How to be object of desire in the

“War for Talent” in Procurement

Presentation to CIPs London event

27 September 2011
 This document is exclusively intended for an agreed audience presentation.
Distribution, quotations and duplications – even in the form of extracts – for
third parties is only permitted upon prior written consent of A.T. Kearney.

A.T. Kearney used the text and graphs compiled in this report
in a presentation; they do not represent
a complete documentation of the presentation.

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 Robyn Wright
Principal
A.T. Kearney
• A member of A.T. Kearney‟s “Operations” Practice in London, which provides cross industry
functional support to clients
• 22 years of consulting and industry experience, including Procurement strategy, Procurement
Excellence, Category Management, Procurement Transformation, Supply Chain Organization
and Change Management
• Sector work has included, Global Financial Institutions Chemicals, Oil and Gas, UK Military,
Central Government Departments, Telecommunications, Retail and FMCG
• Previously worked at ICI Chemicals and Polymers as both a Sales Manager and as Commercial
Services Director
• Robyn now focuses on supporting large organisations in managing their operating models to
deliver the results they want, especially focused on human resource management. This involves
finding out what the business requires of its supply chain and procurement functions, and what
needs to be done to deliver on those requirements. The organisational redesign is often simply
about making sure there are enough of the best people, with the right skills, focused on the right
tasks, who can then be managed and rewarded in a logical way.
• Robyn is married to a Farmer, lives in rural Leicestershire and has twin sons now aged 12
Mobile: +44 7967 168075
E:mail robyn.wright@atkearney.com

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 Contents

1. Hot skills at different levels in the procurement department

2. Behind the scenes in procurement re-organisations and what that

means to individuals

3. Why stakeholder management is at the top of the list

4. What competencies that entails

5. Tips on gaining the experience you need in stakeholder management

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 Section 1 – Hot Skills

Procurement skills come in many forms, and must support

all Rooms in the House

A.T. Kearney‟s House of Procurement and SupplySM

Source: A.T. Kearney

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 Section 1 – Hot Skills

Strategy development, sourcing and post award contract

management are the focus for Value Creation
Value Adding Processes
Traditionally focus of the sourcing team has been in
strategic sourcing, but great value can be gained from
working closely with key suppliers
Category Management
Strategic Sourcing (Periodic Events)
Integrate
Profile Category Identify Generate Select
Select Operations
and Supply Potential Supplier Implemen-
Suppliers with
Market Strategies Portfolio tation Path
Suppliers

Discovery Negotiation Execution

Procurement Supplier Performance/Development Management (On-going Activities)

Strategy
Improve
Development Perform Improve Monitor Evaluate
Customer
(Periodic Continuous Supplier Usage and Market
Respon-
Event) Benchmarking Performance Demand Dynamics
siveness

Monitor/Evaluation/Execution
Day-to-day Purchasing (Daily Activities)

Request Order Receive Pay

Execution

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 Section 1 – Hot Skills

... where strategic skills are paramount (and we think there

are at least 64 strategies on the Purchasing Chessboard®)
Sourcing & Category Management

Purchasing Chessboard® – Strategic supply management framework

4 basic strategies
Key advantages
• Provides a structured approach for all
spend categories

• Defines 64 unique methodologies, from

quick win opportunities to highly
sophisticated sourcing approaches
16 approaches
• Takes into account the market
fundamentals (supply and demand power)

• Goes beyond the scope of traditional

purchasing

64 methods • Is supported by comprehensive training

material and backed up by sanitized
benchmarks from 500+ purchasing projects
in the past 3 years

• See www.purchasingchessboard.com for

more details

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 Section 1 – Hot Skills

Negotiation skills are a given, always required to manage

the balance of power of the parties…
Sourcing & Category Management
The Purchasing Chessboard®
The Purchasing Chessboard TM
High Invention on Demand
Leverage Value chain  TRIZ (Theory of Inventive Problem Solving) originated in 1940s/1950s
8 Invention on innovation Functionality Specification reconfigu- Revenue
Profit sharing
Strategic work of Genrich Altshuller in the USSR
demand network assessment assessment ration sharing alliance
 Over 200,000 world-wide patents analyzed

