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Global Indirect Procurement ELC Procurement 1 Quality Service Cost Best Practices Global Procurement Global Sourcing Strategies in a Volatile Environment.

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Presentation on theme: "Global Indirect Procurement ELC Procurement 1 Quality Service Cost Best Practices Global Procurement Global Sourcing Strategies in a Volatile Environment."— Presentation transcript:

1 Global Indirect Procurement ELC Procurement 1 Quality Service Cost Best Practices Global Procurement Global Sourcing Strategies in a Volatile Environment Leonardo DeCandia, P.E. October 12, 2010

2 Global Indirect Procurement ELC Procurement 2 Presentation Agenda Quality About the Estee Lauder Companies About the Presenter Sourcing Practices at ELC Current & Evolving Challenges Tactics & Strategies Q & A Service Cost Best Practices Global Procurement

3 Global Indirect Procurement ELC Procurement 3 The Estee Lauder Companies Inc Quality Founded in 1946 $8 Billion in Sales Over 25 Brands/Over 40 Global Affiliates Prestige Beauty Segment A Culture of “High Touch” – Unique Connection to the Consumer Building & Investing on a Tradition of Excellence Service Cost Best Practices Global Procurement

4 Global Indirect Procurement ELC Procurement 4 Leonardo DeCandia Quality 15 J&J; Last Role – Head of Supply Management Consumer Companies 8 Roche; Last Role – Chief Supply Officer Pharma NA 4 AmerisourceBergen; Last Role – SVP/CPO Supply Chain Management Part Time Lecturer – Rutgers University Graduate School of Business Chair Emeritus – Rutgers University Supply Chain Center Service Cost Best Practices Global Procurement

5 Global Indirect Procurement Wednesday February 10th, 2010 ELC Procurement Quality Service Service Cost BestPractices ELC Procurement Balanced Approach to Supply Base Management Adherence to ELC Standards & Expectations Robust & Reliable Quality Systems Consistent & Repeatable Global Execution Adherence to Promise Date Responsive & Flexible to Change Clear Understanding of Priorities Marketplace Leadership Continuous Improvement Mindset Optimal Asset Utilization Global Systems & Tools Organizational Training & Development Investment in Innovative Practices & Technologies Global Procurement

6 Global Indirect Procurement ELC Procurement 6 Current & Evolving Challenges Quality A Cautious Supplier Base – Is this recovery sustainable? A Dynamic Geopolitical Environment – The changing of the guard in Asia & the re- industrialization of the US & Europe? An Overleveraged Consumer in the Major Markets – Can the growth of emerging markets off-set the revenue loss? The Constant Need to be Quicker & More Efficient – Procurement’s role in facilitating access to innovation and expansion of profit margins? Service Cost Best Practices Global Procurement

7 Global Indirect Procurement ELC Procurement 7 ELC Procurement Priorities & Focus Quality 1.Direct Material Sourcing Global Brand Leads (Experienced & Integrated Resources) Global Category Leads Source Supplier) Global Innovation Lead (Integrated w/R&D Colleagues) 2.Third Party Manufacturing Global Strategy & Supply Management Consolidate Suppliers Based Upon Core Competencies Formal Innovation Management Practices 3.Indirect Procurement Global Buyer’s Network w/Regional Hubs Global/Regional/Local Category Management Processes Global Roll Out of SAP with Common Data & Policy 4.Organizational Development & Investment Common Category Practices for All Procurement Rotation Programs – Cross Brands, Regions & Procurement Training in Performance Management Service Cost Best Practices Global Procurement

8 Global Indirect Procurement 8 Tactics & Strategies for the Current Environment Quality Full Understanding of Global Regulatory Environment Dynamic Measures & Supplier Reward Systems Early Supplier Engagement in Design for Execution Metrics: receipt; % highest level; etc Best PracticesCost Service Global Center-Led Policy & Processes with Regional Execution Lead Time Reduction Programs & Capacity Planning Innovation in Common Platforms with Brand Customization Metrics: On time delivery; flexibility to change; lead time average; etc Brand Driven COGS Targets with Procurement Programs Category Life Cycle Management & 5 Year Pipeline Plans Global Market Expertise & Dynamic Supplier Management Metrics: COGS; year to year savings; supply base consolidation; etc Quality Cost Best Practices Service ELC Procurement Global Procurement Organizational Design Aligned with ELC Strategy Core Competency Focus Integrated & Complementary to Business Partner Needs Procurement Professional Global Level Metrics: Training hours; retention levels; high potentials %; etc

9 Global Indirect Procurement ELC Procurement 9 Q & A Quality Service Cost Best Practices Global Procurement Thank you


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