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Building Blocks for a Robust Supply Chain: Balancing Supplier Performance and Risk

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Contemporary supplier management has evolved from just managing a large supplier base to acknowledging them as vital business partners, understanding them better with analytics and building efficient and compliant supplier processes. Executives in large organizations still have a lot of unanswered questions.

Access the presentation deck from our recent Office Hours session with Donald Klock, Professor of Supply Chain Management at Rutgers Business School and ex-CPO at Colgate Palmolive, to get questions on Managing Supplier Performance and Risk answered. Don has over three decades of industry experience and combines business and academic best practices. Reach out to us at marketing@zycus.com to learn more.

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Building Blocks for a Robust Supply Chain: Balancing Supplier Performance and Risk

  1. 1. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Building Blocks for a Robust Supply Chain: Balancing Supplier Performance and Risk Access the on-demand webinar of this session here: https://zyc.us/2NeKm0R
  2. 2. Procurement Office Hours Hosted By Zycus, Inc. Presented By Donald Klock
  3. 3. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Know Your Expert – Donald Klock Professor of SCM, Rutgers Business School Director, Procuretrain Ex-CPO, Colgate Palmolive Don Klock is a senior global procurement and supply chain executive with over 30 years of international and domestic experience with major multinational consumer products corporations, such as Colgate Palmolive, Mars, Inc. and Reckitt and Benckiser. After retiring from Colgate Palmolive, he decided to pursue a second career in teaching. He currently is a professor of Supply Chain Management at the Rutgers University Business School. He also directed the Rutgers Center for Supply Chain Management from 2009 to 2014. The Center for Supply Chain Management partners extensively with industry leaders to develop practical solutions in response to problems encountered by the business community relative to the management of the end-to-end supply chain. In 2008, Don completed an 11- year career at Colgate Palmolive where most recently he was Vice President-Chief Procurement Officer. During his tenure, he completed a 4-year global procurement transformation, achieving saving in excess of $1 billion. Professor Klock’s areas of expertise are global sourcing, cost saving identification, supplier innovation, supply chain systems and processes, customer service improvement, talent management and change management. In 2014, Don received Procurement Leaders Lifetime Achievement award recognizing him for both his business and academic contributions. In 2018, Don and two other global senior procurement people formed Procuretrain. Procuretrain is the first global digital learning platform specifically designed for procurement and supply management professionals. Procuretrain’s memberships give subscribers unlimited access to compact but comprehensive learning modules which will help you excel in all aspects of your daily procurement life.
  4. 4. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay  The digital learning platform for procurement professionals  Visit www.procuretrain.com to know more About Procuretrain
  5. 5. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay REGISTER NOW Use the Promo Code WEBINAR100 to avail $100 off on the actual conference cost
  6. 6. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Building Blocks for a Robust Supply Chain: Balancing Supplier Performance and Risk  Format of Office Hours  Why are we talking about this now?  FAQs + attendee questions about this topic  Contact Info Agenda for Today’s Office Hours
  7. 7. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Format of Office Hours  Inspired from typical college office hours sessions  Attendees can ask questions before and during the session • Before: Via our event registration page • During: Via the chat box, please send questions to the host  For additional questions or feedback post this session, email Zycus or Donald Klock • Contact details shared at the end of this presentation
  8. 8. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Why are we talking about this now? Source: PayStream Report underwritten by Zycus (2017 Procure-to-Pay for Indirect Spend)
  9. 9. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay One Solution: Procurement Automation  Automating Processes • Robotics Process Automation (RPA) • Artifical Intellience (AI) • Machine Learning (ML)  Estimated savings-3-4% of Overall External Spend
  10. 10. SUPPLIER PERFORMANCE Q&A For: Access the on-demand webinar of this session here: https://zyc.us/2NeKm0R
  11. 11. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Question for the Expert – Donald Klock Q.1. What are the KPIs for measuring supplier performance? How do I deal with high and low performing suppliers? Related Question: What type of analytics are considered crucial in evaluating the supplier base, and how to appropriately assess the size (quantity vs. quality) of the supplier base?