 23% (inventive patents) were studied in detail

 Key discoveries:
• Technical problems are best described as contradictions
7 Core cost Design for Product Design for Supplier Sustainability Project based Value based
• Problems and solutions across industries & sciences are governed by
analysis sourcing teardown manufacture tiering management partnership sourcing the same objective laws
• Inventions used scientific effects outside the field where they were
developed

Collaborative Virtual
6 Vertical Intelligent Composite Process capacity inventory Total life cycle Collaborative
integration deal structure benchmark benchmark management management concept cost reduction

Collaborative Cost Reduction Focus of CCR

Political Visible Vendor Supplier
5 Bottleneck framework Product Complexity process managed Supplier fitness • Simplify specification of products
management management benchmark reduction organization inventory development program
• Employ product value analysis and
Product engineering
Volume
Supply concentration
specification
improvement
• Substitute materials
• Optimize lifecycle costs

power Best
Joint
process • Reengineer joint processes
Leverage price improve- • Share productivity gains
4 Sourcing Buying Cost data Standardi- RFI/RFP Expressive Total cost of market
evaluation ment
• Integrate logistics
community consortia mining zation process bidding ownership imbalances • Support supplier operations improvement
Global Relationship
sourcing restructuring
• Employ strategic links with key suppliers
• Develop integrated supply chain
• Improve partnership with suppliers
Supplier
3 Procurement Mega supplier Master data Spend market Reverse Price Unbundled
outsourcing strategy management transparency intelligence auctions benchmark prices

Cost Regression Analysis

Current
price Regression
Closed loop Bundling Cost line
2 Compliance spend Supplier across regression Factor cost
management management consolidation generations Make or buy Best shoring analysis analysis
d
rea
Sp

Bundling Cost based Linear

1 Demand Contract across Bundling Global price performance
reduction management product lines across sites sourcing LCC sourcing
modeling pricing
Low R²
A B C D E F G H Price from regression function (based on technical
Low Demand power High parameters)

Deep understanding of supply-demand power balance is key in the definition

of effective negotiation strategies in long term relationships
© Copyright 2011 A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission. A.T. Kearney 27/09/2011 Ver 1.0 8
 Section 1 – Hot Skills

...but advanced sourcing needs the ability to understand

tools like Parametric Bidding & Collaborative Optimisation
Sourcing & Category Management
Sourcing & Category Management
Cost Model
Cost Modelling / Parametric Bidding Collaborative Optimisation Optimizing
Engine
Input
Product External Collaboration with Suppliers
Specs • Alternative Bids
Masterbatch • Conditional Discounts / Bundles
Material
Base Material • Supplier constraints
Material
Variable Costs

Production loss
Shape/Dim
…
Stamping
Supplier Input

Optimi-
Finishing Coating Decoration Decoration Scenarios Optimal
Baseline sation
Unit Engine Analysis Solution
…
EXW
Production Costs Shape/Dim Production Price
Handling &
Handling & Packaging
Packaging
Generic Material
Costs
Fixed

# Silkscreen passes Volume Set-Up Internal Collaboration with Stakeholders

… Decoration • Business/Manufacturing constraints
Admin, • Customer/Marketing constraints
Admin, Margin, etc
%

Margin, etc
Storage Storage
• Cost of constraints

Enables collaboration & scenario

Enables parametric bidding
analysis

Collaborative Optimization often delivers savings of 12% - 35% of spend

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 Section 1 – Hot Skills

When competitive bidding is not the highest “value-

generating” strategy, supply chain skills come to the fore
Supplier Relationship Management

Supplier Management

Deep Sourcing/Integration

Supplier
Economic Gain
• Joint market
development
Strategic Sourcing • Product Innovation
Users Suppliers Supply chain
Requirements Added value • Collaborative Forecasting,
• Complexity reduction • Performance metrics Inventory Planning,
• Standardization • Value engineering • Integrated work planning
Basic Procurement • Early involvement • Logistics management
Consumption
• Rationalization/ Economics Scope
Volume
reduction • Volume commitment • Outsourcing
• Consolidation
• Compliance • Forecasting/demand • Backward integration
• Supplier rationalization
• Total cost of planning/visibility
Price ownership • Supplier / market 10+% improvement on cost
• Benchmarking economic cycles and revenue
• Negotiations
5 to12% of total cost of ownership
• Contracting

