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Empowering Strategic Sourcing: Transforming Your Process
The document discusses a panel presentation on strategic sourcing led by experts from SKF and Megapolis, focusing on procurement processes, transformation, and integration with SAP Ariba. It outlines the current achievements in purchasing strategies, competency frameworks, and the implementation of new sourcing processes designed to improve efficiency and supplier management. Additionally, it includes insights into Megapolis's logistics and distribution operations in Russia.
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Empowering Strategic Sourcing: Transforming Your Process
- 1. PUBLIC Viji Doraiswamy, SAPAriba Kristin Ang, SKF / Yulia Sotnikova, Megapolis June 2017 Empowering Strategic Sourcing: Do Something New!
- 2. 2PUBLIC© 2017 SAPSE or an SAP affiliate company. All rights reserved. ǀ Overview and Introductions Panel Presentations Kristin Ang, SKF Yulia Sotnikova, Megapolis Open Q&A Agenda
- 3.
- 4. 4PUBLIC© 2017 SAPSE or an SAP affiliate company. All rights reserved. ǀ The CPO’s Top Metrics and Strategies - 2017 The CPO’s Top Metrics - 2017 Source: Ardent Partners: CPO Rising 2017 – Tools of the Trade The CPO’s Top Strategies for 2017
- 5. 5PUBLIC© 2017 SAPSE or an SAP affiliate company. All rights reserved. ǀ Panelists Kristin Ang Group Purchasing Strategy & Business Transformation Manager SKF Yulia Sotnikova Chief Procurement Officer Megapolis
- 6. 6PUBLIC© 2017 SAPSE or an SAP affiliate company. All rights reserved. ǀ Overview and Introductions Panel Presentations Kristin Ang, SKF Yulia Sotnikova, Megapolis Open Q&A Agenda
- 7. © SKF Group PurchasingTransformation STAR – A common way of working. Kristin Ang – Purchasing Strategy and Business Transformation Manager
- 8. © SKF Group ©SKF Group 17-06-19 SKF vision and mission A world of reliable rotation The undisputed leader in the bearing business Slide 8
- 9. © SKF Group ©SKF Group • Established 1907 • Sales 2016 SEK 72,787 million • Employees 44,868 • Production sites around 115 in 29 countries • SKF presence in over 130 countries • Distributors/dealers 17,000 locations • Global certificates ISO 14001 OHSAS 18001 certification ISO 50001 SKF – a truly global company 17-06-19Slide 10
- 10. © SKF Group ©SKF Group Manufacturing Footprint Poznan Tver St Cyr DGBB / Sensors & Axleboxes Steyr Gothenburg Mekan Luton SuPB Torino SuPB VP / TBU VP SuPB & SB Charleston Flowery Branch SuPB Pinghu / Y unit Pinghu TBU Nankou / China Mfg Nankou Nilai SRB Dalian / China Mfg Dalian Ahmedabad Pune TRB Jinan / China Mfg Jinan Jakarta Haridwar Sopot Lutsk Cassino Bangalore SRB Slewing & Thin Sections Bearings China Manufacturing SLB Cajamar Massa Bari Ball Bearing SSBC / China Mfg SSBC SLB Muskegon, MI Sumter, SC Plants 12a & 12b Thin Section Suzhou Monterrey SLB La Silla& SLB Kalos Ball Bearings CRB / TRB Tortuguitas Schw CRB / PB / Comp Schw mTRB / LSB / Sheet metal F&R Karnare Schw Special Solutions & Tools France PSD PSD Germany Luechow SLB Avon, OH Xinchang – PEER DGBB & Y-bearings Ningbo – GBC DGBB and TRB Shanghai – GBC TRB Changshan – PEER TRB SRB Hanover / MPU / PSD SLB Avallon 17-06-19Slide 11
- 11. © SKF Group ©SKF Group © SKF Group The new purchasing process framework - 2013 Manage supply market analytics incl supplier innovation scouting Optimize contracts Manage Vision & strategy, Operating model & governance model Conduct Regular Spend & opportunity Analysis Provide sourcing support incl purchasing analytics Execute & place purchase orders Target Setting & Performance mgmt Develop Annual plan for strategic sourcing projects Manage performance reporting & budget integration Perform invoice processing Manage People & Competencies Execute Strategic Sourcing Projects Drive purchasing part of product development projects Contract administration Manage Purchasing Processes & IT Technology Systems Manage QCDIM strategy Manage supplier development program Master data maintenance Manage Supplier Relationship Management Strategy Demand management strategy (indirect) Manage supplier onboarding & execute local contract implement. Goods receiving Manage Communication Manage commercial relationship with suppliers Perform & evaluate SQA audits Operational reporting Manage Stakeholder interaction Manage purchasing risk strategy Manage spot buys Supplier information management Management Processes Strategic Processes Operational Processes Transactional Processes Vision, strategy & future state New process framework New competence framework New organizational design Operational set-up What should purchasing be doing? Which processes are necessary to execute the role? Which competencies are required to execute the processes? What organizational design best ensure we match processes, competencies and roles? What is the most efficient way of delivering cost down and align internally? New