The saying goes, “The only constant is change.” This is all the more true when it comes to sustaining a strategic sourcing program. With rising commodity costs, globalization, and regulatory pressures, procurement teams struggle to sustain savings alongside a plethora of tactical responsibilities.
Join this session where industry leaders will share how they navigate and manage their strategic sourcing programs in today’s ever-changing environments.
Marel Q1 2024 Investor Presentation from May 8, 2024
"Change" is the New Normal - Building a Sustainable Strategic Sourcing Program | Ariba LIVE Rome
1. #AribaLIVE
"Change" Is the New Normal - Building a
Sustainable Strategic Sourcing Program
@ariba
Speakers
• Geoff Elliott – Deloitte
• Jacob Larsen – Maersk
• Andrew Gill – Reed Elsevier
Moderator:
• Sundar Kamakshisundaram – Ariba, an SAP Company
22. A.P. Moller - Maersk is a diversified conglomerate…
60bn USD revenue
1,400+ vessels
60+ port terminals
50+ drilling rigs
250,000+ boepd
1,300+ retail stores
120,000 colleagues in more than 130 countries across six continents
23. Group Procurement
Maersk E-Sourcing Program Evolution
Significant development in spend covered & sophistication of technology applied
Spend
Adoption
2008-13
Program
Milestones
Increasing part of Groups spend managed via E-Sourcing technology
2013
11.0
20122011
3.4
2010
1.3
2009
0.6
2008
0.3
2014
8.5
12.5
USD Billions
First year with +1,000
E-Auctions completed
First year with +1,000
#1 on Google search
1.000 E-Auctions
2nd Generation Sourcing Tool
added to portfolio1st Strategy
E-Sourcing set-up
in China
1st CAPEX
Projects done
First year with +1,000
E-Sourcing support in Mumbai
Network optimization
added
Spanish language support (in
Mumbai)
24. Group Procurement
Typical types of resistance to E-Sourcing…
Denial of Technology... The ”nimby” people.
Buyers are often looking for faster horses!
The Buyers that want to beat the system
Difficult to change because it will take
an additional effort
25. #AribaLIVE
"Change" Is the New Normal - Building a
Sustainable Strategic Sourcing Program
Andrew Gill
Global Procurement - Reed-Elsevier
26. "Change" is the New Normal – Due Diligence
Andrew Gill April 2014
27. Reed Elsevier is a world leading provider of
information solutions for professionals.
We help scientists make new
discoveries, lawyers win cases, doctors save
lives, corporations build commercial
relationships, insurance companies assess
risk, and government and financial
institutions detect fraud.
30. Non-disclosure agreement
Code of Conduct for Suppliers
Legal Issues
Financial Health and Wellbeing
Business Continuity
Information and Application Security
Social Responsibility
Preventing Bribery
Web Content Accessibility
Environmental Impact
US Supplier Diversity Program (December 2014)
Due Diligence Topics
31. 2012
US Government mandated spend with Diverse
Suppliers
Pressure from our own people
Regulatory Concerns
Background
32. Library of pre-approved questions
Written and supported by our own Subject Matter experts
Hosted in our Supplier Knowledge Area
Many automatically scored based on yes / no answers
Due Diligence Questions
33. LexisNexis SmartWatch
Risk-monitoring and alerting tool
Fast assessment of your suppliers’ current risk levels
Anticipate and minimize supply chain disruptions
Financial, political, legal, environmental, etc.
34.
35. More successful
US Government Contracts
Win new business
Mitigate risk
Reputation
Continuity of supply
Why do we have it?
What have we learnt?
One of our suppliers was is involved in legal action for embezzlement
One of our suppliers brother is a government official
36. Reed Elsevier’s Green Teams
Subject Matter Experts
Automation
Targeted
Global Procurement Management Team
Reed Elsevier Legal Counsel
Buyers
Stakeholders
How did we make it happen?
