The CPOs expectations of a Procurement CoE What we aspire to become - PowerPoint PPT Presentation

The CPO’s expectations of a Procurement CoE – What we aspire to become Dean Bennett – Head of Procurement Strategy & Transformation Draft v1.0

The Agenda and Speaker Discussion: Speaker: • Takeda Company Overview • Procurement Today • Why we changed • How we are structured • Knowledge management as the glue • Our learnings so far • Coming Soon

Takeda is the number 1 Pharma company in Japan with Global revenues of Y1,778bn from across 70 markets Built on values Integrity Fairness Honesty Perseverance 誠実 公正 正直 不屈 Takeda-ism guides the actions of everyone within our company. They are our principles, our core strengths – they are the spirit of Takeda. R&D-driven FY2015: Focused, world-class R&D innovation engine Positioning Takeda • Gastroenterology for long-term sales • Oncology • Central Nervous System and profitable • Specialty CV growth • Vaccines People-oriented Performance- focused Patient and customer • Gastroenterology centered • Oncology Global, collaborative • Value brands in and agile emerging markets 3 | Corporate Presentation December 2015

Procurement is set to play a pivotal role in Takeda’s success. Our new operating model allows us to deliver strategic and tactical value Put the patient and functions at the center of everything we do 300+ Act as one global function WHO… Work in a category-centric and global structure Global Procurement Strive to be agile and diverse Experts Meet the needs of its stakeholder and generate savings and value for Takeda STRATEGIC, GLOBAL SUPPORT TO CATEGORIES IT & Marketing & Research & Professional Manufacturing Travel Development Services COUNTRY PROCUREMENT PRESENCE EMEA APAC Austria Poland Americas China Denmark Russia Indonesia Argentina Ecuador France Spain Japan Brazil Mexico Germany Switzerland Singapore Canada USA Italy Turkey South Korea Colombia Venezuela Netherlands Ukraine Thailand 4 |

In June ‘14 we recognized the need to rebalance Procurement with a targeted growth in our strategic capability We needed to rebalance from being tactically focused toward a more strategic function that is aligned with business and Patient needs and focused on value creation Operational Business Proactive Managing Buying, Requisition to Alignment, Opportunity Supplier 1 2 3 4 5 Management Purchase Planning & Generation & Performance of Contracts & Order Performance Sourcing & Innovation Compliance Procurement scope Partnering with the Creating category Actively managing Delivering every day Executing the business, creating an strategies and suppliers to ensure tactical buying transactional overall Procurement delivering major whole-of-life value activity, managing Procurement process plan, and measuring value delivery from contracts, and contracts and performance initiatives pursuing innovation ensuring compliance 5% 15% 5% 60% 15% Estimated current of our of our of our of our of our effort time time time time time Current Focus 20% 35% 20% 20% 5% Target future of our of our of our of our of our effort time time time time time Future Focus Source: Input from 168 Procurement employees during 5 design workshops

Change started with the creation of best-in-class sub-teams to complement the operational heart of our function. Chief Procurement Officer Philip Duncan London Delivery Excellence Category Excellence Operational Excellence Regional Procurement Category Cluster Heads Operational Heads Heads Head of Procurement Head of Procurement Head of Regional Procurement Americas Manufacturing and Supply Procurement Transformation Head of Procurement Head of Procurement Head of Regional Procurement APAC Research and Development Supplier Risk & Performance Head of Procurement Head of Procurement Head of Regional Procurement EMEA Marketing & Travel Process & Systems Head of Procurement Head of Procurement Head of Regional Procurement IT & Professional Services Procurement Finance Emerging Markets

At the heart of linking this team together is our Knowledge Management and Communications Capability 7 |

Knowledge Management plays a pivotal role in providing the Market Intelligence to drive our annual target setting discussions Provided on a dynamic basis and in support of our annual plan review, market intelligence is key for our internal credibility as we build the function 8 |

Our annual stakeholder survey, however, told us while change is being recognized, we still have some improvements to make... “Savings initiatives also help to “ interactions between “We recognize the transform the CRO/Takeda Procurement and the commercial value relationship to deliver better value Business are that Procurement and efficiency” improving” can bring” ...but we need to better understand business requirements and to improve systems and processes “ Have integrated Processes and ““Think beyond cost systems to be more efficient” savings” “ Better leverage innovations from suppliers to benefit the “Understand the uniqueness “ Deliver consistently; on business” of each site/function and time and on target” don't try to address it with a one size fits all approach” In May 2014 and July 2015 9 |

Conclusion: we need to remain close to the business at an operational level until new systems land Procurement Strategy Shift in Procurement’s focus from tactical and Top-down transactional activities to a more strategic sizing Current situation* global function , requiring rebalance of resourcing profile and adjustment of ways of working Business expectations are driving incremental workload and need for greater resourcing at an operational level Operating Model As a result ways of working remain Consolidation of buying activities in Operational Services similar to those pre-Transformation for Buying Units, collocating location independent scope tactical buying resources to drive efficiencies and handing over non-core Procurement activities to the Business • Procurement is playing a larger than anticipated role in enabling business compliance • Service level commitments and Procurement Policy compliance targets vary still by country and logical local thresholds Definition of expected purchasing behaviour , Service procurement self-service scope and criteria levels determining Procurement’s involvement and engagement model Strengthening governance and providing a new level of support and insight has the business functions requesting more help at all levels 10 |

Our focus for the next 6 months is training and preparation for the roll-out of our new system in our pathfinder market Go- Live! Q1FY16: Pre- Reading • Complete pre-read Q2FY16 Q1FY16: (ahead of the • Refresher sessions Q2FY16** instructor-led training) Transformation Lectures • Overview of the Q2FY16: E-learning Procurement • Complete remaining e-learning Transformation, • Refresher Day In The Life Of training (OBU) Procurement policy, new • Attend instructor led-training (including training for ways of working, key Contracts) changes and benefits Q1FY16: Introduction to process & systems e-learning • Compulsory e-learning for all impacted end users • Provides an overview of the new processes and reminder of the new ways of working • Introduction to R2O P&S specific training. For both Procurement & BUs Q4FY15: • SiPM training (Procurement only) OBU specific Q4FY15 OBU Introduction • Contracts training (R&D, Legal) training • Procurement Operating Model (OBU) • Category/BU deep dive (OBU) • Day In The Life Of (OBU) • Sourcing Training (OBU)

Q&A