Patrick Hopkins, Coca Cola Bottling Procurement Director on How Coke Streamlined Procurement Process


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How Coca Cola streamlined procurement.

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  • My research - which was funded for several years by the Government's Scientific Research & Experimental Development Program - showed that the big problem with Indirect spend is misalignment w/commodity characteristics;
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Patrick Hopkins, Coca Cola Bottling Procurement Director on How Coke Streamlined Procurement Process

  1. 1. Transforming Indirect Procurement Patrick Hopkins Coke Consolidated
  2. 2. Coca-Cola HistoryAtlanta Consolidated Begins  Sold to InvestorsPharmacist  First with Dasani and  GlobalizationDr. John FridgepacksPemberton  One of 64 Independent Bottlers1886 1888 1902 1916 1919 Secret Formula Famous Contour Sold to Bottle Asa Candler Thought Coke in bottles was “stupid” and sold bottling rights for $1.00
  3. 3. Procurement Opportunities No visibility to indirect spend detail • Half of indirect on credit cards Six disparate order/payment processes Use of non-approved suppliers • Verbal commitments with non-established suppliers, late and duplicate payments, uninsured liabilities
  4. 4. Procurement Opportunities Use of non-standard, non-approved materials E-commerce solution not widely embraced Significant shopping prior to buying
  5. 5. Procurement’s Mission Put the right materials and services In the right hands At the right place At the right time At the right cost All the time
  7. 7. PRICE Payment Terms & Methods Rebates/Discounts Desktop DeliveryBin Stocking OPPORTUNITY Training Delivery Performance (Timeliness & Accuracy) Receivables, Accounting Timeliness & Accuracy Warranty Costs & Benefits Stock Buy Back Agreements Requisitioner’s Time Cost Savings Programs Operating Life Expectancy – Mean Time Between FailuresData Transmission Costs (EDI vs. Paper) RISKEnergy Consumption Technology Enablers (Catalogs, Internet Capabilities) Regulatory Compliance Shipping/Delivery Costs COST Purchasing Processing Time Compatibility with Existing Equipment/Modification CostsDedicated Inventory Data Management Costs (Pricing, Catalogs) TIME Installation Costs Error Correction/Customer Support Technical Support Safety & Environmental Impact Ongoing MaintenanceProduct Liability Spare Parts Purchase & Inventory Holding Fees Contract/SLA Administration Costs Consignment Inventory
  8. 8. Procurement Transformation Strategy Consolidate Supply Base • Higher spend = lower mark up • Rebates, incentives, MSAs, terms, insurance… Standardize Materials & Services • Higher unit volume = lower unit price • Lower inventory, higher quality, longer life… Automate Processes • Automation = employee & supplier productivity • Simplify, eliminate, combine
  9. 9. Four E-Procurement Truths1. The product must be in the catalog2. Users must be able to find what they need3. The data must be right4. Users must want to use the system
  10. 10. So, Why Coupa?Why Not SAP?
  11. 11. Achieving the 4 E-Procurement Truths1. Items must be in the catalog • Internally hosted – Smaller suppliers, smaller scope – Quicker system response – Shared burden between supplier and customer • Punch-out – More burden on supplier – Must be able to control scope, price – Retrieval to cart process varies An Unlimited Selection of Limited Options
  12. 12. Achieving the 4 E-Procurement Truths2. Users must be able to find what they need • Demands an intuitive, uncomplicated, simple process • Demands master data excellence in accuracy, consistency & clarity • Demands ‘uniqueness’ • Demands fast response time 100% Confidence 100% of the Time
  13. 13. Achieving the 4 E-Procurement Truths3. The data must be right • Visibility to correct price • Inventory availability • Description & all MD accuracy & consistency • Delivery accuracy • Billing accuracy • Accounting accuracy – P&L What Does it Cost if it’s Wrong?
  14. 14. Achieving the 4 E-Procurement Truths4. Users must want to use the system • Process must be: – Easy – Intuitive – Fast – Mobile – Pleasant – Successful Easier than a P-Card
  15. 15. Results Capture & visibility of spend • Integration to SAP Mobility that’s device agnostic Process discipline – 3-way match • Requires receiving but eliminates T&E process J A S O N D J F M 2012 2013 Unlimited supplier expansion • Critical to displace P-cards Cloud solution pleases ISS Positive user response & adoption • Highest user rate vs. P-cards
  16. 16. Questions?