Five Rules for Catalog and Supplier Enablement Success

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  • Negotiated contract pricing and invoices do not match
  • Supplier Enablement must know everything!invited, accepted terms, PO/Contract created, ready to invoiceEscalation – requester/commodity manager/vendor manager

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  • 1. B Five Rules for Catalog and Supplier Enablement Success Under Armour SunTrust Bank© 2012 Ariba, Inc. All rights reserved.
  • 2. Session Abstract Good content is vital to Procure-to-Pay and Invoice Management program success. More specifically, the effectiveness and adoption of your procurement or invoicing program directly correlates to your ability to get the right catalog content and the right suppliers enabled around the right processes. In this session, leading enterprises will share their field-tested best practices to catalogs and suppliers for procure-to-pay collaboration across all spend categories.2 © 2012 Ariba, Inc. All rights reserved.
  • 3. Speaker - Under Armour Mark Gillen, Director of Strategic Procurement, Under Armour • Mark Gillen has served as Director of Strategic Procurement for Under Armour since November 2009. In his current role, Mr. Gillen is responsible for the strategic sourcing of all indirect (non-inventory) goods and services, and also leads the Financial Planning & Analysis teams that support Supply Chain and Retail Marketing. Prior to joining Under Armour, Mr. Gillen held increasing levels of financial management and procurement responsibilities at Ann Taylor. Prior to joining Ann Taylor in February 2000, he held a variety of financial management positions at Lord & Taylor Department Stores. Mr. Gillen received his BS in Marketing and MBA from Villanova University.3 © 2012 Ariba, Inc. All rights reserved.
  • 4. Speaker - SunTrust Bank Andy Woltman, Vice President, Strategic Supply Management Optimization, SunTrust • Andy Woltman is a Vice President and Process Design Manager in the Strategic Supply Management Optimization group of SunTrust Bank, and serves as the Supplier Enablement Team manager overseeing the Ariba supplier on-boarding process.4 © 2012 Ariba, Inc. All rights reserved.
  • 5. B Five Rules for Catalog and Supplier Enablement Success Mark Gillen Director of Strategic Procurement Under Armour© 2012 Ariba, Inc. All rights reserved.
  • 6. 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 — gear engineered to keep athletes cool, dry and light throughout the course of a game, practice or workout. • Company Vision: TO EMPOWER ATHLETES EVERYWHERE • Company Mission: TO MAKE ALL ATHLETES BETTER, THROUGH PASSION, DESIGN, AND THE RELENTLESS PURSUIT OF INNOVATION • Listed on NYSE: UA • Achieved $1.47 billion in revenue in 2011 • Product offerings consist of apparel, footwear and accessories for men, women and youth6 © 2012 Ariba, Inc. All rights reserved.
  • 7. Overview of Under Armour, Inc. (continued) • Distribution channels include: Wholesale accounts, in which our product is sold in over twenty five thousand retail stores worldwide Direct to Consumer – Under Armour Factory House and Specialty Stores (80 Factory House Stored and 5 Specialty Stores open as of 12/31/11) – Online at www.underarmour.com • Over 5,000 employees worldwide (as of 12/31/11) • Offices located in: Baltimore, MD Denver, CO Amsterdam, Netherlands Guangzhou, China Hong Kong Ontario, Canada • Ariba Solutions Deployed by Under Armour Ariba Procure-to-Pay Professional Ariba Sourcing Professional7 © 2012 Ariba, Inc. All rights reserved.
  • 8. Under Armour’s Procure-to-Pay Process Before Ariba • Automated workflow for PO Requisition approvals was non-existent • Catalogs were non-existent • Flexible payment terms with suppliers were rarely proposed • Creating month-end accrual entries was a tedious, inefficient process • Requisitioners were unable to directly access historical spend information, without assistance from the Purchasing Team • The Purchasing Team was viewed as simply a data entry department • Rogue spend was widespread and difficult to control8 © 2012 Ariba, Inc. All rights reserved.
  • 9. Under Armour’s Five Steps to EffectiveCatalog and Supplier Enablement 1. Conservatively estimate the appropriate amount of internal and external resources dedicated to catalog and supplier enablement9 © 2012 Ariba, Inc. All rights reserved.
  • 10. Under Armour’s Five Steps to EffectiveCatalog and Supplier Enablement 2. Understand (and be able to effectively communicate) the benefits that an integrated, e-catalog based P2P solution will offer your buyers and suppliers10 © 2012 Ariba, Inc. All rights reserved.
  • 11. Under Armour’s Five Steps to EffectiveCatalog and Supplier Enablement 3. Proactively communicate P2P expectations to all prospective suppliers as part of the strategic sourcing process11 © 2012 Ariba, Inc. All rights reserved.
  • 12. Under Armour’s Five Steps to Effective Catalog and Supplier Enablement 4. Don’t bite off more than you can chew…take a phased approach over a finite period of time, with key milestones of achievement, in your efforts to build the most effective program12 © 2012 Ariba, Inc. All rights reserved.
  • 13. Under Armour’s Five Steps to EffectiveCatalog and Supplier Enablement 5. Set measureable targets and make internal resources accountable for achieving results13 © 2012 Ariba, Inc. All rights reserved.
  • 14. Results and Key Metrics • Quick implementation – 18 weeks • Since implementing Ariba P2P in January 2011, Under Armour’s procure-to-pay process has been completely transformed • The Purchasing Team is no longer viewed as a data entry function, but rather a strategic partner to all business units with the ability to streamline their non-inventory transactions • Purchase Order adoption rates increased from 25% to 75% • During our first year on P2P, over $80 million of indirect spend was processed using Ariba P2P • 14 catalogs (including three punch-out catalogs) were created, which drove 17% of transactions / 9% of spend processed • 34% of transactions were conducted over the Ariba Network • Increased Purchasing Team’s productivity by approximately 25%, avoiding the cost of adding two new FTEs14 © 2012 Ariba, Inc. All rights reserved.