3 to 7% of purchase price Degree of Development

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 Section 1 – Hot Skills

Whilst at the other end of the spectrum, procurement still

provides a service ....
Operating Process Management

Procurement Services – example support organisation

Functions - customer Key activities Resources
service & P2P required
operations
Customer/supplier • Routing of query to category lead, manage order, supplier enquiry
query routing • Incoming order issues, problems and supplier communications

Ordering and expediting service where BUs do not have resource or capability to self
Assisted serve their buying
Requisitioning • Expedite orders/respond to order enquiries
• Creating Requisitions, Approvals, Change / Cancel Orders
• Releasing/R2P (Self-service tools: Pcard, catalogue, etc.)

• Track Response rates and report on helpdesk service attainment

Communication/
Reporting • Build content and enact communication of activities, support and performance

• Contribute & Retrieve Information to /from Knowledge Base

• Compliance monitoring
Knowledge and Data • Maintain Databases/catalogue management
Mgmnt • Upkeep Supplier Data Technical Setup and ongoing Supplier master data
maintenance
• Maintain Local System information

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 Section 1 – Hot Skills

…and infrastructure and enablement teams need to gather

best practices and use project management skills
Performance Management

Client Example

Source: A.T. Kearney PPM Methodology

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 Contents

1. Hot skills at different levels in the procurement department

2. Behind the scenes in procurement re-organisations and what that

means to individuals

3. Why stakeholder management is at the top of the list

4. What competencies that entails

5. Tips on gaining the experience you need in stakeholder management

© Copyright 2011 A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission. A.T. Kearney 27/09/2011 Ver 1.0 13
 Section 2 – Proc Re-organisations

Organisational Change in procurement is often a very

structured process
1 2 3 4 5
Baseline Organisation Develop
„To-be‟ alignments Design HR Architecture
„As-is‟ Principles Roadmap

Systems review

Best In Class Procurement Processes

Internal
interviews New Job
Potential profiling
Voice of the Operating Resource Impact Roadmap
Baselining Customer Changes to
model profiling Key Analysis
role/job focus
Voice of the Competency
Supplier mapping
Procurement
Director
Group Procurement

Org. charts Divisional Procurement Leadership

Head of Head of Head of Head of Head of
Procurement Market Market Market Market Market
Hub Manager Segment Segment Segment Segment Segment
Sourcing Sourcing Sourcing Sourcing Sourcing

Non-proc Suppliers
Supply Market
Segment
Sourcing
Category
and Tactical
Support
Stakeholders

Operational Transformati
Category Category Category

reports activity Support onal Support

Procurement
Lead
Procurement
Lead
Procurement
Lead
Finance Impact analysis HR

Division Procurement Transformation

Category Category Category Category Category Category Category Category Category Category

Job Group Procurement Enablement Procurement Procurement Procurement Procurement Procurement Procurement Procurement Procurement Procurement Procurement
Specialist Specialist Specialist Specialist Specialist Specialist Specialist Specialist Specialist Specialist
RATEX

descriptions
Competency Org options SLAs Scenarios Governance
maps VP Supply Chain

Performance Procurement
Director

Procurement

management
Heads of Market
Transformation
Segment Sourcing
Manager

Regional
Procurement Hub
Managers

Volumetrics

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 Section 2 – Proc Re-organisations

