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Taking Catalog and SupplierRelationships to the Next LevelFor most companies, significant challenges exist around the mana...
Taking Catalog and SupplierRelationships to the Next LevelMatt MontgomeryLexmark InternationalGlobal Manager, Procure to P...
#AribaLIVEAriba Collaborative Value Chain – Direct,Indirect, Services© 2012 Ariba, Inc. All rights reserved.3Buyer’s Proce...
#AribaLIVEAriba Collaborative Value Chain – Direct, Indirect, Services© 2012 Ariba, Inc. All rights reserved.4•Spend DataE...
#AribaLIVEDelivering Measurable BenefitsValue to Companies of All Sizes, Industries, RegionsSupplier ValueBuyer ValueSourc...
#AribaLIVEMatt Montgomery is a Global Manager with Lexmark,responsible for Procure to Pay (P2P) GlobalOperations, Systems,...
#AribaLIVEAgenda• Lexmark Overview: Who we are…• Our Journey: 2004-2013• Supplier Relationships: Catalogs, Analytics, and ...
#AribaLIVELexmark Overview: Who we are…© 2013 Ariba, Inc. All rights reserved.8
#AribaLIVELexmark Overview: Who we are…© 2013 Ariba, Inc. All rights reserved.9ManagedServicesInnovativeSolutions and Soft...
#AribaLIVEOur Journey: Consolidate (2004-2008)© 2013 Ariba, Inc. All rights reserved.10Geographical StructureChallenges1.M...
#AribaLIVEOur Journey: Transform (2008-2011)• System Optimization♦ Move to single ERP♦ Start of Acquisition Integration♦ C...
#AribaLIVEOur Journey: Optimize (2011-2013)© 2013 Ariba, Inc. All rights reserved.12Actions•Movement from regional purchas...
#AribaLIVESpend Analytics• Gathering the Data:♦ Internal Data vs. Supply Chain (Outsourced Model)♦ Best Possible Outcome w...
#AribaLIVESpend Analytics© 2013 Ariba, Inc. All rights reserved.14UNSPSCSICBenchmarksUNSPSCSICBenchmarksDataAccuracyBusine...
#AribaLIVESpend Analytics© 2013 Ariba, Inc. All rights reserved.15
#AribaLIVECatalogs• IT Software• IT Hardware• Laptops• Scientific Equipment• Office Supplies• Business Cards© 2013 Ariba, ...
#AribaLIVECatalogs© 2013 Ariba, Inc. All rights reserved.17
#AribaLIVECatalogsMetrics•# of Suppliers by Category & Country / Region•# of Transactions by Supplier•$ Spend per Supplier...
#AribaLIVESupplier Communication© 2013 Ariba, Inc. All rights reserved.19
#AribaLIVESupplier Communication• Clear Visibility to Communication• Error Handling / Process Management• Reduction in Tot...
#AribaLIVESupplier Communication• Spend Analytics - Prioritization• Three Categories of Suppliers♦ Current Suppliers on th...
#AribaLIVEStrategy: Projects, Metrics andthe Path Forward• Optimization of Integrated Internal Processes• Continued Networ...
#AribaLIVESummary and Lessons Learned• Continued work to expose Value Stream andeliminate waste• Expansion of Global/Regio...
Questions?Matt MontgomeryGlobal ManagerProcure to Pay OperationsLexmark Internationalmmontgom@lexmark.com© 2013 Ariba, Inc...
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Taking Catalog and Supplier Relationships to the Next level

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For most companies, significant challenges exist around the management of catalogs and supplier relationships. Over the last several years, Lexmark has successfully transformed and streamlined their indirect procurement and catalog processes to become best in class. In this session discover the “real world” lessons that have helped them to optimize processes, eliminate gaps and stabilize organizational structures to create growth, improved efficiencies and better business results for them and their suppliers.

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Taking Catalog and Supplier Relationships to the Next level

  1. 1. Taking Catalog and SupplierRelationships to the Next LevelFor most companies, significant challenges exist around the management of catalogsand supplier relationships. Over the last several years, Lexmark has successfullytransformed and streamlined their indirect procurement and catalog processes tobecome best in class. In this session discover the “real world” lessons that havehelped them to optimize processes, eliminate gaps and stabilize organizationalstructures to create growth, improved efficiencies and better business results for themand their suppliers.© 2013 Ariba, Inc. All rights reserved.
