Presented at NTMA, includes discussions on supply chain opportunities and risks, conflict minerals, and guest speakers from LiveSource clients' Kimberly-Clark and IMMI | LiveSource.com

1. NTMA Sourcing Fair
Pre-Conference

2. MFG.com Qualifications and Experience
50K Buyers
250K Suppliers
MFG.com Fast Facts
Founded 2000
200 Employees
Bezos Expeditions/Fidelity
CNBC Small Business Council
Department of Defense
Marketplace
2
$116B Sourced
MFG.com (2013)

3. DoD Portal
3

4. Over 50,000 Sourcing Professionals use MFG.com
4

5. Roger Blumberg
Vice President, Global Business Development
Strategic Sourcing (15+ years)
• IT
• Chemical
• Distribution
• Retail
Enterprise Software Development &
Consulting (10+ years)
• General Electric
• FreeMarkets
• Ariba
• A.T. Kearney
• MFG.com/LiveSource
5

6. Considerations: Supply Chain Opportunities & Threats
• 68% of global executives responded in a recent McKinsey survey that
supply chain risk will increase in the coming 5 years
• 43,546 business bankruptcy filings in 2009 compared to 28,322 in
2008, and 19,322 in 2007
• A recent survey from the Assessment of Excellence in Procurement stated
that managing risk is at the top of Chief Executives “value” expectations
for procurement
• Single sourced supply and lack of contingency planning for critical
parts/components has resulted in lost production and company revenues
 Japan Tsunami – Paint shortage – Ford F-150
 Lightning strikes mobile phone microchip plant – Phone Manufacturer loses $400M
 Fire at auto parts factory of key supplier forced auto maker to temporarily shut down
productions at its Japanese plants
6

7. Japan Tsunami
Sony, Panasonic, Toshiba, Canon, General
Motors, Caterpillar, Boeing, Intel, Apple, Texas Instruments, Ford, Cisco, Hewlett-
Packard, National Semi-conductor
7

8. Japan Chemical Plant Fire
Nippon Shokubai is one of the world's biggest makers of acrylic
acid, the main ingredient of a resin called SAP, which is used in
diapers
8

9. Thailand Floods
Toyota (reduced operating profit by $1.6 billion), Ford (lost
production of 30,000 vehicles), Lenovo (shortage of hard
disks), Canon and Sharp
9

10. Hurricane Katrina
Shell Oil Company, ExxonMobile, Valero
Energy, ConocoPhillips, Citgo, Colonial Pipeline, Dow, Pinnacle
Polymers, Hercules Inc, GE Plastics
10

11. Volcanic Ash Cloud
Airline Industry, Food Importers/Exporters, Nissan
11

12. Supplier Risk – Protecting Your Brand
• Peanut Corporation of America
 9 deaths and 714 people contracted salmonella
 Plant did not have a valid state health certificate
• Sony Laptop Batteries
 Damaged users laptops and caused small fires
 Impacted Apple, Dell and 8 million batteries
• Unsafe work conditions & child labor
 Nike – Implemented SHAPE
(Safety, Health, Attitude, People and Environment)
 Apple – Foxconn factories – unsafe work conditions
12

13. Supply Chain Risk Categories
• Operational/Technological
 Machine Failure, component/material shortages, capacity constraints
• Social
 Strike, accidents, absenteeism, human error, union/labor relations
• Natural/Hazard
 Fire, wildfire, flood, monsoon, blizzard, ice storm, drought, heat
wave, tornado, hurricane, typhoon, earthquake, tsunami, epidemic
• Economy/Competition
 Interest rate fluctuation, exchange rate fluctuation, commodity price
fluctuation, bankruptcy, stock market collapse, global recession
• Legal/Political
 Law suites, new regulations, war, customs risk, political instability
13

14. Mapping your Risk?
Know your risks and develop your contingency plan
Source: IBM Global Business Services
14

15. How does Marketplace Sourcing Help?
• Readily available references and feedback from the buying
community
• Better pricing – suppliers in a large marketplace know they
need to be competitive
• Reduced research effort – find the right supplier with the right
capability and capacity to handle your surge requirements
• Protect your brand – easily collect and maintain critical
onboarding documentation such as certifications and
classifications (socioeconomic)
• Speed to market – suppliers know they have a very short
turnaround for pricing and delivery
15

