Bassey Duke, Group Logistics Manager at IMI spoke at the SCL Event UK 2013

1. Cost Savings Levers
Bassey Duke
Group Logistics Manager
IMI Plc

2. Introduction
• IMI (www.imiplc.com) is a global engineering group
focused on the precise control and movement of
fluids in critical applications. We work with leading
international companies in over 50 countries to
deliver innovative engineering solutions to address
global trends such as clean energy, energy efficiency,
healthcare and increasing automation.

3. Introduction

4. Agenda
• Scenario – 5 mins
• IMI Plc case study – 15 mins
• Group discussion – 6 mins
• Summary (key nuggets) – 2 mins
• Questions – 2 mins

5. Scenario
• Crude oil price volatility
• Rising freight rates (inflation)
• Cost savings pressures
• Tougher supplier negotiations
• Freight supplier base reduction (M&A)
• Competitiveness of incumbent (price)

6. IMI Plc case study

7. • Different • Periodic test
routes to of the market
market
Cost Savings/
Benchmarking
Avoidance
Supplier
Freight Bill
Relationship
Invoicing
Management
• Continuous • Invoice
relationship matching
management with rates

8. Cost Savings/Avoidance
• Typical routes to market include RFQ/RFP, E-
auction, negotiations etc.
Route Typical Results Comments
Benchmarking 0 – 5% Existing supplier
Negotiations 5 – 10% Existing supplier/New Supplier
RFQ/RFP 10 – 20% New supplier
E-auctions 30+% New supplier

9. Cost Savings/Avoidance
E-auction Results
£60,000
Current Spend
£55,000 Supplier A
Commodity Typical IMIs
Supplier B
£50,000
Supplier C
Results Results
Supplier C
£45,000
Supplier E
Metal Parts 18.4% N/A
£40,000
Packaging 21.2% 25%
£35,000
Freight/ 21.8% 30%
£30,000
Cargo
£25,000
Stationary 59.7% N/A
£20,000
Pre-bid Phase
Eauction - Bid 1
Eauction - Bid 2
Eauction - Bid 3
Eauction - Bid 4
Eauction - Bid 5
Eauction - Bid 6
Eauction - Bid 7
Eauction - Bid 8
Eauction - Bid 9
Eauction - Bid 10
Eauction - Bid 11
Eauction - Bid 12
Eauction - Bid 13
Eauction - Bid 14
Eauction - Bid 15

10. Benchmarking
Scenario Action
• US International • Supplier
Air and Ocean collaboration to
freight tender agree
• Target to save at mechanism to
least 10% ensure rates are
always
competitive

11. Benchmarking
• The SCFI is produced weekly by the Shanghai
Shipping Exchange.
• The SCFI panel is made up of 15 steam
shipping lines and 15 NVOCC.
• Panellists submit freight rate assessments
covering general cargo, all in, spot rates ex
shanghai to a number of global base ports.

12. Benchmarking

13. Benchmarking
Scenario Action Results
• US International • Supplier • Monthly
Air and Ocean collaboration to benchmarks
freight tender agree and reviewed
• Target to save at mechanism to quarterly
least 10% ensure rates are • Saved over 20%
always (year 1 only).
competitive

14. Group Discussion

15. Group Discussion
• Any experience within the group on e-
auctions?
• What are the results achieved from e-
auctions?
• What platforms would you recommend to use
for e-auctions?
• Examples of e-auction projects

16. Group Discussion
• What comes to mind when you think of
benchmarking?
• How many people benchmark?
• What categories do you benchmark?
• How often do you benchmark?

17. Group Discussion
• How do you benchmark?
• What tools do you use to benchmark?
• What results have you achieved from
benchmarking?
• Benchmarking best practises?
• Example of benchmarking project?

18. Summary (Nuggets)
• E-auction is an under utilized route to market,
which can provide significant savings, without
sacrificing the quality of service.
• Irrespective of your route to market, supplier
relationship is very key and important.
• 1 in every 4 invoice received has incorrect
values entered.

19. Summary (Nuggets)
• After going to market, benchmarking/supplier
negotiations, ensure that negotiated rates
remain competitive throughout the life of the
supplier contract.

20. Thank You

21. Questions
Contact – bassey.duke@imiplc.com

22. Additional Slides

23. Packaging - Euwid
• EUWID Packaging Markets provides regular
research on market developments for the
relevant packaging materials and applications.
The main focus is on Europe's largest packaging
market: Germany. In addition, regular market
research is conducted for the neighbouring
countries France, Great Britain and Poland.

24. $ per tonne
1000.0
1500.0
2000.0
2500.0
3000.0
3500.0
0.0
500.0
Jan 06
03/06
05/06
07/06
09/06
WTK
Kraft
Test 3
Test 2
11/06
Jan 07
S/C Fluting
W/B Fluting
03/07
05/07
07/07
09/07
11/07
Jan 08
03/08
05/08
07/08
09/08
11/08
Date
Jan 09
03/09
05/09
07/09
09/09
EUWID - Corrugate Packaging
11/09
Jan 10
03/10
05/10
07/10
09/10
11/10
Jan 11
03/11
05/11
Packaging - Euwid
07/11
09/11

25. Scrap Metal- Metals Bulletin
6,000
LME vs Metal Bulletin Prices - Scrap Metals
LME COPPER
LME ALUMINIUM
LME ALI ALLOY
5,000 MB st st solids
MB st st swarf
Brass Strip
304 Stainless steel solids
304 Stainless steel turnings
4,000 Copper
$ per tonne
3,000
2,000
1,000
0
24/05/2002 10/12/2002 28/06/2003 14/01/2004 01/08/2004 17/02/2005 05/09/2005 24/03/2006 10/10/2006
Date