  • 15. B Five Rules for Catalog and Supplier Enablement Success Andy Woltman Vice President, Strategic Supply Management Optimization SunTrust Bank© 2012 Ariba, Inc. All rights reserved.
  • 16. SunTrust at a Glance • The most direct corporate ancestor, the Trust Company of Georgia, was founded in 1891, and merged with SunBanks, Inc of Florida in 1985 to form SunTrust Banks, Inc • Having total assets of $172.6 billion it is one of the nations largest and strongest financial holding companies. • Employs approximately 30,000 teammates Diversified Business and Corporate & Wealth & Product Mix Retail & Household Investment Investment Commercial Lending Banking Management • SunTrust • National • National • National Footprint • Full line of • Residential • Full array of private • 1,658 Branches investment mortgages, com wealth management banking mercial lending and institutional solutions • 2,889 ATMs products and including personal and • Mortgage • 800+ services institutional investment servicing Relationship management portfolio of Managers $163B16 © 2012 Ariba, Inc. All rights reserved.
  • 17. Ariba Solutions Deployed • Supplier Management • Procurement  Performance Surveys  Catalog and Non-Catalog Purchase Orders: Punch-  Scorecards out, supplier hosted, custom workflow, etc (approx. 200,000/yr. and 5,000 users/mo.  Repository for all macro data on SRM managed suppliers Functionality Not Used: For supplier ―collaboration‖ with •  Sourcing specific modules for service categories (i.e. Temp Project Management: Reporting, timeline, Save Labor, Print, etc) Tracking, Project Artifact, etc. Standardization in Process and Templates: Sourcing • Accounts Payable Invoice Processing: Invoices matched to PO and/or Library Contract Performance of RFI, RFP, and Auctions Invoice Workflow: Exception handling, approvals, receipt Document Archival verification Functionality Not Used: Tasks, Workflow Payment Terms: Prompt payment and Dynamic • Contract Management Discounts Contract Administration: Storage, Archival, and Retrieval • Ariba Network Establishes linkage between Master & Sub-Agreements eBilling: 94% volume of invoices are eBilled and about (approx. 11,000 agreements) 50% of spend is eBilled Contract Compliance: Invoice to Contract Match Electronic issuance of POs, Contracts, etc Reporting: Expiring Contracts, Contracts by Electronic Supplier Connectivity: EDI, cxml, csv uploads Supplier, LOB, etc. Catalog Maintenance: Supplier managed Functionality Not Used: Contract Templates, Clause Library, Contract Authoring and Workflow through Process, eSignature17 © 2012 Ariba, Inc. All rights reserved.
  • 18. The Pain around Catalog and Supplier Enablement • No integration between various systems containing supplier and pricing information (Sourcing, Contracts, Purchase Orders, Payables) • Who is the ―right‖ supplier contact? Aligning Customer/Procurement/AP and Supplier/Sales/AR18 © 2012 Ariba, Inc. All rights reserved.
  • 19. The Pain around Catalog and Supplier Enablement (Cont.) • Resources (Buyer and/or Supplier) to enter line-level detail • Product/Service doesn’t fit into a ―widget‖ • POs: To Receive or Not to Receive? • Enforcement of payment terms • SMP Fees19 © 2012 Ariba, Inc. All rights reserved.
  • 20. Five Steps to Effective Catalog and Supplier Enablement 1. Communication (internal and to suppliers) 2. Know how you plan to transact with supplier (and customize standard communications accordingly) 3. Methodology/Tool to track progress 4. Have a mandate (internal and to suppliers) 5. Compliance follow-up and escalation20 © 2012 Ariba, Inc. All rights reserved.
  • 21. Five Steps to Effective Catalog and Supplier Enablement 1. Sourcing must engage Procurement team early on during contract negotiations to determine proper transaction method 2. Is catalog/requisition the right ―fit‖? 3. If catalog, what type (Local, Punchout, Partial)? 4. Use Catalog Views to restrict visibility 5. Custom Approval Rules for Catalog Items21 © 2012 Ariba, Inc. All rights reserved.
  • 22. Supplier Enablement Process Flow22 © 2012 Ariba, Inc. All rights reserved.
  • 23. Supplier Enablement Metrics23 © 2012 Ariba, Inc. All rights reserved.
  • 24. Catalog Metrics24 © 2012 Ariba, Inc. All rights reserved.
  • 25. Invoicing Metrics25 © 2012 Ariba, Inc. All rights reserved.
  • 26. Lessons Learned/Caveats • You’ll never AN-enable 100% of suppliers. • Must balance desire for visibility, compliance, and electronic submission of invoices by supplier. • Supplier Enablement must have a working knowledge of all system aspects (or a ―go to team‖) for supplier questions.26 © 2012 Ariba, Inc. All rights reserved.
  • 27. Q&A Contact info: John Lark: jlark@ariba.com27 © 2012 Ariba, Inc. All rights reserved.
  • 28. Share This Session…NOW…from your mobile! • All presentations are posted: Guidebook mobile app – Search Apple or Android app store for Guidebook – Enter code ―collabor8‖ Or at Slideshare.net/Ariba • Share via email or social media **Come back soon – we are syncing #AribaLIVE audio and video interviews to the presentations**28 © 2012 Ariba, Inc. All rights reserved.