  12. 12. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Answer  Balance Scorecard-Quantitive and Qualititive KPIs  Segment Your Suppliers-Can’t Treat Them All The Same  Use Supplier Portals To Improve Speed Of Information  Regular Performance Reviews with Written Action items  KISS  Software Can Help (e.g. Zycus iPerform)
  13. 13. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Using Analytics To Evaluate Your Supplier Base  Parato Anaysis  SRM Data  SWOT  Kraljic Matrix
  14. 14. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Question for the Expert – Donald Klock Q.2. I understand how to measure cost, delivery, and quality, but I struggle to measure “value”. Any suggestions?
  15. 15. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Answer  Supplier Innovation  Other Procurement Areas Of Value • Quality Improvement • Customer Returns/Warranty Costs • Cash/SMI • Ethical Sourcing/Social Responsibulity/Sustainability Rating • Risk Management
  16. 16. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Question for the Expert – Donald Klock Q.3. How does supplier management automation help boost supplier performance? How can I get buy-in for its value?
  17. 17. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay  Supplier self-service portal is the second most valuable tool to organizations that have adopted eProcurement  80% of organizations reported improved supplier relationships after adopting a supplier management tool Source: PayStream Report underwritten by Zycus (2017 Procure-to-Pay for Indirect Spend)
  18. 18. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Answer  Supplier Automation Makes You More Efficient & EffectiveMore time to work on Supplier Performance Leveraging Better Data & Risk Management  How To Get Buy-In: • Start with Your Senior Management • Show “as-is” and “to-be” KPIs that Will Improve • Committ to Additional Cost Savings (e.g. 3-4%)
  19. 19. SUPPLIER RISK Q&A For: Access the on-demand webinar of this session here: https://zyc.us/2NeKm0R
  20. 20. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Question for the Expert – Donald Klock Q.4. What are the early symptoms of poor supplier risk management? How can I highlight these internally?
  21. 21. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Answer  If risks were identified in your Strategic Sourcing Process, Build them Into our Supplier/Category Reviews, Develop Written Contingency Plan  Regular Reviews of High Risk Suppliers  On-Going Suppliers • Balance Scorecard-Quantitative and Qualitative • Analyze by Category/Grouping • Review & Monitor Exceptions
  22. 22. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Question for the Expert – Donald Klock Q.5. How much supplier risk am I liable to with poor or no automation? Give me some examples.
  23. 23. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Answer  Hard To Quantify, but….  Supplier Disruption Can Create • Major Cost To Rectify Problem • Loss Revenue • Customer Service/Loyality Issues • Reputation • Shareholder Value  And Not Good for Your Job Security
  24. 24. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Question for the Expert – Donald Klock Q.6. How can I take my organization to a position where it capable to tackle incoming supplier risks?
  25. 25. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Answer  “Sell” Senior Management on Concept  Be Ready with Real Life Examples From Your Own Company and Outside Your Company  Talk With Your Risk Management Insurance Provider  Highlight Your Succeses When They Occur
  26. 26. BUSINESS GROWTH WITH RESPECT TO SUPPLIERS Q&A For: Access the on-demand webinar of this session here: https://zyc.us/2NeKm0R
  27. 27. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Question for the Expert – Donald Klock Q.7. We continue to expand our sourcing globally, and it is difficult to get travel dollars (and time) to manage these suppliers from a risk and supplier development/performance standpoint. What can we do to improve this situation?
  28. 28. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Answer  Rule #1: Realize That You Will Always Be Accountable For Cost Savings  Always Talk/Remind Management About the Other “Value” You Are Creating When You Visit Suppliers • Reduced Risks To The Business • Improved Quality, Etc.  Third-Party Inspectors  International Procurement Office  Some Systems Can Help To Monitor (e.g Financial, Daily Alerts)
  29. 29. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Question for the Expert – Donald Klock Q.8. Our supplier base is exploding. How do I influence purchasers to use contracts with preferred vendors?
  30. 30. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Answer  Leverage Your Information System (e.g. Zycus AI) to Guide Requisitions to Specfic Supplier  Educate Your Stakholders and the Why and Use Verbal, Written, Boss Notification When They Don’t Comply
  31. 31. Source to Pay Suite: Spend Analysis | eSourcing | Contract Management | Supplier Management | Savings Management | Project Management | Request Management | Procure-to-Pay Questions? Thank You for attending Procurement Office Hours by Zycus Contact Information: Prof. Donald Klock dklock@business.rutgers.ed u Zycus Susan.lee@zycus.com marketing@zycus.com
  32. 32. +1 866 563 9219 info@zycus.com www.zycus.com Thank You Access the on-demand webinar of this session here: https://zyc.us/2NeKm0R

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