Procurement design aligns to the strategic objectives of

the organisation ... But beware it‟s a future focused profile
Key Activities

Design principles Org. options Org. structure Role definitions Resource profiling
Design principles (example)
Leverage full buying power and procurement experience of the CXX CXX Role title Category Manager
organisation through category management Chief Procurement Function Top-down Spend Calculated FTE
Reports to Head, Category Management
Division Division Subsidiary Division Division Subsidiary Officer (CPO) benchmark ($M) FTE (reviewed
Separation of strategic and tactical sourcing from transactional Grade D
– spend per with client)
purchasing activity Key • Develops and implements the most FTE ($M)
Occasional Occasional Occasional Occasional Occasional Occasional Head, Head, Head, Responsibilities appropriate category management
Ensure dedicated leads for implementing strategic activities Category Sourcing Centre of
(incl. performance management) with existing suppliers for key Buyers Buyers Buyers Buyers Buyers Buyers strategies and policies for the improvement Category mgt, 70 300 4.3 4
Management Operations Excellence of the business at all levels, in collaboration
categories chemicals
with business users
Operational • Provides advice, leadership and support on
Establish and maintain collaborative, long -term relationships Subsidiary Purchasing Category Head, Head, Head, Head, Head, Category mgt, 100 590 5.9 7
Division Central Manager Supplier Tactical Process Perform- Knowledge all sourcing matters
Division engineering
with strategic suppliers Purchasing Relation- Sourcing - Improve- ance Mgt Mgt • Communicates internal and external
Department ship Mgt. Region A ment
Share best practices, emerging technologies and analytical category expectations, tracks internal Category mgt, 45 70 1.6 2
Purchasing Purchasing
compliance
techniques across the organisation Structure Structure
• Takes primary accountability for delivering IT and
Supply Local Process Perform- Knowledge
Purchasing results (e.g., savings targets and telecoms
Drive consistent procurement policies and procedures across … … Market sourcing improve- ance mgt managers
Field Analysts support ment team analysits performance improvements)
the organisation
Education/ • Substantial experience in conducting
Foster leadership and enhance capability of procurement experience RFI/RFP process and negotiations;
human capital negotiation aptitude
• 5+ years in category specific background

Skills needed • Leadership

• Problem Solving/ Resolution
• Technical expertise in spend category
• Relationship Management

The number of
staff required for
each role in the
new organisation
structure is
profiled based on
expected
workload .. Not
YOUR current
skills...
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 Section 2 – Proc Re-organisations

But the good news is – if you survive there is generally a

will to invest - accurate roles and skills assessment …

Role Characterization: Strategic Buyer Example Client Example

Role: Strategic Buyer
Allocation to Training Modules Based on
Role Definition (Key activities) Training Needs
• Develops and executes supply strategies for local categories
in line with corporate/regional category managers Trainees per level
• Applies sourcing approaches (RFPs, etc.)
Course Participants
• Conducts Negotiations with suppliers and stakeholders
Corporate Ger UK China
• Manages supplier relationships ongoing (performance
measurement, improvement programs) • Entire
procurement
General community
Skill Profile 10 80 18 20
Procurement
• Selected non
Skill
Necessary Skill Level for Role procurement staf f
None Basic Advanced Expert
Analytical skills Analytical skills • Category Mngrs
1. Data gathering (process, tools) 1 2 3 4 Negotiation • Strategic Buyers
2. Analysis and modeling 1 2 3 4 10 80 18 20
Procurement process skills Procurement process skills Management • Operational
1. Strategic thinking 1 2 3 4 Buyers
2. Category Expertise (market, demand) 1 2 3 4
3. Commercial levers expertise 1 2 3 4 • Product
4. Technical / design capabilities 1 2 3 4
5. Negotiation 1 2 3 4 perf ormance test
Productd
6. Contracting / legal 1 2 3 4 labs / 6 4 3
1 2 3 4 Development
7. Manufacturing and Quality expertise
8. New Part Readiness (e.g. PPAP) 1 2 3 4
• Primary
9. Ordering Requisition to Pay (ERP, eProc) 1 2 3 4 technologies
10. ERP planning / configuration 1 2 3 4
Management skills Management skills Non
1. People management 1 2 3 4 • Non Procurement
2. Project management 1 2 3 4 Procurement stakeholders 4 tbd tbd tbd
3. Stakeholder management 1 2 3 4 Staff
Personal qualifications Personal qualifications
1. Presentation skills 1 2 3 4
2. Communication skills 1 2 3 4 Grand Total 22 166 40 43
3. Leadership skills 1 2 3 4

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 Section 2 – Proc Re-organisations

…help to define the right training needs for each individual

and role and the leadership want to invest to succeed with
their plan Illustrative

Business Annual Plan Procurement War on Talent

• Structured Performance Incentives

• Clear Strategic Imperative

Targets by
Personal grade/stage level
Objectives/MBO
Team Structure

Formalised Training Direction

Common
Organisational Needs Reviews
Backbone • Gap Analysis
• Tailored Learning Higher
Performance &
Governance Motivation Means
Retention
RACI/Service
Agreements
Competency needs
by role Ability
• Tailored Role Profiles • Delivering high returns/sourcing value
• Clear Career Progression • Procurement perceived as exciting place to work
• Decreased employee turnover and cost of
recruitment / onboarding time
• Increased knowledge and sharing of best
Procurement/Core Skills practices
Competency Grids