  2. 2. Taking Catalog and SupplierRelationships to the Next LevelMatt MontgomeryLexmark InternationalGlobal Manager, Procure to Pay Operations© 2013 Ariba, Inc. All rights reserved.2
  3. 3. #AribaLIVEAriba Collaborative Value Chain – Direct,Indirect, Services© 2012 Ariba, Inc. All rights reserved.3Buyer’s Processes: Analyze to PaySupplier’s Processes: Market to CashThe Ariba Network is the world’s largest Business Network, allowing Buyers and Sellers tobecome more efficient across their Buying, Selling, and Cash Management Processes
  4. 4. #AribaLIVEAriba Collaborative Value Chain – Direct, Indirect, Services© 2012 Ariba, Inc. All rights reserved.4•Spend DataEnrichment•Spend Analysis•ContractCollaboration•Authoring•Repository•RequisitionOwnership•CatalogCompliance•ContractCompliance•ApprovalWorkflow•POCollaboration•POTransmission•Goods &ServicesReceipt•InvoiceReceipt•InvoiceCompliance•InvoiceApproval•ExceptionWorkflow• AwarenessMarketing•LeadCollaboration•ProposalCollaboration•BiddingOpportunity•ContractCollaboration• ContractRepository•CatalogCollaboration•CatalogSyndication•RequisitionCollaboration•SpecificationNegotiation•OrderCollaboration•Order Status•InvoiceDelivery•InvoiceCollaboration•Supplier Info; PerformanceMgmt; Supplier Research•Company Profile Mgmt•Customer Account ManagementBuyer’s Processes: Analyze to PaySupplier’s Processes: Market to Cash•PaymentCollaboration•DiscountCollaboration•PaymentCollaboration•PaymentVisibility•WorkingCapitalCollaboration•Category /Project Mgmt•RFI / RFP /AuctionCollaboration•SavingsTracking &Pipeline
  5. 5. #AribaLIVEDelivering Measurable BenefitsValue to Companies of All Sizes, Industries, RegionsSupplier ValueBuyer ValueSourcingProcurementProcessAP ProcessComplianceWCM &Discount3-9%ProcessSavings$3-20Savings/Document1-8%SpendSavingsTotalSavingsFasterPaymentAR ProcessProcessingOrdersSales &MarketingIncreasedRevenue15-75%TimeSavings15-75%ProcessSavings5-32%RevenueIncreaseTotalSavingsSource: Ariba customer surveys and interviews© 2013 Ariba, an SAP Company. All rights reserved.5
  6. 6. #AribaLIVEMatt Montgomery is a Global Manager with Lexmark,responsible for Procure to Pay (P2P) GlobalOperations, Systems, and Policy. Since joiningLexmark in 2006, he has led the global rollout ofprocurements systems, supplier corporateresponsibility, and procurement operationalexcellence programs.Mr. Montgomery recently led the Vendor Master DataManagement project which was awarded the 2011Gartner Master Data Management Excellence Awardfor the Lexmark program (which included Vendor,Customer, Product, Material and Person Master DataManagement).© 2013 Ariba, Inc. All rights reserved.6Matt MontgomeryGlobal ManagerProcure to Pay OperationsLexmark Internationalmmontgom@lexmark.comFor the 10 years prior to joining Lexmark, Mr. Montgomery worked for Atos as aBusiness Application Management Consultant to Global 1000 companies. Hisspecialization is in corporate operations, operational excellence, project management andcustom solution development.
  7. 7. #AribaLIVEAgenda• Lexmark Overview: Who we are…• Our Journey: 2004-2013• Supplier Relationships: Catalogs, Analytics, and Communication• Strategy: Projects, Metrics, and the Path Forward• Catalogs & Supplier Relationships: Summary of Lessons Learned• Questions & Answers© 2013 Ariba, Inc. All rights reserved.7
  8. 8. #AribaLIVELexmark Overview: Who we are…© 2013 Ariba, Inc. All rights reserved.8
  9. 9. #AribaLIVELexmark Overview: Who we are…© 2013 Ariba, Inc. All rights reserved.9ManagedServicesInnovativeSolutions and SoftwareCutting EdgeTechnologyInfrastructure OptimizationProactive ManagementBusiness Optimization
  10. 10. #AribaLIVEOur Journey: Consolidate (2004-2008)© 2013 Ariba, Inc. All rights reserved.10Geographical StructureChallenges1.Multiple ERPs – North America/Manufacturing,EMEA, and APG2.Multiple Purchasing Systems/Processes – Noconsistent purchasing system3.Heavy use of Corporate Credit Cards –Department & Project Spend out of controlTactical Objectives:•Consistent Procurement Process that would drivesavings through process control•Spend visibility•Reduction in Process LeakageSolution:•Establish more formal corporate procurementguidelines•Create & Rollout one purchasing system globally•Significantly reduce the number of procurement cardsOrganizational StructureChallenges•Procure VERSUS Pay•Regions acting very independently with countrylevel processes and policies•Strong Executive Support, but in organizationalsiloesApproach:•Meeting with Region, Country, BusinessLeaders to understand goal, strategy andobjectives•Customize the solution to fit their business•Standardize workflow where reasonable.•Maximize (basic) reporting•Maximize catalogs (low hanging fruit)PurchasingITFinanceERPFinal System DesignSystem Design•Single Instance of Purchasing System•Single Instance of Cloud Solutions•Multiple ERPsAriba Supplier NetworkAriba BuyerNA & Mfg EMEA APGContract & eRFx
