Overcoming Obstacles to Finding Vendors: Advanced Ariba Discovery Methods Across all Spend Segments

#AribaLIVE
Overcoming Obstacles to Finding
Vendors: Advanced Ariba Discovery
Methods across All Spend Segments
David Landsman, Sr. Adoption Manager, Ariba Discovery
@SourcingDavid
March 18, 2014
© 2014 Ariba – an SAP company. All rights reserved.
@ariba

Panel
David Landsman
Sr. Adoption Manager, Ariba Discovery
@SourcingDavid
Ashley Moore
e-Sourcing Analyst, Illinois Tool Works
Kory Manley
Director of Strategic Sourcing, Caesars Entertainment
© 2014 Ariba – an SAP company. All rights reserved.2

Agenda
• Challenges Finding Suppliers
• Overcoming Obstacles with Ariba Discovery
• Best Practice Sharing
• Q&A
3 © 2014 Ariba – an SAP company. All rights reserved.

Traditional Supplier Discovery Process
Sub-Optimal Trading Partner Decisions
Time-Consuming Poor Quality of Information Resource-Intensive

Poor Quality of Information
• Can they do the job?
• In the area I need?
• By the required date?
• For the needed amount?
• At the right quality?
• In the colors I need?
• Do they have the right certifications?
• Within budget?
Resource-Intensive
• Highly manual
• Time-intensive
• Limited competition
• Unreliable findings
• Limited scope
• Questioning quality
• No guarantee for success
• Figure out potential suppliers
• Research websites
• Search for contact details
• Find right contact person
• Call, leave a message, call again…
• Find out if they can do it
• Possibly get a quote
Time-Consuming

Source: Aberdeen Group E-Sourcing
Obtain capability
information 6%
Gather
market data 8%
Identify
suppliers 10%
Make
contact 5%
Qualify
suppliers
12%
Develop
RFP 12%
Negotiate
15%
Analyze RFP
Responses 15%
Finalize contract
terms 8%
Consumes about 30% of sourcing resources

Introducing: Ariba Discovery
• Quickly discover and qualify new sources of supply
Discover new suppliers in days or hours, not weeks
Compare multiple bids for every project
Easily import suppliers into other Ariba solutions
Save up to
75% of cost
Save up to
90% of time
*Identifying and qualifying suppliers. Based on documented customer
experiences ** 2011 Ariba GSO Case Study
Lower spend
by 15%

Find relevant new suppliers faster and easier than
through traditional search methods
• Use Ariba Discovery for free in 3 easy steps
How It Works

Analyze, Discover, Qualify
Create Posting on Ariba DiscoveryConduct Analysis on Ariba Discovery
RFP PhaseRFI PhaseSupply Market Analysis
Create a posting in just a few minutes
Target all matching suppliers (or invite selected)
Share requirements publicly
Receive offers from qualified suppliers
Compare all offers in single location
Preview suppliers by category or keyword
Review supplier profiles
Message interesting suppliers for more details
Include relevant suppliers in Posting
Find suppliers with existing transacting relationships on the Ariba Network
Review rich supplier profiles with Ariba Network activity data
Access objective third-party financial and risk information
Planned Purchases Unplanned Purchases
Fully integrated with Ariba Sourcing™ On-Demand
and Ariba Procurement

Insight-Rich Supplier Profiles
• All key details on a single page:
Ariba Network activity data
Financial and risk information
Diversity qualifications
References
“Having access to suppliers already
transacting on the Ariba Network makes
things much easier.” Kory
Manley, Director, Strategic
Sourcing, Caesars Entertainment

Key Benefits
Fast & Easy Interactive
Effective
Trusted
Integrated
It’s Free!
Save up to 90% time and 75% cost
finding and qualifying suppliers
Lower your cost by 15%, reduce lead
time, and improve quality
Communicate with suppliers in
real time, and make better decisions
Join other buyers who post over
$5B USD per year in business volume
Easily bring suppliers into your
Ariba Sourcing project from the start
Post your buying needs in 10 minutes,
and get matched to suppliers at no risk

Integration with Ariba Sourcing
• Easy access directly from Create menu
“Market Research Posting” (RFI) or “Quick Quote Posting” (RFP)

