PURCHASING EXCELLENCE STUDY

PURCHASING EXCELLENCE STUDY

Purchasing trends and benchmarks 2011 –

Production and non-prod.-related materials/services

Contents

A.

STRUCTURE OF THE STUDY

3

B.

KEY TRENDS IN PURCHASING

Summary and key findings of the study

10

C.

DETAILED SURVEY RESULTS

2003 vs. 2009

13

D.

INDIVIDUAL PERFORMANCE BENCHMARK

A

The study investigates trends in purchasing excellence across

different industries and countries

Structure of the Purchasing Excellence Study

In 2011, Roland Berger Strategy Consultants once again carried out an extensive

global study on trends and benchmarks in the purchasing of production and

non-production-related materials and services – the fourth study since 1999

More than 500 CEOs, COOs and purchasing managers were interviewed

The goal of the study was to identify key trends and benchmarks in

purchasing. This year we looked particularly at any changes since the

2008/2009 financial and economic crisis

We compared the results to those of previous years' studies

to identify any general trends

Roland Berger conducted its first Purchasing Excellence Study

more than ten years ago

PROCESS OPTIMIZATION

e.g.: e-procurement

ORGANIZATIONAL

DEVELOPMENT

e.g.: lead buying

SCM OPTIMIZATION

e.g.: strategic alliances,

supply base compression

1999

STUDY

History of the Purchasing Excellence Study

2003

STUDY

2009

STUDY

> Focus on non-production-related materials (NPM) > Focus on retail and service

industries

> More than 100 respondents

from Germany, Austria and

Switzerland

> Focus on NPM

> Focus on retail and service industries

> More than 400 respondents

from across Europe

> Looked at both production materials (PM) and NPM

> Various industries

> More than 500 respondents

worldwide

> Performance ranking by industry

MEGATRENDS

2011

STUDY

> Looked at both production materials (PM) and NPM

> Various industries

> More than 500 respondents

worldwide

> Performance ranking by industry

RISK MANAGEMENT IN

VOLATILE MARKETS

e.g.: supply, financing, ensuring

capacity

Automotive, retail and electronics are still the leading industries –

Strongest growth was seen in financial services

PERFORMANCE CUBE

Performance

Public sector Healthcare Transport Power/ utilities Financial services

Strategy

OVERALL RESULTS

Total 2009 Total 2011 Sector Retail IT/Telecom Engineered products Automotive Electronics Consumer goods Chemicals Pharmaceuticals Financial services Power/utilities Transport Healthcare Public sector Trend IT/telecom Pharmaceuticals Chemicals Electronics Consumer goods Retail Automotive Engineered products

Enabler

We evaluate companies' performance along three dimensions –

Results are shown in the Purchasing Excellence Performance Cube

Performance

Purchasing Excellence Performance Cube – Companies' purchasing performance

BASIS PERFORMANCE BENCHMARK

COMMENTS

> We evaluate companies'

performance

along

three

dimensions

using the

Roland Berger purchasing

approach

> For each dimension, we compare

individual

companies' answers to those of the top

performers

(top 10% of respondents)

> The result is

three performance clusters

for

each

dimension

– Purchasing excellence

– Average

– Bottom players

> We call companies that demonstrate

"purchasing

excellence" in all three dimensions "purchasing

excellence enterprises"

Bottom players Average Purchasing excellence Bottom players Average Purchasing Excellence Purchasing excellence Average Bottom players

St

rat

egy

Purchasing excellence Purchasing excellence Bottom player Average

BACKUP

Purchasing excellence Average Underperformers Sector/company performance

(color = total number of points)

Enabler

16% of companies made it into the "purchasing excellence" cluster

– An improvement on 2009

Share of companies in survey,

2011 vs. 2009

[%]

PURCHASING

EXCELLENCE

AVERAGE

UNDERPERFORMERS

37

47

16

40

46

14

Difference

[% pts]

'11 vs. '09

+2

+1

-3

Respondents by industry, country and purchasing volume –

There were over 500 in total

1) Central & Eastern Europe

COUNTRY SPLIT

[% of respondents]

