Professional Documents
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27 September 2011
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Robyn Wright
Principal
A.T. Kearney
• A member of A.T. Kearney‟s “Operations” Practice in London, which provides cross industry
functional support to clients
• 22 years of consulting and industry experience, including Procurement strategy, Procurement
Excellence, Category Management, Procurement Transformation, Supply Chain Organization
and Change Management
• Sector work has included, Global Financial Institutions Chemicals, Oil and Gas, UK Military,
Central Government Departments, Telecommunications, Retail and FMCG
• Previously worked at ICI Chemicals and Polymers as both a Sales Manager and as Commercial
Services Director
• Robyn now focuses on supporting large organisations in managing their operating models to
deliver the results they want, especially focused on human resource management. This involves
finding out what the business requires of its supply chain and procurement functions, and what
needs to be done to deliver on those requirements. The organisational redesign is often simply
about making sure there are enough of the best people, with the right skills, focused on the right
tasks, who can then be managed and rewarded in a logical way.
• Robyn is married to a Farmer, lives in rural Leicestershire and has twin sons now aged 12
Mobile: +44 7967 168075
E:mail robyn.wright@atkearney.com
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Contents
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Section 1 – Hot Skills
Monitor/Evaluation/Execution
Day-to-day Purchasing (Daily Activities)
Execution
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Section 1 – Hot Skills
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Section 1 – Hot Skills
Key discoveries:
• Technical problems are best described as contradictions
7 Core cost Design for Product Design for Supplier Sustainability Project based Value based
• Problems and solutions across industries & sciences are governed by
analysis sourcing teardown manufacture tiering management partnership sourcing the same objective laws
• Inventions used scientific effects outside the field where they were
developed
Collaborative Virtual
6 Vertical Intelligent Composite Process capacity inventory Total life cycle Collaborative
integration deal structure benchmark benchmark management management concept cost reduction
power Best
Joint
process • Reengineer joint processes
Leverage price improve- • Share productivity gains
4 Sourcing Buying Cost data Standardi- RFI/RFP Expressive Total cost of market
evaluation ment
• Integrate logistics
community consortia mining zation process bidding ownership imbalances • Support supplier operations improvement
Global Relationship
sourcing restructuring
• Employ strategic links with key suppliers
• Develop integrated supply chain
• Improve partnership with suppliers
Supplier
3 Procurement Mega supplier Master data Spend market Reverse Price Unbundled
outsourcing strategy management transparency intelligence auctions benchmark prices
Production loss
Shape/Dim
…
Stamping
Supplier Input
Optimi-
Finishing Coating Decoration Decoration Scenarios Optimal
Baseline sation
Unit Engine Analysis Solution
…
EXW
Production Costs Shape/Dim Production Price
Handling &
Handling & Packaging
Packaging
Generic Material
Costs
Fixed
Margin, etc
Storage Storage
• Cost of constraints
Supplier Management
Deep Sourcing/Integration
Supplier
Economic Gain
• Joint market
development
Strategic Sourcing • Product Innovation
Users Suppliers Supply chain
Requirements Added value • Collaborative Forecasting,
• Complexity reduction • Performance metrics Inventory Planning,
• Standardization • Value engineering • Integrated work planning
Basic Procurement • Early involvement • Logistics management
Consumption
• Rationalization/ Economics Scope
Volume
reduction • Volume commitment • Outsourcing
• Consolidation
• Compliance • Forecasting/demand • Backward integration
• Supplier rationalization
• Total cost of planning/visibility
Price ownership • Supplier / market 10+% improvement on cost
• Benchmarking economic cycles and revenue
• Negotiations
5 to12% of total cost of ownership
• Contracting
Ordering and expediting service where BUs do not have resource or capability to self
Assisted serve their buying
Requisitioning • Expedite orders/respond to order enquiries
• Creating Requisitions, Approvals, Change / Cancel Orders
• Releasing/R2P (Self-service tools: Pcard, catalogue, etc.)
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Section 1 – Hot Skills
Client Example
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Section 2 – Proc Re-organisations
Systems review
Internal
interviews New Job
Potential profiling
Voice of the Operating Resource Impact Roadmap
Baselining Customer Changes to
model profiling Key Analysis
role/job focus
Voice of the Competency
Supplier mapping
Procurement
Director
Group Procurement
Non-proc Suppliers
Supply Market
Segment
Sourcing
Category
and Tactical
Support
Stakeholders
Operational Transformati
Category Category Category
Job Group Procurement Enablement Procurement Procurement Procurement Procurement Procurement Procurement Procurement Procurement Procurement Procurement
Specialist Specialist Specialist Specialist Specialist Specialist Specialist Specialist Specialist Specialist
RATEX
descriptions
Competency Org options SLAs Scenarios Governance
maps VP Supply Chain
Performance Procurement
Director
Procurement
management
Heads of Market
Transformation
Segment Sourcing
Manager
Regional
Procurement Hub
Managers
Volumetrics
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Section 2 – Proc Re-organisations
Design principles Org. options Org. structure Role definitions Resource profiling
Design principles (example)
Leverage full buying power and procurement experience of the CXX CXX Role title Category Manager
organisation through category management Chief Procurement Function Top-down Spend Calculated FTE
Reports to Head, Category Management
Division Division Subsidiary Division Division Subsidiary Officer (CPO) benchmark ($M) FTE (reviewed
Separation of strategic and tactical sourcing from transactional Grade D
– spend per with client)
purchasing activity Key • Develops and implements the most FTE ($M)
Occasional Occasional Occasional Occasional Occasional Occasional Head, Head, Head, Responsibilities appropriate category management
Ensure dedicated leads for implementing strategic activities Category Sourcing Centre of
(incl. performance management) with existing suppliers for key Buyers Buyers Buyers Buyers Buyers Buyers strategies and policies for the improvement Category mgt, 70 300 4.3 4
Management Operations Excellence of the business at all levels, in collaboration
categories chemicals
with business users
Operational • Provides advice, leadership and support on
Establish and maintain collaborative, long -term relationships Subsidiary Purchasing Category Head, Head, Head, Head, Head, Category mgt, 100 590 5.9 7
Division Central Manager Supplier Tactical Process Perform- Knowledge all sourcing matters
Division engineering
with strategic suppliers Purchasing Relation- Sourcing - Improve- ance Mgt Mgt • Communicates internal and external
Department ship Mgt. Region A ment
Share best practices, emerging technologies and analytical category expectations, tracks internal Category mgt, 45 70 1.6 2
Purchasing Purchasing
compliance
techniques across the organisation Structure Structure
• Takes primary accountability for delivering IT and
Supply Local Process Perform- Knowledge
Purchasing results (e.g., savings targets and telecoms
Drive consistent procurement policies and procedures across … … Market sourcing improve- ance mgt managers
Field Analysts support ment team analysits performance improvements)
the organisation
Education/ • Substantial experience in conducting
Foster leadership and enhance capability of procurement experience RFI/RFP process and negotiations;
human capital negotiation aptitude
• 5+ years in category specific background
The number of
staff required for
each role in the
new organisation
structure is
profiled based on
expected
workload .. Not
YOUR current
skills...
