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Redefining Source-to-Pay Processes for the Digital Age
Smith and Nephew is transforming its procurement process through a comprehensive strategy that includes the implementation of the Ariba platform for improved delivery and value. Key initiatives include the creation of a global procurement team, enhanced compliance, cost reductions, and better visibility through buyer-guided solutions and e-auctions. The project has milestones such as upstream go-live in September 2016 and downstream phases planned for 2017, aiming to streamline procurement operations and consolidate suppliers.
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Redefining Source-to-Pay Processes for the Digital Age
- 1. Andrew Croston Dominic Cunnew DanielSilver Smith and Nephew Team Today:
- 2. 2 Smith and Nephew– SAP Ariba Journey 1) Background and Transformation 2) Downstream Focus 3) Upstream Delivery
- 3. About Smith andNephew 3
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- 7. PRIVILEGED AND CONFIDENTIAL GlobalProcurement Strategy What we’re doing to improve delivery/value for the Business:- Page 2 Create Global Procurement Team, so far: - China - Brazil - South Africa - India - Columbia - Mexico - Russia 1 2 3 4 S+N Dinosaur Supply Chain – 20,000 Vendors Top 25 Strategic Vendors Preferred Vendors 3000 Approved Vendors (Small Tail) 5000 5 Compliance, reduce Financial & Fraud Risks: - Global Policy Roll-out - No PO No Pay - No Contract No PO - All Contracts on Ariba - All Contracts Procurement Signed 6 Cost Out / Price Down: - Tail End Project - Year End $ Target - Non contracted Vendors - Post Contract (SRM)
- 8. PRIVILEGED AND CONFIDENTIAL ProcurementTransformation: Ariba Project Kick-off March 1 2016 Phase 1 Upstream Go-Live Sept 19 2016 Team Bolster -New PM -Change Lead Phase 1Partner Exits Project Phase 2 Delivery Partner Engaged Phase 2 Kick-off Jan 2016 - Downstream P2P Go Live: PO & Invoices Q2 2017 Go Live Q2 2017 Catalogues, Spot Buy, Guided Buying Peak 2018 World Class Indirect Procurement Project Ariba is a complex deliverable, Mount Everest depicts our challenge Downstream? Transactions: - Purchase Orders - Invoices - Catalogue and eBay orders - Guided Buying Upstream? Events such as: - Request for Quote - Request for Proposal - Reverse Auction - Contracts db + Work Flow
- 9. The benefits derivedand Implementation of P2P, Guided Buying and Spot Buy Ariba Downstream
- 10. What challenges didwe face? 1. We need to reduce costs 3. We need to improve visibility 2. We need better fiscal control and compliance 5. We need to work more efficiently 4. We need to consolidate the supplier base
- 11. Why Ariba? Spot Buy GuidedBuying Purchase to Pay
- 12. Benefits to Smithand Nephew from Guided Buying 1. We need to reduce costs 3. We need to improve visibility 2. We need better fiscal control and compliance 5. We need to work more efficiently 4. We need to consolidate the supplier base Guided Buying: • Centralises spend to approved suppliers • Increases expenditure data for later use in category planning • Easy to use • Increases visibility of procurement approved suppliers
- 13. Benefits to Smithand Nephew from Spot Buy 1. We need to reduce costs 3. We need to improve visibility 2. We need better fiscal control and compliance 5. We need to work more efficiently 4. We need to consolidate the supplier base Spot Buy offered us the following benefits: • Visibility at the lowest levels of spend • Replace the one-time-ad-hoc vendors to a single Spot Buy proxy vendor • Fill existing catalog gaps • Price comparison opportunity
- 14. Benefits to Smithand Nephew from P2P 1. We need to reduce costs 3. We need to improve visibility 2. We need better fiscal control and compliance 5. We need to work more efficiently 4. We need to consolidate the supplier base P2P has the following benefits: • Streamlined requisitioning process within all one system • Reduce the number of ERP systems currently in place
- 15. Key stages ofImplementation Design Workshop • Outline initial design & timescales • Identify and incorporate key stakeholders Build Workshop • Identify changes to be made to the current iteration of the system • Identify progress and roadblocks Systems Integration Testing • Ensure Ariba downstream elements integrate with finance systems, MDM systems • Identify any challenges which need to be overcome User Acceptance Testing • Ensure final build works as planned • Is the language used appropriate for the global end users? Go Live • Communicate and publicise the new system via company intranet, posters, emails • Review and build upon the feedback received
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- 17. The journey sofar, Smith and Nephew’s use of the Ariba solution and eAuctions Upstream
- 18. Upstream to date •Live with upstream in September 2016 • Supplier onboarding (SIM) • Sourcing • Events • Savings Form • Contracts
- 19. Upstream to date •Live with upstream in September 2016 • Supplier onboarding (SIM) • Sourcing • Events • Savings Form • Contracts Events to date • 16 RFI • 236 RFP • 9 eAuction Savings forms to date • 271 Approved saving forms for FY2017
- 20. Savings Form Data capture •Sourcing project meta data • Different savings types • Baseline, Estimated, Actual, Negotiated • Monthly Allocations Reporting • Approval status • Single currency • Calculated fields • Dashboards
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- 22. Why do aneAuction Pros: • Transparent • Generates competition • More savings Cons: • Price is the main deciding factor • Must be specific • More opportunity for error eAuctions are a dynamic Procurement tool
- 23. Volunteers please • 3Volunteers • Will be required to participate in paper based eAuction as suppliers • May be ask to explain reason behind bids
- 24. Live eAuction Plantronics Blackwire300, USB headset RFP: All 3 participants place 1 bid 2nd and 3rd placed participants place 1 more bid Has anything changed? How could this have been improved? 1. Minimum bid decrement 2. Show lead bid 3. Buffers Overtime, 30 seconds, any more bids? Was this any easier? $ Unit Price Here
Editor's Notes
- #9 Project Summary: Commenced March 1 2016, based out of Memphis Working on both Upstream and Downstream in parallel Upstream go-live Sept 19 2016, upstream is basically events such as RFQ, RFP, e-Auctions The delivery partner didn’t meet the required standard during Phase 1 and was released Phase 2 planning is under way The team has been ‘turbo- charged with the added capability of Gerry Corr and Neena Lazarus A new delivery partner is being engaged and ready for Phase 2 kick-off Jan 2017 Purchase to Pay and Catalogues, Spot Buy and Guided Buying go-live target Q2 2017 By 2018 with the SAP Ariba platform bedded in S+N will be operating a World Class Indirect Procurement function FAQ’s Why did we buy Ariba? Ariba is the leading platform and used by the largest in the Fortune 500, FTSE 100 What are the benefits? One platform with an end-to-end process from event to contract to settlement with out preferred suppliers Catalogues? Not unlike Amazon where we will be able to search and buy our common requirements Spot Buy? Items more adhoc or infrequent so we will have eBay for business to make these one offs easier to acquire (if approved) Guided Buying? Part of our journey to leading practice, were the end user is guided to the right channel to make their purchase. A web interface with good look and feel with help users search for their product or service Delivery Partner exited? Didn’t meet the standards set by S+N, delivery team not bringing experience and best practice to the project How to ensure compliance? Ariba will be the single way to buy anything of significance, supported by a new Global procurement policy
- #11 After a number of discussions with key stakeholders across different departments such as accounts payable, accounts receivable and commercial areas we identifed a number of key challenges facing Smith and Nephew. Firstly, we needed to reduce costs across the business. A major area of spend was in low value purchases. Purchases which would be paid on P cards or company cards and expensed