PURCHASING VOLUME

[EUR m]

INDUSTRY

[% of respondents]

5% 5% 7% 7% 7% 8% 13% 16% Other2) 3% Public sector 3% Transport 4% Pharmaceuticals IT/telecom Healthcare _6% Financial services Energy/utilities Electronics 7% Chemicals Retail Consumer goods 9% Engineered products Automotive >2,500 3% 1,000-2,500 9% 250-1,000 31% 50-250 38% <50 19%

13%

19%

Asia

USA

CEE

1)

24%

Western

Europe

44%

B

KEY TRENDS IN PURCHASING

Seven key findings from the

Purchasing Excellence Study (1/2)

Purchasing excellence supports profitable growth strategies for companies

1.

The purchasing function assesses the different financing options and is largely

responsible for managing investments

4.

2.

Purchasing excellence enterprises treat the purchasing function as a true

business partner – it operates on an equal footing with internal customers and

external suppliers

Sustainability – economic, ecological and social – is a key part of the purchasing

strategies of purchasing excellence enterprises

Seven key findings from the

Purchasing Excellence Study (2/2)

Risk management – suppliers, raw materials and utilities – is considered a top-priority

ongoing task in purchasing

5.

6.

Interdisciplinary and cross-functional activities place new demands on purchasing –

intercultural, linguistic and technical skills are increasing

Employees are better qualified and purchasing has become more professional –

the number of buyers with relevant degrees is increasing

C

DETAILED SURVEY RESULTS

The 2011 study identifies 15 key purchasing trends along the three

dimensions

4

Continuous risk management

minimizes raw material, currency

and price risks

9

Extensive product cost optimization

using complex levers

14

Purchasing staff are becoming

increasingly professional

1

Purchasing is treated as a true

business partner

6

Supply chain financing

11

Purchasing functions are centralized

and coordinated

2

Purchasing drives cross-functional

cost optimization

7

Suppliers are involved in development

processes

12

Purchasing performance is measured

in full

3

Continuous risk management

minimizes product and supplier

risks

8

Cost improvements in collaboration

with suppliers

13

Purchasing is involved early on in

project-related and strategic tasks

15

Advanced technologies are used

(tools & systems)

10

Best cost country sourcing – trend

toward global sourcing continues

5

Sustainability forms a key part of the

purchasing strategy

Purchasing is increasingly viewed as a true business partner –

In 54% of companies, it is on an equal footing with other functions

Support of top management

[% of respondents]

"Does the purchasing department have the full support

of top management?"

Comparison with other functions

[% of respondents]

"Does the purchasing department operate on an equal

footing with finance, sales & marketing, etc.?"

1

STRA

TEGY

PURCHASING TREATED AS A

TRUE BUSINESS PARTNER

Standing of purchasing within the company

23

+3

Increase

in % points

+14

+5

Increase

in % points

Up 26 percentage points since 2003

Up 19 percentage points since 2003

Yes

Yes

77%

74%

51%

2009

2003

2011

54%

49%

35%

2011

2003

2009

Purchasing is increasingly responsible for cross-functional cost and

value optimization projects

2

STRA

TEGY

PURCHASING DRIVES CROSS-FUNCTIONAL

COST OPTIMIZATION

Purchasing leads cross-functional projects

[% respondents]

1)

"Does the purchasing function lead key cross-functional

projects?"

PM/NPM purchasing treated as a reliable business

partner

[% respondents]

1)

"Is PM/NPM purchasing treated as a reliable business

partner?"

+12

Increase

in % points

Yes

58%

46%

2011

2009

74%

68%

2011

2009

+6

Yes

PM

44%

32%

2011

2009

+12

NPM

Yes

Increase

in % points

Managing product and supplier risk is a key part of the purchasing

strategy

3

STRA

TEGY

CONTINUOUS RISK MANAGEMENT MINIMIZES

PRODUCT AND SUPPLIER RISKS

Companies where this is important or

very important

[%]

"Do you actively manage supplier risk in your

company?"