16. Rapidly Find Suppliers Who Can Handle Your Requirements
16

17. Detailed Supplier Profiles Reduces Research Efforts
17

18. All Certifications are Validated Within the LiveSource Platform
18

19. Supplier References Readily Available
19

20. Intellectual Property is Protected
20

21. Quote Volume is Significant but Manageable
21

22. Ability to Easily Evaluate Quotes
22

23. Sourcing Fair Preparation

24. Preparing for a Sourcing Fair
24

25. Pace Yourself
• 345 minutes total Sourcing Fair time
• 75 to 80 supplier attending (2:1 ratio)
• 4 minutes 6 seconds per supplier in order to speak
with every supplier
• Be aware of the time you spend with an individual
supplier. Don’t get drawn into an extended conversation
• Utilize lunch as your opportunity to have extended
conversations
25

26. Table Top Preparation
26

27. Establish a Check-List
 Geography
 Certifications (Quality)
 Diversity
 Capacity
 Capability (machines, material, etc)
 References
 Company demographics
 # of employees
 Years in business
If possible, print out the check list and use it as a way to quickly grade the
suppliers and as a place to take notes
27

28. What is Your Story?
• I am looking for a new supplier for a new product
(projected annual volumes)
• I am looking for a new supplier for an existing
product line (what is wrong with the current
supplier?)
• We are looking to further diversify our supply
base (reduce supplier risk)
• We are looking at brining spend back to North
America from China (how much?)
Any Others Suggestions ?
28

29. Survival Guide
• Give yourself 1 minute between suppliers to take notes on
the checklist and catch your breath
• You don’t need to sell your opportunities, they need to sell
their capabilities, let them do the talking and save your voice
• If someone is clearly not a fit, time is precious, move them
along
• Be selective with the distribution of your business cards
• Hydrate and regular bathroom breaks
29

30. Develop a Code
30

31. Duckpin Bowling
31
Location Fountain Square Theater
1105 Prospect Street
Provided Food, Drinks and Duckpin Bowling provided
Networking Meet with buyers and manufacturers attending the NTMA
Purchasing Fair

32. Thank You
Roger Blumberg
Vice President
MFG.com
rblumberg@mfg.com
32

33. 33
Robert Yoho
Regional Director
Conflict Minerals

34. Global Supply Base
34

35. The LiveSource Solution
• e-Sourcing
 RFI, RFQs and reverse auctions
 150,000 certified and rated
manufacturing suppliers
 Over 500 industry standard templates
 Project management
• Supplier Management
 Supplier
discovery, scorecards, document
management and intelligence
 Supply chain health and risk mitigation
 Conflict mineral management
35

36. Conflict Minerals
Title XV of the Dodd-Frank Wall Street Reform and
Consumer Protection Act
“Section 1502 requires persons to disclose annually
whether any conflict minerals that are necessary to the
functionality or production of a product of the person, as
defined in the provision, originated in the Democratic
Republic of the Congo or an adjoining country and, if
so, to provide a report describing, among other
matters, the measures taken to exercise due diligence on
the source and chain of custody of those minerals, which
must include an independent private sector audit of the
report that is certified by the person filing the report…”
36

37. Solving Conflict Minerals Gap
The LiveSource Solution
37
• LiveSource
 Allows for the collection of your suppliers as well as
their suppliers’ documentation, verifying they are not
sourcing from countries that are on the banned
supply list
 Notifies you and your supply chain organization when
any signed or verified document or certification is due
to expire, protecting against the use of non-compliant
suppliers
 Acts as your single supplier communication vehicle to
easily communicate your company’s policies regarding
Conflict Minerals with acknowledgement records by
individual
 Provides on-demand reports detailing which suppliers
are and are not in compliance with your enforcement
of the Conflict Minerals policy

38. Conflict Minerals Tracking Within LiveSource
38

39. 39
Conflict Minerals Supplier Certifications

40. Discussion
40

41. How Kimberly-Clark bridges the gap
between engineering and sourcing

42. Patrick Nahm
• Education
 B.S. Mechanical Engineering from Marquette U.
• K-C Experience
 Plant Engineer (Baby Care)
 Global Staff Engineer (Corporate)
 Plant Project Manager (Child Care)
 Plant Operations Team Leader (Adult Care)
 Procurement Consultant (Corporate)
42