  11. 11. #AribaLIVEOur Journey: Transform (2008-2011)• System Optimization♦ Move to single ERP♦ Start of Acquisition Integration♦ Consolidation of Purchasing Tools• Process Optimization• Organizational Alignment• Data Consolidation and Master Data ManagementNo change to the Cloud Solutions
  12. 12. #AribaLIVEOur Journey: Optimize (2011-2013)© 2013 Ariba, Inc. All rights reserved.12Actions•Movement from regional purchasingsupport departments to a consolidatedShared Service Centers for PurchasingSupport, Finance and Procure to PayOperations.•One site covers NA, EMEA and APG. Asecond site covers Latin America•The primary stakeholders are based inthe Corporate Headquarters.•Perceptive Software and AcquisitionCompanies are managed through thecorporate processesGeographical Structure Organizational StructureRFx &ContractOverview•Transactional procurement and A/P aremanaged separately, but they are bothlocated in the same facility.•Corporate Workflow Approversmanage transactions above a definedmaterial clip level.•Globally, procurement is managedthrough the single instance of SAP withseparate processes for Direct & Indirectpurchasing.A/P Team inShared ServiceCenterPurchasing Teamin Shared ServiceCenterFinal Process DesignOverview•The Procure to Pay SteeringCommittee—the SAP IT Director, aFinance VP, the Global VP ofPurchasing, and Treasurer meetmonthly to set group priorities andstrategies.•The Global P2P OperationsManager (reports up to SupplyChain) is considered the P2Pprocess owner, but A/P still reportsup to the CFO.•The Global P2P Operationsmanager runs a bi-weekly meetingwith regional purchasing, the SAPcenter of excellence, and regionalfinance to coordinate operationalactivities.Global P2P OperationsSupply ChainPurchasingCFOFinanceERPA/PIT
  13. 13. #AribaLIVESpend Analytics• Gathering the Data:♦ Internal Data vs. Supply Chain (Outsourced Model)♦ Best Possible Outcome with the Uneducated User• Data Enrichment• Reporting & Analytics• Keeping Ahead of the Business© 2013 Ariba, Inc. All rights reserved.13
  14. 14. #AribaLIVESpend Analytics© 2013 Ariba, Inc. All rights reserved.14UNSPSCSICBenchmarksUNSPSCSICBenchmarksDataAccuracyBusiness Value
  15. 15. #AribaLIVESpend Analytics© 2013 Ariba, Inc. All rights reserved.15
  16. 16. #AribaLIVECatalogs• IT Software• IT Hardware• Laptops• Scientific Equipment• Office Supplies• Business Cards© 2013 Ariba, Inc. All rights reserved.16• Professional Services• IT Developers• Furniture• Marketing/Promotional• Manufacturing SupportOur Major Catalog Categories
  17. 17. #AribaLIVECatalogs© 2013 Ariba, Inc. All rights reserved.17
  18. 18. #AribaLIVECatalogsMetrics•# of Suppliers by Category & Country / Region•# of Transactions by Supplier•$ Spend per Supplier / Category & Country / Region•$ Catalog Spend as % of Total Spend•# Catalog Transactions as % of Total Transactions© 2013 Ariba, Inc. All rights reserved.18
  19. 19. #AribaLIVESupplier Communication© 2013 Ariba, Inc. All rights reserved.19
  20. 20. #AribaLIVESupplier Communication• Clear Visibility to Communication• Error Handling / Process Management• Reduction in Total Cost© 2013 Ariba, Inc. All rights reserved.20
  21. 21. #AribaLIVESupplier Communication• Spend Analytics - Prioritization• Three Categories of Suppliers♦ Current Suppliers on the Network – Actively Seeking♦ Current Suppliers on the Network – Passively Seeking♦ Suppliers that would need to be enabled• Corporate Metrics♦ % of Transactions Enabled by Region/Country♦ % of Suppliers Enabled by Region/Country© 2013 Ariba, Inc. All rights reserved.21
  22. 22. #AribaLIVEStrategy: Projects, Metrics andthe Path Forward• Optimization of Integrated Internal Processes• Continued Network Expansion• Spend Analytics Expansion• Metrics:♦ Spend under review♦ Suppliers/Transactions under Catalog♦ % of Spend with Key & Strategic Suppliers♦ # of New Supplies by Category© 2013 Ariba, Inc. All rights reserved.22
  23. 23. #AribaLIVESummary and Lessons Learned• Continued work to expose Value Stream andeliminate waste• Expansion of Global/Regional Catalogs• Improved Data Management to support SpendAnalytics Objectives• Expand Electronic Communication© 2013 Ariba, Inc. All rights reserved.23
  24. 24. Questions?Matt MontgomeryGlobal ManagerProcure to Pay OperationsLexmark Internationalmmontgom@lexmark.com© 2013 Ariba, Inc. All rights reserved.24

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