Detailed results, 2011 vs. 2009

[%]

"How do you actively manage supplier risks?"

Change

in % points

77%

82%

2003

2009

2011

43%

Yes

81%

78%

2011

2009

Audit suppliers

1

+3

57%

62%

2011

2009

Analyze financial data

2

-5

62%

59%

2011

2009

Create sourcing alternatives

3

+3

43%

39%

2011

2009

4

+4

Use industry indicators

In best-in-class companies, the purchasing function minimizes price,

raw material and currency risks on an ongoing basis

4

STRA

TEGY

CONTINUOUS RISK MANAGEMENT MINIMIZES

PRICE, RAW MATERIAL AND CURRENCY RISKS

Companies where this is important or

very important

[%]

"Do you actively manage price, raw material and

currency risks?"

No. of companies where this is important or very

important,

detailed results, 2011 vs. 2009 [%]

"How important do you consider the following

risks?"

2011

69%

2009

64%

37%

2009

46%

2011

PM

NPM

+5

+9

Increase

in % points

Increase

in % points

2011

69%

2009

59%

Price risks:

Increasing purchasing prices

for PM and NPM

Raw material risks:

Availability of raw materials

on markets and risks to

transport routes

Currency risks:

Currency fluctuations that

influence purchasing costs

2011

78%

2009

53%

2011

71%

Sustainability has become an integrated part of purchasing strategy

and is anchored in the corporate mission

5

STRA

TEGY

SUSTAINABILITY FORMS A KEY PART OF THE

PURCHASING STRATEGY

Sustainability as a purchasing goal

[% respondents]

"Is sustainability one of your company's strategic purchasing goals?"

Sustainability tools

[% respondents]

"What tools do you use to make purchasing sustainable?"

Sustainability is considered increasingly important

+25 +13

Increase in % pts.

The influence of sustainability on purchasing strategy continues to grow strongly Yes 69% 56% 21% 2011 2009 2003

47%

74%

NPM

PM

36% 47% 48% 52% 56% Supplier development and sustainability audits Active information to suppliers/ public relations Sanctions/conditions may be imposed Suppliers can be excluded from supplier pool Criteria included in supply contracts

PM = Production material, NPM = Non-production-related/services

Sustainability in PM even more important,

NPM is catching up

[% respondents]

"Is sustainability important/very important in purchasing strategy?"

Sustainability is anchored in the corporate goals and divided into

five categories:

BEST PRACTICE INDUSTRY EXAMPLE:

Sustainability Champion

Product development: Cumulated sales of sustainable products is to reach USD 50 bn in 2012. Currently: 13 bn (share of 16%)

1.

Operations: Reduce CO₂ usage by 20% – Currently: 10%

2.

Social responsibility: Provide aid for children in need, e.g. providing clean water. Currently: 930 m liters

3.

Employees: Make sustainability part of the mindset and actions of all employees

4.

Stakeholders: Create transparency as a basis for responsible innovations

Purchasing plays a key role in supply chain financing – Reducing

working capital is an important lever

6

PERFO

RMAN

CE

SUPPLY CHAIN FINANCING

Relevance of working capital management

for purchasing

[% respondents]

"Do you actively use levers for reducing the working

capital position in purchasing?"

Options for influencing the company's working capital

position

Supply chain financing

Best-practice levers in working capital mgmt.

(selected)

Payables

Scheduling of payment deadlines

I Bundled billing II

Inventory

Consignment storage I

Minimum inventory level

II

Types of working capital

Purchasing can influence:

>

Payment terms

>

Supply frequency/inventory

>

Discounts

Payables

Inventory

Receivables

+23

+1

Increase

in % points

Optimizing working capital is still a matter of

Yes

68%

67%

44%

2011

2009

2003

Leading companies involve suppliers in the innovation process early

on and use KPIs to evaluate them

7

PERFO

RMAN

CE

SUPPLIERS INVOLVED IN THE INNOVATION PROCESS

Early involvement of suppliers in the innovation process

Feedback from respondents

"Do you involve selected/strategic suppliers early

on in the development process?"

