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"Change" is the New Normal - Building a Sustainable Strategic Sourcing Program | Ariba LIVE Rome
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"Change" is the New Normal - Building a Sustainable Strategic Sourcing Program | Ariba LIVE Rome

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The saying goes, “The only constant is change.” This is all the more true when it comes to sustaining a strategic sourcing program. With rising commodity costs, globalization, and regulatory …

The saying goes, “The only constant is change.” This is all the more true when it comes to sustaining a strategic sourcing program. With rising commodity costs, globalization, and regulatory pressures, procurement teams struggle to sustain savings alongside a plethora of tactical responsibilities.

Join this session where industry leaders will share how they navigate and manage their strategic sourcing programs in today’s ever-changing environments.

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  • Whilst the key motivation behind embedding sustainable procurement is to use the firms vast supply chain to generate a positive impact, there are also real tangible benefits to the firm of procuring sustainably.PWC research has identified that Sustainable Procurement could yield economic benefits to a Firm through “Risk management, cost reduction and revenue growth” Risk managementWith the firms substantial supply chain, exposure to reputational damage is inevitable. I’m sure you can all recall examples where brands have been damaged due to unethical practices. By having a robust Sustainable procurement policy we reduce the likelihood of unethical practice within the supply chain.Cost reductionCost reduction through Sustainable Procurement is often achieved by assessing the whole life cost of a product which can often be more advantageous to the Firm in comparison to less sustainable options. Lets take a very simple example. energy efficient light bulbs have a higher purchase price, however, they burn less electricity and will considerably outlast a traditional light bulb.Revenue GrowthSustainable procurement is also integral to the Firms long term revenue growth. A lot of our work comes via engagements with Public Sector clients where vendor selection is often subject to very stringent requirements in terms of sustainability credentials. Embedding sustainable procurement within the Firms processes will help protect that very important revenue stream.Increasingly we are also seeing a Firms green credentials as a way of differentiating ourselves in the marketplace, and ensuring we have an active and meaningful sustainable procurement policy will help us build the image of the “distinctive Firm”. Research has also shown that a Firms sustainable image and commitment to managing their environmental and social impacts are key in attracting talent, particularly amongst graduate recruits. Improving our sustainable procurement credentials will ensure we continue to attract the brightest talent to our Firm.Public sector requirementsDifferentiation in the private sectorAttracting talent
  • Introduce main KPI’s (Spend coverage and Technology split)Key point: It takes a constant flow of new initiatives to continue increased adoption!Top priorities for 2014:Expand Technology portfolio! Increased CAPEX supportERP Integration to drive uniform adoptionAwareness initiatives and reporting on e-sourcing value add!!!The real target is 15 billion in 2015!!
  • Change Management Initiatives:Management commitment!Training and awareness/newslettersEase of use – integration to ERP and ongoing system improvements (e.g. ZIP file upload)Strategy sessions – sometimes over-complicate things a little
  • Hi, my name is Andrew Gill. I’m responsible for Reed Elsevier’s eSourcing in Europe and the Rest of the WorldIn the next ten minutes or so, I’ll tell you a little about Reed Elsevier and give you a whistle-stop tour of Due Diligence Program – what is it, why we have it and how we made it happen.If you’re already using your eSourcing tool to support Due Diligence, then this may help reaffirm the belief that you’re not crazy and other people are doing the same things as you. If this is new, then it will give you insight into our programme.Copies of the presentation are available after, but I promise not to read word for word from the slides, so feel free to take notes, and there’s time for Q&A at the end of the session.
  • 28,000 Reed Elsevier People32 Countries$9.42bn 2013 revenue#4 Digital Paid Content / $1.4bn revenue Big Data servicesPrioritise Corporate ResponsibilitySpend $3.2bn excluding wages, finance costs, rent etcSUM 55%
  • At Reed Elsevier, Due Diligence touches a number of different areas. For example, more traditional topics such as Financial Health and Well being as well as newer topics such as Preventing Bribery and Environmental Impact
  • We’d had a Code of Conduct for Suppliers and people that specialised in Corporate Social Responsibility for some time, but in 2012, we noticed an upturn in RFPs we were responding to including questions about our approach to Due Diligence. As a supplier to the US Government, we’re mandated to have a certain level of spend with Diverse SuppliersWe also had pressure from our own people to do the right thingRegulatory concerns – FCPA and UK Bribery Act
  • So what have we developed....
  • Partnered with a LexisNexis to develop SmartWatch, a tool that monitors a wide range of critical risk categories including financial, political, legal, environmental, etc and gives you a dashboard showing what’s happening with your supply chain by loading in your suppliers and the countries they’re based in, or operate fromNow this isn’t meant to be a plug for our products, but as the English say ‘if you’ve got it, flaunt it’
  • Ariba alert in Diligence. Daily email
  • Having a DD program in place helps us be more successful by making us eligible US Government business, it’s helped us win new business and mitigate risk by ensuring continuity of our supply chain
  • Click the schedule icon,  select Full Schedule, select the day your session occurs at the bottom, and search on the session titleYou can also click the speaker icon and search for session speakers to find the sessionClick on the session to bring up detailsYou’ll see 3 tabs on the page, Details, Speakers, and Surveys, as shown on the slideClick on the Surveys tabClick on Breakout Session SurveyRespond to survey and click submit
  • Transcript