Integration with Ariba Procurement
Sourcing Initiatives
#AribaLIVE
• Easy access, use with or without a requisition
To create posting without requisition, click on “Create” menu and select “Quick
Quote Posting”, then click on “Post Now” button
Create requisition under “Create Non-catalog Item”, then click on “Start Now”
button to create a posting

Integration with SAP ERP System
• Ariba® Spot Quote for easier supplier identification and qualification:
ERP system generates automated RFQ and publishes it in Ariba Sourcing
Suppliers (invited/matched by Ariba Discovery) provide responses through Ariba Sourcing
Responses are sent back automatically to the source system

More Benefits from SAP Integration
• Ariba® Spot Quote – Benefits:
Reduction in processing time for spot quotes through highly automated process
New supplier discovery via Ariba Discovery provides increased saving potentials
Quick ROI due to out-of-the-box configuration of templates/integration adapters, plus
zero implementation and training
Bundled customer support for supplier participants and Sourcing administrators
Robust out-of-the-box integration with SAP ERP and Oracle E-Business Suite

Buyer Successes in Key Categories
16
Reduced time to find suppliers
from 4-8 weeks to days or hours
Up to 58% cost savings through
competitive bidding
Solves challenges by tapping into
supplier expertise
Connects with suppliers in a few
days instead of weeks
15% cost saving across different
categories
40% productivity increase
Retail Manufacturing Chemicals
Received first responses
within 24 hours
20% cost savings for packaging
Delivered savings 3x initial
investment in Ariba Sourcing
Reduced supplier identification
processes from 2 weeks to 1 day
Achieved price reductions of
22-30% for its customers
Deliver maximum value to its
customers
Services

• Quickly and easily find suppliers for every need on
Ariba Discovery
Obstacle 1: New commodities
Obstacle 2: Low-cost countries
Obstacle 3: Re-shoring
Obstacle 4: Diversity & Green
Obstacle 5: Rush orders
Obstacle 6: Fostering innovation
Overcoming Obstacles

Obstacle 1:
Finding Suppliers for New Commodities
• New or additional suppliers are needed sometimes
New product launches
Expansion into new markets
Existing suppliers not available
Supplier consolidation efforts

Overcoming Obstacle 1:
• Ariba Discovery has grown exponentially with more
suppliers than ever before
20,000 product and service categories
2012 2013 2014
500K
750K
1.4M
Agriculture, Farming
& Fishing, 1% Construction &
Engineering, 11%
Culinary Equipment, Food &
Beverage, 3%
Education, Organizations &
Clubs, 3%
Electronics & Electrical
Components, 5%
Energy, Drilling &
Mining, 2%
Facilities &
Maintenance, 7%
Industrial Equipment, 5%
Industrial Services, 5%
IT &
Telecomm, 9%
Marketing &
Communications, 7%
Medical, Healthcare &
Lab Equipment, 4%
Office Supplies
& Printing, 4%
Other Products, 5%
Paper, Packaging &
Containers, 3%
Parts & Components, 5%
Professional Services, 12%
Raw Materials &
Chemicals, 4%
Vehicles, Transportation &
Logistics, 5%

Overcoming Obstacle 1: Case Study
• Used Ariba Discovery to easily
find and vet local, large
beverage distributors that were
already supplying other casinos
Received multiple responses
despite very targeted search
criteria, saved time by eliminating
unqualified suppliers
“Ariba Discovery has been helpful for me
because I took over a different region and
category with a learning curve. Using
Ariba Discovery, I was able to easily find
and vet suppliers in this new category.”
Tim Thompson, Strategic Sourcing - National
Beverage Manager at Caesars

Obstacle 2:
Finding Low-Cost Country Suppliers
• Outsourcing, off-shoring, or moving production abroad can bring cost
savings and other benefits
Lower labor costs
Higher level of expertise (e.g. IT)
Shorter lead time (e.g. transportation)
Lower turnover

• International Supplier Base
Over 30% of suppliers are head-quartered
outside of the United States
More than 36% of suppliers have
global reach in addition to serving
locally and regionally
Review suppliers’ credit and risk scores
Other, 5%
Asia-
Pacific, 15%
Europe, Middle
East &
Africa, 10%North
America, 69%
Latin
America, 1%
Geographic distribution
of suppliers
“The opportunity to get vendors in the game by using Ariba Discovery
is big for us. It’s a good tool – whether you’re in the
Americas, EMEA, or Asia Pacific – as it allows us to look well beyond
local vendors. It helps grow the maturity of the buyer organization
and capture the efforts in building commercial bid analyses.”
Brian Bender, Sr. Director Global Purchasing, J.M. Huber