43. Lead the World in Essentials for a Better Life
57,000 employees worldwide
$21.1 Billion in Net Sales in 2012
Well-known global brands HUGGIES®
KLEENEX®
SCOTT®
KOTEX®
PULL-UPS®
DEPEND®
#1 or #2 position in more
than 80 countries
1.3 billion consumers
use our products daily

44. Our Businesses
Personal Care
Health Care
Consumer Tissue
K-C Professional

45. Our Brands

46. K-C’s World Class Manufacturing Program delivers bottom-line results through
operations in more than 100 manufacturing facilities located in 38 countries
worldwide
United States
27
Canada 1
Europe
20
Asia, S. Asia, MEA 24
Latin
America
32
Other
8
Manufacturing Facilities
United States
Canada
Europe
Asia, S.
Asia, MEA
Source: K-C 2009 Annual Report
World Class Manufacturing Program

47. Machinery & Equipment Team
47
M&E Director
Parts Supply (30 people)
• Provides spare parts to K-
C plants globally
Manufacturing (50 people)
• Fabricate and assemble
machines to support global
projects and development
Buyers (12 people)
• Procurement of
machinery, equipment, and
engineering

48. Opportunities/Challenges
• Need to supply the “best value” equipment
anywhere in the world to support businesses
 Primarily used local suppliers
 Mix of simple and complex machining processes
 In House vs. Outsource challenges
 Intellectual Property concerns
 Hundreds of RFQ’s per year
48

49. Example – Converting Machine Module
49

50. Results
• Created a new Machinery & Equipment organization
 Link Manufacturing, Parts Supply, and Buyer teams
 Strong ties to engineering organization/project teams
 Global accountability for machinery purchases
• Utilized MFG.com supplier marketplace and
technology
 Developed new suppliers
 Used LEAN to optimize and standardize processes
 Leverage supplier capability – “right part to right shop”
50

51. Part of the Journey
• We did NOT lose our core capability to
manufacture machines
• Learned that suppliers will build per the spec
• Communicated to our suppliers what we were
doing
• Sourcing example – machine frames
51

52. Conclusion
• Challenge the status quo
• Align objectives with engineers/project teams
• Continue to challenge your current suppliers
• Constantly test the global markets to
determine best value
• Leverage technology when appropriate to
speed up the RFQ/Supplier management
process
52

53. Purchasing and Supply Chain Management
“Global Purchasing in an Ever
Changing World”

54. Procurement Strategies achieve:
 Long-term objectives of the organization
 Provide geographic localization where applicable
 Review constraints and policies that restrict, or bog down
activities
 Action plans and goals expected to help achieve financial
objectives
 Transparent operational alignment
Define your Purchasing Strategy

55. Strategy Levels
Departmental Strategies
Functional Strategies
Business Unit Strategies
Strategies require horizontal
and vertical alignment!
Corporate Level Strategies

56. Resources
• Internet Searches
www.transportlink.com
www.thomasregister.com
www.fabricating.com
• Applied internet global sourcing
www.mfg.com
• Prior Purchase Files/Assessments
• Professional 3rd party sources
• Professional industrial affiliations
ASTM/SAE/SEMA/SME/MAPP
• Discussions with end user, customers, net-
working, commodity leaders
• Financial reviews

57. Portfolio Analysis
Strategic Leverage
Acquisition Multiple
Number of Capable Suppliers
Value to
Buyer
Few Many
Low
High

58. • Insource or outsource?
• Cost-vs. market-based approach
• Type of suppliers?
 High or low technology
 Full service
 Niche or distributor
• Local or global supplier?
• Single, dual or multiple source?
• Percentage of buy to each supplier?
• Can the supplier help improve your organization?
• What is the true value of the product?
Key Commodity Strategy Questions

59. Portfolio Analysis
Acquisition Phase
 Suppliers within a region
 Priority items
 Total dollars spent
 Amount of time and dollars to acquire
 Developed quality and technology
 Able to move easily between suppliers--low cost to switch
 Focus on removing effort and transactions
 Focus on Value Analysis (Cost Breakdown)

60. Value Purchasing
• Value in Purchasing
Strategic Leverage
Acquisition Multiple
Number of Capable Suppliers
Value to
Buyer
Few Many
Low
High

61. Value Proposition
Does the supplier provide a strategic deployment
plan that reflects a quality product at the lowest
landed price?

