presentation #1 a new buy-side view of collaborative · pdf file · 2014-07-09what...
TRANSCRIPT
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Presentation #1
A New Buy-Side View of Collaborative Supplier Development
Marc Rosen, President & COO – Corporate United
Joanna Martinez, Chief Procurement Officer – Cushman & Wakefield
Mark Gillen, Director of Procurement – Under Armour
Andrea Morton, VP of Supplier Center of Excellence – Corporate United
Presenters:
©2014 SAMA Annual Conference
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The Eyes See What the Mind is Prepared to Comprehend
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Key Deliverables & Mobilizers 1
The Journey on the Buy Side
2
Collaborating to Achieve Different Results 3
Panel Q & A 4
AGENDA
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Business Dynamic Many budget holders, which: • Have diverse needs • Multiple processes, often not
followed • Lack of procurement expertise • Have limited visibility of total
spend, preferred suppliers, contracts, related activity across business
Supplier Dynamic High volume of suppliers, which:
• Are across multiple categories
• More knowledgeable in category
• Have relationships in other functions and use to their advantage
Internal Pressures • Reduce headcount • Achieve more savings • Get more visibility & control over
spend • Reduce exposure and risk
Procurement Pressures
• 100’s of diverse categories • Constant evolution of markets and
technologies • Globalization • Regulatory compliance
Indirect Procurement Function • Has limited resources • Has limited buy-in from Functional
heads & senior leadership • Lacks market knowledge • Is reactive & time pressured • Lacks investment and technology
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Category Management
Spend Analysis Sourcing Process
Procure to Pay Performance Management
1. Aggregate Data 2. Data normalization 3. Data classification 4. Review contracts 5. Identify
opportunities
1. Align with stakeholders 2. Determine Requirements 3. Identify Sourcing
Strategy 4. Determine baseline and
evaluation criteria 5. Implementation
1. PO Processing 2. P-card transactions 3. Open order management 4. Expediting 5. Dispute resolution 6. Master data updates
1. Supplier management 2. Demand management 3. Stakeholder collaboration 4. Category strategy 5. Stakeholder satisfaction
1. Continuous Improvement
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Price
Starting point
Price Management
Supply Market
Competition
Volume
3
Current best practice
Ownership costs Obsolescence costs Inventory costs
Total Cost of Ownership
Acquisition cost
Purchase cost
Specifications
Emerging Trend
Price Risk & Sustainability
Usage & Innovation
Process & Working Capital
Total Value of Ownership
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3
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Risk Avoidance Revenue Enhancement
Ease of Doing Business Cost Avoidance
Levers
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Overview of Under Armour, Inc. Founded in 1996 by former University of Maryland football player Kevin Plank, Under
Armour is the originator of performance apparel, footwear and - gear engineered to keep athletes cool, dry and light throughout the course of a game, practice or workout around the globe
Under Armour’s Mission: TO MAKE ALL ATHLETES BETTER, THROUGH PASSION, DESIGN, AND THE RELENTLESS PURSUIT OF INNOVATION
Listed on NYSE: UA Achieved $2.33 billion in revenue in 2013 Product offerings consist of apparel, footwear and equipment for men, women and
youth Distribution channels include wholesale accounts, and direct-to-consumer through
company managed stores and online at www.UA.com Over 7,000 employees worldwide
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Evolution of the Indirect Procurement Function – “Old School” Purchasing vs. Strategic Procurement
“Old School” Purchasing • Myopic focus on cost reduction • Transaction-centric • “Anti-relationship” • Views suppliers as “vendors” who simply serve their organization’s needs • Ideas for improvement driven primarily by internal partners • Non-collaborative
Strategic Procurement in 2014 • Focus on Mutual Value Enhancement • Recognizes the benefits of value-engineering efforts in long-term partnerships • Embraces relationship-building, trust, and the creation of an emotional connection between the buyer’s
brand / product and the supplier’s account management team • Works with suppliers as true partners, driving toward mutually beneficial goals • Relies on suppliers as a major source of innovative solutions • Partners with suppliers’ Account Managers to increase the value-sum gained by all parties
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What is the Definition of Value?
“Value is defined by Under Armour’s
Strategic Procurement Team as being a function of Quality, Service, and Price.”
