Procurement Organizational Transformation: Standardization, Centralization, Automation May 4, 2017
ABInbev’s Global Procurement Journey • First step in centralization in 2010 – Global Procurement Office (‘GPO’) • Increasingly agile determination and realization of M&A synergies • Global transformation (‘Project Denali’) in 2015-2016 • New setup allowed quick integration of SABMiller’s Procurement organization RPO Setup 2019… 2018 GPO Setup 2017 2016 2015 2014 2013 2012 2011 Project Denali 2010 Planning>Implementation 2009 2008 2
Reflections & Key Learnings: Denali project The dream.. … dependent on • Leaner, more efficient organization • Strong leadership and change management in the Zones • Spend control with compliance to terms & policies • Process & org. design standardization • Increase Procurement coverage of tail spend • Clear & aligned Collaboration Model • Improve business interface with Procurement • Investment in automation (POs in SAP, platforms) • Better reporting analytics • Cross functional support (People, IBS) • Overhead cost control • Capture additional tax efficiencies • Implement excellence program • Standard state-of-the-art Tech platforms • ‘Plug & Play’ M&A readiness 3
Keys to Success • Change Management • Over-communicate • Organization needs to believe in the model • Quickly identify blockers & supporters, address the blockers & recruit supporters • Build multi-functional local teams to deal with day-to-day logistics, and a central team to ensure consistency of approach (and fund adequately) • Invest first in learning (benchmarking, fit-gap), then plan • Transform before “Lift & Drop” • Knowledge management – document & train • Hyper-care is critical • Service level will be different – focus on KPIs • People & Leadership are (as usual) KEY 4
Clearly Defined Procurement Offices Roles Front Office Middle Office Back Office (Managerial & Strategic) (Tactical) (Transactional) Global Regional Global Global/Regional RPSS GPSS GPO RPO BSC Regional Procurement Global Procurement Shared Global Procurement Office Regional Procurement Office Business Service Centers Shared Services Services 1 Global 1 per Region 1 per Region 1 Global 1 per Region • Global Category Management • Regional Category Language-dependent activities Non-language-dependent • AP (invoice processing, Management activities payment) • Category strategy • Spot Buy desk • Category strategy • Sourcing execution • PO creation • MDM • PR/PO follow up • Sourcing execution • SRM strategy/exec • Continuous Improvement • Demand Management • SRM strategy/exec • Content management • Global Planning & • eSourcing Factory • Service levels (SLA/KPI) • Supplier enablement Performance Management • Regional Planning & Performance Management • Analytics Engine • Helpdesk • Risk Management • Contract admin & optimization • Compliance & Value Tracking • Regional Capabilities • Continuous Improvement • Global Capabilities & • Centralized Operational & Compliance* • Operations • BuySell support Financial Reporting • Stakeholder management • “Smart Value Creation”** • Global BuySell support • Contract implementation • BuySell Provides Services to RPO Provides Services to RPO Provides Services to RPSS Provides Services to PSS Provides Services to GPO * S2P Process ownership, Compliance, Tech Agenda, Learning and Development ** Supply chain consulting, Design to Value, Sustainability 5
Design Source to Pay Process Framework • All activities are process-oriented in an efficient end-to-end procurement organization • Allows focus on the right KPIs and tracking Procurement performance from source to pay • Processes split into different levels of complexity: Managerial processes Tactical processes • Performed by procurement Management team • Repetitive value creation activities • Includes target setting and ownership • Focuses on process commonality • Drives the development of the procurement • Managed through defined service requests function • Data and analytics enabled Strategic processes Transactional processes • Core to the company strategy • Repetitive processing activities • Drives business value agenda • Efficiency driven • Specialized and category specific • Low-interaction activities • Requires stakeholder proximity • Language and location neutral 6
