02_achieving global sourcing and procure-to-pay success at heinz

7/28/2019 02_Achieving Global Sourcing and Procure-To-Pay Success at Heinz

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How H.J. Heinz Uses SAP Sourcing 7.0and SRM 7 for Procurement Excellence

Christopher Yope



Background

• Global SRM & eSourcing Lead at H.J. Heinz

• 8+ Years SAP Experience

– SRM

– ECC – SNC

– eSourcing

• Levera ed diverse ex erience and dee functional knowled e to hel

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drive business transformation for Heinz• Successfully helped roll out many implementations across the global

Heinz organization



Introduction to Heinz

Founded in 1869 in Pittsburgh, PA by Henry John Heinz

Today, headquartered in Pittsburgh and famous on six continentsfor its iconic brands

With products in more than 200 countries around the world, Heinzis the most global U.S.-based food company

The Heinz brand is a $4+ billion global icon

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.

Global Spend of $4.5B+

Key Heinz markets

North America

Europe

Asia Pacific

Rest of World



Leading Heinz Brands Around The World

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In This Session …

• Understand how SAP SRM and SAP Sourcing fits intoHeinz’s Global Procurement Strategy

• Hear results delivered and benefits obtained by

implementing SAP SRM and SAP Sourcing

– Global Business Transformation, Not SystemsImplementation

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– Spend Visibility Metrics and Compliance – Project Savings Management and Reporting in the tool

– Improved contract authoring, management, and

reporting• Learn best practices when it comes to leveraging Key

Users, global standardized processes, and acceleratedtimelines



Heinz’s Path to World Class Procurement

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Developed our

Strategy Invested in

our People &Processes

Implementing the System Backbone



Establish the Foundation

• Get Ca abilities Current with Com etition

What is Keystone?

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Platform for Future Growth

• Globally Upgrade & Integrate Business Processes

• Standardize IS Platform in SAP

• Drive Visibility, Productivity and Efficiency



How SAP Supports the Procure to Pay Process

Keystone Procure to Pay Benefits

Establish Business

Requirement

Develop

Sourcing

Strategy

Negotiations /

Contracting Place OrdersReceive Goods

/ ServicesPay Supplier

Manage / Continuously Improve

Supplier Relationship

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• Full visibility of spend

• Proactive compliance via effective workflow and improved buyingtools

• Increased buyer effectiveness through touch less PtP transactions• Common and measurable global PtP process

• Platform to enable global sourcing

• Standard global metrics and reporting



Keystone Global Implementations

ECC

Direct Procurement

SRM

Indirect Procurement

US,Europe

ContinentalEurope

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E-Sourcing

Sourcing, Projects and

Contracting

North America, Europe, India

Indonesia, China, Australia, New Zealand



How SAP Enables Savings At Heinz

Negotiated Spend• Full use of 7 step process• Highly utilizes catalogs (65%)• Focus on demand management

• Tailwind savings $

Non-negotiated Spend• Little procurement involvement• SRM improves spend visibility• Procurement negotiates to shift

5-20% Savings

Negotiated Savings

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Maverick Spend

• Should be negotiated• Leverage SRM to shift

• Catalogs• Process control team• Reporting

Key Drivers• Proactive compliance• Greater spend visibility• Catalogs (target 80%)• Significantly improved

reporting

Compliance



The SRM Value Proposition

• Easier shopping experience

• Online, catalog driven shopping

• Better reporting and visibility

• Spend by individual / cost center / stakeholder

• Compliant / non compliant spend, opportunities

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by stakeholder, category, vendor

• Improving compliance proactively through completionworkflow



Success To Date

• Stable solution, scaling globally while increasing capabilities

• Creating visibility and opportunity

– ~3 Years since 1st go live

– 40+ sites, 9 countries

– 1600+ requesters, 800+ approvers

– $1B+ in spend annually

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– ~65% transactions on catalogs



Global Functionality Benefits

• Global System, Global Processes

• Resources can focus on delivering incremental capabilitiesfor the business

• Enhancements impact all regions - do it once, get it globally• Learning around training and change management carryforward

• UKI

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• Catalogs, Standardized Workflow, BI Reporting, BlackberryApproval

• US

• Standalone Implementation, Reporting Improvements

• CE (Continuous)• Plant Maintenance Integration, Supplier TransactionalPortal

• Italy

• Support Pack Upgrade, Deployed In Italian



External / Internal Catalog Benefits and Drivers

• Internal Catalogs using SRM MDM

– Increases transaction efficiency

– Fully populates shopping cart with required data

– Streamlines the end user experience – Drives the spend with strategic suppliers

– Guarantees Heinz contracted price

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• External (Punch Out) Catalogs – Web enabled buying experience