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Key Steps in Driving Mutual Value Enhancement through Collaborative Supplier Development
Step #1 – Identify a core group of suppliers to engage in robust partnership development efforts
Step #2 - Identify a baseline of mutual value that has been historically achieved
Step #3 - Identify individuals in each organization who are accountable for success
Step #4 – Develop a cadence for tracking progress of initiatives, and measuring value achieved vs. baseline
Step #5 – Begin implementation of collaborative supplier development program
Step #6 – Communicate results and celebrate victories
Step #7 – Sustain ongoing results
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About Cushman & Wakefield
• Cushman & Wakefield is one of the world’s largest commercial real estate services firms. • The company was founded in 1917 and the firm’s major shareholder is Exor, the investment arm of
the Agnelli Family. • Cushman & Wakefield currently has 250 offices in 60 countries, employing 16,000 professionals. • Cushman & Wakefield was named the exclusive leasing agent for 1 World Trade Center, the Freedom
Tower, by the Port Authority of New York and New Jersey. • The Corporate Investor and Occupier Services (CIS) Division manages investment and owner-
occupied properties across the globe.
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On the tactical side… • If you’re responding to an RFP online
– Register in advance – Practice – Ask questions if given the opportunity
• Ask how responses will be weighted • Don’t try to upsell before we’ve done the first deal • People are expecting us to deliver (sometimes unrealistic) cost reductions. If
that’s not possible, help us understand the value proposition. • “Years of experience” is not a value proposition
Help me make a decision… Innovation? What sets you apart from your competitors? What value do you add that
no one else does?
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Portfolio Analysis Tool
Relative Market Difficulty
Relative Spend
Critical Strategic
Acquisition Leverage
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From a strategic viewpoint…
• Do what you say you are going to do • Use the knowledge that you gain from working
with the firm to help us make improvements • Take a Supply Chain view – there are
opportunities upstream and downstream. • The more embedded you are… the higher the
hurdle rate to change • Give us that Innovation – help us bring something
new, to our clients. Increase the Value Proposition.
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1. Building stronger more committed supplier relationships for CU and our members
2. Collaborating with suppliers to reinforce their value and increase their ability to retain customers
3. Increasing customer satisfaction by
supporting their contract and performance management initiatives Delivering CONTINUOUS VALUE to our stakeholders
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BEING VIEWED AS STRATEGIC PARTNER Small Steps that can Make a Big Impact
• The Business Review as we know it is dead • Need to move from operating as tactical vendors to
strategic partners through understanding TCO • Take a Business Advancement Meeting mindset &
strategy • Change doesn’t happen overnight, but you can take
small steps NOW to get there
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- The customer does not bring additional stake holders to the
meeting - They are not interested in hearing
about new products & services - They usually just have me email the
business review
- The supplier does bring anything new to the meeting
- Reviews are not supported by the suppliers management team or SMEs
- I am not sure the suppliers understand our business and its
goals & objectives
The Business Review Impasse
The voice of the suppliers The voice of the customer
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4 Small Steps to Developing a Business Advancement Strategy Now
1. Data Dump
• Send data in advance • Spend time during the meeting on more strategic agenda
items
2. Education • Demonstrate interest in knowing about customers company &
department goals and objectives • Apply the knowledge to be creative on ways to innovate new
solutions.
3. Transparency • Begin profitability discussions which strike at the heart of
sustainability • Demonstrates a level of partnership that goes well beyond
tactical procurement initiatives.
4. New Value • Continue to bring value that goes beyond just lowering the piece price
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1. Cost Driver or Program Improvement
2. Define existing and desired state 3. Make suggestions on how to move to best in class
Generic Utilization
Specialty Management
Network Utilization
Wellness Programs
• Recommendation 1 • Recommendation 2 • Recommendation 3
• Recommendation 1 • Recommendation 2 • Recommendation 3
• Recommendation 1 • Recommendation 2 • Recommendation 3
• Recommendation 1 • Recommendation 2 • Recommendation 3
Current Position
Best-in-Class
Current Position
Best-in-Class
Current Position
Best-in-Class
Current Position
Best-in-Class
Solution
Impact
Disruption / Cost
Solution
Impact
Disruption / Cost
Solution
Impact
Disruption / Cost
Solution
Impact
Disruption / Cost
4. For each suggestion, present the solution, the relative price / efficiency impact, and the “pain” in achieving the result
How do you continue to bring value to the table that goes beyond just lowering the piece price?
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A New Buy-Side View of Collaborative Supplier Development
Marc Rosen, President & COO – Corporate United > [email protected]
Joanna Martinez, CPO – Cushman & Wakefield > [email protected]
Mark Gillen, Director of Procurement – Under Armour > [email protected]
Annie Morton, VP of SCOE – Corporate United > [email protected]
Presenters: