Ramesh Veeramuthu. Head of Procurement, MODEC

Transcription

1 Ramesh Veeramuthu Head of Procurement, MODEC

2 High Critical Strategic Market Difficulty Acquisition Leverage Low Relative Spend/ Profit Impact High

3 Procurement Efforts Transactional Strategic Value Price Harmonization and Negotiation Leverage Volume Hedging Reduce or Right Size Supply Base Change the Supply Base Change the Internal Specs Lean, CI and Business Process Improvement Deploy Common Procurement Policies Change the Supply Chain 38% 28% 8% 1% 13% 4% 4% 0% 4% High Willingness to Change Low Many companies have associated issues to move on the value chain which if they address enables them to access a range of valuable opportunities

4 Source-to-Pay (STP) Processes 1.1 Sourcing 1.2 Requisition Request 1.3 Order Materials / Services 1.4 Material Management & Logistics Services 1.5 Accounts Payable Process Classification: Classify the processes as Strategic or Transactional based on the scope of work Strategic Transactional Strategic Sourcing, Including Supplier Management RFx Development and Processing Dynamic Commerce Negotiation & Contract Development, Transitional Contracts and Contracts Lifecycle Management Supplier Collaboration and Development Maintain Master Data, Vendor Master Data, Other Purchasing Master Data and Integration with EDM (enterprise structure, governance, vendor hierarchy) Opportunity Analysis (Spend Analytics) Purchase Requisition / Shopping Cart Processing (Direct & Indirect) Purchase Requisition Approvals (all types), including Workflow Outline Agreements Processing Purchase Order Processing Affiliate Order (Inter-company) Processing Catalog-based and Non-catalog Procurement Supplier Managed Inventory Supplier Consignment Processing Purchasing Outputs Subcontracting & 3 rd Party Manufacturing Freight Management Process Supplier Returns Import Management and Compliance Inbound Receiving and Confirmation Physical Inventory and Warehouse Mgmt Procurement Quality Control Invoice Verification Evaluated Receipt Settlements Bill of Exchanges Credit and Debit Memos Invoice Release and Payment Processing Cost / Price Forecasting (PPV, QF)

5 Routine and Repetitive Work Efficiency Focused Transformation Opportunity What is the Opportunity? Requires Physical Presence or Process Localization The process compass allows us to segment out activities that could be delivered in alternate models from the current status quo in organizations. This analysis would drive us to find services that could be delivered through a leveraged Shared Service model, and a Centre of Excellence (CoE). Site Support Distributed to Locations Service Focused Specialized Services End-User Centric Physical Touch (ex. QC) Value to Site SSC-Optimized Services Operational Focus Standardized Services Process Intensive Routine/Repetitive Sweet Spot Expert Networks Aligned to Function/Unit Management Focused Knowledge Focused Decision Intensive Highly Collaborative Value to Business CoE Model Process/Specialty Focused Corporate Services Issue/Opportunity Intensive Decision Support Cost Savings Requires Special Skills, Processes, and Knowledge Scalable Through Consolidation & Central Processing

6 Procurement Transformation Model SSC (Shared Services Center) A collaborative strategy in which selected portions of each Function / Process are concentrated into a new services unit. The objectives are to: Drive efficiency Generate value Achieve cost savings Improve service to customers A SSC is an execution arm that focuses on transactional processes and leveraging knowledge. Value Mgmt. Business Risk & Return Functional Effectiveness Functional Efficiency Transactional Process & Control CoE (Center of Excellence) The essence of the Function. Where high value deep competency capabilities are concentrated to advance company strategy and plans. Strategy Establishing the direction of the organization to achieve its vision over the long-term. Stewardship Establishing policies, practices, audit and enforcement capabilities that protect the company s right to operate, intellectual property, corporate image, compliance and Core Values. Core COE Architecting the function s future by integrating the internal needs of the company with emerging practices and trends in their competency/industry to advance its capabilities. Scope of Activity

7 Benefits and Risks Transactional Services Knowledge Services Purchase Requisition Catalogs Sourcing Execution Invoice processing Purchase Order Processing Supplier Data Management Strategic Sourcing Supplier Partnership Supplier Development Enhance Value for Business/Stakeholder Capital Project Procurement/Acquisitions Cost reduction Standard and consistent application of the processes across the company Increased governance Establish Service Level Benchmarking Focus on value added activities Provide a platform for growth Change Management & Buy In from the business Ensuring day to day operations are not impacted Ensuring retention of local business knowledge & skill sets Ensuring regulatory compliance is maintained Demonstrating quick wins; Conditioning on learning curve associated issues are critical

8 Change Management Issues

9 Change Management Enablers

10 Learning Curve

11 Thank You