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Transforming Procurement into a Strategic Value Driver – NSG Group
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Transforming Procurement into a Strategic Value Driver – NSG Group

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The Networked Economy presents a great opportunity for Procurement to increase ...

The Networked Economy presents a great opportunity for Procurement to increase
its strategic value to an organization. By embracing automation and improving
skills, Procurement cannot just drive increased savings and productivity, but also
help finance better manage working capital and support a range of other
objectives. Learn how NSG Group has done just that, increasing the stature of
Procurement within the organization, improving collaboration with finance and
driving significant value.

Mike Nicklin, Procurement Systems Manager – NSG Group
Marie Gresko, Procure to Pay Manager – NSG Group

2013 Ariba Commerce Summit London

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Transforming Procurement into a Strategic Value Driver – NSG Group Transforming Procurement into a Strategic Value Driver – NSG Group Presentation Transcript

  • NSG Group and AribaTransforming Procurement into a StrategicValue DriverAriba Commerce Summit – London 15 th January 2013
  • NSG Group overview• A global glass technology leader• Sales of JPY 577,212m (€4933m) in FY11• Principal manufacturing operations in 29 countries, with sales in approximately 130 countries• Approximately 29,000 employees• Leading manufacturer of functionalised architectural glass• Supplier to every major car maker in the world• Leading position in glass for solar energy sector• Leading player in technical glass for touch-screen displays and optical devices for printer/scanner applicationsA global leader in glass for Automotive, Architectural and Technicalapplications 2
  • Product Applications
  • Systems Landscape Europe North America ♦ SAP (2 instances) Japan♦ SAP ♦ Some Legacy systems ♦ SAP (Japan Instance)♦ Legacy SE Asia South America ♦Legacy / SAP (Malaysia)♦Legacy systems ♦SAP roll-outs in 2011♦SAP roll-outs in 2010-11 Ariba Contract Management, Sourcing and Supplier Modules Rolled Out Globally – Ariba eInvoicing in Europe
  • NSG Procurement – 2007 Disconnecte Maverick d Manual Too many of the wrong peopleTransactional , poor control, disconnected, low value-add, low ambition
  • NSG Procurement – 2007Organization People• Disconnected ‘Purchasing silos’ • Variable leadership/ability to• Immature Global sourcing influence the business• ‘Maverick’ buying • Transactional focus > 70% of time• Poor resource match to spend/value • 430 people, < 20% graduateopportunity • Poor credibility with the business• No defined strategy / ‘house style’ • Lacking ambitionProcess Technology• Inconsistent / incomplete • Patchwork of legacy systems• Paper & people intensive • Low priority• Poor PO compliance <50% indirects • Failed eProcurement• Variable risk mgt approaches implementations• Supplier proliferationPoor foundation for effective technology adoption
  • NSG Procurement – 2012 Matrix Organisation Increasing Skill LevelGlobal Supplier Development Extensive eProcurementMore Strategic, integrated, much more credible
  • NSG Procurement – 2012Organization People• Matrix by category & region • Category Directors as leaders and• Dedicated category teams influencers ( >70% turnover)• Centralised/ dedicated P2P teams • <40% of time on transactional• Aligned/ Integrated with BU’s • 320 people, > 50% graduate• Specialised Process & Systems and • Graduate development programmeSupplier Development teams • Fewer and better…more to do!Process Technology• Complete and (mainly!) consistent • Ariba: for everyone, everywhere• > 90% global spend visibility • Mandatory use of Sourcing &• > 98% PO compliance Contract Management• Robust risk management approach • Ariba eInvoicing: > 45,000 invoices, > 90% touch-less• > 70% reduction in supplier numberA solid foundation for technology uptake8
  • NSG and Ariba Internal Stakeholders Category Management Sourcing Category Strategies RFX/eAuction Savings Projects Standard Templates KPIs Info and Knowledge Sharing Contract Management Multiple Instances Approvals Contract Authoring + Legacy Standard Clauses and Templates eInvoicing Supplier PO Invoice Performance Management Certificates Supplier Audits Sustainability s
  • Ariba Sourcing is delivering forNSG…Examples of where Ariba has supported our activity in FY12: 28% €400K 24% Step Change in User Adoption FY11 FY12 FY13 (run rate) Sourcing Events 15 529 >1,000 Contracts 166 2,296 >3,000 Users <30 >250 >650Progress is being made but there is still much room for improvement
