1. Purchasing Management Workshop
Grand Hotel, Waterloo, Belgium
October 11th and 12th 2005

2. Oriflame Purchasing Management Workshop
Module 1 – Introduction, Six Dimensions, Status, SWOT Task
Introductions
Purpose
Workbook
Purchasing Six Dimensions / Challenges
Status
SWOT Task

3. 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.
Oriflame Purchasing Management Workshop

4. Attendees Purchasing Management Workshop – October 11/12th 2005
Edwin Koehler
Maggie Taverna
Luca Nanni
Bruno Bastin
Bernard Hensenne
Francoise Beaujean
Julien Bellanger
Robert Connolly
Brian Rolfe (To be confirmed)
Oriflame Purchasing Management Workshop

5. Agenda October 11th 2005 Session October 12th 2005 Session Time Module
Who
0830 – 1000
1. Introductions, Purpose, Workbook, 6 Dimensions, Challenges, Check List
Paul, Edwin & All
1015 – 1115
2. Oriflame Business and Purchasing Cost (P&L) and Cash (Balance Sheet)
Edwin, Paul & All
1130 – 1230
3. Current and Improved Source Planning and Supplier Management Process. Six Sigma / Lean
Paul & All
1330 – 1430
4. Purchasing / Sourcing / Project Team Development
1445 – Close
5. Data Gathering, RFI, RFP, Market Evaluation, Supplier Scorecards
October 12th 2005 Session
Time
Module
Who
0830 – 1000
6. Sourcing Strategy & Selection, Standardisation, Leverage, e Auction
Paul & All
1015 – 1130
7. Negotiation skills & practice. Agreement formation and implementation.
All
1145 – 1230
8. Cebal Case Study and how to improve current and future year (s) results. Sales & Marketing Strategies.
Edwin, Paul & All
1330 – 1430
9. Supplier Management, and Benefits Tracking.
Paul, Edwin & All
1430 – Close
10. Oriflame Purchasing Management Plans. Slide / Workbook review
Oriflame Purchasing Management Workshop

6. 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.
Oriflame Purchasing Management Workshop

7. 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.
Oriflame Purchasing Management Workshop

8. Six Procurement Dimensions
SRM
DEALMAKING
STRATEGIC SOURCING
PROCESS & TOOLS
COST, CASH & SPEND
LEADERSHIP & PEOPLE 6
Supplier Management – Relationships & Results 5
Negotiation & Agreements – Skills & Type 4
Strategic Sourcing – Process & Capability 3
Process & Tools – Awareness & Use 2
Cost, Cash & Spend – Management & Control 1
Supply & Procurement – Integration & Leadership
Oriflame Purchasing Management Workshop

9. Challenges The Cost, Cash, Supply Chain & Inventory Challenge
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
Oriflame Purchasing Management Workshop

10. 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
Oriflame Purchasing Management Workshop

11. 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
Oriflame Purchasing Management Workshop

12. Low Capability Purchasing Example
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!
Oriflame Purchasing Management Workshop

13. Workshop – Breakout Session
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 ?
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 
Oriflame Purchasing Management Workshop

14. Workshop Task – Guide
Use either / both the 6 Dimensions or AQSCI Pyramid in the presentation
SRM
DEALMAKING
STRATEGIC SOURCING
PROCESS & TOOLS
COST, CASH & SPEND
LEADERSHIP & PEOPLE
Service
Cost
Innovation
Quality/Regulatory
Assurance of Supply
Oriflame Purchasing Management Workshop

15. Delos Procurement Assessment
Oriflame Purchasing Management Workshop

16. Journey to Purchasing Excellence
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.
Benchmark
Bronze
Silver
Silver Gilt
Gold
Platinum
Score
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
Oriflame Purchasing Management Workshop

17. Purchasing Assessment Results
Oriflame Purchasing Management Workshop

18. Questions ?
Oriflame Purchasing Management Workshop