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 Contents

1. Hot skills at different levels in the procurement department

2. Behind the scenes in procurement re-organisations and what that means to

individuals

3. Why stakeholder management is at the top of the list

4. What competencies that entails

5. Tips on gaining the experience you need in stakeholder management

© Copyright 2011 A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission. A.T. Kearney 27/09/2011 Ver 1.0 18
 Section 3 – Importance of Stakeholder Mgmnt

The AEP in 2011 shows that as Procurement‟s involvement

in cross-functional efforts increases so does the need for
“business savvy” skills
Skills/Capabilities required from procurement personnel
(% Companies selecting „Required‟)
67% 1.5x
Use of IT Tools
44%
77% 1.3x
Spend Analysis Expanded
58%
Supplier Development 41% technical skills
1.6x
Programs 25%
56%
Risk Management 1.4x
40%
70%
Project Management 1.8x
39%
79%
Change Management 1.6x Deeper
49%
Communication/ 73% interpersonal skills
58% 1.2x
Presentation Skills
69%
Team Building 1.2x
55%
2011 2008

And the skill set requirements of professionals are recognised as broader, including
interpersonal skills
Source A.T.Kearney‟s Assessment of Excellence in Procurement (AEP) 2011
© Copyright 2011 A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission. A.T. Kearney 27/09/2011 Ver 1.0 19
 Section 3 – Importance of Stakeholder Mgmnt

Folks it is about the CUSTOMER; you have to create

ownership with key business leaders
Client Example

We would like to We have some potential We have the tender We have completed
investigate….. sourcing options….. responses… benefits calculations…

Gate A Gate B Gate C Gate D

Launch Strategy Defined Implementation Planned Savings
Approved

0 1 2 3 4 5 6 7
Analyze Determine Assess Supply Develop Execute Operationalize Sustain Results
Mobilize Category Business Markets Category Strategy New / Manage
Spend Needs Strategy Agreements Suppliers

GATE A GATE B GATE C

The Board is initially shown: The Board is shown: The Board is shown:
• potential areas of category focus • Internal and external research and • Comparative attractiveness of offers
• spend numbers and consumption conclusions • Estimated savings
• Options on approaching the supply • Implications of supplier choice – cost
market /managing demand of contractual change
• Business Case (benefits, risks), • A proposed way forward
timelines and next steps • Clear implementation plans

The Board approves: The Board approves: The Board approves:

• Give operational views on usage • the sourcing strategy and • Supplier selection decision
patterns and a future forecast contractual approach • The implementation plan
• Agree to further investigations and • the supplier selection criteria and
staff engagements the benefit measurement approach

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 Section 3 – Importance of Stakeholder Mgmnt

Category skills are a given...key capabilities /selection

criteria which make you stand out are about soft skills

Procurement capability framework

• Strategic influencing • Conflict resolution • Process excellence

Leadership & • Facilitation / coaching • Time management • Project management
core skills • Change management • Communication • Cross-cultural awareness
• Team working • Policy compliance • Managing for sustainability

• Demand management • Risk management • Costing and pricing

Strategic • Sourcing strategy develop. • Commercial skills • e-sourcing
sourcing • Negotiation & contracting • Basic Knowledge of intra- • Supply market analysis
• New supplier selection departmental activities
• Supp. Rel. Management

Required skills Purchasing • Specification definition • Warranty management

• Supplier performance • Catalogue management
process management • Inbound logistics
management • Transaction management • Order expediting

• Knowledge sharing • Openness to feedback • Learning focus

Behavioral • Innovation focus • Response to feedback • Risk affinity
• Adaptability • Going the extra mile • Volunteering
capabilities
• External focus • Learning openness

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 Contents

1. Hot skills at different levels in the procurement department

2. Behind the scenes in procurement re-organisations and what that means to

individuals

3. Why stakeholder management is at the top of the list

4. What competencies that entails

5. Tips on gaining the experience you need in stakeholder management

© Copyright 2011 A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission. A.T. Kearney 27/09/2011 Ver 1.0 22
 Section 4 – Stakeholder Mgmnt Skills