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Section 2 – Proc Re-organisations
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Section 2 – Proc Re-organisations
Targets by
Personal grade/stage level
Objectives/MBO
Team Structure
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Contents
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Section 3 – Importance of Stakeholder Mgmnt
And the skill set requirements of professionals are recognised as broader, including
interpersonal skills
Source A.T.Kearney‟s Assessment of Excellence in Procurement (AEP) 2011
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Section 3 – Importance of Stakeholder Mgmnt
We would like to We have some potential We have the tender We have completed
investigate….. sourcing options….. responses… benefits calculations…
0 1 2 3 4 5 6 7
Analyze Determine Assess Supply Develop Execute Operationalize Sustain Results
Mobilize Category Business Markets Category Strategy New / Manage
Spend Needs Strategy Agreements Suppliers
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Section 3 – Importance of Stakeholder Mgmnt
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Contents
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Section 4 – Stakeholder Mgmnt Skills
Pro-active
Stakeholder
Mgmnt
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Contents
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Section 5 – Tips and Learning Strategies
Most survey respondents do not include cross functional team members outside procurement
in training on procurement topics
Source A.T.Kearney‟s Assessment of Excellence in Procurement (AEP) 2011
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Section 5 – Tips and Learning Strategies
• Tools that guide performance as the learner And seek out opportunities on the job, at
Stand Alone performs the ability
Job Aids • Usually used in combination with other conferences, and best of all – watch and
strategies to enhance training effectiveness then do....building up your role
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About A.T. Kearney
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Credentials
Founded in 1926
2,500 employees worldwide
Middle East
58 cities in 38 countries
• Abu Dhabi
Private, 100% Partner-owned • Dubai
• Manama
Collaborative Working Style • Riyadh
Asia Pacific
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Credentials
Provisioning
Enablement
Generation
Traditional
Sourcing
Sourcing
Process
Service
Next
850 consultants on
"S-Teams" sourcing projects
Analysis of $ 400 bn
Selection Sourcing
…
spend so far
BPO Typical saving range
Consortia LSN, … of 8-15% on
addressed spend
Telecom AT&T, Bell South, Cesky
Telecom, DT, FT, NTT $ 68 bn cumu-lated
Process BP, Arcelor, Chevron, Elf, Esso, HKM, savings
Lafarge, RAG, Saint Gobain, Shell, ...
Abbott, Astra Zeneca, Bayer HealthCare, BMS,
$ 15 mln annual
Pharma Merck, Novartis, Pfizer, Quintiles, Viatris, Wyeth, … investment in in-
Retail, tellectual capital
cons. goods Campbell, Carrefour, M&S, Sara Lee, Sears, Unilever, …
Financial ABN Amro, AXA, Barclays, Citigroup, Daito Bank, Deutsche Bank, Thought leader
services Groupama, HSBC, JP Morgan, Prudential, Royal Bank of Scotland, … in sourcing since
Babcock & Wilcox, Camargo Correa, Fluor Daniel, Grundfos, Hochtief, Impregilo, more than 15 years
Engineering Lenze, MacGregor, Mettler Toledo, NCC, Rolls-Royce, Schindler, …
Automotive Caterpillar, DaimlerChrysler, Ferrari, Fiat, Ford, GM, Jaguar, Land Rover, Nissan, Volvo, VW,
ArvinMeritor, Delphi, Faurecia, Federal Mogul, Getrag, Knorr Bremse, Magna, TRW, Visteon, …
(1) Over 1,000 elements benchmarked across 33 leadership practices covering 8 dimensions of Procurement
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Overview
Highlights
• 201 companies have submitted
responses
• Participants from Asia (22%), Americas
(27%) and EMEA (51%)
• All industries are represented:
Information Intensive Services (30%),
Asset Intensive Services(14%), Non-
Durable Consumer Products (17%),
others (39%)
• Survey remains open; tracking to 500+
participation
• Average participant is US$12.5 B in
revenues
• Survey remains open
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