Uploaded bySAP Ariba
Effective Supplier Management: Because Knowing Is Better than Wondering
The document summarizes a panel discussion on effective supplier management. Kathryn Hinton of Tesoro Corporation and Jennifer Roberts of Sonoco Products Company presented on their companies' supplier relationship management programs. Hinton discussed how Tesoro uses consistent supplier scorecards and metrics to drive performance improvement and savings. Roberts explained how Sonoco evolved from manually tracking a few suppliers to using automated tools to measure key suppliers and achieve better quality, delivery, and costs. Both emphasized that formal measurement provides a fact basis to identify issues and opportunities that informal relationships may miss.
More Related Content
![Procurement Transformation: A Story of a Learning Journey [Amsterdam]](https://cdn.slidesharecdn.com/ss_thumbnails/acs-amsterdam-procurementtransformationatasml-141029175256-conversion-gate01-thumbnail.jpg?width=640&height=640&fit=bounds)
Similar to Effective Supplier Management: Because Knowing Is Better than Wondering
![Customer Success Story: UCB [Paris]](https://cdn.slidesharecdn.com/ss_thumbnails/ucbaribacommercesummit-external-151104170547-lva1-app6892-thumbnail.jpg?width=640&height=640&fit=bounds)
Effective Supplier Management: Because Knowing Is Better than Wondering
- 1. #AribaLIVE @ariba Effective Supplier Management: BecauseKnowing Is Better than Wondering Speakers: Kathryn A Hinton – Tesoro Corporation Jennifer Roberts – Sonoco Products Company Moderator: Keertan Rai – Ariba, an SAP Company © 2015 Ariba – an SAP company. All rights reserved.
- 2. #AribaLIVE @ariba Agenda • Overviewand Introductions • Panel Presentations Kathryn A Hinton, VP Supply Chain Management, Tesoro Jennifer Roberts, Supply Systems Manager, Sonoco • Q&A © 2015 Ariba – an SAP company. All rights reserved.2
- 3. #AribaLIVE @ariba Effective SupplierManagement: Because Knowing Is Better than Wondering © 2015 Ariba – an SAP company. All rights reserved.3
- 4. #AribaLIVE @ariba Panelists © 2015Ariba – an SAP company. All rights reserved.4 Kathryn A Hinton VP Supply Chain Management, Tesoro Corporation Jennifer Roberts Supply Systems Manager, Sonoco
- 5. #AribaLIVE @ariba Agenda • Overviewand Introductions • Panel Presentations Kathryn A Hinton, VP Supply Chain Management, Tesoro Jennifer Roberts, Supply Systems Manager, Sonoco • Q&A © 2015 Ariba – an SAP company. All rights reserved.5
- 6. SRM Program K. Hinton– VP Supply Chain 04/09/2015
- 7. 7 Los Angeles, CA 363MBD Key Metrics 2014 Refining Capacity (MBD) 850 Refining Complexity 11.5 Tesoro Logistics LP (%) 35 Tesoro Logistics GP (%) 100 Branded Retail Stations 2,300 Retail Sales (3Q MBD) 278 Marketing Integration (%) 86 Employees 7,200 Mandan, ND 71 MBD Salt Lake City, UT 58 MBD Anacortes, WA 120 MBD Martinez, CA 166 MBD Kenai, AK 72 MBD San Antonio Headquarters Tesoro’s Business Today
- 8. 8 Overview of CurrentAssets Uinta San Juan Denver Julesburg (Niobrara) Powder River Key Metrics Crude Oil, refined product and Natural gas pipelines 3,500+ miles Natural gas throughput capacity 2,900+ MMcf/d Natural gas inlet processing capacity 1,500+ MMcf/d High Plains pipeline throughput 100+ MBD High Plains trucking volume 50+ MBD Marketing terminal capacity 645+ MBD Marine terminal capacity 795 MBD Rail terminal capacity 50 MBD Dedicated storage capacity 9,200+ MBBLS Green River Martinez Mandan Salt Lake City Los Angeles Kenai Anacortes Bakken Refinery Tesoro Corporation Tesoro Logistics Gathering High Plains crude oil pipelines Trucking Natural gas gathering pipelineProcessing Natural gas processing complex Terminalling and Transportation Northwest Products System pipeline Crude oil and refined product terminal Marine terminal Rail unloading facility Pipeline
- 9. Better Sourcing and Contracting Managing categories Contract compliance Supplierperformance, quality and risk management Current value creation Contract Signature Generate incremental value by managing supplier performance and contract compliance Source (pre contract signature) Manage (post contract signature) Benign neglect Why measure? 9
- 10. • Use consistentperformance metrics to compare productivity • Provide fact-based feedback • Drive continuous improvement • Maintain expected contract value • Bring supplier innovation to operations • Deliver results with dedicated team 10 SRM objectives
