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Making Procurement Strategic:  the Journey to Global Spend Management Excellence
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Making Procurement Strategic: the Journey to Global Spend Management Excellence

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  • 1. NSG Group and AribaTechnology Supporting the Drive forProcurement Excellence
  • 2. 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
  • 3. Product Applications
  • 4. 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 2010-11Ariba Contract Management, Sourcing and Supplier Modules Rolled OutGlobally – Ariba eInvoicing in Europe
  • 5. NSG Procurement – 2007 Disconnected Maverick Manual Too many of the wrong peopleTransactional , poor control, disconnected, low value-add, low ambition
  • 6. NSG Procurement – 2007 Organization People • Disconnected „Purchasing silos‟ • Variable leadership/ability to influence the • Immature Global sourcing business • „Maverick‟ buying • Transactional focus > 70% of time • Poor resource match to spend/value • 430 people, < 20% graduate opportunity • Poor credibility with the business • No defined strategy / „house style‟ • Lacking ambition Process Technology • Inconsistent / incomplete • Patchwork of legacy systems • Paper & people intensive • Low priority • Poor PO compliance <50% indirects • Failed eProcurement implementations • Variable risk mgt approaches • Supplier proliferationPoor foundation for effective technology adoption
  • 7. NSG Procurement – 2012 Matrix Organisation Increasing Skill Level Global Supplier Development Extensive eProcurementMore Strategic, integrated, much more credible
  • 8. NSG Procurement – 2012 Organization People • Matrix by category & region • Category Directors as leaders and influencers • Dedicated category teams ( >70% turnover) • Centralised/ dedicated P2P teams • <40% of time on transactional • Aligned/ Integrated with BU‟s • 320 people, > 50% graduate • Specialised Process & Systems and Supplier • Graduate development programme 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 & Contract • > 98% PO compliance Management • Robust risk management approach • Ariba eInvoicing: > 45,000 invoices, > 90% touch-less • > 70% reduction in supplier numberA solid foundation for technology uptake
  • 9. NSG and Ariba Internal Stakeholders Category Management Sourcing Category Strategies RFX/eAuction Savings Projects Standard KPIs Templates Info and Knowledge Sharing Contract Management Multiple Instances Approvals Contract Authoring + Legacy Standard Clauses and Templates eInvoicing Supplier PO Invoice Performance Management Certificates Audits Suppliers Sustainability
  • 10. Ariba Sourcing is delivering for NSG…Examples of where Ariba has supported our activity in FY12: 28% €400K 24% Step Change in User Adoption FY11 FY12 Sourcing Events 15 529 Contracts 166 2,296 Ariba Monthly Medals Users <30 >250Ariba use for Sourcing is mandated in FY13
  • 11. Also used for Huge, Complex Events…Global Integrated Facilities Management Project : €125m, 29 countries, >400 sites RFI with scoring for supplier qualification and selection RFP with qualified suppliers Full Project Management for Due Diligence and Implementation StagesAriba is our chosen tool for strategic and highly complex events
  • 12. 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
  • 13. Supplier Performance Management• 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
  • 14. E-Invoicing - progress to dateOver 375 suppliers enabled for eInvoicingOver 45,000 invoices since Go-LiveOver 90% “Touch-less” Invoices
  • 15. 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 and functionsimproves quality and speed of decision making
  • 16. 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 adoption Real-time dashboard data helps Category and Regional directors drive adoption
  • 17. Key benefits from Ariba tools Incremental, repeatable savings from eSourcing events vs. traditional methods Robust contract management and approval processes Global database of suppliers – supporting rationalisation and sustainability goals Electronic invoicing supporting efficiency gains in invoice processing and WC management Global, secure knowledge database. Supporting effective document management and compliance Establishing/supporting standard processes and building organisational capability
  • 18. Key challenges and learning points 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
  • 19. NSG Procurement – 2014…and beyond!• 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;change agents, challenging and ambitious