Designed Procurement Processes from Scratch – Level 1 to SOPs GPO/RPO PSS BSC Sourcing Supplier Mgmt Contract Mgmt P2P Proc. Capabilities Service mgmt. Manage Strategy, Manage Performance Managerial Manage Top Line Manage People and Manage Procurement Manage Technology Manage Services Manage Stakeholders Policy, Op. Model & Objectives & Manage Knowledge processes Growth Competencies Projects (PMO) & Tools delivery and Communication Ways of working Business Alignment 2.1 2.3 2.5 2.6 2.7 2.8 2.10 2.12 Define & Approve Define & Execute Define and Execute Define Contract Define P2P strategy Define and execute Execute Budgeting Define S2P KPI/SLA Category Strategy Category Risk Supplier Management Management sustainability & BW cycle Strategic Management Strategy strategy processes 2.2 2.4 2.9 2.11 Execute Sourcing Execute Value Define & execute Execute PPM Project Engineering Project innovation strategy activities 3.1 3.2 3.4 3.7 3.9 Execute Execute Contract Execute predictive Execute sourcing Execute Continuous Spot Buys Implementation analytics analytics Improvement Tactical 3.3 3.5 3.8 3.10 Processes Manage contracts Execute performance Execute Inventory Execute SLA/KPI Optimization corrective actions 3.6 Perform VE analytics 4.1 4.2 4.3 4.6 4.7 4.8 Perform Supplier Perform Contract Perform Requisition Perform eSourcing Perform Helpdesk Perform Operational Enablement Administration to Order support services Reporting 4.4 4.9 Transactional Perform PO Mgmt. Perform Master Data Processes Management 4.5 4.10 7 Perform Accounts Perform IT tools Payable Management
Some Processes are not Trivial to Centralize Offshore services Spot Buys eSourcing Factory Analytics Engine • PR triangle • Check Completeness of Request • Commodity analytics • Inventory optimization • PR quality check • Register Supplier • Value Tracking • Analyze Specification • Develop eSourcing event • Budgeting • Identify & Conduct RFx • eSourcing set up & supplier enablement • Contract analytics (compliance) • Negotiate agreement & Select Supplier • Manage eSourcing event • Supply risk analytics • Update Requisition & Create PO • P2P analytics • PR/PO follow-up • Should-Cost model • Handle order acknowledgements • VE analytics • Reduce Spot Buy • Supplier performance analytics PSS suitable spend Sourcing Service Management Operational Reporting & Category Mgmt. • Strategic Sourcing • Execute Tier 2 helpdesk • Generate set of standard reports • Follow up strategy category implementation • Execute SLA/KPIs corrective actions • Create ad hoc reports based on available system data • Identify and implement continuous improvement actions • Distribute reports to stakeholders Supplier Enablement & Management Contract Administration & Content Management Support Optimization • Quality suppliers • Create contract in SAP • Manage/Update Buyer Portal Content • On-board & Enable suppliers and e-Invoices • Enable catalogues • Maintain catalogues • Support performance, collaboration, • Retain Contracts in Repository development and phasing-out • Monitor contract expiration dates 8
Tackling Tail Spend Strategic Sourcing Type (~80% of spend, few Tail Spend Tail of the Tail suppliers) Responsibility GPO & RPO PSS Business User • Process Standardization • Catalogue/Contracts Automation • Centralization • eSourcing • Separate Sourcing vs. • Knowledge Management & • P-Card Keys for Success Operations Training (Visibility & • Business Insights & • Global Supplier Portal & Clean Control) Market Analytics Master Data • Analytics for Continuous Improvement 9
Collaboration Model Overview Non Compliant PSS RPO GPO Led GPO Level of GPO involvement Strategy Country Strategy PSS Strategy RPO Strategy GPO Strategy GPO More Extensive RPO RPO & GPO GPO Sourcing Country Sourcing PSS Sourcing Sourcing Sourcing ( PSS spot buys) (PSS spot buys) (PSS spot buys) Strategy Strategy Strategy Strategy Strategy Planning Planning Planning Planning Planning Sourcing Sourcing Sourcing Sourcing Sourcing Less Extensive Implementation Implementation Implementation Implementation Implementation Not Involved Planning / Order Planning / Order Planning / Order Planning / Order Planning / Order Contract Mgmt Contract Mgmt Contract Mgmt Contract Mgmt Contract Mgmt Supplier Mgmt Supplier Mgmt Supplier Mgmt Supplier Mgmt Supplier Mgmt Risk Mgmt Risk Mgmt Risk Mgmt Risk Mgmt Risk Mgmt 10
Recommend
More recommend