Detailed results, 2011

(extract)

"What tools do you use to evaluate the performance

of your suppliers when it comes to innovation?"

57%

79%

2003

2009

2011

19%

Yes

_17%

22%

56%

76%

Assessment during

joint projects

Supplier audits

Supplier

assessment

Specific KPIs

for suppliers

Leading companies collaborate with their suppliers to optimize costs

– Even greater transparency is needed here

8

PERFO

RMAN

CE

COST IMPROVEMENTS IN COLLABORATION

WITH SUPPLIERS

Cost improvements in collaboration with suppliers

No. of respondents working closely with their

suppliers to improve costs

[%]

63%

57%

2011

2009

37%

29%

2009

2011

PM

NPM

+6

+13

Increase

in % points

Increase

in % points

Detailed results, 2011 vs. 2009

[% respondents]

"Do you require open-book calculations from your

suppliers?"

66%

34%

YES

NO

Only one-third of companies use levers to increase

cost transparency

Companies are increasingly turning to complex levers to optimize

product costs

9

PERFO

RMAN

CE

EXTENSIVE PRODUCT COST OPTIMIZATION

USING COMPLEX LEVERS

No. of respondents using sophisticated

cost-improvement levers

[%]

+8%

Change

2009 vs. 2011

Full product cost optimization – example:

Roland Berger design-to-value approach

27% 25% 21% 8% 37% 29% 14% 11%

Considered important/

very important

[%]

Lever

Standardization of technical solutions Redesign of specification requirements

Value analyses and full product/service cost optimization

Volume bundling and focus on strategic suppliers

1

2

3

4

2009 2011

+2%

+13%

+3%

Customer perspective Company perspective What drives costs and how can we influence them early on? > Cost driver analysis > Product tear-down > etc. What alternatives do we have (e.g. features, solutions)? > Collaborative supplier integration > Product convention > etc. DEVELOPMENT PROCESS What are customer preferences (e.g. performance, features)? > Consumer Clinic > Focus groups > etc. What alternative is valued by the customer and increases profitability? > Sales volume test > Price positioning > etc.

A

D

B

C

Examples of methods/tools

Global sourcing is still on the rise – Key criteria are logistics

requirements and geographical proximity to the company's sites

10

PERFO

RMAN

CE

BEST COST COUNTRY SOURCING

Best cost country sourcing

Share of global sourcing

[% of respondents]

63%

57%

2011

2009

37%

29%

2011

2009

PM

NPM

+6

+8

Increase

in % points

Increase

in % points

Top performers actively shape their

global supplier footprint

"What criteria do you use when shaping your

international supplier basis?"

Suppliers' currency zone 21% Local content regulations 38% Needs of our customers 41% Physical proximity to our sites 69% Requirements of our logistics network 87%

Purchasing is increasingly centralized for both direct and indirect

materials – This trend is expected to continue to 2015

11

ENAB

LE

R

FURTHER CENTRALIZATION OF

THE ORGANIZATIONAL MODEL

A

Structure for direct materials

[% of mentions]

1) Trend identified by respondents in Purchasing Excellence Study 2011

14%

14%

4%

14%

54%

Mixed

Lead

buyer

Local

BU

Central

9%

14%

5%

14%

59%

Mixed

Lead

buyer

Local

BU

Central

2011

9%

14%

5%

5%

68%

Mixed

Lead

buyer

Local

BU

Central

+5%

+9%

2009

2015

1)

B

Structure for indirect materials

[% of mentions]

2009

2011

2015

1)

18%

23%

9%

5%

46%

Mixed

Lead

buyer

Local

BU

Central

14%

18%

1%

5%

62%

Mixed

Lead

buyer

Local

BU

Central

5%

19%

0%

5%

71%

Mixed

Lead

buyer

Local

BU

Central

+16%

+9%

Measuring purchasing performance has become a standard –

Top performers use a comprehensive set of KPIs

12

ENAB

LE

R

COMPREHENSIVE MEASUREMENT OF PURCHASING PERFORMANCE

Importance/use of KPIs

[1 not important – 5 very important]

Measuring purchasing performance

[% respondents]

Frequency of reporting/measuring

[% respondents]

"Do you measure purchasing

performance?"

