The document discusses strategic sourcing and ADMA-OPCO's plans to implement it. The goals of strategic sourcing are to increase customer satisfaction, improve internal service levels and product quality, and significantly reduce total costs through coordinated purchasing across the organization. ADMA-OPCO aims to leverage its buying power to obtain goods and services efficiently for end users. The document outlines the strategic sourcing process and opportunities for ADMA-OPCO to analyze spending, the supply base, develop a sourcing strategy, manage negotiations, award contracts, and implement the strategy.

1. Strategic Sourcing “ The arm’s length buy-sell transaction , use your clout to beat up the supplier , is a highly outdated Model. We also believe that to share information is absolutely key , and sometimes this requires changing a lot of norms practices in your company where secrets are sovereign” Martin J. Garvin , Vice President Corporate Management , Dell Computers. “ Knowledge is Power” Mubarak Al-Mansouri Procurement Officer / Drilling and Logistics Commercial Division

11. Strategic Sourcing is Evolving Traditional Purchasing Strategic Sourcing Global Supply Management ADMA-OPCO Paradigm Transaction Project Enablement Focus Price, Transaction management, Compliance Supplier rationalization, Spend consolidation, Cycle-time reduction, Standardization Balancing Total System Cost; Maximizing shareholder value; Enabling product innovation Reach Local; Many suppliers Multi-regional, Some collaboration with related functions Global; Highly collaborative across the enterprise and visible at executive levels Technology Spreadsheets Auctions, eSourcing, Basic optimization Technology enablement across all strategic sourcing processes People Decentralized Buyers Commodity Teams , Center-led or centralized Cross-functional teams Global

12. Strategic Sourcing Process Analyze Spend 1 Identify Requirements 2 Analyze Market 3 Implement Strategy 8 Manage Negotiations 6 Award & Contract 7 Develop Strategy 5 Traditional Procurement Strategic Sourcing 4

18. Determining the Negotiation Strategy Value Complexity Low High High Auction RFP Auction RFP Renegotiate RFP Few suppliers Complex Pricing Complex Services Many suppliers Transaction based Clear Requirements Many suppliers High volume Single source of supply Proprietary products Complex Pricing Partner Strategic Suppliers

21. Strategic Sourcing Information Flow Measure & Report Capture Learning Ensure Compliance

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