RAPID model Who is responsible for what decision in the processes? © SKF Group Purchasing report EMT 12w42.2 Security Class: Confidential The New Purchasing Competence Framework 2013 Purchasing Strategy Purchasing Strategy Opera ng model (solu on architecture) Governance Model Target se ng & performance management Project Management Project management Change management Strategic Sourcing Supply Market analysis Spend Analysis Demand Management/Consump on Policies Supplier selec on criteria Bid strategy RFx Management Nego a on strategy planning Fact Based Nego a on Contract design Supplier Rela onship Management Supplier development Supplier joint cost workshops Supplier performance management Supplier Quality ISO 9000/ISO 14000 ISO 14001/ISO 50001 Supplier QA Audit/Supplier Quality Performance APQP/PPAP Six sigma methodology Cost management Total cost of ownership modeling Should cost modeling/clean sheet cos ng Value Analysis/Value Engineering Working Capital efficiency improvement Business case design Category Management Category strategy & target se ng Compliance management Purchasing IT system support Purchasing applica ons Purchase-to-pay process P2P process design Transac on management Risk Management Currency Risk management Supplier Financial health Supply Chain disrup on Geopoli cal risk Commodity price development and vola lity Supply chain visibility Sustainability Sustainable sourcing CSR - Corporate Social Responsibility Code of conduct New job roles Current state & opportunity assessment How are we performing today? What titles and job roles do we need to perform the processes? WHAT have we done – Purchasing Transformation Journey 17-06-19Slide 12
- 12. © SKF Group ©SKF Group SKF Purchasing Process & Systems Identified savings Sustained savings Approve requisition Complete requisition Invoice payment Invoice verification Receive goods or service Place order Manage RfQ & negotiate Implement sourcing strategy Develop category sourcing strategy Perform market analysis Determine business requirements STAR – SAP Ariba Strategic Sourcing SAP ECC & SAP Ariba Buying HOW WHERE WHO Captured savings Conduct spend analysis WHAT Manage contracts & compliance Select goods or service Contract & Supplier Relationship Management Select supplier & execute contract Supplier performance management Strategic Purchasing Procure to Pay 17-06-19Slide 13
- 13. © SKF Group ©SKF Group Defining STAR (SAP Ariba Strategic Sourcing) WE HAVE … • up-skilled, reorganized and standardized to ensure we have the right people with the right skills doing the right things in One Purchasing. • However, one critical piece of the puzzle has been missing: one process and integrated system to support strategic purchasing. WE NEED … • One common way of working! • Flexible tool which will improve communications and the sharing of best practices to foster exchange, transparency and interaction • System that supports our digital purchasing strategy • Ability to monitor and improve our processes by using data. • Taking supplier management to next level-reducing risks and to foster innovation to increase VALUE. STAR 17-06-19Slide 14
- 14. © SKF Group ©SKF Group • Project phased in waves with defined gates of development. Pilot community used for system set up and test. • Creation of new sourcing processes (sourcing & strategic sourcing) with related tasks in order guide buyers • Faster processes with less administration, reactive monitoring instead of proactive (based upon lessons learned - empowerment) • Templates per category to copy- be able to do more in less time … • Creation of new supplier performance process and its relating KPIs • New set of KPIs and rules of when / how / who • Supplier information requirements aligned and updated (SPQ) • Contract Repository and contract process with workflow • Contract authorizing with paragraph library • Category Management Process • Project repository WHAT have we been doing … 17-06-19Slide 15
- 15. © SKF Group ©SKF Group 17-06-19Slide 16
- 16. © SKF Group ©SKF Group HOW to manage the transformation – One common way of working What is the change? Who will it impact? What is the impact? Change impact analysis (CIA) Process System Role Behavior Change Definition & Impact How to create involvement, in order to get better adoption rate? Distribution of reactions and support focus. Involvement Slide 16 17-06-19Slide 17
- 17. © SKF Group ©SKF Group 10% 20% 30% Resisting Late majority Early majority InnovatingHesitating 2% 14% 34% 34% 14% 2% Early adopting Distribution of reactions & support focus 17-06-19Slide 18
- 18. © SKF Group ©SKF Group HOW to manage the transformation – One common way of working Change Definition & Impact Involvement What to communicate to who, when and what channels to use? WIIFMs: “what is in it for me” creation for each segment. Communication strategies Slide 18 What is the change? Who will it impact? What is the impact? Change impact analysis (CIA) Process System Role Behavior How to create involvement, in order to get better adoption rate? Distributions of reactions and support focus. 17-06-19Slide 19