- 11. Tesoro’s Supplier RelationshipManagement (SRM) program establishes consistency and comparability across key suppliers, and aims to drive tangible performance improvement. Supplier Management Tesoro‘s SRM program includes key suppliers across various spend categories Suppliers’ performance is evaluated quarterly Program Background Scorecards have performance and risk management elements Scorecards are consistent across all Tesoro sites where the supplier provides materials or services Supplier Scorecards Overview Tesoro uses the Ariba Supplier Information and Performance Management tool All scorecards and supporting documents are maintained in Ariba Tool for Supplier Performance Management All scorecards have 6 sections, with qualitative and quantitative metrics KPIs in each Section weightings vary by category All KPIs are scored on a scale of 1 to 5, where a 3 is meeting expectations Supplier Scorecards Scoring Tesoro’s SRM Program 11
- 12. Section Q2 2014 EHS&S 4.4 Quality5 Value Delivery 4 Innovation 4 Ease of Conducting Business 3 Risk Management 3 4.1 Scorecard section summary shows high level performance information. Detailed metrics are defined for each of the sections. A sample of the Value Delivery section is shown below: Value creation (cost savings / avoidance) Management of labor composite rate Indirect work hours as % of total hours Total cost – cost to erect per leg foot Total cost - dismantles cost per leg foot Delay tracking and management - implementing productivity improvements and incorporating lessons learned Management of time on tools results (annual) Productivity improvement - scaffold erects leg feet per hour Productivity improvement - scaffold dismantles leg feet per hour Detailed metrics: Scorecard details 12
- 13. • $7m invalue improvement • Stakeholders see value • Expanding across categories of spend • Supplier segmentation 13 First year, real results
- 14. • Scalability • Increasedautomation • Tighter link to Supplier Audit results • Delivering value through demand management 14 The road ahead More, Better, Faster
- 15. #AribaLIVE @ariba Agenda • Overviewand Introductions • Panel Presentations Kathryn A Hinton, VP Supply Chain Management, Tesoro Jennifer Roberts, Supply Systems Manager, Sonoco • Q&A © 2015 Ariba – an SAP company. All rights reserved.15
- 16. #AribaLIVE @ariba Sonoco– CompanyOverview © 2015 Ariba – an SAP company. All rights reserved.16 • Global Packaging Solutions Company Founded in 1899 $5 Billion in Sales 330 operations in 34 countries $2.5 Billion in spend across 325 spend pools
- 17. #AribaLIVE @ariba Supplier PerformanceManagement Journey © 2015 Ariba – an SAP company. All rights reserved.17 • Manually tracking (2006-2008) Few Suppliers Excel spreadsheets Labor Intensive • Automated System (2008-present) More suppliers Ariba SPM More collaboration
- 18. #AribaLIVE @ariba SPM Goals •Measure performance of key suppliers • Drive improvements in key focus areas Quality Delivery Productivity & Total Cost of Ownership Sustainability © 2015 Ariba – an SAP company. All rights reserved.18
- 19. #AribaLIVE @ariba Why MeasuringIs Better I know my supplier… • …has good processes • …provides a quality product • …believes in supplier diversity © 2015 Ariba – an SAP company. All rights reserved.19 My measured supplier… • …provides 90% inaccurate invoices • …had $715,964 in claims one year • …reported 1.5% diversity spend vs 5% goal
- 20. #AribaLIVE @ariba Actionable Results ©2015 Ariba – an SAP company. All rights reserved.20 Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 Supplier 10 Supplier 11 Supplier 12
- 21. #AribaLIVE @ariba Supplier PerformanceSuccesses © 2015 Ariba – an SAP company. All rights reserved.21 My measured supplier… • …provides 90% inaccurate invoices • …had $715,964 in claims one year • …reported 1.5% diversity spend vs 5% goal My measured supplier NOW… • …provides 90% accurate invoices • …had <$25,000 in claims the next year year • …reported 3.6% diversity spend vs 5% goal
- 22. #AribaLIVE @ariba What HappensWhen You Stop Measuring © 2015 Ariba – an SAP company. All rights reserved.22
- 23. #AribaLIVE @ariba Agenda • Overviewand Introductions • Panel Presentations Kathryn A Hinton, VP Supply Chain Management, Tesoro Jennifer Roberts, Supply Systems Manager, Sonoco • Q&A © 2015 Ariba – an SAP company. All rights reserved.23
- 24. #AribaLIVE @ariba © 2015Ariba – an SAP company. All rights reserved.24 “A good plan violently executed now is better than a perfect plan executed next week.” - George s Patton
- 25. #AribaLIVE @ariba © 2015Ariba – an SAP company. All rights reserved.25 Contact Us Contact Information: (Panelists) Jennifer Roberts jennifer.roberts@sonoco.com Kathryn A Hinton Kathryn.A.Hinton@tsocorp.com Contact Information: (Moderator) Keertan Rai Keertan.rai@sap.com