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Key Strategies to Drive Compliance_Vertis Communications
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Key Strategies to Drive Compliance_Vertis Communications

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Creative ways business data can be used to measure, manage & drive compliance to enterprise contracts & preferred procurement processes for creating and implementing strategies which uncover savings …

Creative ways business data can be used to measure, manage & drive compliance to enterprise contracts & preferred procurement processes for creating and implementing strategies which uncover savings opportunities and drive compliance.

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  • 1. KEY STRATEGIES TO DRIVE COMPLIANCE Monica Graham, Director, Technology Sourcing October 23, 2012
  • 2. Agenda Company Overview SCM Organization Challenges and Goals Situation and Process Analysis Case Study Lessons Learned
  • 3. Company OverviewVertis Communications is one of the top producers of advertisinginserts and direct marketing/direct mail solutions in North America Key Facts – Industry: Marketing Communications – Size: Top 10 commercial printer in U.S. – Revenue: $1.1B, Private equity – Facilities: 25 production sites – Employees: 5,000
  • 4. Vertis Communications Facilities Portland Shakopee Stevensville Springfield GreenvilleSacramento Chalfont Medina Bristol Marengo York N. Brunswick Salt Lake Westampton Boulder Columbus Manassas Monroe Lenexa St. Louis Irvine So. Cal Charlotte Dallas Lufkin Legend Houston Advertising Inserts Tampa Direct Marketing Specialty Print
  • 5. Vertis Supply Chain Organization
  • 6. Challenges Vertis Spends Millions
  • 7. Goals Spend under SCM Standard control procurement procedure Contract Compliance Item level spend information
  • 8. The Situation Over $1 billion annual spend – Indirect spend categories account for 30% of total spend – SCM controlled less than 10% of total indirect spend SCM only controlled direct materials spend Cost saving tactics were non-collaborative – Heavy reliance on corporate rebates that did not benefit plant P&L Inherited D&B “Supply Optimizer”
  • 9. The Process Categorization Opportunity Assessment Implemented UNSPSC with Local Management Improved SCM Involvement Long lead-time to get Joined Group Site visits to plants in spend analysis results Purchasing conjunction with other Organization (GPO) business in the area Spend analysis is unreliable because of Increased staff Created three Regional poor quality data Supply Chain Manager positions Synergy Savings
  • 10. The Tools Discovery Spend Analysis e-Procurement E-Sourcing Services• Quarterly spend • Integrated with • Targeted reverse • Supplier data categorization business unit auctions identification and ERP’s qualification • Implemented (“Go Live”) September 2011
  • 11. Path To Success ROI Cost – Benefits Ease of Use Timely Turnaround Data of Spend Currency Analysis Capture ALL Accurate Spend Categoriza DataRight tionTaxonomy
  • 12. Identify SavingsOpportunities by reducing the number of suppliers Click Next to set Filters
  • 13. This category has the highest number of suppliers under the category of Information Technology.This further drill down enables the procurement specialist to find the category where the suppliers is the highest and there is a possibility to rationalize their supplier base.
  • 14. Opportunity is added to list of my opportunityThe identified opportunity then gets added to the entire list of opportunities.
  • 15. Bubble Matrix Graph to prioritize identified opportunities Armed with all the information the head of procurement team can review the pool of all theseopportunities in the opportunity prioritization module in the form of a bubble chart, where the X-axis represents the efforts in months and the Y-axis represents the maximum saving potential.
  • 16. CASE STUDY
  • 17. Safety Supplies Vertis annual spend is ~$400K Decentralized purchases No minimum safety standards Multiple suppliers No volume discounts for aggregated spend
  • 18. Implementation Process Emailed Shared Vertis Emailed announcement announcement to locations & contacts to requisitioners & requisitioners & with Choctaw - Kaul management management Released Choctaw- Developed monthly Contacted sites with Kaul to initiate local spend and cost savings slow adoption site visits report template Solicited feedback & Visited Vertis sites to Requested management engaged supplier in emphasize partnership assistance as last resort response to local concerns
  • 19. Supplier Collaboration Savings • Lean & Continuous Improvement Project Product • Team of SCM, Supplier, Safety Coordinators, standardization Inventory Clerks • Minimum safety standards Best value • Quality appropriate to the application • Reduce number of SKU’s to manage Lower inventory • Ability to share inventory between sites • Lower prices Reduced costs • Lower inventory levels; more inventory turns
  • 20. Results Improved product quality and consistency – ANSI approved anti-fog safety glasses with UV protection – Minimum NRR 29 on earplugs – More durable nitrile gloves – Top rated cut resistance gloves Eliminated 80% of SKU’s (from 69 to 14) for hand/eye/ear PPE Additional 12% cost savings – Renegotiated prices with manufacturer – Spend concentrated on best value items Current compliance is 90+%
  • 21. Conclusion: Lessons Learned Detailed and accurate spend data essential Compliance requires collaboration – Control increased from 10% to 50% – Compliance increased from 0% to 40% There is no substitute for face-to-face interactions Comparative benchmarking drives friendly competition