"Do you use KPI sets and external

_{benchmarking?"}

Yes No 2011 96% 2009 81% 2003 63% No 2011 69% 2009 65% 2003 39% Yes +15% +100% +65% +95% +72% +50% 4.0 3.0 2.0 1.0 Inventories _0.5 3.6 Quality costs _1.8 3.1 Process time _2.0 3.5 Purchasing op. costs 1.9 3.3 Number of suppliers 1.7 3.6 Automation rate _2.0 3.4 Customer satisfaction 2.0 3.8 Price reduction/ saving 4.0 4.4 +61% +440% Change 2009-2011

Evolution of steering indicators

MATERIALS

SERVICES

+10% +90% +70% +111% +74% +75% +72% +620% 10% 9% 19% 62% 12% 4% 31% 54%

13

ENAB

LE

R

Comments

Feedback from study respondents

+4%

+7%

+0%

+1%

Delta

09-11

2009

2011

2003

_15%

19%

23%

47%

54%

61%

67%

70%

70%

84%

86%

87%

>

Purchasing is increasingly

involved in early phases of

needs definition – this is also

where costs can be more easily

affected

> Trend toward

purchasing having

more weight than other

functions/departments

–

involvement in key process

steps is up between 2 and 7

percentage points

> Purchasing is involved in just one

in five processes for

defining

specifications

–

top performers

are involved as early on as

possible

Defining needs

(specification,

volume)

Analyzing

sourcing market,

initial contacts

Selecting

strategic partners

Handling orders

Cross-functional collaboration with other internal departments through early involvement in the product creation process

"Which of the following process steps are you involved in?"

Early involvement of purchasing in the value creation process

Purchasing is increasingly a proactive player in cross-functional

activities – Increase of between 2 and 7 percentage points since 2009

PURCHASING IS INVOLVED EARLY ON IN

PROJECT-RELATED AND STRATEGIC TASKS

Purchasing staff are increasingly well qualified – Respondents say

this can improve still further

14

ENAB

LE

R

PURCHASING STAFF ARE BECOMING INCREASINGLY

PROFESSIONAL AND WELL QUALIFIED

Level of education of workforce

[%]

14

29

33

17

25

₂₇

5

None Commercial training Technical training Degree

100

3

37

100

41

100

10

59

Skills in purchasing – requirement and current status

Analytical skills 39 59 39 61 51 65 53 73 62 85 51 75 62 87 75 87 65 89 59 84 67 93 Strategic skills Purchasing skills Finance/legal IT

Multi-functional (Sales, Eng.) Foreign languages

Creativity Leadership skills Soft skills

Communication skills

Skills

Evaluation

[% respondents]

Change

[% points]

-26 -25 -24 -12 -25 -24 -23 -20 -24 -22 -20

Staff qualifications and key skills

Change 09-11

[% points]

+2 -2 -4 +4

0

20

40

60

80

100

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Other

2.1

E-auctions

3.2

Supplier relationship

management

3.7

Purchasing controlling

4.1

Operational sourcing

4.3

E-tools are used in 77% of purchasing organizations – They are

most important in operational sourcing

15

ENAB

LE

R

ADVANCED TECHNOLOGIES ARE USED

(TOOLS & SYSTEMS)

Use of e-tools

Feedback from respondents

"Which of the following tools do you use in your

purchasing processes?"

Detailed results, 2009

"How important do you consider e-tools in the

following areas? How often are they used?"

