Beyond the Transaction
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Beyond the Transaction

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Enabling Knowledge Based Services in your Procurement Captive

Enabling Knowledge Based Services in your Procurement Captive

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Beyond the Transaction Beyond the Transaction Presentation Transcript

  • Beyond the Transaction: Enabling Knowledge Based Services in your Procurement CaptivePhilip IdesonProcurement & outsourcing experience as a client andprovider across multiple industries. Lived and worked in UK,US & India.Key Points• Background: Offshore Shared Services Procurement Office• Approach: Identifying Knowledge Based Processes• Enablement & Engagement: Building Offshore Capabilities• Creating Value: Knowledge Based Services Examples• Capture the Benefit: Conditioning Home Country Colleagues
  • Quick Poll: ABOUT YOU Who has offshored part of their 1 procurement function ? Captive Shared Service or 2 Outsourced? Do they perform any knowledge 3 based services?
  • OUR PROCUREMENT SHARED SERVICES JOURNEY Initial Vision: Offshore team to provide tactical procurement activities 5 Years In: 170 FTE’s across multiple verticals We then challenged ourselves: “Move beyond labor arbitrage and create value for our home office through the provision of knowledge based services”
  • Approach: WORK FLOW PLATFORMS “Work flow platforms are enabling us to do for the service industry what Henry Ford did for manufacturing. We are taking apart each task and sending it around to whomever can do it the best, and because we are doing it in a virtual environment, people need not be physically adjacent to each other, and then we are reassembling the pieces back at headquarters…24/7/365.” - Thomas Friedman; The World is Flat
  • We plotted the process steps for every job type based on the complexity and thestrategic nature of the processWe then allocated each process step to either our home office colleagues or an analystin our offshore shared service center, and rebuilt the process flow and R&R’s
  • Approach: Filling the Gaps FILLING THE GAPS We identified gaps in the capabilities of our resource constrained home office procurement teams
  • Approach: LEVERAGING DATAWe considered how we could leverage themasses of data we accumulated during ourtransactional activities
  • We identified three key areas where we couldcreate value through knowledge based services:1. Strategic Sourcing (support Direct & Indirect spend categories)2. Analytics (market intelligence, cost modeling, negotiation support)3. Category Management (low value, “ignored” categories)
  • To enable the implementation, we built a holisticframework to grow the entire organization… 1. Talent 3. Governance 5. Structure 2. Performance 4. Transitions 6. Branding
  • To enable the implementation, we built a holisticframework to grow the entire organization… 1. Talent 3. Governance 5. Structure 2. Performance 4. Transitions 6. Branding TALENT: Develop, Measure, Incent & Grow Example / Success Factor: Voluntary Attrition of 12%
  • To enable the implementation, we built a holisticframework to grow the entire organization… 1. Talent 3. Governance 5. Structure 2. Performance 4. Transitions 6. Branding PERFORMANCE: Create a performance driven culture Example / Success Factor: Performance metrics across 100% of our processes
  • To enable the implementation, we built a holisticframework to grow the entire organization… 1. Talent 3. Governance 5. Structure 2. Performance 4. Transitions 6. Branding GOVERNANCE: SOW’s & Business Operating Reviews Example / Success Factor: Only group within Global Purchasing to commit KPI’s to internal clients
  • To enable the implementation, we built a holisticframework to grow the entire organization… 1. Talent 3. Governance 5. Structure 2. Performance 4. Transitions 6. Branding TRANSITIONS: Consistency of Approach Example / Success Factor: Implemented formal project management process for all transitions
  • To enable the implementation, we built a holisticframework to grow the entire organization… 1. Talent 3. Governance 5. Structure 2. Performance 4. Transitions 6. Branding STRUCTURE Build a locally managed business Example / Success Factor: In-country chain of command ensures accountability of local leadership
