Organizations can no longer afford to be content with focusing on optimizing internal operations (inside-out view). Instead, they need to focus on optimizing the entire value chain (outside-in view) and extend collaboration beyond the four walls. Participate in this session and discover how best-in-class companies leverage inter-enterprise collaboration as a means to mitigate supply chain risk and drive revenue growth and profitability. You'll hear how leading Ariba customers have built a collaborative sourcing and supplier management program that leverages world-class web-based technology and tools, as well as structured processes, expertise, and a networked community.

1. Maximizing Trading Partner Performance
and Collaboration in the Networked
Economy
May 2013
© 2013 Ariba, Inc. All rights reserved.

2. Agenda
• Introduction
• Panel Discussion
• Key Takeaways
• Q & A
© 2013 Ariba, Inc. All rights reserved.2

3. What is Supplier Relationship
Management (SRM)?
Supplier Stratification SRM Governance
Supplier Performance
Management
Supplier Development
and Collaboration
How should supplier
relationships be stratified
based on strategic
importance to prioritize
resources and tailor
management processes?
How should supplier-facing
staff be organized and
internal collaboration and
supplier interactions be
conducted?
How should supplier
performance be managed
across different supplier
types and strata to
maximize performance?
How should capabilities of
existing suppliers be
developed to deliver
continuous improvement
and ongoing cost
reduction?
• Supplier Stratification
Definition
• Supplier Stratification
Criteria
• Supplier Stratification
Process
• Team Structure and
Roles
• Ongoing Governance
• SRM Competency
Management
• Function KPI
Development
• Supplier Performance
Target, KPI and
Scorecard Definition
• Ongoing Supplier
Measurement. Includes
Cost, Quality, Risk, etc.
• Supplier Development
Needs Definition
• Supplier Development
Program Definition
• Ongoing Supplier
Development
“Key processes, definitions, tools, and roles to drive
coordinated proactive management of suppliers across the business”
Transactional Suppliers
Strategic
Enterprise
Partners
Strategic Suppliers
Core Suppliers
Transactional Suppliers
Strategic
Enterprise
Partners
Strategic Suppliers
Core Suppliers
Transactional Suppliers
Strategic
Enterprise
Partners
Strategic Suppliers
Core Suppliers
Transactional Suppliers
Strategic
Enterprise
Partners
Strategic Suppliers
Core Suppliers
Strategic
Suppliers
Basic Suppliers
Core
Suppliers
Basic
Suppliers
Non-Preferred
80%
Financial
Value
20%
Financial
Value
Strategic
Company-
Wide Partners
Strategic
Company-
Wide Partners
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Supplier Team Member
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Roles
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Company Supplier
Company Supplier
Company Company
Supplier
Company
Supplier
Company
Supplier
Initiative
Management
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Supplier
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Company Supplier
Company Supplier
Company Company
Supplier
Company
Supplier
Company
Supplier
Initiative
Management
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Supplier
Company Team Member
Supplier 1
Supplier 3
Supplier 2
JointJoint
capabilitycapability
investmentinvestment
IntellectualIntellectual
capitalcapital
sharingsharing JointJoint
processprocess
improvementimprovement
Systems &Systems &
processprocess
integrationintegration
MultiMulti--
suppliersupplier
collaborationcollaborationCapabilityCapability
acquisitionacquisition
by supplierby supplier ValueValue
creationcreation
opportunityopportunity
JointJoint
capabilitycapability
investmentinvestment
IntellectualIntellectual
capitalcapital
sharingsharing JointJoint
processprocess
improvementimprovement
Systems &Systems &
processprocess
integrationintegration
MultiMulti--
suppliersupplier
collaborationcollaborationCapabilityCapability
acquisitionacquisition
by supplierby supplier ValueValue
creationcreation
opportunityopportunity
Supplier Scorecard
Functional Area / Category:
Site:
Scorecard Date:
Status Definition Supplier Representatives:
Good Meets or exceeds performance target
Fair Does not meet performance target; acceptable variance; improvement needed Company Representatives:
Poor Unacceptable variance from performance targets; action required
Invalid Invalid percentage data has been entered into the cell
KPI
KPI Wt. Metric
Metric
Wt.
Metric
Total
Data
Source
Score
Range
Accept-
able Range
Last
Yr
Last
Qtr
Last
Mo
Today
One Qtr
Trend
Metric
Score
KPI
Score
On time delivery percentage 50% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 90 80 85 90 h 9.0
Delivery conformance 50% 100% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 80 78 85 95 h 9.5 9.3
Additional available capacity 56% tbd 0 - 100 ≤ 80 80 - 89 ≥ 90 50 75 80 90 h 9.0
Financial stress 33% tbd 0 - 60 ≤ 48 49 - 53 ≥ 54 40 54 58 50 i 8.3
Credit score 11% 100% tbd 0 - 20 ≤ 16 17 ≥ 18 15 16 17 18 h 9.0 8.8
Rejection rate 26% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 70 75 80 90 h 9.0
Weighted non-comformance rate
/ CAR
26% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 80 83 85 91 h 9.1
Process chage 16% tbd 0 - 60 ≤ 48 49 - 53 ≥ 54 40 45 50 60 h 10.0
Audit rating 16% tbd 0 - 60 ≤ 48 49 - 53 ≥ 54 30 35 40 42 h 7.0
Auidt response time 16% 100% tbd 0 - 60 ≤ 48 49 - 53 ≥ 54 40 43 45 56 h 9.3 8.9
Response to standard request 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 60 70 80 91 h 9.1
Response to emergency request 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 90 80 70 60 i 6.0
Communication about potential
problems
9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 70 75 76 78 h 7.8
Flexibility to change 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 80 85 85 91 h 9.1
Customer services 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 70 75 80 85 h 8.5
Efficiency in providing information 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 90 80 70 60 i 6.0
Local support efficiency 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 85 91 h 9.1
Production lead-times 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 90 80 70 60 i 6.0
Competitiveness of Production
lead-times
9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 85 90 h 9.0
Stability of lead-times 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 80 80 g 8.0
Compliance with quoted lead-
times
9% 100% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 85 90 h 9.0 8.0
Performance Targets
Unaccept-
able Range
Target
KPIs Metrics
Assurance
ofSupply-
Delivery
Assuranceof
Supply-
Environment/
Business
15%
15%
Quality
25%
Services
15%
Comments
Performance Trend
Supplier Score
(Scale of 1-10)
Supplier Name
SRM Lead:
Account Manager:
Supplier Contact:

