The Journey to Successful Supply Management

Transcription

1 The Journey to Successful Supply Management Sven-Anders Stegare Chief Procurement Officer SEB Group 1

2 Frequently asked Questions What is supply management in a bank? How to select the right transformation strategy? How do you plan your transformance? How to measure your performance? 2

3 Content Introduction to SEB Business Environment Transforming to Best-in-Class Supply Management Measurements of Successful Supply Management 3

4 SEB the key to North-European markets SEB Group Local presence in ten countries + strategic locations globally Half of the result generated outside of Sweden About 20,000 employees 600 branch offices Global top rankings within several areas 4

5 Share of operating profit before credit losses and goodwill impairment Jan Dec 2009 Lithuania Latvia Estonia Finland Denmark 4% 6% 4% 4% 4% 10% 15% Germany 53% Wealth Management Retail Banking Life 10% 6% 15% Baltic 7% Merchant Banking 62% Norway Sweden Geography Adjusted for Other and SEK 1,6bn capital gain on debt buy-s Divisions Adjusted for Other 5

6 SEB's cornerstones during 150 years Long-time lasting customer relations Entrepreneurship International outlook 6

7 Content Introduction to SEB Business Environment Transforming to Best-in-Class Supply Management Measurements of Successful Supply Management 7

8 Highest customer satisfaction Highest RoE 8

9 SEB Supply Cost derived from the annual report External supply cost represents more than 40% of total cost MSEK Investments Other Costs Net turnover Less operating profit Less financial cost & income Less amortiz ation & depreci ation Less staff cost Plus invest ments SEB Supply Cost 1. Excluding SEB Tryggliv

10 SEB Supply Management Vision Best-in-class Procurement to Payment services based upon customer needs, economy of scale and operational excellence 10

11 SEB has followed a conscious journey to professionalize supply management Effectiveness DECENTRALIZED FUNCTIONAL FOCUS CENTRE LED CROSS FUNCTIONAL FOCUS Retailers Automotive Consumer electronics SEB 2004 Food and beverages Telecommunication Computers PC Public utilities Pharma Transactional orientation Commercial orientation Procurement co-ordination Internal integration External integration Value chain integration SOURCE: Procurement and Supply Chain Management, Van Weele, and Rozemaijer (1998) 11

12 How to plan and make a journey? Vision/ object Where are we going? Which road do we take? Navigation Tool Performance management Adjustment to keep position Real time data Early warning signals of problems Problem solving 12

13 How to select the right strategy to professionalize supply management? Step-by-Step Strategy People Process Technology 13

14 The journey has focused on multiple areas SEB 2004 SEB 2009 SEB 2012 PILOT Prove the procurement value by running Sourcing Pilots TRANSITION Competence review and shift Recruitment of personnel Define and implement key processes Procurement policy Establish governance structure SOURCING Run sourcing projects Category management Spend analysis Establish Performance management DEVELOPMENT Efficient Sourcing Supplier Relationship Management Enhance Procure-to-Pay "Best-in-class Procurement to Payment services based upon customer needs, economy of scale, and operational excellence" 14

15 Content Introduction to SEB Business Environment Transforming to Best-in-Class Supply Management Measurements of Successful Supply Management 15

16 How to measure your performance? Vision/ object Navigation Tool Where are we going? Which road do we take? Performance management Adjustment to keep position Real time data Early warning signals of problems Problem solving 16

17 The Supply Management Scorecard linking day-to-day actions to the Corporate Strategy Corporate Strategy SM Business Objectives SM Business Plans SM Measures Actions 17

18 The Supply Management Scorecard has four Perspectives Objectives Financial Measures How does our performance look to our key stakeholders? Corp Culture & HR Objectives Measures Are we able to sustain innovation, change and improvement? Vision and Mission Objectives Customer Measures How do we look to our customers? Operational Excellence Objectives Measures What must we excel at? What business processes are the value drivers? 18

19 Measure and follow-up by Supply Management Scorecard Procurement Balanced Scorecard GP Sep 08 Financials (reported monthly) Customer (reported quarterly) Corporate Culture / HR (reported monthly/quartely) Operational Exellence (reported monthly/quartely) Measurement 2007 Two months One month This month 2008 Measurement 2007 Two quarters One quarter This quarter 2008 Measurement 2007 Two months One month This month 2008 Measurement 2007 Two months One month This month 2008 Enabled total savings YTD (MSEK) Procurement involvement YTD (%) Number of FTEs No. SRM programs Enabled cost reduction savings YTD (MSEK) Internal Client Satisfaction Service Quality Competence development status (%) Sourcing process efficiency (%) Enabled cost avoidance savings YTD (MSEK) Supplier Quality Index PDD status (%) Compliance to Procurement Buying Channels (%) Financial outcome YTD (MSEK) Measurement 2007 Two quarters One quarter This quarter 2008 Measurement 2007 Two quarters One quarter This quarter 2008 Cost/Income ratio Voice Index Category Mgmt coverage (%) Estimated P/Leffect savings YTD (MSEK) Total number of suppliers Supplier contract coverage (%) 19

20 Top Supply Management KPIs SEB s KPI status 1. Negotiated cost reductions savings 2. Implemented cost reduction savings 3. % of total spend under management 4. Cost avoidance 5. Procurement ROI (savings/operating costs) 6. Supplier performance 7. Contract compliance 8. Requisition, PO or invoice transaction volume 9. Subjective feed (surveys, etc) % % 75 % X MSEK 5 times Supplier scorecard TBD OK TBD Source: Aberdeen Group, November

21 Thank You and Happy Journey! Sven-Anders Stegare Chief Procurement Officer SEB Group 21