Importance/use [0-5]

Use '11 (1 low; 5 high)

4.1 3.0 2.2 1.4

27%

31%

32%

42%

55%

Web EDI

Business

warehouse

B2B platforms

SAM

solutions

1)

E-auctions

Use '09 (1 low; 5 high) Importance '11 (1 low; 5 high)

3.4 2.5 1.5 1.9 1.6 2.0

1) Sourcing software package

D

INDIVIDUAL PERFORMANCE BENCHMARK

Your responses compared to peer industries

Use individual performance benchmarking to derive

recommendations for action from the study

Two evaluation options for your company

BASIC

PERFORMANCE

BENCHMARKING

A.

ADVANCED

PERFORMANCE

BENCHMARKING

B.

>

Individual

analysis of your

study results

>

Comparative

representation including

top

performers

in and outside the industry

>

Detailed feedback

on best practices in

purchasing

>

Quick check of spend volumes

and

spend-cube setup

>

Focus workshops

in purchasing including

cross-functions to

identify additional

optimization potential

>

Defined actions

for closing any

performance gaps

Transparenz schaffen Performance Benchmarking

OPTIMIERUNGSHEBEL ZUM SCHLIESSEN DES PERFORMANCE-GAP

Spend Case Commodity Review Organisation & Prozess Review Strategy Check Balancing Coating Welding/ brazing Testing Total overhaul Surface treatment Machining Total spend 17.39.6 3.0 1.6 1.5 1.10.4 0.1 Share of total spend [%] 1005612 9 9 6 2 1 012345 Studientrends Bewertung [0-5]

Low Per-formerAveragePurchasingexcellence

Purchasing-Excellence-Merkmale

(Auszug)

1Etablierung des Einkaufs als akzeptierter Business Partner

3Verstärkter Einsatz von Einkaufs-kooperationen

2Renaissance des Kostenprimats

4Supply Base Compression weiter auf dem Vormarsch

6Nutzung von Insourcing-Optionen

5Management von Risiken in der Lieferantenbasis

7Sicherstellung Nachhaltigkeit in der Lieferkette Individuelle Perf ormance (Outside-in-Einschätzung auf Basis Fragebogen)Perf ormance Gap

Im Gespräch zu diskutieren • Einkauf auf GF-Ebene vertreten, auf Augenhöhe mit Cross-Funktionen • Nutzung von Kooperationen in ausgewählten Warengruppen • Kostenoptimierung als oberstes strategisches Ziel des Einkaufs • Lieferantenanzahl in Vergangenheit stark reduziert • Nutzung interner Kapazitäten in ausgewählten Bereichen • Risikomanagementsystem im Einkauf installiert und genutzt • Sustainability ist strategisches Ziel und wird von Lieferanten eingefordert Im Gespräch zu diskutieren

PURCHASING

EXCELLENCE

Average

Under-

performers

The four pillars of our study represent the basis for

individual company performance benchmarking

A

Approach to basic performance benchmarking

Purchasing Excellence Study data pool

Individual performance benchmarking

Focus interviews

Project database

Online survey

Phone interviews

Strategy

Performance

Enabler

0 1 2 3 4 5 Studientrends Bewertung [0-5] Low Per-former Purchasing excellence Average Purchasing-Excellence-Merkmale (Auszug)

1Etablierung des Einkaufs als akzeptierter Business Partner

3Verstärkter Einsatz von Einkaufs-kooperationen

2Renaissance des Kostenprimats

4Supply Base Compression weiter auf dem Vormarsch

6Nutzung von Insourcing-Optionen

5Management von Risiken in der Lieferantenbasis

7Sicherstellung Nachhaltigkeit in der Lieferkette

Im Gespräch zu diskutieren

• Einkauf auf GF-Ebene vertreten, auf Augenhöhe mit Cross-Funktionen • Nutzung von Kooperationen in

ausgewählten Warengruppen • Kostenoptimierung als oberstes

strategisches Ziel des Einkaufs • Lieferantenanzahl in Vergangenheit stark

reduziert • Nutzung interner Kapazitäten in

ausgewählten Bereichen • Risikomanagementsystem im Einkauf

installiert und genutzt • Sustainability ist strategisches Ziel und

wird von Lieferanten eingefordert Im Gespräch zu diskutieren

Detailbetrachtung und Gesamtergebnis

Strategie Performance Enabler Gesamt Branche

Kliniken Verortung im Cube Performance S tr a te g ie Öffentl. Inst. Kliniken Automobil Elektronik Maschinenbau Pharma Chemie Energie/ Versorger Öffentliche Institutionen Banken/ Versicherungen Handel

