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Effective Collaboration in the New Normal
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Effective Collaboration in the New Normal

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  • 1. Effective Collaboration inthe New NormalPanel Members: BBVA Compass – Amanda Frith Sonoco Products – Jennifer Roberts Reed Elsevier – Scott Meiser © 2010. Ariba, Inc. All rights reserved.
  • 2. Agenda • Opening Comments • BBVA Compass – Amanda Frith • Sonoco Products – Jennifer Roberts • Reed-Elsevier – Scott Meiser • Panel Discussion • Wrap up2 © 2010. Ariba, Inc. All rights reserved.
  • 3. Managing SupplierInformation andPerformanceAmanda Frith – VP of Supply Chain ManagementBBVA Compass © 2010. Ariba, Inc. All rights reserved.
  • 4. Company Overview • BBVA Compass • BBVA ♦ Founded 1964 as Central Bank ♦ Madrid, Spain by Harry Brock ♦ Francisco González (Executive ♦ Jose Maria Garcia Meyer, chairman), José Ignacio Chairman & US Country Goirigolzarri (President Manager and COO) ♦ Manolo Sanchez, President ♦ $785 Billion in Assets ♦ HQ Birmingham, AL ♦ 7,600 Branches ♦ 14,000 Employees ♦ 30 Countries ♦ 741 Branches ♦ 105,000 Employees ♦ 15 Largest U.S. Bank ♦ www.bbva.com th ♦ www.bbvacompass.com4 © 2010. Ariba, Inc. All rights reserved.
  • 5. Challenges • Procurement Consolidation and • No Enterprise-Wide Supplier Centralization Performance Management Program ♦ Technology ♦ Manual Process ♦ Business ♦ Only Technology Suppliers • No Standardization of Required ♦ Limited Supplier Risk Management Supplier Information • Lack of a Complete Critical Supplier List ♦ Data only gathered at time of bid. ♦ Define “Critical” ♦ No central repository for existing or ♦ Large number of suppliers potential supplier data • Transformation and Reporting fragmented among business units ♦ Identify Critical Suppliers and Requirements ♦ BBVA Global Supplier Certification monitor performance Standards • Audit Findings ♦ Access to supplier data for ♦ April 30, 2010 Deadline Corporate Purchasing55 © 2010. Ariba, Inc. All rights reserved.
  • 6. Solution • Ariba Supplier Performance Management ♦ Electronic Registration and Certification Process ♦ Electronic Supplier Performance Management Process • Implementation ♦ Three Months ♦ Two Employees ♦ Identified and Completed Scorecards on top 35 suppliers in two weeks6 © 2010. Ariba, Inc. All rights reserved.
  • 7. Results • Supplier Certification ♦ Centralized repository of supplier information ♦ Formal approval process for suppliers ♦ Better supplier risk management ♦ Compliance with BBVA Group Certification Policy • Supplier Performance Management ♦ Automated and scalable process ♦ Electronic surveys ♦ Centralized repository ♦ Identification of “at risk” suppliers ♦ Standardized key performance indicators7 © 2010. Ariba, Inc. All rights reserved.
  • 8. Key Takeaways • Identify Your Organizations Goals ♦ Risk management ♦ Communication of strategic objectives ♦ Better decision making ♦ Supplier alignment • Define Process ♦ Create Consistent Metrics (KPIs) and Measurements ♦ Define roles and responsibilities ♦ Create and communicate a review schedule ♦ Hold business liaisons and suppliers accountable8 © 2010. Ariba, Inc. All rights reserved.
  • 9. Managing SupplierRelationshipsJennifer Roberts – Director, Supplier SystemsSonoco Products © 2010. Ariba, Inc. All rights reserved.
  • 10. Sonoco Overview • Founded 1899 in Hartsville, S.C. • Diversified provider of consumer and industrial packaging and services • $4.1 billion in sales • 300 plants in 35 countries, 17,500 employees • Products sold in 85 countries10 © 2010. Ariba, Inc. All rights reserved.
  • 11. Sonoco Overview Consumer Packaging Packaging Services Rigid Paper Flexible Packaging Point-of-Purchase Service Centers Industrial Products Rigid Plastic Ends and Closures Global Tubes and Cores Protective Packaging11 © 2010. Ariba, Inc. All rights reserved.
  • 12. Challenges in Managing Suppliers • How many suppliers should you manage? • What percentage of spend should you manage? • Does it make sense to scorecard all suppliers? • Managing and Measuring Service Suppliers12 © 2010. Ariba, Inc. All rights reserved.
  • 13. Results in Managing Suppliers • Developed process for determining if a supplier should be managed • Determined if supplier was a scorecard or business review supplier • Determined if supplier was global or needed to be managed regionally • Developed process for rolling out globally and determining supplier involvement13 © 2010. Ariba, Inc. All rights reserved.
  • 14. Key Takeaways: Managing Suppliers • Not all suppliers need to be ‘scorecarded’ • More important to manage supplier reviews than worry about getting a supplier score • Review suppliers in program annually14 © 2010. Ariba, Inc. All rights reserved.