• Discovered highly competitive
supplier
Cut the time it took to find low-cost
country suppliers of banquet chairs
by 50%
“We already have many suppliers in our
database, but if you have been using the same
suppliers for years and don’t want to go
elsewhere, you may not be using the right or
the best suppliers.”
Celia Parsons, Category Manager – Indirect and
Professional Services, Caesars

Obstacle 3:
Finding Local Suppliers (Re-shoring)
• US is poised for a large growth in exports as manufacturing
moves stateside
• Exports have reached their highest
point in 50 years4
• Favorable wage, natural gas, and
electricity prices
• Increased wages in export-heavy
developing countries
• US shipping advantage along
important trade routes

• Through Ariba Discovery, you can find high-quality suppliers that
may allow you to move production back home
Many suppliers are already transacting on the Ariba Network
Conduct geography-based market and supply research
Evaluate shipping routes and other specific requirements
Assess skills and resources through detailed RFI/RFP process
Achieve cost savings through shorter lead times and reduced shipping rates
Widen supply opportunity

• Discovered highly competitive local
supplier of iron-on products and
moved entire production from
China to US
Achieved 34% cost savings
Reduced lead time by 75%
Improved product quality
Increased marketability
“Posting my buying needs on Ariba Discovery
has been a huge success. I was able to
discover a supplier that was right below my
nose. Not only did I achieve huge savings and
significantly improved quality, I can now market
our products as “Made in America” – it’s a win
all the way around.”
Leanne Melton, Strategic Supply Base Manager,
Plaid Enterprises

Obstacle 4:
Finding Diverse & Green Suppliers
• Complying with diversity requirements can be a burden and result
in extra cost
Qualified diverse suppliers may be hard to find
Searching for green suppliers difficult
Need to research and invite diverse suppliers
Diverse suppliers may not provide best quotes

• Find over 80,000 diverse suppliers
Find small businesses that are already
on the Ariba Network and reduce
on-boarding efforts
Highlight diverse and green requirements
in postings or during preview and get
matched to diverse suppliers
See available qualifications on
supplier profile pages

• Receives 5+ supplier responses
on average
Reduced cycle time to find suppliers by
50% and costs by up to 10%
Streamlined supplier enablement for
P2P, suppliers already on Ariba Network
Met diversity requirements:
– CO2: woman-owned, local supplier
provided most competitive offer
– Baked goods: minority-owned supplier,
closed deal within 30 days
“It doesn’t take much time to do, and you may
just find that there are more suppliers than you
think, especially minority, women and
disadvantaged businesses. […] We received
strong bids from diverse suppliers through
Ariba Discovery. The best price came from a
local, woman-owned supplier. This is a huge
win – without Ariba Discovery, it would have
been very challenging to find this supplier.”
Kory Manley, Strategic Sourcing Process &
Compliance Manager, Caesars Entertainment
“It’s now an essential piece of our regional supplier
diversity outreach program.” Jessica Rosman, Director of
Supplier Diversity and Sustainability, Caesars
Entertainment.

Obstacle 5:
Finding Suppliers for Rush Orders
• Even with strategic sourcing processes in place, you may have
urgent buying needs
Supply chain disruptions (e.g. natural disaster)
Unanticipated demand
Quality issues
Supplier issues (e.g. illegal practices)

• Use Ariba Discovery to quickly find suppliers and get
quotes, especially in the Manufacturing arena
Run rapid RFI/RFP to respond quickly to market changes
No need to search for suppliers – let Ariba Discovery do the work for you
Creating a posting takes only minutes, get first supplier responses within hours
Deep pool of OEM and MRO suppliers through integration with ThomasNet
– Access to ThomasNet directory of over 600K suppliers from Ariba Discovery
– Detailed product information for 100 million+ parts, components, materials and more
– Greatly expanded match and response rates for direct and MRO category postings