62. Portfolio Analysis
• Portfolio Analysis Quadrant Characteristics:
Multiple
 Greater number of suppliers
 Low to medium annual dollars
 Able to move easily between suppliers--low
switching costs
 Developed quality and technology
 Focus on price analysis to gain benefit

63. Portfolio Analysis
• Portfolio Analysis Quadrant Characteristics: Leverage
 Greater number of suppliers
 Medium to high annual dollars
 Focused commodity families
 Combining contracts across units yields savings
 Developed quality and technology
 Able to move easily between suppliers
 Focus on cost and price analysis

64. Portfolio Analysis
• Strategy emphasis: Leverage
 Combine volumes for lower cost
 May use a longer-term agreement
 Use target costing
 Probe for efficiencies or improvements

65. Portfolio Analysis
• Portfolio Analysis Quadrant Characteristics: Strategic
 Few capable suppliers
 Items or services critical to success
 Unique or customized items
 Collaborative or interdependent relationships
 Unable to move between suppliers easily
 Practice reverse marketing
 Develop collaborative relationships
 Pursue annual cost/price/quality/cycle time improvement
goals
 Use of longer-term agreements

66. • What are past expenditures by commodity and by
supplier?
• What are expenditures as percent of total?
• What are the scores for each supplier related to
Q/D/C?
• What is the technology roadmap for each
supplier?
• What are current & future volume requirements?
• Are there opportunities to leverage commodity
expenditures with similar commodities?
Are You Able to Answer the Following Questions?

67. • Long-term or short-term agreements?
• Escape clause?
• Degree of risk?
• Bailment agreements related to tooling?
• Electronic on-line or manual ordering?
• Supplier development - degree of difficulty?
• Use full-service provider?
• Supplier’s ability to support design?
• Supplier’s ability to provide cost down
improvement plans?
Key Product Strategy Questions

68. Translating Objectives into Purchasing Goals
Company
Objectives
Performance
Measurement
Review
Continuous
Improvement
Purchasing &
Supply Chain
Goals
Cross-Functional
Business
Objectives
Purchasing &
Supply Chain
Strategies
Performance
Measurement
System

69. Purchasing and Supply Chain Management
What single piece of technology has
changed the way we do business today?

70. Purchasing and Supply Chain Management

71. World Wide Web (Benefits)
Generates interaction globally!
Creates a global community!
Facilitates communication!
Provides information!

72. What the WEB Says
Advantages
– Availability of free information
– Low cost of initial connection
– The same protocol of communication can be used for several services
– Facilitates rapid interactive communication
– Facilitates the exchange of huge volumes of data
– Facilitates professional contacts
– Facilitates access to different sources of information
– Facilitates management of companies information system
– lt is accessible from anywhere
– It has become the global media

73. What the WEB Says
Disadvantages
– Danger of overload and excess information
– Requires an efficient information search strategy
– The search can be slow
– It is difficult to filter and prioritize information
– No guarantee of finding what your looking for
– Misdirection
– No regulation
– No quality control over available data
– Validity of findings

74. www.mfg.com
As you choose your supply base consider technology to
assist in your efforts.
I. Provide bench-marking
II. Deploy geographic boundaries
III. Set Non-disclosure boundaries
IV. Provide price boundaries
V. Tabulate your results
VI. Expand your supplier intelligence

75. www.mfg.com
I. Deploy geographic boundaries
II. Set Non-disclosure boundaries
III. Provide price boundaries
IV. Tabulate your results
RFQ # 688970
Quote Download Date 2013-04-22 10:08 RFQ Status Open
RFQ Information RFQ # 688970
Buyer Company Strong Solutions LLC RFQ Name Probe Tube, Pressure
Buyer Name John Strong Reference Number
Address 8906 Cobbler Lane RFQ Description Production of a Probe Tube, Pressure.
Approximately 0.156 inch OD x 12.7 inch long.City Lafayette
Country United States of America
Project
RFQ Creation Date 04/15/201310:28 Category Fabrication
RFQ Closing Date 04/29/201323:59 Question 1
RFQ Award Date 05/13/201323:59
Currency US Dollars Question 2
Shipping Terms
DDP - Delivered Duty Paid / Supplier
Pays
PaymentTerms Net 45 days Question 3
Special Logistics
Item Information
Item Pos. # Item # Item Name Quantity 1 Quantity 2 Quantity 3
Estimated Annual
Use (EAU)
Unit
01 1366036086296 Probe Tube, Pressure 75 300 3600 3600 Pieces