  • Also used for Huge, ComplexEvents… Facilities Management Project :€125m, 29 countries,Global Integrated>400 sites RFI with scoring for supplier qualification and selection RFP with qualified suppliersFull Project Managementfor Due Dilligence andImplementation StagesAriba is our chosen tool for strategic and highly complex events
  • Ariba Contract ManagementAriba is the sole database used for Procurement Contracts :• Internal and external auditors will only check Ariba for contract compliance• Contracts approval; from weeks previously to gain physical signatures to hours online today• Contract approvers automatically identified by the system by using the base data of the contract• Business, Finance, Procurement and Legal Departments are all engaged in the Contract Approval Process• Next steps are to explore contract authoring and clause libraries within Ariba• Dashboard reporting gives clear visibility to Category DirectorsAriba use for Contract Management is mandated in FY13
  • Supplier PerformanceManagement• One global Supplier Database in Ariba • Single “source of truth” for Supplier Information• Supplier Evaluation • Six monthly supplier audits now done in Ariba • Covering supplier risk, certifications, code of conduct compliance, delivery and quality:Ariba supports achievement of our sustainability targets
  • E-Invoicing - progress to date POs Invoices Transactions via Ariba Suppliers 50000 400 375 45000 350 40000 325 300 35000 275 250 number (cum.) 30000 225 suppliers 25000 200 175 20000 150 15000 125 100 10000 75 50 5000 25 0 0 Weeks since Go-LiveOver 375 suppliers enabled for eInvoicingOver 45,000 invoices since Go-LiveOver 90% “Touch-less” Invoices
  • Information & Knowledge ManagementGlobal data sharing across a common platformThis file is 15mb in size and cannot be emailedInstant, global access is available via AribaNo need for remote servers, Sharepoint etc.Access available via Network Single Sign OnCategory ManagementAll Category Strategies are now held in AribaInstant access for CPO to all strategiesStrategies managed with staging gates, phases and approvalsAccess being extended to key stakeholders outside of ProcurementReal-time information sharing across countries, time zones andfunctions improves quality and speed of decision making
  • Dashboard Reporting• Category and Regional Directors have specific dashboard tabs • ‘One click’ navigation to their key procurement information• CPO has overview tab containing all information • Easy drill-down into each area of data • Clarity and ease of access of information has helped to drive adoptionReal-time dashboard data helps Category and Regional directorsdrive adoption
  • Key benefits from Ariba tools• Incremental, repeatable savings from eSourcing eventsvs. traditional methods• Robust contract management and approval processes• Global database of suppliers – supportingrationalisation and sustainability goals• Electronic invoicing supporting efficiency gains ininvoice processing and WC management• Global, secure knowledge database. Supportingeffective document management and compliance• Establishing/supporting standard processes andbuilding organisational capability
  • Key challenges and learningpoints• Technology is not a ‘quick fix’ …organisation design, team capability and attitude needs to be right• Recognise success …but be tough on those who try to opt out• Recognise and support learning and transition difficulties…up to a point …then just get on with it!• Organisational culture can hinder progress…be aware of the need to engage/challenge other parts of the business as well as your own team• Discipline is required• Use all the Ariba tools…re-inforces the message ” this is the way we do things around here”• Biggest benefits start to flow when everyone uses the tools … everywhere• Make performance visible…set objectives and KPI’s to drive improvements …use the dashboardsEstablish the right foundation with no opt-out allowed
  • NSG Procurement – 2014…andbeyond!• Fewer/ better people working in specialised buying and transactional hubs• Procurement as a Centre of Excellence … seen as a key development function for the best and brightest in the organisation• Influential, innovative and challenging• Internal consultants/project managers• Linked by and leveraging smart technology…Fewer and better people, leveraging smart technology; changeagents, challenging and ambitious
  • NSG Group and AribaTransforming Procurement into a StrategicValue DriverAriba Commerce Summit – London 15 th January 2013