• Typically receives bids from 7-15 for
a single sourcing event
Reduced sourcing lead time from several
weeks down to a couple of days
Alleviates local capacity issues and
enhances productivity by leveraging
available resources outside the plant
Leveraging Ariba Discovery for large
percentage of capital equipment purchases
to receive multiple competitive offers
“Ariba Discovery is a great spot buying tool for
low-dollar MRO parts and accessories. It provides
buyers for spot buys of non-catalog items with an
opportunity to easily conduct market research
and identify qualified suppliers.”
Niclas Truedsson, Sr. Manager CAPEX, J.M. Huber

Obstacle 6:
Finding Innovative Suppliers
• Many sourcing professionals don’t have technical expertise in the
commodities they are charged with
Product development
Prototyping
Disruptive technology
Engineering support

• Through Ariba Discovery, find suppliers who are
Experts in their fields
Already transacting with other buyers with similar needs
• Engage with suppliers
Conduct pre-RFI analysis and contact relevant suppliers
Publish RFI or RFP postings to gather more feedback
Experience no-risk process to foster product innovation
– Leverage supplier community’s deep knowledge and expertise
– Find new solutions for solving sourcing challenges

• Created 6 RFPs, received about
10 bids on each, and found
5 new suppliers through
Ariba Discovery
Discovered suppliers who
provided strategic insight to
influence product development
Collaboration resulted in more
cost-effective solution ($1>$17)
and more predictability
“Ariba Discovery saved me at least a couple of
days worth of time. It has been a huge
advantage. Having done a few RFPs on Ariba
Discovery, I can now justify time spent on
Ariba Discovery as a solid investment. I am
confident I will get excellent responses”
Ian Thomson, Head of Business
Development, Koozoo

How to Get Started
36
• Getting started with Ariba Discovery is easy:
1. Contact us. We will show you how to get the right process set up.
2. Onboard and train team members. Assign user accounts and access permissions.
3. Try different categories. Create postings for different categories to increase success.
Ariba Procurement
(P2P)
Ariba Discovery
(Website)
Ariba Sourcing
(On-Demand, On-Premise)
discovery.ariba.com

Q&A

Helpful Resources
• Resources on Ariba Discovery for Buyers
Live Demo Registration
http://www.ariba.com/resources/live-demo/ariba-
discovery-for-buyers
Buyer Posting Tips Datasheet
http://exchange.ariba.com/docs/DOC-2366
Ariba Spot Buy (Tactical Spend) Datasheet
Ariba Discovery Customer Presentation
Quick Start Guide for Ariba Sourcing Buyers
Quick Start Guide for Ariba P2P/P2O Buyers
Quick Start Guide for Ariba Discovery
Website Buyers

Thank You!

How Ariba Discovery Works

Standard
Free to join
No annual fee
Advantage
$449 USD / year
Less than $38 USD / month
Advantage Plus
$1,999 USD / year
Less than $167 USD / month
Create a company profile and appear in
buyer search results
Included Included Included
Allow buyers to contact you and be able to respond to
them directly
20 messages per year 50 messages per year Unlimited
Get a premium profile and prioritized listing
in buyer search results
Included Included
Promote your company to active buyers with
a ProfilePitch
1 standard ProfilePitch 5 ProfilePitches Unlimited ProfilePitches
Network with buyers at Ariba LIVE with a free ticket Included
Get easy access to active buyers
Receive email notifications when new
RFI/RFQ postings match your business
View buyer RFI/RFQ postings online and
ask questions
Respond to RFI/RFQ postings and
collaborate with buyers
Response fee by deal size
Free up to $10,000
$19 up to $50,000
$39 up to $100,000
$79 over $100,000
Included Included
Maximize your presence
Receive priority customer service and
expert advice to increase your success rate
Included
Ariba Discovery Supplier Subscriptions
Sales tax not included.
Get easy access to active buyers
Maximize your presence
Showcase your company

Maximize Your Impact as a Buyer
1. Add critical details in your posting to allow faster seller response
2. Give seller feedback on their bidding process and your decision
3. Provide more guidance to sellers through Q&As and messages
4. Review seller ratings and customer references
5. Share your buyer portal URL broadly to increase awareness
• Top 5 things to do to get what you need fast

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Overcoming Obstacles to Finding Vendors: Advanced Ariba Discovery Methods Across all Spend Segments

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Overcoming Obstacles to Finding Vendors: Advanced Ariba Discovery Methods Across all Spend Segments

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