Transcript Module - 01 - Introd..

Supplier Relationship Management (SRM)
Module 1 – Introduction, Six Dimensions, Status, SWOT Task
• Introductions
• Purpose
• Workbook
• Purchasing Six Dimensions / Challenges
• Status
• SWOT Task
Introduction Slide 1
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Purpose of the SRM Workshop
Individual & Purchasing Team Improvement
• Provide education on Supplier Relationship Management in order to support Supply side
career development plans and team skill levels & effectiveness.
• Identify Supplier profit improvement opportunities, ensuring they are aligned with the
business strategy and priorities.
• Develop the learning interactively in the workshop, so that there is ownership &
applicability both internally within and externally with suppliers.
Business Improvement
• Further improve supply side profit and cash, respecting AQSCI (Supply, Quality &
Regulatory, Service, Cost and Innovation) principles, thereby increasing Supply credibility
and reputation with Leadership, Employees, Customers, Suppliers and Stakeholders.
Introduction Slide 2
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Attendees
Supplier Relationship Management Workshop –
Introduction Slide 3
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SRM Agenda
Day Two – Session
Day One – Session
Time
Module
1. Introductions, Purpose,
Workbook, 6 Dimensions,
Challenges, Check List
0830 – 1000
6. Sourcing Strategy &
Selection, Standardisation,
Leverage, e Auction
1015 – 1115
2. Business and Purchasing
Cost (P&L) and Cash
(Balance Sheet)
1015 – 1130
7. Negotiation skills &
practice. Agreement
formation and
implementation.
1130 – 1230
3. Current and Improved
Source Planning and Supplier
Management Process. Six
Sigma / Lean
1145 – 1230
8. Supplier Case Study and
how to improve current and
future year (s) results.
Sales & Marketing
Strategies.
1330 – 1430
4. Purchasing / Sourcing /
Project Team Development
1330 – 1430
9. Supplier Management,
and Benefits Tracking.
1445 – Close
5. Data Gathering, RFI, RFP,
Market Evaluation, Supplier
Scorecards
1430 – Close
10. SRM Plans.
Slide / Workbook review
Time
0830 – 1000
Introduction Slide 4
Module
Who
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Who
Workshop Presenter – 1
Paul Warrick – The Delos Partnership Limited
Through global purchasing leadership roles with ICI PLC, Elementis PLC, Lonza AG, Crown Cork & Seal and Georgia
Pacific, Paul has acquired substantial Strategic Purchasing, Supply Chain and Business expertise and has a career track
record of delivering outstanding supply side value Improvement.
He has complete spend category and project management expertise and has recently led major supply side
improvement projects on Strategic Sourcing of Raw Materials with volumes in excess of 500,000 tonnes, Inventory
Reduction, Global Logistics & E Commerce.
Paul wrote the Delos Procurement Masterclass, containing all of the leading edge procurement & supply tools and
techniques, which has been delivered to numerous blue chip businesses. The Masterclass is based on both first hand
global Purchasing experiences in the Chemicals, Packaging, Paper, Coatings, Biopharmaceuticals, Adhesives & Metal
industries and the Delos approach. This recognises that the drive towards effective procurement will only be achieved
through engagement of all of the people across the functions – from Sales & Marketing providing accurate forecasts, to
Development innovating in a way that is integrated within an effective global Procurement Strategy, to working closely
with Operations, Supply Chain and Finance to ensure P&L spending and Balance Sheet cash & assets are optimized.
Paul has a chemistry & polymer science degree, is Six Sigma and World Class Manufacturing trained and has worked
with most of the big five and leading procurement consultants. Procurement support and advice has been delivered to
manufacturing, service and consumer companies.
Introduction Slide 5
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Workshop Presenter – 2
Mr. X – The Delos Partnership Limited
Introduction Slide 6
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Workbook
• Data used in the workshop can be found in the
Delos SRM excel workbook.
• The workbook also contains spreadsheets that
can be customised for individual or team use.
• Feedback on workbook improvements and
further development is required from each
delegate.
