CPO Agenda for 2nd half 2013
Bill Kohnen
Discussion notes for Informal CPO Roundtable
Hyatt Hotel San Francisco CA June 20...
Agenda
• Emerging Key Measures
▫ Self reported cost savings not trusted anymore
• Success factors of top performing organi...
Emerging Key Measurements are:
Cost of Goods Sold
EBITDA
0
20
40
60
80
100
120
2010 2011 2012 2013
COGS
EBITDA
~ 70% of Purchasing Success Based on
• People
▫ Who you have
▫ Development
▫ Skills
▫ Support
• How Categories are Defined...
People
• Organizations not doing a good job getting and keeping people with skills needed or
training them internal
▫ Core...
How Categories are Defined and
Managed
• This does not require any particular technology
• Recent evidence suggests rethin...
Emerging View of Categories
Operational
Importance
Strategic
Importance
Action Where Goal
Not Not Automate Consolidate Lev...
Corporate Social Responsibility
• Remains important to companies with and
without brand image.
• Leaders are integrating i...
Upcoming Events
PASIA World is a high level event that worth attending if you can coordinate with other travel
to Asia or ...
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CPO Round table Agenda for 2nd half 2013

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CPO 2013 Discussion - Emerging Measures, Success factors, Redefinition of Strategic Spend, CSR and recommendation to attend PASIA World 2013

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CPO Round table Agenda for 2nd half 2013

  1. 1. CPO Agenda for 2nd half 2013 Bill Kohnen Discussion notes for Informal CPO Roundtable Hyatt Hotel San Francisco CA June 2013
  2. 2. Agenda • Emerging Key Measures ▫ Self reported cost savings not trusted anymore • Success factors of top performing organizations ▫ People and how categories are defined • Redefining Categories ▫ Need to add forward looking view • CSR remains Important ▫ Becoming business practice and strong area for professional development
  3. 3. Emerging Key Measurements are: Cost of Goods Sold EBITDA 0 20 40 60 80 100 120 2010 2011 2012 2013 COGS EBITDA
  4. 4. ~ 70% of Purchasing Success Based on • People ▫ Who you have ▫ Development ▫ Skills ▫ Support • How Categories are Defined and Managed ▫ How you define what to focus on ▫ What you do with categories
  5. 5. People • Organizations not doing a good job getting and keeping people with skills needed or training them internal ▫ Core Procurement Skills ▫ Analytic Skills ▫ Business Acumen ▫ Managerial Skills Why? Salary part of issue Poor understanding of needs by HR staff and Headhunters Not investing in tools and training to support top people For Example: Hiring a top person to identify million dollar total cost savings opportunities but expecting her to fly to Asia coach, stay in a discount hotel while using a hand me down computer and expecting her to expense trips with personal credit cards.
  6. 6. How Categories are Defined and Managed • This does not require any particular technology • Recent evidence suggests rethinking setting categories based on 4 quadrant review. • Refining Definition of Strategic sourcing ▫ Strategic Sourcing Methodology does deliver results ▫ However, as practiced this really covers operationally and financially important suppliers in the short term ▫ Using 80/20 Rule and Single/Sole Source as criteria do not identify areas that are really strategic
  7. 7. Emerging View of Categories Operational Importance Strategic Importance Action Where Goal Not Not Automate Consolidate Leverage Basic core Purchasing Skills Operations in LCC Outsource or create Shared Service Organization Operational efficiency Cost Yes Not Current Strategic Sourcing Tools Based on historical data and near term forecast Regional Reporting into CPO. Cost Manage Risk Quality No Yes Forward looking Identification of opportunities for mutual alignment with suppliers With CTO, Bus Development Design Centers Enabling technology Product Development New revenue
  8. 8. Corporate Social Responsibility • Remains important to companies with and without brand image. • Leaders are integrating into practice of: ▫ Supplier Management ▫ Supplier Audit ▫ Supplier Recognition • An area where there are opportunities to develop staff internal with rotational assignments or teams to conduct reviews.
  9. 9. Upcoming Events PASIA World is a high level event that worth attending if you can coordinate with other travel to Asia or can send your staff in Asia there. Semicon – July 8 to 10 San Francisco ▫ As industry picks up and 450mm becomes more clear may be some excitement this year.

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