2. GETTING TO GLOBAL SPEND VISIBILITY
October 2012
Brian Jones
Nestlé Business Services
Procurement Excellence

3. About Nestle
Global Mission
To be the recognized leader in Nutrition, Health and Wellness and
the industry reference for financial performance
Key Stats
 CHF 83.6 billion in sales in 2011
 330,000 employees in over 150 countries
 461 factories in 83 countries

4. Unmatched
product
and brand
portfolio
 10,000 different products
 Over 1 billion products sold every day
 A product for every moment of every
day, from morning to night and from birth to
old age

5. Nestlé Business Services - North America
 Part of Nestlé’s global shared services organization supporting the
North American businesses
North America Nestle Business Units
Nestle
Nestle Nestle
Nestle Nestle Nestle Waters
Health Purina Nestle USA
Canada Nutrition Profession North
Science PetCare
America

6. About Me
 Personal Experience
– 32 years with the Nestlé family
• Ralston Purina, Nestlé Purina PetCare, Nestlé Business Services
– Last 8 years in Nestlé Business Services (NBS)
– Held roles in product R&D, IT, and Procurement
– Current role is Technology Manager within NBS Procurement Excellence team
• NBS Procurement Excellence is a tools and processes team supporting direct and
indirect strategic buyers

7. Summary: Nestlé Spend Reporting
Nestle Spend Reporting
Tools Used Business Areas
SAP Non SAP
SAP ERP
Business SAP Business Units Business
Systems
Warehouse Units
Direct Indirect
Material Material
Materials are classified according to the global classification when
they are created in master data, thus eliminating the possibility to
misclassify spend

8. Key Challenges
Indirect Material Non SAP Business
Materials are classified by the PO creator at
the time the PO is generated using the Nestlé No direct or indirect material spend in current
global classification. Nestlé system
“Human Factor” has a significant impact on
accuracy
Non PO spend is Detailed P-Card Marketing Procurement Org. Reporting
unavailable spend is unavailable
Market Procurement organizations need
Global Procurement Org. Reporting spend reported using a classification they can
understand
Global Procurement organization wants spend
reported according to the Nestlé global The global taxonomy is not intuitive to buyers
taxonomy and does not represent spend the way buyers
manage their categories

9. Current Solution: Zycus iAnalyze
 Nestlé needed a tool to bridge the spend reporting needs
 After a rigorous search process, ultimately chose Zycus
iAnalyze

10. Benefits of iAnalyze
 Supports Business Units
– SAP
– Non SAP
 Applies consistent classification across direct and
indirect materials
– Indirect materials
• Provides consistent classification using a “regional” classification
• Allows for the capture of non PO spend
• Enables detailed P-Card spend reporting

11. Indirect Materials:
“Regional classification” is key!
 Not a mapping between Nestlé global classification and Nestlé
regional Market classification
 It’s an independent classification built on:
– Nestlé custom developed classification rules
– Nestlé preferred supplier list for indirect categories
• This provides the supplier “line of business” classification when Nestlé
specific rules cannot be applied
 Spend tool engine classification
• When neither rules or suppliers apply to the spend
 Spend tool reclassification capability is vital
– Regardless of the Nestlé regional classification generated, it can be improved
over time via input from buyers

12. Supports Performance Metrics
 Sample KPI #1 - Percent spend under management
 Spend in certain categories is designated as non-
addressable, which allows increased focus on KPIs for percent of
addressable spend under management
Marking non-addressable
spend allows Procurement to
better focus on spend under
management

13. Supports Performance Metrics
 Sample KPI #2 - Preferred supplier spend (reduced “maverick
spend” )
 Designating supplier categories gives this visibility
The supplier categories can be
defined by the Procurement
organization

14. Supports Performance Metrics
 Sample KPI #3 - Spend under contract
 Example: Top 5 indirect suppliers, spend and percent of total spend

15. Supports Performance Objectives
Ensure Information
is Backed by the
Required
Lack of Private Certifications
Suppliers’ •Nestlé populates
Information supplier diversity
Verification of •Lack of private information in
Supplier Information suppliers’ information iAnalyze, using
can also create gaps in information that Nestlé
•Many spend analysis can ensure is backed
Increase Spend tools have a native supplier diversity
information by the required
•Increase Spend with capability to support certifications
diverse suppliers diverse suppliers, but
verification of the
supplier information
was a Nestlé concern

16. Supports Procurement Strategies
 Sample Strategy - supplier rationalization
– Helps identify where a large number of suppliers exists within a single
category
There may be a savings
opportunity with over 1,200
suppliers for Gaskets and
Seals

17. Summary
Doing the upfront
work with
Understanding the rules, preferred Buyers will accept
classification that vendor lists, etc. will and use the tool
makes sense to the help your spend because it shows
Procurement analysis tool the spend data in
buyers is key to the present the spend a form they are
adoption of spend data in the familiar with, and
analysis tools classification that can use
makes sense to the
buyers
Final Thought:
Tools need to truly work for people in order to drive the adoption and
use needed to support your Procurement organization’s goals

18. Questions