- 19. © SKF Group ©SKF Group What's in it for me? 17-06-19Slide 20
- 20. © SKF Group ©SKF Group HOW to manage the transformation – One common way of working Change Definition & Impact Involvement What to communicate to who, when and what channels to use? WIIFMs: “what is in it for me” creation for each segment. Communication strategies Slide 20 What is the change? Who will it impact? What is the impact? Change impact analysis (CIA) Process System Role Behavior How to create involvement, in order to get better adoption rate? Distributions of reactions and support focus. Nominate change agents as key users to drive adoption at local level. Localization Obtain management approval - not a temporary role. Key User How to train the end users? What training channels should be used? When should the training be conducted ? Training Strategies Slide 20 What is our value? • Saving • Process compliance • Effectiveness • Risk reduction How to realize our value? Value Realization 17-06-19Slide 21
- 21. © SKF Group ©SKF Group Consequences … Competence • Competence and skill sets has been revised • New competence assessment will be launched Training • New training material developed (mainly business process/strategy not system) • Up skilling program initiated Job Positions / Responsibility • Hire of new skill-set and new job positions introduced to support the new way of working. • New decision of purchasing accountability/responsibility! Governance forum • New/updated governance forum to speed up decisions • Definition of new KPIs for all users Change Management & Strategy • Management strategy workshops to prepare for the next vision. • Change management strategies • Adoption / transparency might lead to further changes 17-06-19Slide 22
- 22. © SKF Group ©SKF Group • Analytics – follow up! • Celebrate! • Recognize the effort! • Communicate! • Continue the journey! … and finally to succeed … don't forget 17-06-19Slide 23
- 23. © SKF Group ©SKF Group 19 June, 2017 Slide 23
- 24. 24PUBLIC© 2017 SAPSE or an SAP affiliate company. All rights reserved. ǀ Overview and Introductions Panel Presentations Kristin Ang, SKF Yulia Sotnikova, Megapolis Open Q&A Agenda
- 25. 2519.06.2017 About Megapolis MEGAPOLIS Groupof Companies, Russia, established in 1998, is a privately held logistics and distribution business, focusing on FMCG including tobacco products, beer and soft drinks, grocery products, lighters, batteries, contraceptives, energy drinks and OTP (cigars, cigarillos, tobacco). SOVINTERAVTOSERVIS, one of the largest dealers of commercial vehicles (Ford, Fiat, IVECO, etc), became part of MEGAPOLIS group of companies in 2009. MEGAPOLIS CURRENTLY HAS DISTRIBUTION CONTRACTS IN RUSSIA WITH: • tobacco manufacturers: Japan Tobacco International, Philip Morris International, Imperial Tobacco • long-term distribution contract with beer and soft drink producer Baltika (Carlsberg Group) distribution contracts with tea and coffee producers - Dilmah and Jacobs Douwe Egberts; • distribution contract with energy drinks manufacturer Red Bull GmbH (Red Bull, Bullit). • MEGAPOLIS also works with other brands in Russia such as Neska (Cricket), Flamagas S.A. (Clipper) and Amatti lighters; Samsung, Energizer and Kodak batteries and RB (Reckitt Benckiser) products (Durex, Contex and etc.). • The company is also a licensed producer and distributor of Jacobs Douwe Egberts’ product on the territory of Russian Federation and CIS –coffee Moccona. MEGAPOLIS delivers goods to more than 160 000 point of sales all over the Russian Federation with their own fleet of about 4000 vehicles. There are 300 local MEGAPOLIS offices in Russia populated by over 15 000 employees. Procurement department in its current form was formed in November 2015 among the results of the transformation in MEGAPOLIS Group of Companies.
- 26. SAP Ariba Sourcingin Megapolis 26 Project scope: - Source 2 Contract - Supplier management – limited, supplier pre- qualification only - Spend Analysis, Contract Management, P2P not included - Integration with SAP data out of scope. In pipeline for 2017-2018 Project initiation Market analysis Sourcing strategy Sourcing: RFx Award Policies, Controls & Roles Change Impacts Metadata ReportingBuying Channels Templates Users Roles Tasks Suppliers pooling Market analysis Sourcing strategy creation List of tasks Suppliers qualifications RFX type selection RFx posting RFx monitoring Negotiations Scoring Supplier award Results approval Legend SAP Ariba processes Offline processes
- 27. 55°45’ N 37°37’E Q&A 27
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- 29. Contact information: Michael Koch SAPAriba Integrated Marketing (SAP) +1 203456 4162 [email protected] Thank you.