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Rethinking how Supply Chain
Management Creates Value
Market Disruptive Solutions:
JLL
Denver ClarkChief Procurement Officer – Americas
Jonathan TuckerSr. Manager, Strategic Sourcing
Yardi
Mike RooneyIndustry Principal
sig.org/eval
Market Disruptive Solutions: Rethinking
how Supply Chain Management Creates
Value April 21, 2016
Denver Clark
Chief Procurement Officer- Americas
JLL
Proprietary & Confidential 3
Denver Clark
Chief Procurement
Officer – Americas
Denver.Clark@am.jll.com Jonathan.Tucker@am.jll.com Mike.Rooney@yardi.com
Mike Rooney
Industry Principal
Jonathan Tucker
Sr. Manager
Strategic Sourcing
Proprietary & Confidential
Session Objectives
• Introduction and Background
• Explore the concept of supply chain value creation
• Review traditional approaches and thinking
• Share experiences of the session group
• Case Study: Tailoring your strategy to your business - JLL unique approaches
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Proprietary & Confidential
Who is JLL?
Americas
7 countries
95 offices
EMEA
27 countries
69 offices
Asia Pacific
15 countries
64 offices
2015 gross revenue
$6.0B
S.F. under management
3.4B
Employees
58,000
Corporate offices
230+
LEED APs
1,300+
Six Sigma Green or Black Belts
390
Platinum 400 Best Big Companies
2006, 2007 and 2008 (U.S.)
2015, 2014, 2013, 2012, 2011, 2010, 2009 Global outsourcing
100 list
Only real estate firm listed seven years running
JLL provides commercial real estate
strategy, services and support to
organizations around the globe
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JLL Services Overview
• Agency Leasing
• Capital Markets
• Corporate Solutions
• Facility Management• Investment Management
Full Spectrum of Commercial Real Estate Services
• Investment Sales
• Lease Administration
• Project and Development Services
• Property Management• Tenant Representation
• Transaction Advisory Services
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Maximize JLL’s Procurement Power
Facilities Management Property Management
Project Management JLL Corporate
All JLL Spend
Financial benefits for JLL & its Clients
Productivity gains
Differentiation advantage
Total 3rd
Party Spend $ 30B
Core Countries Estimated
Addressable
75%
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350 SCMP staff dedicated to sourcing, procurement and
contract management activities
JLL Central Team
Dedicated Client Accounts
VSC
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Stage 3Stage 2Stage 1 Stage 4
• Localized decision-making
• Operational silos
• Transactional purchasing
• Integrated by geography
• Momentum, applying leverage
• Build capabilities – function &
stakeholders
• Supplier Performance Management
• Integrated across business
• Localized execution
• Formalized Category Strategies
• Deep Supplier Relationship
Management
• Cross platform – business
lines and geographies
• Centralized strategy, localized
execution
• Key suppliers integrated with
business
Val
ue
Co
ntr
ibu
tio
n
Level of Maturity
Supply Chain Evolution and Value
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Traditional Approaches to Value Creation
Align procurement and finance to manage cash effectively
Generate savings and extract more value through effective buying
Implement rebate and supplier incentive programs
Improve processes to gain productivity
Leverage the Supply Chain to Create Growth
Outsource Effectively to reduce overhead costs
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Group Discussion and Sharing
What approaches and strategies have you used? What has been most effective?
Supply Chain Value Generation
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Supply Chain Value Extraction
Market Disruptive Solutions
Suppliers become partners and thought leaders
Share in risk and share in reward
Competitors collaborate – skin in the game
Break the rules of
traditional business
relationships
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Solve common
challenges and gaps
with unconventional
solutions
Supply Chain Value Extraction
Market Disruptive Solutions
Make technology your secret sauce
Brand your solutions
Create new markets and demand
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Supply Chain Value ExtractionMarket Disruptive Solutions
Buyers become customer of choice
Suppliers become trusted advisors
Totally shift the
buyer-supplier
paradigm
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Supply Chain Value Extraction
JLL Case Study
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JLL Case Study – What were we solving for at the core?
• What is the Opportunity?- 3.4 Billion SF under management
- $30 Billion in 3rd party managed Spend
- $12 B Project Spend (US)
• How do we get at it?
- Increase centralized activities
- Add new platform capabilities
- Increase the size and talent on central team
- Differentiate JLL in our industry
Transformation of the Supply Chain Management team and platform
• Specific Areas of Development and Gap Closure addressed in 2015:
- Leveraged Savings and Service
Multi-Account Group Bidding
MRO/Products Spend
- Best in Class partnerships
Supplier Relationship Management
Supplier Advisory Councils
- Differentiating Support and Value
Improved Supplier Risk Management Platform
Create new revenue generating services
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JLL Supplier Advisory Councils
• Security Guarding
• Facility Trade Aggregator
• Janitorial
• Exterior Services
SRM
Customer
Satisfaction
Strategy
Alignment
Risk
ManagementInnovation
Corporate
Responsibility
Council
Service Level
Optimization
JLL SCMP has formed and chairs strategic, collaborative councils of our most strategic suppliers in
several key service areas as shown below.