  • To enable the implementation, we built a holisticframework to grow the entire organization… 1. Talent 3. Governance 5. Structure 2. Performance 4. Transitions 6. Branding BRANDING Brand as an external service provider Example / Success Factor: Focus on brand helped facilitate 100% growth within 12 months
  • Pilot: PHONE-A-FRIEND We identified an internal client and advocate who would help build and pilot new knowledge based services
  • Pilot: BUILD Route 2: Built it COMEEnablement AND THEY WILL and they will come While for other activities, clients were not able to visualize the possibilities, so we built services and then demonstrated the value they could create
  • Example: BUYER/CAPTIVE R&R SPLIT Enablement Route 2: Built it and they will comeFor our Commodity Buyer’s, we split all rolesand responsibilities between the home office 2. SourcingBuyer and our Captive Team Regional Commodity Buyer Activities Supplier Resourcing Strategic Sourcing – Source Selection 1. Global Commodity Strategies Captive Purchasing Support Activities Information Gathering Regional Commodity Buyer Activities Directed Supplier Purchases Outsourcing Visteon Manufacturing On-line bidding events Make/Buy Participation Populate RFQ EST Cost Models & Targets Recommend Source Commodity Strategy Selection (auction or eRFQ) 3, Negotiations & Supply Base Performance Captive Purchasing Support Activities Category Info Gathering Regional Commodity Buyer Activities Market Intelligence Non-Design Price Changes Supplier contact database Supplier Resourcing Populate RFQ Negotiate Service Price Ups Supplier Charge back Supplier Assessment Governance Supplier Management and Relations Regional Commodity Buyer Activities Captive Purchasing Support Activities Supplier Legal Issues Information Gathering Budgeted Parts Reconciliation On-line bidding events Obsolescence Mgmt. Info Gathering (CMMS, SAP) Escalated Payment Issues Claim Verification and Processing Escalated Service Pricing Issues Manage Supplier Location Changes Supplier Management and Relations (SCR) Raw Material Surcharge analysis Captive Purchasing Support Activities Populate RFQ Amortization Tracking Productivity Negotiations Performance Information Gathering Warranty negotiations
  • Example: SOURCING PROCESSEnablement Route 2: Built it and they will come We divided the work flows across the sourcing process between colleagues in our home offices and our offshore captive center: Value Creation Activities Strategy & Needs Id RFQ Requirements RFQ Analysis Negotiation Implement Supplier Management STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7 Identify Build Sourcing RFQ Supplier Evaluation, Implement Performance Sourcing Strategy Preparation response negotiation Sourcing Management Requirement and issuance collection & and sourcing analysis award Time Consuming Activities Build & Issue RFQ RFQ Q&A RFQ Collection Negotiation Data Analysis Issue PO Track Performance
  • Example: COST ANALYTICS Our Captive took a lead role in capturing, analyzing and Analyzing cost breakdowns reporting intelligence Cost elements (FOREX, Material, Labor, Markups) Supplier costs for similar products & services Gather market intelligence Commodity prices, price trends, price forecasts) OUTPUT: “Should Cost” Models Negotiation Support Reports
  • CAPTURE THE BENEFIT Conditioning of home office colleagues Cultural awareness Understanding of captive shared services capabilities Ability to reassemble work flow platforms
  • KEY TAKEAWAYSKey Takeaways Identify the processes you want to target Build the organizational foundation that will enable you to make the leap to knowledge based services Pilot your services with an internal advocate Use early successes and advocates to facilitate growth For maximum benefit, ensure your team members providing the knowledge based services are fully integrated into your home office teams
  • CONTINUE THE CONVERSATION Continue the Conversationphilip.ideson@ally.com+1 313 670 1333www.linkedin.com/pub/philip-ideson/1/552/618
  • With Thanks: PHOTO CREDITSTitle Name URLThomas Friedman Charles Haynes http://www.flickr.com/photos/americanprogress/3077771442/sizes/m/in/photostream/Euros Username 1suisse http://www.flickr.com/photos/1suisse/3752554593/sizes/l/in/photostream/Mind the Gap Username limaocarjuliet http://www.flickr.com/photos/limaoscarjuliet/3305886294/sizes/l/in/photostream/Fish & Chips Box Username livepine http://www.flickr.com/photos/livepine/4550549518/sizes/z/in/photostream/ With Thanks: OUR TEAM IN INDIA!