4. Defining Supplier Management or
Alternately Called “SRM”…
© 2013 Ariba, Inc. All rights reserved.4
Supplier
Portals
Vendor Master
Management
Risk
Management
Diversity/Green/
Corporate
Responsibility
Registration &
On-boarding
Process
Performance
Management
Supplier
Management
or SRM
Supplier
Discovery
“Supplier Management” is multi- faceted and
touches many aspects of Business Commerce
• Supplier Information Management that unifies
platform, process and supplier profiles across the
company and keeps it current, complete and correct.
• Highly usable web-based portal for suppliers to register
and manage information collaboratively with customers
• Supplier Performance Management capabilities
including Process Workflow and approvals, Surveys
and scorecards, flexible role based dashboards and
customizable reports
• A Robust technology platform that seamlessly
integrates in-context Supplier info such as
Parentage, Financials, Diversity and Sustainability to
manage and mitigate Supply Risk
• A unified Supplier Record merging data and process
flows to third party systems and data sources

5. © 2013 Ariba, Inc. All rights reserved.5
Source: Procurement Key Issues Study, The Hackett Group, 2011
Strategic Sourcing Is Foundational, but Supplier
Management (SRM) Is Transformational...

6. The Benefits of Collaboration
Source: McKinsey & Company, “The rise of the networked
enterprise, Web 2.0 finds it’s payday.” Survey of 4,394 executives.
Spring 2011
“ Networked enterprises are 50% more likely to
have increased sales, higher profit margins, gain
market share, and be a market leader. ”
41%
improved
collaboration
across
silos
55%
better
information
sharing
24%
increased
revenue
77%
increased
access to
knowledge
63%
increased
marketing
effectiveness
43%
greater
market
share
8%
higher
margins
“Increasingly companies are
embracing collaboration as part
of their strategy to grow.”
© 2013 Ariba, Inc. All rights reserved.6

7. Agenda
• Introduction
• Panel Discussion
• Key Takeaways
• Q & A
© 2013 Ariba, Inc. All rights reserved.7

8. The Panel Team
Speakers: Patrick Connaughton, Hackett Research Somit Mukherjee – Dabur
Ryan Wheelan – Ally Bank John Butkus – Fifth Third Bank
© 2013 Ariba, Inc. All rights reserved.8
Moderator : Sundar Kamakshisundaram,
Sr. Director – Solutions Marketing, Ariba, Inc

9. © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
SUPPLIER RELATIONSHIP MANAGEMENT
MAXIMIZING TRADING PARTNER PERFORMANCE AND COLLABORATION IN THE
NETWORKED ECONOMY
Patrick Connaughton
Research Director
The Hackett Group
May 8th, 2013

10. © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
SRM’s evolution aligns closely with procurement’s goals

11. © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
The value contribution is clear…

12. © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
… with a lot of room left to grow

13. © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
What key capabilities are World-class organizations focused on?
Top 10 SRM capability gaps between importance
and maturity
Importance
vs. maturity
gap (Rank)
SDM component Capability element description
1.
Information: Supplier
performance
measurement
Sophistication of KPIs and SLAs used for
supplier performance management
2.
Information: Supplier
performance
measurement
Extent of supplier scorecards to drive
performance improvement
3. Enabling Technology
Degree of technology used to enable
supplier management programs and
processes
4.
Process: Supplier
development
Level of continuous performance
improvement with suppliers
5.
Governance and
Organization
Clarity of performance management roles
6. Skills and Talent
Degree of skills and training provided to
SRM professionals
7.
Process: Supplier
partnering
Maturity of issue-resolution processes with
suppliers
8.
Information: Supplier
performance
measurement
Sophistication of process for establishing
supplier metrics and targets
9.
Process: Supplier
quality and risk
Maturity of processes for supplier
certification
10.
Governance and
Organization
Maturity of SRM roles
Source: The Hackett Group, 2012
SRM capability maturity in
descending order
1 2 3 4
Enabling technology
Process sourcing
Service placement
Information
Skills & talent
Process design (drill
down)
Governance &
organization
Top Quartile Current Maturity Level
Average Target Maturity Level
Average Current Maturity Level
Lagging Achieving Exceeding Leading

14. © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
The characteristics of top SRM performers…
2.1
1.6
2.4
3.0
3.2
0.4
0.5
1.0
0.7
0.9
Talent management processes assess current/future skill
gaps and develop hiring/training/outsourcing plans
Outsourcing, offshoring and COEs support specific
processes
Formal cross-functional teams with clear roles and
ownership, internal alignment, integrated interface to
suppliers
Business office/COE centralizes mgmt. of all aspects of the
supplier relationship process
A formal account management role for key supplier
accounts
Peer group Top performers
Top performers
average 2.53
Peer group
average 0.77
Extent to which practices have been adopted
Strategic
SRM
SRM
strategy
&
alignment
Scale:
0 = Not applied
1 = Applied somewhat in a few areas
2 = Applied very well in a few areas
3 = Applied somewhat across most areas
4 = Applied well across most/all areas
5 = Going even beyond this practice

15. © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Practical success factors of SRM adopters
Organization Process Metrics
• Strong governance structure
with champions for the program
in each area; engagement with
internal audit for program
adherence and support.
• Understanding the SRM
process, having a framework; a
culture of collaboration in the
organization.
• Active support from upper
management, internally and
externally.
• Regular steering committee
reviews.
• A mandatory external
accreditation program aimed at
upskilling capabilities.
• Vendor risk management
profiles for key supplier
relationships.
• Consistency of SRM
approach, with strategic
relationships effectively
managed via use of best-
practice tools.
• Supplier recognition program,
including supplier awards.
• Joint strategic supplier
technology roadmapping.
• Use of a scorecards as
measurement and feedback
mechanisms.
• Measuring cost-avoidance.
• One-page scorecards.
• Clear metrics that are actively
managed with the contracts.
• Supplier scorecards track
performance and progress of
initiatives.

16. © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Ultimately, Top Performers are better customers to their key suppliers
4%
38%
46%
12%
0%
20%
30%
50%
1=We are definitely
NOT a customer of
choice
2=We're a good
customer in a few
areas
3=We're a good
customer
overall, but still have
a few opportunities
4=We're a very good
customer, especially
with critical
suppliers
Peer Group
Top Performer
Relative to your competitors, to what extent do you feel that you are
a "customer of choice" for suppliers in critical spend categories?

17. © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Contact Information
The Hackett Group
Suite N500
1117 Perimeter Center West
Atlanta, GA 30338
Phone: +1 770 225 3600
Martin House
5 Martin Lane
London EC4R 0DP
Phone: +44 207 398 9100
Torhaus Westhafen
Speicherstrasse 59
60327 Frankfurt am Main, Germany
Phone: +49 69 900217 0
8, rue de Port Mahon
75002 Paris, France
Phone: +33 1 53 43 0400
Strawinskylaan 3051G, 1077 ZX
Amsterdam, The Netherlands
Phone: +31 20 301 2210
Patrick Connaughton
Research Director, Procurement Research & Advisory
pconnaughton@thehackettgroup.com
1-888-8HACKETT
advisor@thehackettgroup.com
www.thehackettgroup.com

18. © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
www.thehackettgroup.com
Statement of Confidentiality and Usage Restrictions
This document contains trade secrets and other information that is company sensitive, proprietary, and confidential, the disclosure of which would provide a competitive
advantage to others. As a result, the reproduction, copying, or redistribution of this document or the contents contained herein, in whole or in part, for any purpose is strictly
prohibited without the prior written consent of The Hackett Group.
Copyright © 2009 The Hackett Group, Inc. All rights reserved. World Class Defined and Enabled.

19. 19
November [ ], 2011
Ryan Wheelan
Ariba Live Conference – May 2013

20. 20
Awards and Recognition
• Stevie Awards for Customer Service – 2013
• Kiplinger’s Personal Finance (Online Bank “Hit”) – 2012
• Money Magazine “Best Banks in America” – 2012
• “Best Online Bank,” “Best Savings Account” and “Best One-Year CD”
• Ponemon Institute’s 2011 Most Trusted Companies for Retail Banking Study
Ally Financial Overview
Ally Financial is a leading vehicle financial services company powered
by a top online bank franchise. Ally offers a full suite of automotive
financing products and services, including new and used auto and RV
inventory and consumer financing, leasing, inventory
insurance, commercial loans and vehicle remarketing services. Ally
operates as a bank holding company.

21. 21
Ally Core Values

22. 22
Supplier Management Collaboration
Sourcing
Line of
Business
Supplier
Risk
• Product/Service Risk Evaluation
• Ongoing Supplier
Scorecards/Evaluations
• Supplier Issue Tracking
• Supplier Controls Review
• On-site visits
• Internal Risk Function Evaluations
• Supplier Risk Documents
• RFI/RFP Data
• Sourcing Deal Data
• Supplier Selection
• Contract Negotiation
• Issue Remediation
• SLA Creation

23. 23
Collaboration: Supplier Risk
Sourcing
Line of
Business
Supplier
Risk
• SPM Project per Supplier
• Contains Phases, Survey, dForms, & linkage to Line
of Business eForms
• Supplier Risk Document Storage
• Controllable/Auditable
• Date/Time Stamps
• History Tracking
Supplier
Performance
Management
Project
• Supplier Controls Review
• Ability to send to multiple participants at Supplier via
Ariba
• Consistent Supplier Responses
• Ability to attach Risk Documents
Survey
• Supplier Risk and Internal Risk Output Data
• Product/Service Risk eForm and Survey Risk
Output
• Key Participants & Dates
dForms

24. 24
Collaboration: Sourcing
Sourcing
Line of
Business
Supplier
Risk
• Sourcing Project per Deal
• Contains Events, dForm, Approvals, & Contract
Linkage
• Sourcing Deal Documents
• Controllable/Auditable, Date/Time Stamps, &
History Tracking
Sourcing Project
• RFI/RFP Supplier Responses
• Ability to send to multiple Suppliers via Ariba
• Consistent Supplier Input
Events
• Supplier Deal Data & Approvals
• UNSPSC, Cost, Savings, Project/Service
Risk, Approvers, Supplier Selection, SLAs, etc.
dForm
• Contract Workspace per Contract
• Contains Contract Risk dForm & Sourcing
Project Linkage
• Contracts
• Controllable/Auditable, Date/Time Stamps, &
History Tracking
Contract
Workspace(s)
• Contract Risk
• Template Deviations
• Risk Approvals
dForm

25. 25
Collaboration: Line of Business
Sourcing
Line of
Business
Supplier
Risk
• Product/Service Risk Evaluation
• Automated Workflow
• Calculated Fields based on algorithms and
scoring
eForms
• Ongoing Supplier Scorecards/Evaluations
• Automated Workflow
• Calculated Fields based on algorithms and
scoring
eForms
• Supplier Issue Tracking
• Enterprise-wide tracking of Supplier Issues
• Ability to categorize as Closed/Open
• Broad access and controls
Offline
Tool