76. www.mfg.com
Supplier Name
Liaocheng Golden
Empire Group
Co.,Ltd
Yixin Precision
Metal & Plastic
Ltd.
Shanxi Fuding
International
Trade Co.,Ltd.
Hecasa USA
Corporation
Qingdao
Huameier
Metalwork
Products Co.,Ltd
青岛华美尔金属
制品有限公司
Compare quote totals based on Quantity 1 Quantity 1 Quantity 1
Using the quoted prices for Quantity 1 Quantity 1
Quote Summary [US Dollars]
Item Total 730.80 20,880.00 1,800.00 5,112.00 4,500.00
Tooling Total 0.00 0.00 0.00 0.00 0.00
Engineering Total 0.00 0.00 0.00 0.00 0.00
Material Total 0.00 0.00 0.00 0.00 0.00
Miscellaneous Total 0.00 0.00 0.00 0.00 0.00
Quote Sub-Total [US Dollars] 730.80 20,880.00 1,800.00 5,112.00 4,500.00
Shipping Total 0.00 0.00 0.00 0.00 30.00
Quote Total [US Dollars] 730.80 20,880.00 1,800.00 5,112.00 4,530.00
Quote Comparison [US Dollars]
Prices Based on
My Total Baseline Price for These Items 0.00 0.00 0.00 0.00 0.00
Over/Under for This Quote (730.80) (20,880.00) (1,800.00) (5,112.00) (4,500.00)
Average Over/Under for Competing Quotes (6,604.56) (6,604.56) (6,604.56) (6,604.56) (6,604.56)
My Total Target Price for These Items 0.00 0.00 0.00 0.00 0.00
Over/Under for This Quote (730.80) (20,880.00) (1,800.00) (5,112.00) (4,500.00)
Average Over/Under for Competing Quotes (6,604.56) (6,604.56) (6,604.56) (6,604.56) (6,604.56)
Price Rank vs. Competing Quotes 1 5 2 4 3
Item Details [US Dollars]
Prices Based on
Item # 1366036086296
Item Name Probe Tube, Pressure
Estimated Annual Use (EAU) 3600 3600 3600 3600 3600
Item Unit Pieces Pieces Pieces Pieces Pieces
Price Per Unit 0.203 5.80 0.50 1.42 1.25
Tooling 0.00 0.00 0.00 0.00 0.00
Rolled Up Price Per Unit 0.203 5.80 0.50 1.42 1.25
Baseline Price 0.00 0.00 0.00 0.00 0.00
Over/Under (730.80) (20,880.00) (1,800.00) (5,112.00) (4,500.00)
Target Price 72.00 72.00 72.00 72.00 72.00
Over/Under (658.80) (20,808.00) (1,728.00) (5,040.00) (4,428.00)
Price Rank vs. Competing Quotes 1 5 2 4 3
Item Total [US Dollars] 730.80 20,880.00 1,800.00 5,112.00 4,500.00
Unit Prices only (not including any one-time cost)
Estimated Annual Use (EAU)
Quantity 1
Unit Prices only (not including any one-time cost)

77. www.mfg.com
Tabulate your results
Delivery
Date
Quant
ity 1
Unit
Unit
Price Qty
1
Unit
Price Qty
2
Unit
Price Qty
3
EAU Qty 1
Cost
EAU Qty 2
Cost
EAU Qty 3
Cost
Suppliers Payment Terms
2013-06-27 75 Pieces 1.42 0.892 0.791 5,112.00 3,211.20 2,847.60 Net 45 days
2013-06-27 75 Pieces 0.50 0.24 0.12 1,800.00 864.00 432.00 Net 45 days
2013-06-27 75 Pieces 1.25 0.75 0.50 4,500.00 2,700.00 1,800.00
50% on placement of order and 50% on
completion, after inspection and prior to shipping
2013-06-27 75 Pieces 5.80 2.80 1.50 20,880.00 10,080.00 5,400.00 To be negociated.
2013-06-27 75 Pieces 0.203 0.203 0.203 730.80 730.80 730.80 Net 45 days