Excellence in influencing /stakeholder mgmnt means

planning, thinking like your receiver, and receiving like
you‟re thinking
• The case for change: Is the Category Strategic Agenda and benefits case clear enough?
• Sponsorship Visibility: Are there clear supporting and vocal sponsors?
 Transformation Figurehead
 Category Business Leads
• Dynamic Engagement: Do you communicate based on stakeholder interests?
Develop the plan Undertake category initiatives w hich are business driven
Align the top
consistent
team around the Communicate
and achievable
Ensure the need, the Communicate
business case approach Communicate
for a new proc and style of Create ow nership of
operating change the w ay forw ard from Drive decisions on sourcing strategies w ith options and data facts
model is all the key stakeholder
clear and groups
M ake sure there
compelling is enough Develop pull by Identify and pursue opportunities or quick w ins
resource (time, passing responsibility
energy, skill and out and dow n as fast
money) to embark as possible Balance empow erment w ith the need to integrate and give focus
on the journey

Pro-active
Stakeholder
Mgmnt

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 Contents

1. Hot skills at different levels in the procurement department

2. Behind the scenes in procurement re-organisations and what that means to

individuals

3. Why stakeholder management is at the top of the list

4. What competencies that entails

5. Tips on gaining the experience you need in stakeholder management

© Copyright 2011 A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission. A.T. Kearney 27/09/2011 Ver 1.0 24
 Section 5 – Tips and Learning Strategies

Leaders in procurement provide a broader range of training

topics to employees … is yours? Leaders
Followers

Procurement topics Business leadership skills topics

(% participants selecting “Training available to (% participants selecting “Training available to
procurement employees”) procurement employees”)
Sourcing 92% Communication/ 85%
Methodology 72% Presentation Skills 61%

Sourcing strategy 92% Building and 77%

Developmant 69% motivating teams 53%

Negotiation and 85% Change 77%

Contracting 80% Management 48%

85% Balance sheet 77%

Spend Analysis
68% Literacy 46%
Use of
77% Stakeholder 77%
Procurement IT
69% Engagement 45%
tools
Supply Market 69% Project 69%
Analysis 66% Management 59%

Most survey respondents do not include cross functional team members outside procurement
in training on procurement topics
Source A.T.Kearney‟s Assessment of Excellence in Procurement (AEP) 2011
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 Section 5 – Tips and Learning Strategies

You should seek out opportunities to learn but more

importantly PRACTICE
Never stop learning … Choose training sessions that take into account
your perceptual learning style …
Strategy Description
Self • One person learning completely on their own
Instruction in a very informal manner Visual Auditory Kinesthetic
Learners Learners Learners
• Learners are given carefully prepared
materials
Self-Directed Description
Learning • Questions are included to keep learners
engaged and answers provided to allow for • Learn by seeing • Learn by listening • Learn by doing
self-evaluation • Pictures and images are • Verbal instructions • Games and practical
important are important exercises are
Computer • Self-directed learning presented by computer • “I see what you mean…” • “I hear you…” important
Based • A computer program acts as instructor and • “That makes sense
Training CBT information source to me…”
Training Implications
• Can be used to disseminate self-directed or
CBT courses • Include visual • Have discussions • Organize and
Web-Based • Can also provide opportunity for learners to reinforcement (e.g. during training allow enough time
Training locate their own chat groups where they learn projectors, videos) for practical
from other participants in an unstructured self • Use nuances of
speech (e.g. varying assignments
instructional way
pitch, speed of
• Training happens at the actual job site presentation) to
• A supervisor/coach delivers and monitors deliver key messages
On-the-Job highly structured training program complete
with guides, application sessions and formal
performance test

• Tools that guide performance as the learner And seek out opportunities on the job, at
Stand Alone performs the ability
Job Aids • Usually used in combination with other conferences, and best of all – watch and
strategies to enhance training effectiveness then do....building up your role
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 About A.T. Kearney

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 Credentials

A.T. Kearney is one of the world‟s leading strategic

management consulting

A.T. Kearney – Company Profile

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• Mexico City • Washington, DC • Copenhagen • Madrid • Stuttgart
• New York • Düsseldorf • Milan • Vienna
• Frankfurt • Moscow • Warsaw
• Helsinki • Munich • Zurich
• Istanbul • Oslo