26. 26
Collaboration: Reporting
Data
Warehouse:
Reporting
Supplier
Risk
Line of
Business
Sourcing
Reports Driving:
• Supplier
• RFI/RFP Short List
• Supplier Selection
• Line of Business
• SLA Tracking
• Scorecard Management
• Risk Level
• Project Management, etc.
• Scheduled Supplier
Evaluations
• Certificate ExpirationsInternal Collaboration for Managing
Third-Party Supplier Risk

27. 27
Ally Supplier Management Metrics
Data
Warehouse:
Reporting
Supplier
Risk
Line of
Business
Sourcing
•Supplier Risk
•Managed Suppliers in Program: 100+
•Categories Managed: All
•Monthly Scorecards Created: 100+
•Sourcing
•Sourcing Deals for Suppliers in
Program: 1,500+
•Contracts for Suppliers in Program:
3,500+
•Line of Business
•Product Service Risk Evaluations:
2,500+
•Issue Tracking: 250+

28. 28 Fifth Third Bank | All Rights Reserved
Strategic Sourcing Ariba Process Overview
April 2013

29. 29 Fifth Third Bank | All Rights Reserved
Sourcing Process Integrated with Ariba
Service Risk
Tier
Evaluation
Supplier
Integration
Supplier
Risk
Review
Performance
Monitoring
1) Know the Service and Potential Risk-Calibrate the Correct Due Diligence Required (Ariba)
2) Integrate Right Number of Suppliers for Project Bid – Self Registration Ariba-5/3
3) Correct Level of Risk Review Based on Risk Calibration of Service (Ariba)
4) Continual Supplier Performance Monitoring – SLA Scorecard (Ariba)
PROCESSES DEIGNED AND EXECUTED IN ARIBA

30. 30 Fifth Third Bank | All Rights Reserved
Disaster
Recovery
Initial Filter (SAS)
PLC
Level 3
Assessment
of
Risk
Tier
Level
Sourcing Portfolio
Officers
Sourcing
Relationship
Partners
Criticality of
Service
Volume of
Data
Data
Sensitivity
Regulatory
= Sourcing Initiatives
Review and Oversight Tier Levels
6: Highest Level
5: High-Moderate
4: Moderate
3: Moderate-Low
2: Low
 1: Lowest
Location
Service Risk Tier Evaluation
Service Assessment Survey (SAS) Executed with Ariba SI Workspace

31. 31 Fifth Third Bank | All Rights Reserved
Sourcing – Supplier Integration
Project Initiation
Opportunity
Assessment
Sourcing
Strategy
Supplier
Registration
(Ariba)
Sourcing Event
Supplier
On boarded
Supplier
Performance
Monitoring
Strategic Sourcing Process Cycle
End

32. 32 Fifth Third Bank | All Rights Reserved
Supplier Risk Review
IT Risk
• Completes IT Risk Review Requirements
Operational
Risk
• Operational Requirements are Met
Human
Resources
• H.R. Requirements are Compliant
Community
Affairs
• Reviews Diversity/ISO/Green Status
Finance
• Strength of Financial Position B/S-P/L-Cash Flow
Enterprise
Risk Mgt
• Overarching Risk Review Completed
Risk Review Completed for Service Providers using Ariba PM Workspace

33. 33 Fifth Third Bank | All Rights Reserved
SLA Scorecard Performance Monitoring
Supplier
On Boarded
SLA Scorecard
- Created in Ariba
- By Service
- Line of Business Owner
- Review Schedule Set
Scored on
Schedule Basis
Ongoing
Collaborative
Performance
Monitoring
Supplier Performance Excellence
Collaborative Monitoring
Best In Class Performance

34. Dabur. Celebrate Life.
Maximizing Trading Partner
Performance and Collaboration in the
Networked Economy
A Dabur perspective
Somit Mukherjee
Head-Procurement
Dabur India Ltd
May 2013

35. Dabur. Celebrate Life.
DABUR GROUP – AN INTRODUCTION
Largest Indian Personal &
Health care Company –
Revenue of over USD 1Bn
Market Cap of USD 4 Bn
World Leader in Ayurveda
Portfolio of over 400
Herbal / Ayurvedic Products
Professionally Managed
Awarded for excellence in
Corporate Governance
Strong Internal Competencies
Robust Manufacturing Set up &
State of the Art R&D Facilities
A Trusted Indian Brand

