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Purchasing Management Workshop Grand Hotel, Waterloo, Belgium October 11 th and 12 th 2005
Oriflame Purchasing Management Workshop Module 1 – Introduction, Six Dimensions, Status, SWOT Task Introductions Purpose Workbook Purchasing Six Dimensions / Challenges Status SWOT Task
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop3 Purpose of the Workshop Individual & Purchasing Team Improvement Provide education on Strategic Purchasing to the Oriflame Purchasing Management team, in order to support career development plans and team skill levels & effectiveness. Identify Oriflame Purchasing improvement opportunities, ensuring they are aligned with the Oriflame business strategy and priorities. Develop the learning interactively in the workshop, so that there is ownership & applicability both internally within Oriflame and externally with Oriflame suppliers. Oriflame Business Improvement Further improve Oriflame supply side profit and cash, respecting AQSCI (Supply, Quality & Regulatory, Service, Cost and Innovation) principles, thereby increasing Purchasing credibility and reputation with Oriflame Leadership, Employees, Customers, Suppliers and Stakeholders.
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop4 Attendees Edwin Koehler Maggie Taverna Luca Nanni Bruno Bastin Bernard Hensenne Francoise Beaujean Julien Bellanger Robert Connolly Brian Rolfe (To be confirmed) Purchasing Management Workshop – October 11/12 th 2005
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop5 Agenda October 11 th 2005 Session TimeModuleWho 0830 – Introductions, Purpose, Workbook, 6 Dimensions, Challenges, Check List Paul, Edwin & All 1015 – Oriflame Business and Purchasing Cost (P&L) and Cash (Balance Sheet) Edwin, Paul & All 1130 – Current and Improved Source Planning and Supplier Management Process. Six Sigma / Lean Paul & All 1330 – Purchasing / Sourcing / Project Team Development Paul & All 1445 – Close 5. Data Gathering, RFI, RFP, Market Evaluation, Supplier Scorecards Paul & All October 12 th 2005 Session TimeModuleWho 0830 – Sourcing Strategy & Selection, Standardisation, Leverage, e Auction Paul & All 1015 – Negotiation skills & practice. Agreement formation and implementation. All 1145 – Cebal Case Study and how to improve current and future year (s) results. Sales & Marketing Strategies. Edwin, Paul & All 1330 – Supplier Management, and Benefits Tracking. Paul, Edwin & All 1430 – Close 10. Oriflame Purchasing Management Plans. Slide / Workbook review Edwin, Paul & All
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop6 Workshop Presenter Paul Warrick – The Delos Partnership Limited Through global purchasing leadership roles with ICI PLC, Elementis PLC, Lonza AG, Crown Cork & Seal and Georgia Pacific, Paul has acquired substantial Strategic Purchasing, Supply Chain and Business expertise and has a career track record of delivering outstanding supply side value Improvement. He has complete spend category and project management expertise and has recently led major supply side improvement projects on Strategic Sourcing of Raw Materials with volumes in excess of 500,000 tonnes, Inventory Reduction, Global Logistics & E Commerce. Paul wrote the Delos Procurement Masterclass, containing all of the leading edge procurement & supply tools and techniques, which has been delivered to numerous blue chip businesses. The Masterclass is based on both first hand global Purchasing experiences in the Chemicals, Packaging, Paper, Coatings, Biopharmaceuticals, Adhesives & Metal industries and the Delos approach. This recognises that the drive towards effective procurement will only be achieved through engagement of all of the people across the functions – from Sales & Marketing providing accurate forecasts, to Development innovating in a way that is integrated within an effective global Procurement Strategy, to working closely with Operations, Supply Chain and Finance to ensure P&L spending and Balance Sheet cash & assets are optimized. Paul has a chemistry & polymer science degree, is Six Sigma and World Class Manufacturing trained and has worked with most of the big five and leading procurement consultants. Procurement support and advice has been delivered to manufacturing, service and consumer companies.
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop7 Workbook Oriflame data used in the workshop can be found in the excel workbook. The Workbook also contains spreadsheets that can be customised for individual or team use. Feedback on workbook improvements and further development is required from each delegate.