    • 1. #AribaLIVE "Change" Is the New Normal - Building a Sustainable Strategic Sourcing Program @ariba Speakers • Geoff Elliott – Deloitte • Jacob Larsen – Maersk • Andrew Gill – Reed Elsevier Moderator: • Sundar Kamakshisundaram – Ariba, an SAP Company
    • 2. Agenda • Introduction • Panel Discussion • Key Takeaways • Q & A © 2014 Ariba – an SAP company. All rights reserved.2
    • 3. © 2014 Ariba – an SAP company. All rights reserved. Change Is the “New Normal” Inevitable Accelerates Innovation Improves Agility 3
    • 4. Global Trends Are Driving Change in Sourcing and Procurement 4
    • 5. Top Challenges for CPOs © 2014 Ariba – an SAP company. All rights reserved. Source: 2012 CPO Agenda, Aberdeen Group 61% of you will have increased cost savings targets 44% of these targets will be greater than 5% Creating procurement process efficiencies is the top priority for CFOs and CPOs 5
    • 6. Key Levers to Maximize Savings © 2014 Ariba – an SAP company. All rights reserved.6 Increase “Spend Under Management” (SUM) Accelerate Strategic Sourcing Efforts Drive Contract Compliance to Prevent Leakage Practice Continuous Improvement
    • 7. Agenda • Introduction • Panel Discussion • Key Takeaways • Q & A © 2014 Ariba – an SAP company. All rights reserved.7
    • 8. © 2014 Deloitte LLP. All rights reserved. Sustainable procurement How procurement contributes to corporate objectives Geoff Elliott 9th April 2014
    • 9. © 2014 Deloitte LLP. All rights reserved. Content • About Deloitte; our business, our people, our values • Procurement structure at Deloitte • Sustainable procurement at Deloitte; policy and practice • Our Green Journey; targets and achievements • Social Pioneers programme; being responsible corporate citizens 9 Title
    • 10. © 2014 Deloitte LLP. All rights reserved. About Deloitte • UK member firm of a global organisation • 16,000 people in UK and Switzerland • Professional services with 4 integrated service lines: ‒ Audit, Tax, Consulting, Corporate Finance • Purpose: ‒ Impact & success of clients ‒ Contribution to society • Core Values: 1. Integrity 2. Clients 3. Commitment 4. Cultural diversity 10 Title
    • 11. © 2014 Deloitte LLP. All rights reserved. Deloitte procurement • Category management structure • Cross category buyer and analyst support • How success is measured: • Volume of spend influenced • Mitigation of risk • Cost savings • Reduced environmental impact • Position in the supply chain • What we buy and what we spend • Where does Ariba fit in? 11 Title
    • 12. © 2014 Deloitte LLP. All rights reserved. What is “Sustainable Procurement” ? “To Deloitte, Sustainable Procurement means evaluating our goods, services and utilities purchases on a whole life basis and taking into account both the social and environmental, as well as the economic impact of our supply chain” – Deloitte Sustainable Procurement Policy , January 2013 • Whole life costing • Reducing negative environmental impacts of supply chain • Accentuating positive social impacts of supply chain 12 Title
    • 13. © 2014 Deloitte LLP. All rights reserved. Our supply chain is global 13 Title
    • 14. © 2014 Deloitte LLP. All rights reserved. Why should big business procure sustainably ? • Risk management • Cost reduction • Revenue protection and growth • Living up to your word 14
    • 15. © 2014 Deloitte LLP. All rights reserved. Is sustainability important for big business ? 250 Global CFOs, Combined company value of $3 trillion 15
    • 16. © 2014 Deloitte LLP. All rights reserved. How do we turn all of this into action? Responsible Procurement Sustainable Pioneers Charities 16
    • 17. © 2014 Deloitte LLP. All rights reserved. Our Green Journey Procurement is integral to the process 17
    • 18. © 2014 Deloitte LLP. All rights reserved. Deloitte Social Pioneers initiative Some success stories in our own supply chain 18
    • 19. © 2014 Deloitte LLP. All rights reserved. A Social Pioneer Success Story A Deloitte Social Pioneer in 90 seconds 19
