Presentation #1 A New Buy-Side View of Collaborative Supplier Development

Transcription

1 Presenters: Presentation #1 A New Buy-Side View of Collaborative Supplier Development Marc Rosen, President & COO Corporate United Joanna Martinez, Chief Procurement Officer Cushman & Wakefield Mark Gillen, Director of Procurement Under Armour Andrea Morton, VP of Supplier Center of Excellence Corporate United 2014 SAMA Annual Conference

2 The Eyes See What the Mind is Prepared to Comprehend

3 AGENDA 1 Key Deliverables & Mobilizers 2 The Journey on the Buy Side 3 4 Collaborating to Achieve Different Results Panel Q & A

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6 Business Dynamic Many budget holders, which: Have diverse needs Multiple processes, often not followed Lack of procurement expertise Have limited visibility of total spend, preferred suppliers, contracts, related activity across business Internal Pressures Reduce headcount Achieve more savings Get more visibility & control over spend Reduce exposure and risk Indirect Procurement Function Has limited resources Has limited buy-in from Functional heads & senior leadership Lacks market knowledge Is reactive & time pressured Lacks investment and technology Procurement Pressures 100 s of diverse categories Constant evolution of markets and technologies Globalization Regulatory compliance Supplier Dynamic High volume of suppliers, which: Are across multiple categories More knowledgeable in category Have relationships in other functions and use to their advantage 6

7 Category Management Spend Analysis Sourcing Process Procure to Pay Performance Management 1. Aggregate Data 2. Data normalization 3. Data classification 4. Review contracts 5. Identify opportunities 1. Align with stakeholders 2. Determine Requirements 3. Identify Sourcing Strategy 4. Determine baseline and evaluation criteria 5. Implementation 1. PO Processing 2. P-card transactions 3. Open order management 4. Expediting 5. Dispute resolution 6. Master data updates 1. Supplier management 2. Demand management 3. Stakeholder collaboration 4. Category strategy 5. Stakeholder satisfaction 1. Continuous Improvement 7

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10 Starting point Current best practice Emerging Trend Price Management Total Cost of Ownership Total Value of Ownership Purchase cost Price Volume Price Risk & Sustainability Supply Market Competition Specifications Acquisition cost Ownership costs Obsolescence costs Inventory costs Usage & Innovation Process & Working Capital 3

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12 Risk Avoidance Revenue Enhancement Levers Ease of Doing Business Cost Avoidance

13 Overview of Under Armour, Inc. Founded in 1996 by former University of Maryland football player Kevin Plank, Under Armour is the originator of performance apparel, footwear and - gear engineered to keep athletes cool, dry and light throughout the course of a game, practice or workout around the globe Under Armour s Mission: TO MAKE ALL ATHLETES BETTER, THROUGH PASSION, DESIGN, AND THE RELENTLESS PURSUIT OF INNOVATION Listed on NYSE: UA Achieved $2.33 billion in revenue in 2013 Product offerings consist of apparel, footwear and equipment for men, women and youth Distribution channels include wholesale accounts, and direct-to-consumer through company managed stores and online at Over 7,000 employees worldwide

14 Evolution of the Indirect Procurement Function Old School Purchasing vs. Strategic Procurement Old School Purchasing Myopic focus on cost reduction Transaction-centric Anti-relationship Views suppliers as vendors who simply serve their organization s needs Ideas for improvement driven primarily by internal partners Non-collaborative Strategic Procurement in 2014 Focus on Mutual Value Enhancement Recognizes the benefits of value-engineering efforts in long-term partnerships Embraces relationship-building, trust, and the creation of an emotional connection between the buyer s brand / product and the supplier s account management team Works with suppliers as true partners, driving toward mutually beneficial goals Relies on suppliers as a major source of innovative solutions Partners with suppliers Account Managers to increase the value-sum gained by all parties

15 What is the Definition of Value? Value is defined by Under Armour s Strategic Procurement Team as being a function of Quality, Service, and Price.