Founded in 1926
2,500 employees worldwide
Middle East
58 cities in 38 countries
• Abu Dhabi
Private, 100% Partner-owned • Dubai
• Manama
Collaborative Working Style • Riyadh
Asia Pacific

• Bangkok • New Delhi

• Beijing • Seoul
•
Immediate Impact & •
Hong Kong
Jakarta
•
•
Shanghai
Singapore
•
Growing Advantage •
Kuala Lumpur
Melbourne
•
•
Sydney
Tokyo
• Mumbai

© Copyright 2011 A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission. A.T. Kearney 27/09/2011 Ver 1.0 28
 Credentials

We are the recognized market leader in supply management,

accredited with the original “invention of 7 Step” sourcing
Development of A.T. Kearney‟s supply management consulting expertise
"Invention“ of Extension to Enabling of Supply Facts
Global Sourcing Strategic Sourcing Management
 500 projects during
Supply Management
past 3 years

Provisioning
Enablement
Generation
Traditional
Sourcing

Sourcing

Process

Service
Next
 850 consultants on
"S-Teams" sourcing projects
 Analysis of $ 400 bn
Selection Sourcing
…
spend so far
BPO  Typical saving range
Consortia LSN, … of 8-15% on
addressed spend
Telecom AT&T, Bell South, Cesky
Telecom, DT, FT, NTT $ 68 bn cumu-lated
Process BP, Arcelor, Chevron, Elf, Esso, HKM, savings
Lafarge, RAG, Saint Gobain, Shell, ...
Abbott, Astra Zeneca, Bayer HealthCare, BMS,
 $ 15 mln annual
Pharma Merck, Novartis, Pfizer, Quintiles, Viatris, Wyeth, … investment in in-
Retail, tellectual capital
cons. goods Campbell, Carrefour, M&S, Sara Lee, Sears, Unilever, …
Financial ABN Amro, AXA, Barclays, Citigroup, Daito Bank, Deutsche Bank,  Thought leader
services Groupama, HSBC, JP Morgan, Prudential, Royal Bank of Scotland, … in sourcing since
Babcock & Wilcox, Camargo Correa, Fluor Daniel, Grundfos, Hochtief, Impregilo, more than 15 years
Engineering Lenze, MacGregor, Mettler Toledo, NCC, Rolls-Royce, Schindler, …
Automotive Caterpillar, DaimlerChrysler, Ferrari, Fiat, Ford, GM, Jaguar, Land Rover, Nissan, Volvo, VW,
ArvinMeritor, Delphi, Faurecia, Federal Mogul, Getrag, Knorr Bremse, Magna, TRW, Visteon, …

1990 1995 2000

© Copyright 2011 A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission. A.T. Kearney 27/09/2011 Ver 1.0 29
 Overview

A.T. Kearney's Assessment of Excellence in Procurement

(AEP) 2011 is the seventh in the series

History of A.T. Kearney's Assessment of Excellence

in Procurement (AEP)
162 Initial
Participants,
201+ total
participants to
date
295 Initial
Participants, 2011*
650+ total
participants
281 Initial
Participants,
638 total 2008
participants
147 Total
Participants
162 Total 2004 * The Survey is still
Participants open in 2011 and
77 Total
25 Total Participants 2002 companies can receive
Participants
1999 full assessments
1996 against peers on an
1992 ongoing basis

(1) Over 1,000 elements benchmarked across 33 leadership practices covering 8 dimensions of Procurement
© Copyright 2011 A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission. A.T. Kearney 27/09/2011 Ver 1.0 30
 Overview

The AEP in its 19th year, and is the most comprehensive

benchmarking of Procurement practices

Highlights
• 201 companies have submitted
responses
• Participants from Asia (22%), Americas
(27%) and EMEA (51%)
• All industries are represented:
Information Intensive Services (30%),
Asset Intensive Services(14%), Non-
Durable Consumer Products (17%),
others (39%)
• Survey remains open; tracking to 500+
participation
• Average participant is US$12.5 B in
revenues
• Survey remains open

© Copyright 2011 A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission. A.T. Kearney 27/09/2011 Ver 1.0 31