Introduction Slide 7
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Six Procurement Dimensions
SRM
DEALMAKING
STRATEGIC SOURCING
PROCESS & TOOLS
COST, CASH & SPEND
LEADERSHIP & PEOPLE
Introduction Slide 8
6 Supplier Management – Relationships & Results
5 Negotiation & Agreements – Skills & Type
4 Strategic Sourcing – Process & Capability
3 Process & Tools – Awareness & Use
2 Cost, Cash & Spend – Management & Control
1 Supply & Procurement – Integration & Leadership
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Challenges
The Cost, Cash, Supply Chain & Inventory Challenge
• Inflation Up – Oil & Energy, Asia Demand, Market Consolidation
• Global Supply Chains – Asia Outsourcing by Europe & US
• Customer Expectations – RFTQ100%OTIF, Faster, Cheaper
• Shareholder Demands – More Profit, Higher Dividends
• Excess Inventories – Slow Moving / Obsolescence
Introduction Slide 9
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Check List
Leadership & People – Key Areas
•
•
•
Purchasing Vision and Strategy – integrated with the Business
Internal customer / business “Buy – In”
Purchasing Capability & Management System
Cost, Cash & Spend Focus – Key Areas
•
•
•
Focus on all key spend categories & suppliers
P&L, Balance Sheet and Expense coverage
Inflation (Cost) & Project Management
Process & Tools – Key Areas
•
•
•
Integration with the ERP system / report
P2P
Sales Process (demand/forecast) understanding / management
Introduction Slide 10
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Check List
Strategic Sourcing – Key Areas
•
•
•
Managed supply risk on key strategic / critical products & services
Innovation (New Product/New Source) Project involvement
Standardisation / Dual Sourcing + Leverage
Dealmaking – Key Areas
•
•
•
Complete Agreement coverage (CDA to Supply/Service Level)
Negotiation excellence
Clear terms, price lists and optimised invoice / payment
Supplier Management / Benefits Tracking – Key Areas
•
•
•
Complete supplier mapping / management
Self Monitoring suppliers (RFTQ100%OTIF) & Finance integrated
savings system
Strategic Supplier partnerships
Introduction Slide 11
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Low Capability Purchasing
• No evidence of supplier partners in each business / region / plant
• No evidence of Supplier Management / Low RFTQ & OTIF
• Supply problems
• No evidence of agreements / price lists
• High Supply side inventories
• No recognition of the importance of Strategic Sourcing
• Limited bargaining power (sole source & size)
• No Standard Sourcing Process
• No Shared Service Centre / P2P system.
• Focus on Price / Cost only
• Uncompetitive prime materials pricing
• No clear Leadership – No Goals/Focus – Poor People – Not Lean!
Introduction Slide 12
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Workshop – Breakout Session
You have been asked make a 10’ presentation to the Board on SRM
What went well – Where are the problems – Where are the opportunities ?
Costs Reduced 
Fragmented Supply Base 
Supply problems 
No Standardization of Products or Services 
No understanding of / support for SRM
Internal battles and politics 
Supplier Quality improvements 
Service improvements 
High Emergency Transport Costs 
Excess Stocks 
Innovation & Plants doing their own thing 
Introduction Slide 13
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Delos Procurement Assessment
DELOS
DELOSPROCUREMENT
PROCUREMENTMASTERCLASS
ASSESSMENT
Public
– Overviewcapability & valuable
DefinesCourse
current procurement
improvement opportunities on Spend, Assets and Cash Flow
Introduction Slide 14
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Journey to Excellence
SRM – Value Gap Analysis
The Delos Partnership has assessed procurement capability and the value gap in businesses ranging from large multinationals through to S.M.E.'s, across all of
the spend & territory map and in many market segments. Procurement is now firmly established as an essential part of Supply Chain and plays a vital role in
global sourcing, supplier relationship and cost management strategies. We assess the capability of business procurement and how effective the business is in
leveraging its cost and spend on behalf of its customers to support of the business vision, strategies and goals. We assess performance against the six
dimensions of Procurement which cover leadership and people, internal and external customer performance, how spend & cost is managed, process capability,
strategic sourcing, leverage, dealmaking and supplier relationship management. This provides an independent and quantitative measure of how much year on
year net total value improvement is being delivered versus agreed goals & benchmarks and improvement opportunities in business profit , cash and service.
Benchmark
Bronze
Silver
Leadership & People (Management System)
Cost, Cash and Spend
Process and Tools
Strategic Sourcing
Dealmaking
Supplier
Bronze
Silver
Silver Gilt
Gold
Platinum
Relationship
= Entry level Management
= Developing
= Competent
= Advanced
= Expert
Introduction Slide 15
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Silver Gilt
Gold
Platinum
Scor
e
Questions ?
Introduction Slide 16
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