Cost & Cash Slide 1 © The Delos Partnership 2005 Supplier Relationship Management Module 2 – Cost & Cash Financials Cost Analysis Cost Trends Supply Data Spend Coverage 2006 Purchasing Goals Financial & Service Level Purchasing Performance

Cost & Cash Slide 2 © The Delos Partnership 2005 Financial Results Financial Results Sales, Profit & Variable Costs

Cost & Cash Slide 3 © The Delos Partnership 2005 Cost Analysis Variable & Fixed Cost Breakdown

Cost & Cash Slide 4 © The Delos Partnership 2005 Cost Analysis Trends –Selling & Marketing Costs? –Cost of Sales Costs? –Administration Costs? –Inventories ? –Tangible Assets? –Capital Expenditure? From 2003 Baseline to Extrapolated 2005 FY Costs

Cost & Cash Slide 5 © The Delos Partnership 2005 Supply Side Data Supply Side Data External Spend of >€m Thousands of Suppliers Tens of Thousands of supplier invoices/pa >X people with a high Purchasing content to Role Many other “Buyers” Procurement Headlines

Cost & Cash Slide 6 © The Delos Partnership 2005 Finished Products & Services – Toll Conversion Category covers products & services that the business has chosen not to manufacture but to source from a third party supplier. Products and Services can be made to the business specification or purchased as a generic. Raw Materials & Consumables Category covers items that typically consumed or used within a manufacturing or assembly process (direct materials) and are normally held as an inventory item by the supplier (VMI or Kanban). Purchase price variance, usage and spoilage are key category measures. Packaging Category covers both inner packaging such as cans, bottles, closures, cartons & labels used to protect, decorate and identify the product and outer packaging such as corrugated, stretch wrap, strapping, pallets and tote bins used for product transportation. Spend Categories

Cost & Cash Slide 7 © The Delos Partnership 2005 Energy & Utilities Category covers Electricity, Gas, Oil, Water, Effluent and Waste disposal. CEMRO Category covers capital equipment, engineering and maintenance, repair and operating expenditure – typically electrical, mechanical and pneumatic items such as switches, pumps, valves, freezers, instruments, compressors, heating, ventilation etc. Logistics & Freight Category covers internal and external warehouses, off site storage, inbound freight, outbound freight, (sea, air, road, rail) couriers, duties, transport hire and the cost of producing & paying for import and export documentation and clearance. Spend Categories

Cost & Cash Slide 8 © The Delos Partnership 2005 Technical & HSE Category covers R&D & Quality spend on pilot equipment, glassware, equipment, calibration, servicing, laboratory consumables (reagents, gloves etc), laundry, gases, safety equipment, testing and maintenance services, archiving etc. Goods & Services Category covers catering & vending, I.T. hardware & software, telecoms, office equipment, stationery, photocopiers & fax, cars (lease & hire), fuel, travel & accommodation, conferences & exhibitions, consultants, auditors, business corporate communications, legal, property, leases, rates, subscriptions, books & magazines, cleaning, security, insurance, printing & artwork, market research, advertising, post, credit cards, entertainment etc. People Category covers recruitment, temporary workers, clothing, professional fees, private medical, training, courses, relocation and functional outsourcing etc. Spend Categories

Cost & Cash Slide 9 © The Delos Partnership 2005 Stocks – Inventories Creditors Land & Buildings Plant & Equipment Capital Expenditure & Disposals Expenses Authorisation Channels & Control Assets and Cash Flow

Cost & Cash Slide 10 © The Delos Partnership 2005 Task – Spend Coverage Spend Categories Purchasing / Supply Chain Involvement Other Function & ”Maverick buyer” Spend Involvement Purchasing Centre FactoriesOfficesR&D Finished Products – Toll Conversion Raw Materials & Production Consumables Packaging Capital, Engineering MRO (CEMRO) Energy & Utilities Logistics & Freight Technical & H.S.E. Goods & Services People Spend Cash – Assets / Capital / Creditors  Low/No Purchasing involvement Purchasing involvement

Cost & Cash Slide 11 © The Delos Partnership 2005 Business & Purchasing Budget Business Strategies New Products New Services Sales Force numbers / productivity More Catalogues/More frequently Supply Chain / Product Availability Service Levels Supply Centre Outsourced Manufacturing Purchasing Focus & Goals Purchasing Focus & Goals to support Business Strategies

Cost & Cash Slide 12 © The Delos Partnership 2005 Purchasing Budget & Plans Spend Categories Finished Products – Toll Conversion Raw Materials & Production Consumables Packaging Capital, Engineering MRO (CEMRO) Energy & Utilities Logistics & Freight Technical & H.S.E. Goods & Services People Spend Cash – Assets / Capital / Creditors Purchasing Focus & Goals Purchasing Focus & Goals to increase Spend Coverage

Cost & Cash Slide 13 © The Delos Partnership 2005 Focus on Cost & Cash - Top Suppliers Top 10 Suppliers = €m and X% of Total Spend Category Months Spend (€) 2005 Planned Spend (€) 2006 Forecast Spend (€) Centre / Region / Factory / Function Managed TOTAL Ensure there is a Value Plan and Ownership for each and then extend to the Top 20 +

Cost & Cash Slide 14 © The Delos Partnership 2005 Integration Pyramid SuppliersProduct/Service Spend €m Owner Insurance Company Secretary Audit Finance Director ERP/ Microsoft / PC’s / Phones / Raw Materials ERP/I.T./ Telecoms//Mobiles/RM I.T. Director CEO, P.D. SuppliersProduct/ServiceSpend €m Owner Goods & ServiceOuter PackagingSupply Chain Goods & ServiceTicketsSecretary Goods & ServicePrinting & Business CardsUser Goods & ServiceWaste RemovalPlant Manager Group - Centre Led Country/Function Led - Group Support Plant / Office Led - with support Single User SuppliersProducts & Services Spend €m Owner Raw MaterialsSome Ingredients & Product Packaging R&D / Manufacturing/ Customers EnergyGas & ElectricityOperations Logistics & FreightTrucks / CouriersSupply Chain

Cost & Cash Slide 15 © The Delos Partnership 2005  Questions ?