SupplyTime to implement 2 year 3-4 year 5 - year
Option 1: Logistic partner*Mission: By 2012, xxx
Strategy: xxx
Organisation: xxx
*Mission: By 2012, xxx
Strategy: xxx
Organisation: xxx
Option 2: Strategic Procurement
Mission: By 2012, xxx
Strategy: xxx
Organisation: xxx
Option 3: Supply chain leader *
NPV and Discounted Cash Flow option 1, 2 and 3*Investment in organisation limited return in jaar 1Option 1 mainly process improvement: traditionally savings are difficult to measureOption 3Option 2
Impact on nett margin option 2 and 3*Current xkOption 3Option 2
Pro & Cons 3 options*
1. Logistic partner2. Strategic Procurement 3. Supply Chain leadershipPro xxx Investment: x xx Investment: y xxx
Con xxx xxx xxx Investment: z
*Advice SiPM xk cumulative DCF * on 5 years
Investment : 1 manager, 2 buyers and 1 assistent.
Simultaneous improvement of skills and coverage (3-4 yr evolution revolution)
SkillsCoverage0%40%80%BronzeSilverGold* = nett, including investment in new organisation
Short-term actions (6-9 months)Recruitmentxxx
Next:
xxxXxx*ComplexityHighLowHighLowPotentialStart with these categories
APPENDIX*All calculations are in excel file
Option 2: Profile Procurement Managerxxx
Xxx
xxx
Xxx
*
*Financials
*Financials- Gross and nett = exc. and inc. costs of new organisation Savings = bottom line impact. Only 34% of traditional savings calculations are visible at the bottom line, hence multiply the figures times 3 to compare them with other companies.
*Financials
*Financials
*Double of current profitSavings: 2nd benchmark Next to WINS benchmark, there is a 2nd detailed benchmark Results are similar: in year 5, the margin would xxx
Coverage: definitions and methodologyDefinitions
Which of the following tactical steps can be influenced by procurement?
Methodology
Source: buyers (Interviews and questionnaire)
*
Definition
By buying smarter, you will be buying more efficient, cheaper and be protected against market fluctuations. We have been measuring your procurement against a benchmark on 8 different topics, ranging from strategic intent to supplier relationship management.
Methodology
Interviews + questionnaire
*Skills: definitions and methodology
*Central organisation: tactical process mainly (>60% of spend) driven by procurementDecentral organisation: tactical process mainly (>60% of spend) driven by local departementsHybrid organisation: For a number of categories, the tactical process is managed by procurement, for other categories by the local departmentsAll structures but the central structure are suboptimal in terms of efficiency. However, this does not imply that other structures are not good. A hybrid structure for example is the most desirable options for most multinationals, as this currently fits better with the culture of the company.Organisation: definitions
*****************************************