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop8 1 Supply & Procurement – Integration & Leadership Cost, Cash & Spend – Management & Control Process & Tools – Awareness & Use Strategic Sourcing – Process & Capability 5 5 Negotiation & Agreements – Skills & Type 6 6 Supplier Management – Relationships & Results Six Procurement Dimensions SRM SRM DEALMAKING DEALMAKING STRATEGIC SOURCING STRATEGIC SOURCING PROCESS & TOOLS COST, CASH & SPEND LEADERSHIP & PEOPLE
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop9 Challenges Inflation Up – Oil & Energy, Asia Demand, Market Consolidation Global Supply Chains – Asia Outsourcing by Europe & US Customer Expectations – RFTQ100%OTIF, Faster, Cheaper Shareholder Demands – More Profit, Higher Dividends Excess Inventories – Slow Moving / Obsolescence The Cost, Cash, Supply Chain & Inventory Challenge
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop10 Purchasing – Check List Leadership & People – Key Areas Purchasing Vision and Strategy – integrated with the Business Internal customer / business Buy – In Purchasing Capability & Management System Cost, Cash & Spend Focus – Key Areas Focus on all key spend categories & suppliers P&L, Balance Sheet and Expense coverage Inflation (Cost) & Project Management Process & Tools – Key Areas Integration with the ERP system / report P2P Sales Process (demand/forecast) understanding / management
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop11 Purchasing – Check List Strategic Sourcing – Key Areas Managed supply risk on key strategic / critical products & services Innovation (New Product/New Source) Project involvement Standardisation / Dual Sourcing + Leverage Dealmaking – Key Areas Complete Agreement coverage (CDA to Supply/Service Level) Negotiation excellence Clear terms, price lists and optimised invoice / payment Supplier Management / Benefits Tracking – Key Areas Complete supplier mapping / management Self Monitoring suppliers (RFTQ100%OTIF) & Finance integrated savings system Strategic Supplier partnerships
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop12 No evidence of valuable supplier partners in each business / region / plant No evidence of Supplier Management / Low RFTQ & OTIF Supply problems No evidence of agreements / price lists High Supply side inventories No recognition of the importance of Strategic Sourcing Limited bargaining power (sole source & size) No Standard Sourcing Process No Shared Service Centre / P2P system. Focus on Price / Cost only Uncompetitive prime materials pricing No clear Leadership – No Goals/Focus –Poor People – Not Lean! Low Capability Purchasing Example
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop13 Workshop – Breakout Session Costs Reduced Fragmented Supply Base Supply problems No Standardization of Products or Services No understanding of / support for Central Purchasing Internal battles and politics Supplier Quality improvements Service improvements High Emergency Transport Costs Excess Stocks Innovation & Plants doing their own thing You have been asked make a 10 presentation to the Oriflame Board on Purchasing What went well – Where are the problems – Where are the opportunities ?
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop14 Workshop Task – Guide SRM SRM DEALMAKING DEALMAKING STRATEGIC SOURCING STRATEGIC SOURCING PROCESS & TOOLS COST, CASH & SPEND LEADERSHIP & PEOPLE Service Cost Innovation Quality/Regulatory Assurance of Supply Use either / both the 6 Dimensions or AQSCI Pyramid in the presentation
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop15 Delos Procurement Assessment
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop16 Procurement – Value Gap Analysis The Delos Partnership has assessed procurement capability and the value gap in businesses ranging from large multinationals through to S.M.E.'s, across all of the spend & territory map and in many market segments. Procurement is now firmly established as an essential part of Supply Chain and plays a vital role in global sourcing, supplier relationship and cost management strategies. We assess the capability of business procurement and how effective the business is in leveraging its cost and spend on behalf of its customers to support of the business vision, strategies and goals. We assess performance against the six dimensions of Procurement which cover leadership and people, internal and external customer performance, how spend & cost is managed, process capability, strategic sourcing, leverage, dealmaking and supplier relationship management. This provides an independent and quantitative measure of how much year on year net total value improvement is being delivered versus agreed goals & benchmarks and improvement opportunities in business profit, cash and service. BenchmarkBronzeSilverSilver GiltGoldPlatinumScore Leadership and People (Procurement Management System) Cost, Cash and Spend Process and Tools Strategic Sourcing Dealmaking Supplier Relationship and Results Management Bronze = Entry level Silver = Developing Silver Gilt = Competent Gold= Advanced Platinum= Expert Journey to Purchasing Excellence
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop17 Purchasing Assessment Results
Purchasing Workshop Module 1 © The Delos Partnership Oriflame Purchasing Management Workshop18 Questions ?
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