– Highly enabled shopping list

– Supplier managed

– Elevated shopping experience

– More complex catalogs, quoting and functionality



Workflow / Blackberry Approval

• Completion workflows enables the procurement organizationalto be involved in non-strategic spend

• After completion workflow, routes via the HR hierarchy

• Simplified 6 level globally standard approval process – Eliminating non value added approval levels

– No exceptions

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• om na se approva or a users

• Allows the use of Blackberry approval for shopping carts



Usage of BI and Reporting

• Full spend visibility and segmentation into what we spend, withwho, and how

• Easy compliance tracking

• Enables significant standardization• Improves financial forecasting and planning

• Available to all users

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• Ease of use• Fully exportable to Excel

• Highly customizable

• Standardized spend classification, descriptions



Plant Maintenance Integration

• Utilizes a robust workflow platform built and leveraged inprevious roll outs

• Enables maintenance in one global system versus multiple

regional instances• Simplifies the reporting metrics as they have already been

delivered

•

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solutions for a robust integration• Enhanced buying experience through the use of catalogs

– enabling further sourcing from strategic suppliers.



Enabled Electronic Transactions

• Investing in XML communication for high transaction volumesuppliers

• 3rd Party hosted portal for mid tier suppliers

• Integrated transaction include: – PO

– PO Confirmation (converts email to requisitioner)

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– nvo ce



SAP Sourcing Scenarios and Landscape

• Business Scenarios Implemented: – RFI

– RFP

– RFQ – Auctions

– Project Management

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– Contract Lifecycle Management

– Supplier Self Registration

• Single Global Application

• SAP Sourcing On Premise (Ramp Up) – Better Heinz Infrastructure Fit



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

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• ow s an ar o wor w

• SAP SRM Replication

– Custom program to get vendor master from the SRMstandalone locations



Global Roll Out Timing

• Accelerated Rolled Out Ahead of Global ECC

• Initial Go Live: July 18th US and Europe

• Further successful rollouts:

– Canada – September 2011

– Indonesia – October 2011

– India – October 2011

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– China – December 2011 – Australia – December 2011



Metrics

• 350+ people trained

• 100+ Strategy projects being managed in the tool

• 350+ Sourcing Projects

• $1.5+ Billion tendered

• High level of adoption globally

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Project Management Design

MarketAnalysis

3Stage

BusinessNeeds

2Stage

PortfolioAnalysis

1Stage

Gate Review 1 Gate Review 2 Gate Review 3 Gate Review 4

4Stage

StrategyExecution

StrategyImplement’n

5Stage 6Stage 7Stage

StrategyDevelopment

ContinuousPortfolioImprovement

Create understanding of the portfolio

Establish Business Needs: short, med and long term (5 yrs)

Understand supply market

Agree the appropriate strategy

Secure agreement and contract

Effect delivery of the strategy

Ongoing delivery against business needs and our Procurement goals

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• Used the Heinz Global 7 Step Sourcing Process as ourFramework

• Built into the Schedule Tab

– Templates, Attachments, etc.



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 –

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• 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



Project Management Workflow

Strategy Project Workflow

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Sourcing Project Workflow



Project Management Financials

Financials Tab – the bottom portion of

the tab allows the entry of the one-time

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, ,

allocation.



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

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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



Auctions Design and Details

• Leveraged standard SAP configuration for auctions types

– Created variants when it comes to anonymous or leadingbidding

• Made adjustments to what fields are on the schedule area forsimplicity

– Still allow for flexibility around auction closes

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• ra ne ou es prac ce o go ng rom a pro ec n o an auc on o

carry over the relevant data

– Efficiency in setup



Contract Lifecycle Management Design/ Details

• Enabled 4 types of contracts: – Indirect Master Agreement

– Direct Master Agreement

– Master Service Agreement

– Confidentiality/NDA Agreement

• -

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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



Contract Lifecycle Management Benefits

Legacy

• No Electronic Storage

• Paper BasedApprovals

• Labor Intensive Audit

SAP Sourcing

• Global Repository

• Electronic Approvals• System Generated

Audit reports

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• 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

rocess



Global Reporting

• Previously, Heinz did not have an ability to report out dataconsistently

– 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

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• ey repor s nc u e -

– 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



Bolstering Adoption

• Strong Executive support – Usage / training mandates essential

• One set of globally consistent process

– The whole Heinz procurement world on same tool / samemetrics

• Regional Administrators

–

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• Key users

– Engage early

– Give them additional training

• Training – Instructor led

– Simulations



Lessons Learned

• Enroll executive support and make sure your programis driven from the top

• Establish Key User network early

• Metrics and reporting are big value drivers for thebusiness

• Ensure users are trained before go live

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• Communicate, over communicate, then communicatesome more

• Value comes from increased visibility of globalprojects and savings

• Global Template – Build it once, get it globally

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02_achieving global sourcing and procure-to-pay success at heinz

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