The document outlines procurement's strategic priorities and objectives to lead in responding to economic volatility. It identifies six key areas of focus: 1) optimizing costs to fund strategic initiatives, 2) inspiring cultural change for accountability, 3) collaborating with stakeholders, 4) delivering cost savings, 5) implementing tools to improve collaboration, and 6) leveraging ERP systems. The priorities are digitalization, next-gen shared services, and improving procurement leverage. Goals include partnering on a digitization strategy, reducing costs through technology and nearshore locations, and strengthening spend management through a new intake model.

1. TIME FOR PROCUREMENT TO LEAD
JOSH GAO
2023
Responding to Economic Volatility:

2. 2
• Relentlessly optimize operational costs to invest in corporate strategic initiatives
• Inspire corporate cultural change to drive accountability and expense control
• Build collaborative culture with stakeholders and push “Pipeline” projects to Committed; Move “Committed” to “Budgeted”
• Deliver XX in EBITDA in FY23 (excluding cost avoidance and revenue enhancements related projects)
• Implement intake and demand management tool to increase collaboration, improve engagement and deliver results
• Leverage ERP to transform B2P process and improve value capture and retainment
Our Purpose
Business
Objectives
Strategic Priorities
Digitalization / Automation
• Partner with external vendor partners to frame up
digitization and automation strategy
• Investigate investment opportunities in new
technologies to drive internal capabilities and
efficiency
• Achieve cost optimization to re-allocate resources to
new growth opportunities
Next Gen Shared Services
Evolution
• Develop a next gen shared services operation,
leveraging enhanced technology to create a more
flexible model and deliver an elevated service.
• Reduce administrative costs and improve talent
pipeline potentially by leveraging near shore locations
• Improve operational accuracy and service quality via
captive ownership of previously outsourced functions
Improve Procurement Leverage
and Expense Management
• Implement new demand management and intake self
service model to increase exposure to stakeholders
and improve procurement leverage
• Drive key stakeholder in ERP transformation
• Implement indirect purchase orders in certain
function areas to strengthen transparency and SOX
compliance
Procurement Team Key Objectives and Strategies

3. 3
Improve Procurement Leverage and Expense Management
Purchasing
& PO
Execution
Strategic
Sourcing
Category
Mgt
• Drive deeper level of collaboration between procurement and internal stakeholders and
externally with vendors
• Deploy various contractual models and category management strategy and benchmarking
tools
• Partner with vendors to achieve costs transparency and leverage 3rd party benchmarking
tool to gain objective feedback
• Provide benchmark information to facilitate contract negotiations, financial planning and
forecasting
• Link future MSA/WO into purchase order process and improve transaction compliance
• Issue purchase orders ahead of actual expense and request vendors to invoice referring to
purchase orders
• Improve PO process and communications internally and externally
Source
Identify
Opportunity
Develop
Strategy
Contract
Request &
Order
Invoice & Pay
Category Management Source-to-Manage
Transactional
Compliance
Increase Spend Reach & Satisfy
Stakeholder Requirements
Manage
Value Creation Value Retainment
Value Capture
Efficient / Effective Negotiation &
Value Capture
Automate, Lower OP Cost
Expense Control

4. 4
4
Procurement and Shared Services Key Priorities
Deep Understanding and Collaboration
(internally with stakeholders and externally with vendor partners)
Cost Savings/Cost Avoidance
Contract Rigor and
Compliance
Sustainability and
Diversity
Financials and Expense Management
Category and Vendor Strategy
Team and Individual Development and Goals

5. Listen to Your Feedback and Drive Deeper Understanding and
Collaboration with Stakeholders
• Annual survey to receive feedback from internal stakeholders
• Continuously improve expectation with business partners and leadership team
Department
Response
Rate
q1-In terms of timeliness
and results, the quality of
Indirect Procurement's
work meets my
expectations
q2- I consider the
contribution and input (e.g.
category strategy and
vendor plan) from Indirect
Procurement as a part of my
department 's overall
business strategy
q3- I receive adequate
support from Indirect
Procurement when
executing my business
strategy with external
vendors
q4-I am satisfied with
the Indirect
Procurement lead
assigned to support my
team
q5- I have full confidence in
Indirect Procurement’s ability
to collaborate and negotiate
with vendors to achieve the
best business outcome for
Petco Overall Group Avg
Construction, Facilities and Maintenance 2 4 3.5 4.5 3.5 4.0 3.9
eCommerce and Digital 1 5 3.0 5.0 5.0 5.0 4.6
Finance, Accounting and Taxes 6 3.8 4.0 4.0 4.0 4.0 4.0
Freight, Logistics and Distribution Centers 3 4.3 4.7 4.7 4.7 4.7 4.6
Human Resources 5 4.0 4.0 4.2 4.0 4.4 4.1
Information Technology 9 4.2 4.0 4.6 4.4 4.2 4.3
Legal Services 6 4.5 4.7 4.5 4.3 4.8 4.6
Marketing and Related Services 2 4.0 3.5 4.0 4.0 3.5 3.8
Merchandising and Pricing Related Services 1 5.0 5.0 5.0 5.0 5.0 5.0
Store and Retail Operations 3 4.0 4.0 3.3 4.0 3.7 3.8
Travel and Events 1 5.0 4.0 4.0 5.0 5.0 4.6
Grand Total 39 4.4 4.0 4.3 4.4 4.4 4.3
Prior Survey Results 58 3.4 3.8 3.9 4.1 4.0 3.9