Verortung der Performance Branche / Unternehmen (Farbgrad Gesamtpunktzahl) Purchasing Excellence Durchschnitt Schlusslicht

Transport IT/Telekom IT/Telekom Handel Pharma Chemie Elektronik Automobil Transport Energie Banken & Versich. Maschin-enbau

BASIC PERFORMANCE BENCHMARKING

Your company's positioning in the Purchasing Excellence

Cube is based on the scores achieved in the study

A

BASIC PERFORMANCE BENCHMARKING

Purchasing Excellence rating – Example

Purchasing Excellence Average Underperformers Sector/company performance

(Color = total number of points)

Performance

Public sector Healthcare Transportation Power/ utilities Financial services

Strategy

IT/telecom Pharmaceuticals Chemicals Electronics Consumer goods Retail Automotive Engineered products

Enabler

INDIVIDUAL PERFORMANCE BENCHMARKING

COMMENTS

(example)

> Performance of "Sample Corp."

compared to other study respondents

based on questionnaires

–

Strategy: Top section in the

"Average" cluster

–

Performance: Bottom section in the

"Average" cluster

–

Enabler: Top section in the

Individual performance benchmarking – Detailed results

on the performance level

A

BASIC PERFORMANCE BENCHMARKING

Detailed results for Sample Corp. – Example evaluation of performance level

STUDY TRENDS

EVALUATION [0-5]

Average

Performance gap

Under-performers Purchasing Excellence

2

Purchasing is an essential driver for

cross-functional cost-cutting projects Purchasing controls and drives cross-functional cost-cutting projects

6

Supply chain financing Working capital position improved from within

Purchasing

5

Sustainability forms a key part of the purchasing

strategy Comprehensive sustainability activities in these three dimensions: economic, ecological, social

8

Cost improvement in collaboration with

suppliers Suppliers involved in cost-cutting and performance improvement projects

13

Early involvement of purchasing in project-related

and strategic tasks Purchasing involved early on in identifying requirements and defining specifications

12

Comprehensive measurement of purchasing

performance KPIs as well as internal and external benchmarks applied to determine Purchasing performance

15

Use of advanced technologies Use of e-auctions, Web EDI, B2B platforms, etc.

Advanced performance benchmarking is based on a quick check of

the Purchasing Excellence rating

B

ADVANCED PERFORMANCE BENCHMARKING

Advanced performance benchmarking procedure

1) Determined by company size and complexity as well as number and complexity of the focus areas to be analyzed (categories, processes, systems)

Organize setup

Collect basic quantitative

and qualitative data and

information

Create

transparency

> Discussions on setup

> Interview sessions

> Workshop preparations

Conduct

quick-check workshops

> Workshop

– Category review and

levers

– Organization review

and areas with room

for improvement

– Process review

Define potential

and priorities

> Benchmark

documentation

> Wrap-up discussion

– Potential

– Priorities

– Next steps

1-2 weeks

1)

Potential estimated

and priorities specified

Optimization levers

and areas with room

for improvement

identified

Transparency created

Basis defined for

Advanced Performance

Benchmarking

Benchmarking results in prioritized optimization actions including

potential and defined next steps

B

POTENTIAL AND PRIORITIES

Advanced performance benchmarking results

RESULTS

ANALYSIS SCOPE

PERFORMANCE BENCHMARKING

I

STRATEGY

III

ENABLER

Vision, mission and strategy Service performance Cost per- for- mance Capital perfor- mance I II III Organization and resources/HR Controlling, objectives and KPIs Infrastructure, systems and tools Processes

II

PERFORMANCE

Optimization actions prioritized