Making Procurement Strategic: the Journey to Global Spend Management Excellence
1. NSG Group and Ariba
Technology Supporting the Drive for
Procurement Excellence
2. NSG Group overview
• A global glass technology leader
• Sales of JPY 577,212m (€4933m) in FY11
• Principal manufacturing operations in 29 countries, with sales
in approximately 130 countries
• Approximately 29,000 employees
• Leading manufacturer of functionalised architectural glass
• Supplier to every major car maker in the world
• Leading position in glass for solar energy sector
• Leading player in technical glass for touch-screen displays
and optical devices for printer/scanner applications
A global leader in glass for Automotive, Architectural and Technical
applications
4. Systems Landscape
Europe
North America SAP (2 instances) Japan
SAP Some Legacy systems SAP (Japan Instance)
Legacy
SE Asia
South America
Legacy / SAP (Malaysia)
Legacy systems
SAP roll-outs in 2011
SAP roll-outs in 2010-11
Ariba Contract Management, Sourcing and Supplier Modules Rolled Out
Globally – Ariba eInvoicing in Europe
5. NSG Procurement – 2007
Disconnected Maverick
Manual Too many of the wrong people
Transactional , poor control, disconnected, low value-add, low ambition
6. NSG Procurement – 2007
Organization People
• Disconnected „Purchasing silos‟ • Variable leadership/ability to influence the
• Immature Global sourcing business
• „Maverick‟ buying • Transactional focus > 70% of time
• Poor resource match to spend/value • 430 people, < 20% graduate
opportunity • Poor credibility with the business
• No defined strategy / „house style‟ • Lacking ambition
Process Technology
• Inconsistent / incomplete • Patchwork of legacy systems
• Paper & people intensive • Low priority
• Poor PO compliance <50% indirects • Failed eProcurement implementations
• Variable risk mgt approaches
• Supplier proliferation
Poor foundation for effective technology adoption
7. NSG Procurement – 2012
Matrix Organisation Increasing Skill Level
Global Supplier Development Extensive eProcurement
More Strategic, integrated, much more credible
8. NSG Procurement – 2012
Organization People
• Matrix by category & region • Category Directors as leaders and influencers
• Dedicated category teams ( >70% turnover)
• Centralised/ dedicated P2P teams • <40% of time on transactional
• Aligned/ Integrated with BU‟s • 320 people, > 50% graduate
• Specialised Process & Systems and Supplier • Graduate development programme
Development teams • Fewer and better…more to do!
Process Technology
• Complete and (mainly!) consistent • Ariba: for everyone, everywhere
• > 90% global spend visibility • Mandatory use of Sourcing & Contract
• > 98% PO compliance Management
• Robust risk management approach • Ariba eInvoicing: > 45,000 invoices, > 90%
touch-less
• > 70% reduction in supplier number
A solid foundation for technology uptake
9. NSG and Ariba
Internal
Stakeholders
Category Management Sourcing
Category Strategies RFX/eAuction
Savings Projects Standard
KPIs Templates
Info and Knowledge Sharing
Contract
Management
Multiple Instances Approvals
Contract Authoring
+ Legacy Standard Clauses and
Templates
eInvoicing Supplier
PO
Invoice Performance
Management
Certificates
Audits
Suppliers Sustainability
10. Ariba Sourcing is delivering for NSG…
Examples of where Ariba has supported our activity in FY12:
28% €400K 24%
Step Change in User Adoption
FY11 FY12
Sourcing Events 15 529
Contracts 166 2,296
Ariba Monthly Medals
Users <30 >250
Ariba use for Sourcing is mandated in FY13
11. Also used for Huge, Complex Events…
Global Integrated Facilities Management Project : €125m, 29 countries, >400 sites
RFI with scoring for supplier
qualification and selection
RFP with qualified
suppliers
Full Project Management for
Due Diligence and
Implementation Stages
Ariba is our chosen tool for strategic and highly complex events
12. Ariba Contract Management
Ariba is the sole database used for Procurement Contracts:
• Internal and external auditors will only check Ariba for
contract compliance
• Contracts approval; from weeks previously to gain physical
signatures to hours online today
• Contract approvers automatically identified by the system by
using the base data of the contract
• Business, Finance, Procurement and Legal Departments are all
engaged in the Contract Approval Process
• Next steps are to explore contract authoring and clause libraries
within Ariba
• Dashboard reporting gives clear visibility to Category Directors
Ariba use for Contract Management is mandated in FY13
13. Supplier Performance Management
• One global Supplier
Database in Ariba
• Single “source of truth”
for Supplier Information
• Supplier Evaluation
• Six monthly supplier
audits now done in Ariba
• Covering supplier risk,
certifications, code of
conduct compliance,
delivery and quality:
Ariba supports achievement of our sustainability targets
14. E-Invoicing - progress to date
Over 375 suppliers enabled for eInvoicing
Over 45,000 invoices since Go-Live
Over 90% “Touch-less” Invoices
15. Information & Knowledge Management
Global data sharing across a common platform
This file is 15mb in size and cannot be emailed
Instant, global access is available via Ariba
No need for remote servers, Sharepoint etc.
Access available via Network Single Sign On
Category Management
All Category Strategies are now held in Ariba
Instant access for CPO to all strategies
Strategies managed with staging gates, phases
and approvals
Access being extended to key stakeholders outside of
Procurement
Real-time information sharing across countries, time zones and functions
improves quality and speed of decision making
16. Dashboard Reporting
• Category and Regional Directors have specific dashboard tabs
• ‘One click’ navigation to their key procurement information
• CPO has overview tab containing all information
• Easy drill-down into each area of data
• Clarity and ease of access of information has helped to drive adoption
Real-time dashboard data helps Category and Regional directors
drive adoption
17. Key benefits from Ariba tools
Incremental, repeatable savings from eSourcing events vs.
traditional methods
Robust contract management and approval processes
Global database of suppliers – supporting rationalisation and
sustainability goals
Electronic invoicing supporting efficiency gains in invoice processing and
WC management
Global, secure knowledge database. Supporting effective document
management and compliance
Establishing/supporting standard processes and building
organisational capability
18. Key challenges and learning points
Technology is not a ‘quick fix’ …organisation design, team capability and
attitude needs to be right
Recognise success …but be tough on those who try to opt out
Recognise and support learning and transition difficulties…up to a point …then
just get on with it!
Organisational culture can hinder progress…be aware of the need to
engage/challenge other parts of the business as well as your own team
Discipline is required
Use all the Ariba tools…re-inforces the message ” this is the way we do things
around here”
Biggest benefits start to flow when everyone uses the tools …everywhere
Make performance visible…set objectives and KPI’s to drive improvements
…use the dashboards
Establish the right foundation with no opt-out allowed
19. NSG Procurement – 2014…and beyond!
• Fewer/ better people working in specialised buying and
transactional hubs
• Procurement as a Centre of Excellence … seen as a key
development function for the best and brightest in the
organisation
• Influential, innovative and challenging
• Internal consultants/project managers
• Linked by and leveraging smart technology…
Fewer and better people, leveraging smart technology;
change agents, challenging and ambitious