Sourcing Is Now Resourcing: How Sourcing Is Utilized Beyond Just the Basics
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The document discusses the evolving role of sourcing in procurement, emphasizing the need for organizations to adapt to globalization, economic volatility, and regulatory changes while focusing on cost savings and efficiency. It highlights the importance of technology in managing sourcing processes and stresses the benefits of integrating procurement systems to enhance supplier management and compliance. CWS-Boco Group's experience with SAP Ariba is showcased as a case study for improving procurement effectiveness through better communication, collaboration, and strategic sourcing practices.
Sourcing Is Now Resourcing: How Sourcing Is Utilized Beyond Just the Basics
- 1. Dr. Martin Kotula, Director, Value Engineering EMEA & MEE, SAP Ariba Laszlo Adam, E-procurement Manager, CWS-boco Group / June 15, 2016 Sourcing Is Now Resourcing: How Sourcing Is Utilized Beyond Just the Basics Public
- 2. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public Increased Globalization Expansion into new markets Global process standardization International supply chains Economic Volatility Volatility in markets Decreased stock valuation Slow economic growth Pressure on Margins Profitability by segments Decreased budgets and spending Determination of the cost to serve Focus on Risk Supply chain disruption Financial risk and fraud Commodity risk New Business Models Shared services organizations Business partnerships Leveraging big data for decisions Regulatory Changes Increasing disclosure requirements Country-specific regulations Industry-specific disclosures CPOs Need Help to Navigate a Changing Environment Competing Pressures on Procurement Organizations
- 3. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Public …while still needing to focus on key metrics Early Engagement of Sourcing Opportunities New ( or Improved) Technology Larger and/or More Talented Staff Better Communication Plan Better Team Execution 66% 53% 53% 48% 44% Savings continues to the be the #1 driver for CPOs And Strategic Sourcing remains the quickest path to get there The CPO’s Top Driver for Future Success The CPO’s Top Priorities ( Next 3 years) Source: CPO Rising – The Agility Agenda. By Ardent Partners, March 2015 Savings Processes Compliance Innovation People 42% 39% 33% 28% 27%
- 4. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 4Public CPOs are navigating a changing environment… • Fragmented supply base • Volatile markets • Intricate costing and pricing structures • Detailed specs & design requirements • Extensive supplier qualification • Many line items and pricing variances • Existing strategic supplier relationships • Supplier contingency plans • Regulatory and environmental requirements Market complexity Category complexity Strategic constraints
- 5. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 5Public Contingent Labor & Services 28% Travel & Other Services 11% Indirect & MRO 23% Capex 11% Direct & Supply Chain 27% After successfully driving spend under management, procurement leaders are ready to harness all spend categories. Source: Spend Categories for Global Top 2000
- 6. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 6Public But the procurement and sourcing systems need to catch up RESULTS IN: Supplier data in disparate systems Contract leakage disconnects negotiated terms procurement execution Limited process and data integration to key execution manufacturing systems of direct materials source-to-pay processes are manual of contracted direct materials spend is non-complaint of enterprises cannot integrate sourcing initiatives into corporate data management 69% 30% 57% Sources: Chainlink Research, Paystream Advisors
- 7. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 7Public Higher average annual savings where organizations drive best price through e-auctions, global sourcing, and new suppliers Source: SAP Performance Benchmarking 54% Spend that is contract compliant at best-in- class companies, versus 48% at all others Source: Ardent Partners 69% lower sourcing cycle time when using Auction as the e-sourcing strategy over RFP Source: SAP Performance Benchmarking 47%
- 8. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 8Public Best-in-Class organizations consider eSourcing and eProcurement critical components Source: Ardent Partners, CPO Rising 2015: The Agility Agenda, March 2015 Strategic Sourcing – Best-in-Class Utilize Technology…
- 9. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 9Public What if you could… Integrate source-to-contract processes to ERP and execution systems Address all categories of direct and indirect spend Manage source-to-contract processes on a single solution