36. Dabur. Celebrate Life.
AN INDIAN MULTINATIONAL
ORGANISATION WITH GLOBAL SOURCING

37. Dabur. Celebrate Life.
Dabur’s Health & Wellness Products
Namaste Laboratories Inc. Chicago, IL

38. Dabur. Celebrate Life.
A DIVERSIFIED SOURCING BASE OF 3000+ ITEMS
• Global Materials spend of over US $ 450 million
• 900 commodities , 3000 item codes
• 21 sourcing locations & 700 + vendors
• 9 sourcing time-zones globally
• 5 Currencies
• Std deviation of over 30% in prices

39. Dabur. Celebrate Life.
Price
Costs
Profit
Price
Costs
Price
Profits
Profit Costs
What business model do you operate on ?
• Store brands control price. . Investors expectations control profits.
. Mgt has to control costs. . Business environment highly challenging
. Calls for end to end collaboration

40. Dabur. Celebrate Life.
Performance
Anticipatory
Change
Reactive
Change
Crisis
Change
Resources:
Substantial Deteriorating Minimal
Time
When do we change practices ??.....as
change is inevitable

41. Dabur. Celebrate Life.
Networked Environment
Strategic Roadmap of Sourcing
Maverick
Buying
(Decentralized)
Centralized
Procurement,
Scale Analysis
E-Procurement
Contract
Management,
Opportunity
Identification
Benchmarking,
Supplier
Performance
Collaborative
Sourcing
Competition Timeline
We have a significant
head start
Dabur Timeline

42. Dabur. Celebrate Life.
COLLABORATION Vs TRADITIONAL
SOURCING : Improving Trading Partner Performance
• Procurement departments have defined budgets and a volatile price
environment
• Need to expand the scope of high value sourcing activities across a wider
range of spend, categories , business units spread globally
• Identification of ‘ripe’ high value categories , spends and partners as part of
Enterprise Risk Management
• Unleash Next generation of Value enhancing changes in Sourcing

43. Dabur. Celebrate Life.
COLLABORATION
NEEDS….
…..AND LEADS TO…
• Improved visibility and understanding
into the true cost of sourcing
decisions and awards
• Mitigating the risk of savings leakage
& Potential risks (incl. delivery) by
enabling a shared visibility into various
sourcing scenario impacts
• Providing the sourcing team deeper
insights into the global spend
manager's needs and preferences for
future planning.
• Top Management Commitment
• Supplier performance
management
• Training & Capacity Building
• Risk mitigation & production
focus enhancement by
intermediary manufacturing in
non core areas
• Due diligence in supplier
selection , GAP analysis &
continuous assessment
• Vendor as a partner for Price
Risk Management

44. Dabur. Celebrate Life.
Physical Factual
Emotional
LEVERAGES HUMAN
SENSIBILITIES BETTER
• Real Worldly
– Efficient & Journey oriented
– Effective & more likely to
sustain
– Focus on maximising
Business potential
• Traditional
– Competitive
– Effective but often
mistrusting

45. Dabur. Celebrate Life.
An independent agency for
price assessment and
discovery
Independent price
assessment is done to
enhance transparency in
pricing for all stakeholders.
The means to offset
price risk for all players
is provided.
The means of price
discovery mechanism
through efficient paper
markets (Exchanges and
OTC) to be provided.
Farmers/Vendors/Suppliers
•Focus on improving yield .
• Invest in cultivation with
assured return and finance
at early stages.
DABUR/CP Co.
• Provide long term, fixed price
and /or guarantee contracts to
trade partners.
• Develop supply chain.
• Provide financial institution
with quality assurance.
• Invest in stakeholder education.
Financial Institution
• Provide finance against long term contracts
and infrastructure development.
. Provide finance against commodity warehouse.
DABUR/CP Co.
Invest in branding/marketing to
create genuine structure
margins.
Processors
Engage in contract
manufacturing with the
assurance of structured
market
RESOURCE CONNECTIVITY & PERFORMANCE

46. Dabur. Celebrate Life.
BENEFITS REALIZED BY ACTIVE PARTNER(S)
COLLABORATION
Cycle Time
Reduction
More Time
for Strategic
Inputs
Improved
Bottom-line
Process
Compliance
Market
Transparency
• Significant reduction in data collection
efforts and cycle time
• More time for high value activities
such as spend analysis, strategy
selection, and award optimization
• Helped shave off significant time from
the traditional offline negotiation
process
• Helped the organization save bid-to-
award lead time
• Significant reduction in cost due to
dynamic bidding process
• Average savings of 5 – 15%, depending
on category type and other governing
factors
• Increased transparency
• Objective and documented
supplier selection
• Helped to derive the true and best
market price of the auctioned items.
• Enabled buyers to know and achieve
the best market price
Sourcing
Collaboration