    • 20. © 2014 Deloitte LLP. All rights reserved. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms. Deloitte LLP is the United Kingdom member firm of DTTL. This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte LLP would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Deloitte LLP accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom. Tel: +44 (0) 20 7936 3000 Fax: +44 (0) 20 7583 1198. © 2014 Deloitte LLP. All rights reserved.
    • 21. #AribaLIVE Change Is the New Normal – Building a Sustainable Strategic Sourcing Program Jacob Gorm Larsen, Global E-Sourcing Manager, Maersk @jgl005 Ariba LIVE April 2014 © 2014 Ariba – an SAP company. All rights reserved. @ariba
    • 22. A.P. Moller - Maersk is a diversified conglomerate…  60bn USD revenue  1,400+ vessels  60+ port terminals  50+ drilling rigs  250,000+ boepd  1,300+ retail stores 120,000 colleagues in more than 130 countries across six continents
    • 23. Group Procurement Maersk E-Sourcing Program Evolution Significant development in spend covered & sophistication of technology applied Spend Adoption 2008-13 Program Milestones Increasing part of Groups spend managed via E-Sourcing technology 2013 11.0 20122011 3.4 2010 1.3 2009 0.6 2008 0.3 2014 8.5 12.5 USD Billions First year with +1,000 E-Auctions completed First year with +1,000 #1 on Google search 1.000 E-Auctions 2nd Generation Sourcing Tool added to portfolio1st Strategy E-Sourcing set-up in China 1st CAPEX Projects done First year with +1,000 E-Sourcing support in Mumbai Network optimization added Spanish language support (in Mumbai)
    • 24. Group Procurement Typical types of resistance to E-Sourcing… Denial of Technology... The ”nimby” people. Buyers are often looking for faster horses! The Buyers that want to beat the system Difficult to change because it will take an additional effort
    • 25. #AribaLIVE "Change" Is the New Normal - Building a Sustainable Strategic Sourcing Program Andrew Gill Global Procurement - Reed-Elsevier
    • 26. "Change" is the New Normal – Due Diligence Andrew Gill April 2014
    • 27. Reed Elsevier is a world leading provider of information solutions for professionals. We help scientists make new discoveries, lawyers win cases, doctors save lives, corporations build commercial relationships, insurance companies assess risk, and government and financial institutions detect fraud.
    • 28. 28
    • 29. 29 32 28,000 $9.42bn World’s #4 CSR
    • 30.  Non-disclosure agreement  Code of Conduct for Suppliers  Legal Issues  Financial Health and Wellbeing  Business Continuity  Information and Application Security  Social Responsibility  Preventing Bribery  Web Content Accessibility  Environmental Impact  US Supplier Diversity Program (December 2014) Due Diligence Topics
    • 31.  2012  US Government mandated spend with Diverse Suppliers  Pressure from our own people  Regulatory Concerns Background
    • 32.  Library of pre-approved questions  Written and supported by our own Subject Matter experts  Hosted in our Supplier Knowledge Area  Many automatically scored based on yes / no answers Due Diligence Questions
    • 33. LexisNexis SmartWatch  Risk-monitoring and alerting tool  Fast assessment of your suppliers’ current risk levels  Anticipate and minimize supply chain disruptions  Financial, political, legal, environmental, etc.
    • 34.  More successful  US Government Contracts  Win new business  Mitigate risk  Reputation  Continuity of supply Why do we have it? What have we learnt?  One of our suppliers was is involved in legal action for embezzlement  One of our suppliers brother is a government official
    • 35.  Reed Elsevier’s Green Teams  Subject Matter Experts  Automation  Targeted  Global Procurement Management Team  Reed Elsevier Legal Counsel  Buyers  Stakeholders How did we make it happen?
    • 36.  Our programme  Topics  Tools Summary Contact me andrew.gill@reedelsevier.com
    • 37. Summary - Wrap Up Align Results to Objectives Embrace change and not fight it! Be Flexible ACCELERATE SAVINGS, IMPROVE COMPLIANCE & MITIGATE RISK! © 2014 Ariba – an SAP company. All rights reserved.
    • 38. Thank you Q A& Contact information: Sundar Kamakshisundaram Sr. Director – Global Solutions Marketing E: sundar.kamak@sap.com
    • 39. Please Complete Session Survey Locate Session 41 Click Surveys Button Select Breakout Survey Rate Session Thank you for joining us © 2014 Ariba – an SAP company. All rights reserved.