16 Key Steps in Driving Mutual Value Enhancement through Collaborative Supplier Development Step #1 Identify a core group of suppliers to engage in robust partnership development efforts Step #2 - Identify a baseline of mutual value that has been historically achieved Step #3 - Identify individuals in each organization who are accountable for success Step #4 Develop a cadence for tracking progress of initiatives, and measuring value achieved vs. baseline Step #5 Begin implementation of collaborative supplier development program Step #6 Communicate results and celebrate victories Step #7 Sustain ongoing results

17 About Cushman & Wakefield Cushman & Wakefield is one of the world s largest commercial real estate services firms. The company was founded in 1917 and the firm s major shareholder is Exor, the investment arm of the Agnelli Family. Cushman & Wakefield currently has 250 offices in 60 countries, employing 16,000 professionals. Cushman & Wakefield was named the exclusive leasing agent for 1 World Trade Center, the Freedom Tower, by the Port Authority of New York and New Jersey. The Corporate Investor and Occupier Services (CIS) Division manages investment and owneroccupied properties across the globe.

18 On the tactical side If you re responding to an RFP online Register in advance Practice Ask questions if given the opportunity Ask how responses will be weighted Don t try to upsell before we ve done the first deal People are expecting us to deliver (sometimes unrealistic) cost reductions. If that s not possible, help us understand the value proposition. Years of experience is not a value proposition Help me make a decision Innovation? What sets you apart from your competitors? What value do you add that no one else does?

19 Portfolio Analysis Tool Critical Strategic Relative Market Difficulty Acquisition Leverage Relative Spend

20 From a strategic viewpoint Do what you say you are going to do Use the knowledge that you gain from working with the firm to help us make improvements Take a Supply Chain view there are opportunities upstream and downstream. The more embedded you are the higher the hurdle rate to change Give us that Innovation help us bring something new, to our clients. Increase the Value Proposition.

21 1. Building stronger more committed supplier relationships for CU and our members 2. Collaborating with suppliers to reinforce their value and increase their ability to retain customers 3. Increasing customer satisfaction by supporting their contract and performance management initiatives Delivering CONTINUOUS VALUE to our stakeholders

22 BEING VIEWED AS STRATEGIC PARTNER Small Steps that can Make a Big Impact The Business Review as we know it is dead Need to move from operating as tactical vendors to strategic partners through understanding TCO Take a Business Advancement Meeting mindset & strategy Change doesn t happen overnight, but you can take small steps NOW to get there

23 The voice of the suppliers The voice of the customer - The customer does not bring additional stake holders to the meeting - They are not interested in hearing about new products & services - They usually just have me the business review The Business Review Impasse - The supplier does bring anything new to the meeting - Reviews are not supported by the suppliers management team or SMEs - I am not sure the suppliers understand our business and its goals & objectives 23

24 4 Small Steps to Developing a Business Advancement Strategy Now 1. Data Dump 2. Education 3. Transparency 4. New Value Send data in advance Spend time during the meeting on more strategic agenda items Demonstrate interest in knowing about customers company & department goals and objectives Apply the knowledge to be creative on ways to innovate new solutions. Begin profitability discussions which strike at the heart of sustainability Demonstrates a level of partnership that goes well beyond tactical procurement initiatives. Continue to bring value that goes beyond just lowering the piece price

25 How do you continue to bring value to the table that goes beyond just lowering the piece price? 1. Cost Driver or Program Improvement Generic Utilization Specialty Management Network Utilization Wellness Programs 2. Define existing and desired state Current Position Best-in-Class Current Position Best-in-Class Current Position Best-in-Class Current Position Best-in-Class 3. Make suggestions on how to move to best in class Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 1 Recommendation 2 Recommendation 3 4. For each suggestion, present the solution, the relative price / efficiency impact, and the pain in achieving the result Solution Impact Disruption / Cost Solution Impact Disruption / Cost Solution Impact Disruption / Cost Solution Impact Disruption / Cost

26 Presenters: A New Buy-Side View of Collaborative Supplier Development Marc Rosen, President & COO Corporate United > mrosen@corporateunited.com Joanna Martinez, CPO Cushman & Wakefield > Joanna.Martinez@cushwake.com Mark Gillen, Director of Procurement Under Armour > mgillen@underarmour.com Annie Morton, VP of SCOE Corporate United > amorton@corporateunited.com