  • 15. Managing SupplierPerformance and RiskScott Meiser, Director of Sourcing and PerformanceManagementReed Elsevier © 2010. Ariba, Inc. All rights reserved.
  • 16. Who is Reed Elsevier? • A world-leading publisher and information provider targeting the science and medical, legal and risk management, and business to business sectors ♦ Parent company to: – Lexis Nexis – Elsevier – Choicepoint – Reed Business Publications – Reed Exhibitions ♦ 2009 Revenues: £6,071m/€6,800m ($8.9B) • Our Procurement Profile: ♦ $3.2 billion in spending across 100,000 suppliers ♦ Distinct business units with varying levels of Procurement acumen • Procurement Objectives: ♦ Deliver Cost Savings while – Creating a centralized and globalized procurement organization – Implementing Fiduciary Controls & Risk Mitigation where none existed – And enhancing the Employee Experience16 © 2010. Ariba, Inc. All rights reserved.
  • 17. What is Supplier Management toReed Elsevier? • What Supplier Management is not: ♦ “Stand alone” process ♦ Static/disjointed scorecards ♦ Supplier performance reviews (unidirectional v. 360o) • What Supplier Management is: ♦ Open dialog ♦ Embedded throughout Procurement lifecycle ♦ 360o relationship review ♦ Creating incremental value through win-win initiatives17 © 2010. Ariba, Inc. All rights reserved.
  • 18. Risk Management Framework • Frequency of Occurrence ♦ During Sourcing ♦ During Supplier Management, and ♦ On an on-going basis • Categories of Risk ♦ Legal ♦ Financial ♦ Data Security ♦ Business Continuity ♦ Social Responsibility/Risk • Variety of Tools ♦ Standard Ariba Content ♦ News Feeds ♦ Scorecards/Surveys ♦ Audits18 © 2010. Ariba, Inc. All rights reserved.
  • 19. Highlight: Standard AribaContent• Problem: Absent standards, risk categories are evaluated inconsistently from project to project ♦ Prioritization of criteria differs (criteria are either excluded or weighted differently) ♦ Evaluations differ (e.g. what is a “bad” revenue number?)• Problem: Sourcing Experts are expected to be experts in “everything” (financial statement evaluations, IT security risks, business continuity, etc.)• Solution: ♦ Standard content in every eRFx for NDA, Code of Conduct, and Financial and Social Responsibility Risks ♦ Simply worded questions for Sourcing Expert results in standard, auto-scored and auto-weighted content ♦ Consistent content in eRFx and Supplier Management survey – always evaluating the same ♦ Direction to Expert to target grade if “failed”19 © 2010. Ariba, Inc. All rights reserved.
  • 20. Highlight: Standard AribaContent “Failed” doesn’t sound “Collaborative”… …But we tell suppliers what we’re looking at… …we have no intention of sharing and protect BOTH parties… …And we’re even clear that it is NOT an elimination criteria BUT NOT PROVIDING IT CAN BE… • Example: Travel industry segment ♦ Nearly every short-listed company “failed” the financial risk segment ♦ NOT indicative of poorly run companies but of poor market conditions ♦ Engaged in meaningful dialog ♦ Agreed to closely review financial data on an on-going basis20 © 2010. Ariba, Inc. All rights reserved.
  • 21. Highlight: Standard Ariba Content We also have a more-collaborative view of Auctions…21 © 2010. Ariba, Inc. All rights reserved.
  • 22. Highlight: News Feeds “…If we could only schedule bankruptcy around Sourcing and Quarterly Reviews…”• On-going monitoring of negative news for Preferred Suppliers ♦ Lexis Nexis Publisher feeds updated hourly ♦ Global news sources ♦ Not all news is actionable but provides a starting point for Supplier Relationship Manager ♦ Available via e-mail, SharePoint and RSS Feed into Ariba ♦ NOT restricted to Procurement users • Example: ♦ Entity temporarily blocked from doing business in EU country by regulators ♦ Supplier notified customers on Monday ♦ But Reed Elsevier knew on prior Friday due to news feeds22 © 2010. Ariba, Inc. All rights reserved.
  • 23. Highlight: PerformanceFeedback FROM Suppliers Are we a good customer? • Standard section in every Supplier Performance Management survey ♦ May not always be positive ♦ However, identifies relationship improvement opportunities23 © 2010. Ariba, Inc. All rights reserved.
  • 24. Where are we and what’s next? • Where are we? ♦ Standard content is live in the eRFx process ♦ News feeds are live and continue to be refined ♦ SPM pilot conducted in 2009 • What’s next? ♦ Institutionalize risk framework (on-going) ♦ Continued enhancement of risk framework (e.g., anti-corruption) (on-going) ♦ Steady state Supplier Performance Management (2010) ♦ Supplier Information Management – Recognizing RFx and Survey responses as supplier knowledge and storing and maintaining via Ariba SIM (TBD – pilot in 2010) – With an eye on centralization on Supplier information (e.g., including AP data) and standardized workflow sometime in the future (TBD)24 © 2010. Ariba, Inc. All rights reserved.
  • 25. Discussion25 © 2010. Ariba, Inc. All rights reserved.
  • 26. 26 © 2010. Ariba, Inc. All rights reserved.