47. Dabur. Celebrate Life.
AT DABUR……
LIVE EXAMPLES OF THE TRADE PARTNER
COLLABORATION
 Participate in Infrastructure : Logistics
 Rigid Polymer containers : Packaging
 Herbs Sourcing : Raw Material Protection & Sustainability
 Honey Sourcing : Expansion of Supply
 Fruit Pulp Procurement : Managing the External Supply Chain

48. Dabur. Celebrate Life.
49
LOGISTICS : SCOPE OF COLLABORATION
•3rd party collaboration in Logistics to maximise value for
Farmers, Processors and Buyers

49. Dabur. Celebrate Life.
RIGID PACKAGING SOURCING
Technology provider, Manufacturer, Raw Material processor and Buyer working in
synergy to combat inflation

50. Dabur. Celebrate Life.
SUSTAINABLE HERBS SOURCING
•Production of planting material
•Sale to farmers at cost
•Agreements with other input
providers
•Buy back arrangements
•E-auctions for regular
procurement
•Now, due to our everyday e-
procurement, there is a need for
an Ariba mobile APP

51. Dabur. Celebrate Life.
HONEY PROCUREMENT
2. Overhaul of Buying strategy of Honey :- From Competitive Buying to Collaborative Buying
3. Advantageous Position :-
- Company “collaborates with Vendor “ to arrive at the best negotiated rate
- Negotiations still on , However Vendor COGM +Margin is the basis for negotiations
instead of a flat market price being trust on vendors
- “Correct Identification “ of best market price - crucial for an agricultural item with a
unstructured market.
1. Traditional model of Procurement :-
- Fierce Competition amongst vendors ,
followed by intensive negotiations to arrive at the
best possible market rate
Over a period of time – inherent flaws in
the system crept up :- quality, shrinking of vendor
data base, etc.

52. Dabur. Celebrate Life.
FRUIT PULP PROCUREMENT
Fruit stocking & ripening Washing of Fruits
Thermal treatment
Crushing & Destoning
Homogenization Pasteurisation Packaging
•Primary producers of a commodity, processors, logistics providers and
buyer networking in a perishable high value product

53. Dabur. Celebrate Life.
Knowledge driven
sourcing
Sustainable
Business
Eco-system
Hedge if
required w.r.t
portfolio
adjusted
budgeted prices
Mark to
Market/Mark to
Target/Use VAR
concepts with
suitable
software
Ensure continuity of successes
and reduce/revisit failure
TRUE COST/PRICE
DISCOVERY
Operationalize Sourcing Decisions/Collaborate
on market intelligence/forecasts and Value
add techniques
Analyze spends and ‘Focus’ on objectives
Procurement
optimisation/
Price Decision
Performance/
Risk monitoring
Partnering/
Hedging costs
Systematizing
Efficiencies
Target setting
Budgeting
MAXIMISING TRADING PERFORMANCE
Growth&stability

54. Dabur. Celebrate Life.
ACTIVE COLLABORATION FOR SUPERIOR TRADING
PERFORMANCE IN A NETWORKED WORLD

55. Dabur. Celebrate Life.
THANK YOU….

56. © 2013 Ariba, Inc. All rights reserved.
Summary and Key Take-aways

57. 58
To maximize Trading Partner Performance . . .
58
• Solidify sponsorship of internal champions and executives
• Design a collaborative relationship methodology to improve
supplier management
• Determine Supplier Segmentation Model (i.e.
strategic, key, transactional)
• Pilot specific categories and/or supplier tiers
• Use technology as an enabler to understand supplier
performance and risk
Manage all aspects of supplier information and performance on a single
integrated technology platform
Gain complete visibility into supplier information, performance, and risk
Provide suppliers a single web-based portal to share information to many
buying organizations
• Measure the success of the SRM methodology and plan for
continuous improvement
© 2013 Ariba, Inc. All rights reserved.