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Multi-Client (Group) BiddingLeverage many JLL managed sites
Utilize advanced Sourcing technology
Formal Project Management processes
Deliver SME resources
Centrally managed while maintaining local decision making and controls
Reduce Supplier Cost of Sales
Proven Results of
10-20 %
Additional Savings >
single portfolio
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JLL Vendor Portal
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Comprehensive Supplier Screening and Risk Management
Challenge: Quickly centralize and standardize the critical process of supplier screening, on-boarding, and COI assessment and monitoring across a huge supplier base and dozens of independent client teams
• Needed to close gaps rapidly dictated an industry partnership and innovative technology
• Very unique client facing environment dictated a new business model
• Existing budget had no money to develop a new type of program
• Solution: A market changing industry partnership with Avetta which provides technology and professional resources, JLL manages the program with internal stakeholders and develops unique compliance requirements
• Once successfully registered and screened, the supplier is eligible to work on any JLL accounts within a country provided that they produce a compliant COI for each client.
• Suppliers increase their exposure within JLL and more easily and quickly qualify for additional work with JLL
• Avetta technology investments, supplier funded platform, revenue share to JLL
Academy 2016
Unlock the Power of JLL
Value Creation: Sourcing Services
Industry Experience
Functional Sourcing Expertise
Strategy Development
Tools: SpendHQ, e-RFX
Contract, Relationship
Management
Supplier Screening
Scalable Sourcing Services
Expertise
Compliance Performance
• Creates direct revenue stream
• Expands current client relationships
and creates new clients
• Grows business with strategic suppliers
Proprietary & Confidential
What is JLL Marketplace?
• Platform integrates strategic vendors into one integrated market place
• Technology is backed by fully leveraged contracted pricing with manufacturers and distributors
• Individual user accounts with personalization – Favorites, saved GL codes, ship-to addresses, etc.
• User Interface based on end-user feedback - ease of use being top priority
• Consolidated invoicing – one invoice per order form multiple suppliers
- MRO
- Jan/San consumables
- Construction supplies
- Office Products
One-stop shopping for commercial real-estate and FM
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Value Extraction – Case StudyDisruption with Edginess
Complete Transparency
• JLL contracts directly with the manufacturer to get
pricing.
• JLL contracts directly with distributor with margin
transparency and uses selected manufacturer
contract
• Distributor enables contract pricing with JLL
Marketplace with the help of Yardi
• All sales information is made available to the
partners
• JLL shares competitive baseline if pricing
adjustments are needed
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Proprietary & Confidential
Value Extraction – Case StudyDisruption with Edginess
Transaction
Partnership
Taking relationships from Transaction to Partnership
• Moving from unit price >>> program solutions
• Push to Customers vs Pulling in Customers
• Product purchasing from strictly cost to pure differentiation
How this looks on JLL Marketplace…
• Collaboration between 9 different fortune 500
manufacturers and distributors and Yardi, our solutions
provider
• One price for all of JLL
• No more “one off deals” to buy a specific opportunity
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Value Creation – Case StudyDisruption with Edginess
Challenge JLL Marketplace Solution
Not all clients are the same, we can’t make
everyone happy
Complete transparency in communication with
partners. Treat every lost opportunity as a
learning experience and view correction as
mandatory if reasonable, manage optics and
messaging.
End-user pushback – “I have my own
relationships”, “I have been using my local guy
for years”, “Supplier XYZ is too expensive”
Make integrations with suppliers “vanilla”.
Moves conversation from a “supplier program”
to a “JLL Program”. Also gives common cause
amongst all partners to sell “JLL” vs their
individual company
Technology and Implementation Costs- sounds
great but I don’t have the budget
Shared cost model. Have partners pay for the
technology and a JLL program manager.
• Partners get compliance and exposure
• JLL gets “free” technology platform
• Yardi is made whole
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Value Creation – Case StudyDisruption with Edginess
Challenge JLL Marketplace Solution
Multiple players, how do you coordinate the
transactions and share tactical support?
Yardi becomes the aggregation point. We even
partnered to provide customer service,
receivables, and implementation support.
Only large corporate suppliers can do this, what
about diverse partners?
Yardi is a minority owned company. Yardi takes
on the receivables and sends consolidated
invoices to our clients.
My partners only want to make an extra dollar Relationships are key, especially when your
business depends on 3rd party providers.
Standing calls to “catch up” and making yourself
available while demanding reciprocal treatment
from supplier reps is a must.
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Value Extraction – Case Study
Summary of Programs Implemented in 2015
• Created a completely new
and unique supply chain
channel
• Disrupted current business
models
• Created massive leveraging
and new business
opportunities generating
revenue for JLL and partners
• Rapidly closed a gap with
little
JLL investment.• Powered by an industry
leading technology/partner
with a fee share to JLL
• 100% supplier funded
• Brings consistency and
efficiency to process for
suppliers
• Creates tremendous value
and opportunities for
suppliers
• Annual fee model for
participation
• Key KPI for success:
supplier revenue growth
• Multi-client group bidding
drives admin fees
• Sourcing Services and
Consulting – variable fee
models create revenue
• Grows the business
Supply
Chain
Value
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Value Extraction – Case Study
Benefit Projections
2015 2016 2017 2018 2019
$1M $3M $5M $7M $10M
• 2015 Reflects Q4 Throughput Only
• Out year projections based only on growth of current programs
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Supply Chain Value Extraction
Closing Thoughts and Q&A
Identifying the opportunities in your business
Associating Revenue to true Value Add
Solutions
Broaden the view of who the client is
Drive consistent change management and
messaging internally and externally
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Thank you
Contact:
Denver Clark
Chief Procurement Officer- Americas
JLL
Denver.clark@am.jll.com
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Denver Clark
Chief Procurement Officer- Americas
JLL
Denver.clark@am.jll.com
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