- 10. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 10Public Pricing conditions Product Life-cycle sourcing Supplier qualification & segmentation The new way of strategic sourcing of direct materials with a tight integration into the ERP Supplier Information & Performance Management Contract Management Professional Sourcing Professional User experience + SAP HANA Cloud Platform + integration SAP ERP and non-SAP A new layer of innovations to support Direct Materials sourcing Volume & price forecasting Product costing Supplier perf. automation Advanced optimization Multi-level BOM Service item hierarchy PLM integration
- 11. Sourcing Is Now Resourcing: How Sourcing Is Utilized Beyond Just the Basics Laszlo Adam E-procurement Manager Madrid, SAP Ariba Live 2016 ©CWS-boco Supply Chain Management GmbH Best Practices in creating and managing RFPs in CWS-boco Group
- 12. Introduction CWS-boco Group a Haniel Holding member Textile Care (boco) & Washroom care (CWS) Floor Care (CWS) Belongs to Haniel Holding (Metro/ Media Markt/Saturn Group, Takkt, ELG) 757 Million Euro Turnover (2012) 18 Countries (Europa + China) 45 Laundries, 100-s of logistics hubs 1.2+ Million wearer 250 thousand CWS installations
- 13. Indirect Procurement at CWS-boco Purchase spend = 40% of group‘s turnover Indirect = 23% of total spend of the group Central Procurement org. in Dreieich Local (country) Procurement Capex MRO Professional services 1st level Logistics Fleet Operations Real estate mngt. Utilities mngt. Travel mngt. Insurance Information Services Facility mngt. Facility management E-procurement Indirect Procurement Categories
- 14. SAP Ariba in CWS-boco Group Ariba Sourcing Pro 2014 May (Indirect and Direct Procurement) Ariba Spend Visibility – 2014 November Ariba Procure-to-Pay and and Ariba Contract Management under evaluation
- 15. Why did we choose the SAP Ariba solution? ©CWS-boco Supply Chain Management GmbH Vision – Full suit solution Maturity & Process Benefits We targeted a vision to improve our strategic procurement efficiency “We chose now for future” – system partner with continuous product improvement We were looking for a solution and partner with fast & efficient implementation One system for all strategic procurement activities We targeted a strategy roadmap to achieve procurement excellence – we needed an enabler We looked to set up new strategic sourcing processes and we needed a speed enabler We needed to improve spend under management drastically Leverage group‘s spend volume Face suppliers to real time competition Speed of negotiations Opportunities of Ariba Network to explore markets and suppliers Faster – better – more flexible
- 16. Increasing Ariba Sourcing Pro usage SAP SuccessFactors Usage scoping Continuous templating Training Sourcing champion(s) Monitoring & mentoring (!) Success Stories Communication (!) Support Lack of strong stakeholder support Commitment Buyers experience and tradition Cultural elements Distance Organizational dynamics, environment Challenges
- 17. The “rocking way” to source … “Ariba is a tool to do public postings” “Ariba is an auctioning tool – we do not do auctions” “Our supplier selection process often lasts for months, we have a very complex way to select the suppliers, this is not fitting us, just simple supplier selections” RFP RFI Auction Postings BUT
- 18. Back to origins … What are our challenges? How do we source today? How could we collaborate better? How could we faster? How could SAP Ariba help us do our job easier, faster, better? Aconcagua basecamp
- 19. Saving by resource … E-Mail, Excel Program Template in Ariba Sourcing Integrated sourcing process SupplierCodeof ConductProgram Less effort = less resource Finish faster Get visibility Sustainability Savings
- 20. Saving by speed … High number demand, low value, “immediate” Template in Ariba Sourcing SmallProjects Meet speed expectations Reduce errors Less effort=less resource Transparency in sourcing cycle and success rate Savings
- 21. Saving by collaboration… E-Mails, Excels, disrupted systems, disrupted processes Ariba Project Management, collaborative project work One system collaboration and channeled information flow Demand-design- source-purchase Streamlined communication SPEED Transparency Significantly less resource Customer satisfaction More winning opportunities Savings
- 23. - © 2013 CWS-boco Supply Chain Management GmbHSeite: 23 Thank you!
- 24. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 24Public Please complete session survey Locate Session Click Surveys Button Select Breakout Survey Rate Session