58. Q&A
Contact info:
Sundar Kamakshisundaram: sundar@ariba.com
© 2013 Ariba, Inc. All rights reserved.59

59. Please Complete Session Survey
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60. The Hackett Group Procurement Benchmark-2011
Backup slide 1
2.22
2.50
1.67
2.20
2.56
2.38
2.40
2.60
2.80
3.00
3.80
0.32
0.56
0.48
0.81
0.96
0.68
0.38
1.35
0.32
1.35
1.85
Supplier development resources (e.g., Lean/six sigma experts) help suppliers improve
performance and capabilities
Detailed supplier capability studies and open-book costing techniques used for mutually
beneficial improvement opportunities
Gainsharing established so suppliers share in realized SRM benefits
Relevant suppliers measured on submitting improvement ideas; process in place to
assess and provide timely feedback on proposals
Supplier conferences for best-practices sharing, supplier recognition, supplier feedback
etc.
Formal assessment and nurturing of ongoing strategic relationships
(e.g., communications, conflict resolution)
A "voice of the supplier" feedback process used (e.g., supplier surveys, reverse
scorecards, etc.); process in place to respond to supplier feedback
Issue resolution via clear escalation/resolution process; preventive process
improvements focused on relationship health
Concise SRM strategies and 1/3/5-year plans developed for strategic suppliers
SLAs periodically reviewed to ensure relevancy and minimize bureaucracy; metrics
linked to business outcomes
Periodic supplier performance reviews for contract compliance and to identify
improvement opportunities (e.g., risk reduction)
Peer group Top performers
Top performers
average 2.56
Peer group
average 0.82
Extent to which practices have been implemented
Capability
mgmt.
Collaboration
management
Relationship
healthmgmt.
Performance
management
Scale:
0 = Not applied
1 = Applied somewhat in a few areas
2 = Applied very well in a few areas
3 = Applied somewhat across most areas
4 = Applied well across most/all areas
5 = Going even beyond this practice

61. 64%
52%
64%
52%
49%
41%
21%
21%
Some type of supplier management process incl. outside of
procurement - Direct spend
Some type of supplier management process incl. outside of
procurement - Indirect spend
Enterprise-wide SRM program/process - Direct spend
Enterprise-wide SRM program/process - Indirect spend
Peer group Top performers
Backup slide 2
Percent of companies
Harder
(but better)
Easier

62. The Hackett Group Procurement Benchmark-2011
Backup slide 3
1.7
1.9
1.3
2.2
1.6
2.1
2.1
1.7
2.2
1.7
2.1
2
1.9
1.8
2.2
2.4
2.2
2.1
2.4
2.1
1.8
2.6
1.8
2
2.2
1.6
1.6
1.8
2
2.2
2.1
2.2
2.1
2.3
1.2
0.9
1.4
1.1
1.2
1
1.2
1.3
1.1
1.2
1
1
1.2
0.7
0.6
0.9
1
1.2
0.9
1.1
1
0.7
1.1
1.2
1.1
1
1
1
1.1
1
1.2
1
1.1
0.8
Extent to which supplier portals are used
Degree of external system integration with suppliers for day-to-day operations
Degree of technology used to enable supplier management programs and processes
Level of skills on SRM team
Degree of skills and training provided to SRM professionals
Maturity of SRM roles
Maturity of supplier capability assessments
Maturity of issue resolution processes with suppliers
Maturity of supplier risk management
Maturity of processes for supplier certification
Level of support given to suppliers
Level of supplier enablement and capability building
Level of continuous performance improvement with suppliers
Maturity of supplier partnering structures
Level of collaborative activities with suppliers
Level of supplier collaboration
Maturity of process for supplier to provide feedback to buying organization
Maturity in setting joint objectives with suppliers
Focus of influence on suppliers
Degree of risk and reward-sharing with suppliers
Extent to which supplier stratification practices are used
Level of value measurement with suppliers
Extent of supplier scorecards to drive performance improvement
Sophistication of KPIs and SLAs used for supplier performance management
Sophistication of establishing supplier metrics and targets
Maturity of service placement strategy
Maturity of business process sourcing strategy
Clarity of performance management roles
Maturity of organizational structure to support SRM
Level of executive support for SRM program
Level of focus on supplier innovation outside of new-offering development
Degree that SRM is tied into strategic sourcing activities
Degree of collaboration with stakeholders
Scope of SRM program
Current Maturity Level (average score) Gap to Target Maturity Level
Source: Hackett Procurement Capability Maturity Model (SRM section), 2012
Strategy &
alignment
Organization
Performance
management
Process:
Alignment
Process:
Partnering &
development
Process:
Risk/quality
Skills & talent
Enabling
technology
Lagging Achieving Exceeding Leading
1 2 3 4