Whilst the key motivation behind embedding sustainable procurement is to use the firms vast supply chain to generate a positive impact, there are also real tangible benefits to the firm of procuring sustainably.PWC research has identified that Sustainable Procurement could yield economic benefits to a Firm through “Risk management, cost reduction and revenue growth” Risk managementWith the firms substantial supply chain, exposure to reputational damage is inevitable. I’m sure you can all recall examples where brands have been damaged due to unethical practices. By having a robust Sustainable procurement policy we reduce the likelihood of unethical practice within the supply chain.Cost reductionCost reduction through Sustainable Procurement is often achieved by assessing the whole life cost of a product which can often be more advantageous to the Firm in comparison to less sustainable options. Lets take a very simple example. energy efficient light bulbs have a higher purchase price, however, they burn less electricity and will considerably outlast a traditional light bulb.Revenue GrowthSustainable procurement is also integral to the Firms long term revenue growth. A lot of our work comes via engagements with Public Sector clients where vendor selection is often subject to very stringent requirements in terms of sustainability credentials. Embedding sustainable procurement within the Firms processes will help protect that very important revenue stream.Increasingly we are also seeing a Firms green credentials as a way of differentiating ourselves in the marketplace, and ensuring we have an active and meaningful sustainable procurement policy will help us build the image of the “distinctive Firm”. Research has also shown that a Firms sustainable image and commitment to managing their environmental and social impacts are key in attracting talent, particularly amongst graduate recruits. Improving our sustainable procurement credentials will ensure we continue to attract the brightest talent to our Firm.Public sector requirementsDifferentiation in the private sectorAttracting talent
Introduce main KPI’s (Spend coverage and Technology split)Key point: It takes a constant flow of new initiatives to continue increased adoption!Top priorities for 2014:Expand Technology portfolio! Increased CAPEX supportERP Integration to drive uniform adoptionAwareness initiatives and reporting on e-sourcing value add!!!The real target is 15 billion in 2015!!
Change Management Initiatives:Management commitment!Training and awareness/newslettersEase of use – integration to ERP and ongoing system improvements (e.g. ZIP file upload)Strategy sessions – sometimes over-complicate things a little
Hi, my name is Andrew Gill. I’m responsible for Reed Elsevier’s eSourcing in Europe and the Rest of the WorldIn the next ten minutes or so, I’ll tell you a little about Reed Elsevier and give you a whistle-stop tour of Due Diligence Program – what is it, why we have it and how we made it happen.If you’re already using your eSourcing tool to support Due Diligence, then this may help reaffirm the belief that you’re not crazy and other people are doing the same things as you. If this is new, then it will give you insight into our programme.Copies of the presentation are available after, but I promise not to read word for word from the slides, so feel free to take notes, and there’s time for Q&A at the end of the session.
28,000 Reed Elsevier People32 Countries$9.42bn 2013 revenue#4 Digital Paid Content / $1.4bn revenue Big Data servicesPrioritise Corporate ResponsibilitySpend $3.2bn excluding wages, finance costs, rent etcSUM 55%
At Reed Elsevier, Due Diligence touches a number of different areas. For example, more traditional topics such as Financial Health and Well being as well as newer topics such as Preventing Bribery and Environmental Impact
We’d had a Code of Conduct for Suppliers and people that specialised in Corporate Social Responsibility for some time, but in 2012, we noticed an upturn in RFPs we were responding to including questions about our approach to Due Diligence. As a supplier to the US Government, we’re mandated to have a certain level of spend with Diverse SuppliersWe also had pressure from our own people to do the right thingRegulatory concerns – FCPA and UK Bribery Act
So what have we developed....
Partnered with a LexisNexis to develop SmartWatch, a tool that monitors a wide range of critical risk categories including financial, political, legal, environmental, etc and gives you a dashboard showing what’s happening with your supply chain by loading in your suppliers and the countries they’re based in, or operate fromNow this isn’t meant to be a plug for our products, but as the English say ‘if you’ve got it, flaunt it’
Ariba alert in Diligence. Daily email
Having a DD program in place helps us be more successful by making us eligible US Government business, it’s helped us win new business and mitigate risk by ensuring continuity of our supply chain
Click the schedule icon, select Full Schedule, select the day your session occurs at the bottom, and search on the session titleYou can also click the speaker icon and search for session speakers to find the sessionClick on the session to bring up detailsYou’ll see 3 tabs on the page, Details, Speakers, and Surveys, as shown on the slideClick on the Surveys tabClick on Breakout Session SurveyRespond to survey and click submit