Signature Ceremony Chair GSK Biologicals Strategic Sourcing and Procurement November 24th 2011

Signature Ceremony

Chair GSK Biologicals

Strategic Sourcing and Procurement

Prof. Bruno Delvaux

M. Christophe Weber

President Designate

GSK Biologicals

From talent acquisition to academic

partnership in a growing

Prof. Per Agrell

President of the Louvain School of

Management Research Institute

The Chair GSK Biologicals in

Sourcing and procurement: the first

of its kind in Belgium

The three university missions

Service

Research

Teaching

Academic service (national, international)

Societal (expertise, policy, analysis)

Enterprises (spin-offs, executive ed, applied res.)

Undergraduate

Graduate

Continuing

Fundamental

Applied

Critical

Background

•

 

Sourcing and procurement are

vital functions

in virtually all

enterprises

•

 

The importance of sourcing and procurement

increase with

internationalization and outsourcing

of value-added processes

•

 

The economic impact of the function is

very important

•

 

In Belgium, there was no university training for procurement

professionals

•

 

In Belgium, there was no research group working specifically at

•

 

Teaching excellence is built on research

excellence

›

 

LSM is a research-based school of management

›

 

Synergy between active research and teaching staff

•

 

Research excellence is created on-site by people

›

 

Research projects are founded in scientific discourse

›

 

Doctoral training is vital to research groups

›

 

Integration in an existing team is primordial to lasting

value

›

 

Build research groups on domain experts

Service

Research

Teaching

Training expertise

Analytics for policy and

Improvement processes

Network creation

Specialized training

Master’s theses

Case studies

Methods

Models

Processes

•

 

Becoming one of the leading think tanks for

Strategic Sourcing & Procurement in Europe

•

 

Covering the full knowledge chain – Academic &

Applied Research, Education and Networking.

•

 

Addressing always the latest & future agenda

setting topics in Strategic Sourcing &

Procurement.

Innovate

- Analyze new topics

-

 

Develop solutions

-

 

Rigorous research

-

 

Research collaboration

Educate

-

 

State of the art education

methods

-

 

Latest research contents

-

 

High return on education

Implement

-

Apply solutions in firms

- Analyze implementations

-

Improve solutions

Scientific Research – Currently ongoing collaborations

Per Agrell UCL Lieven Quintens University of Maastricht Marc Sachon IESE Ram Narasimhan Michigan State University Martin Lockstroem CEIBS Tobias Schoenherr Michigan State University Sriram Narayanan Michigan State University Santosh Manapatra

Clarkson University of Northern Antony Paulraj Florida

Philippe Chevalier

UCL Protopappa-Sieke Margarita EBS Business School

Michael Henke

EBS Business School EBS Business School Richard Pibernik Christoph Bode ETH Zurich Nottinham Business Bart MacCarthy School Kurt Jörnsten Norges Handelshøyskole Andreas Norrman Lund University Arash Azadegan New Mexiko State

University

Americas

Europe & Asia

Vaidy Jayaraman University of Miami Guillaume Roels UCLA Per Semal UCL

Mathieu Van Vyve UCL

Aadhaar Chaturvedi U of Namur

Applied Research

Scientific Research

Executive Education

Teaching

Research Networks

Research

Education

Network

Practice

Theory

Practice Networks

Value Creation

Global Supply

Networks

Risk Management

Performance &

HRM

Governance

Strategy &

- Sourcing of Innovations - Integration in NPD - Early Supplier Involvement - Glocal Sourcing - Offshoring & Emerging Markets - Global Supplier Coordination - IPOs

- Supply Chain Risk Management - New Methods in Performance Measurement - Incentivisation & Alignment

Strategic Research Topics

- Capability Development - Retention - Training -  Category Management - Demand Management -  Procurement Organisation

Enabling Research Topics

Corporate Social

Responsibility

- Product Stewardship in SCM - Environmental Proactiveness - Code of Conducts & Supplier Compliance

Sourcing

Strategies

- Outsourcing - Supplier Portfolios - Cost Management - SRM and Supplier Selection

Technologies &

Techniques

- Contracting - E-Auctions - E-Procurement

Analytical

Research

Empirical

Research

Harvard,

MIT,

Stanford,

UCLA

RSM,

Bath,

ASU

No dedicated

procurement

center!

Dedicated

procurement

centers!

MSU,

Wuerzburg,

PSU

ETH

UCL

UCL

CORE

Mainly teaching,

no procurement research

“Business

Schools EU”

Chair Positioning

Active Academic Network

Universities in US:

Universities in Europe:

Universities in Asia:

Scientific Conferences:

The chair is each year involved in hosting

and chairing sessions, presenting as well

as reviewing papers at the following

Prof. Constantin Blome

Chairholder

Sourcing and Procurement as

succes factors in globalization: its

future role in research and practice

Is the world flat?

“Supply chains cannot tolerate even 24 hours of disruption. So

if you lose your place in the supply chain because of wild

behavior you could lose a lot. It would be like pouring cement

down one of your oil wells.”

!

Thomas Friedman

!

17

Shortages of raw

materials / energy

Demographic

developments

Environmental protection / risks

Pressure on

cost of capital

Globalization

Megatrends drive criticality of strategic sourcing &

procurement

19

!

 

Global sourcing as instrument for reducing

costs

!

 

Companies in all industries are pushing

forward activities for global sourcing

!

 

Competitive pressure necessitates global

sourcing

Need for Global Sourcing

Material

Other Prod.

costs

W-Europe Low wage

countries Savings

Savings of up to 30% can be achieved with wage cost

differences

20 _{Source: WTO Secretariat}

The Megatrends: Globalization increases with a

stronger focus on regionalization

21

Global supply and demand for raw materials

Supply

Demand

Australia

Russia

Brasil

India

Japan

Western Europe

China

USA

= Population ca. 200 million

Source: BHP Biliton

Per capita energy consumption

(in ‘000 t coal equivalent)

Global energy consumption

(in ‘000 million t coal equivalent)

World population

(in ‘000 million)

World population is growing

Per capita consumption is

rising

Energy

consumption

is rising

dramatically

Source: IEA-Outlook and BP

24

Development of fossil

carbon emissions

Source: GNU FDL

TOPLINE

BOTTOMLINE

26

Recent CPO statements of a best practice firm:

„Over the last two decades the approach toward suppliers by major

corporations has shifted from an overwhelmingly price and cost focused,

supplier by supplier basis to one of interconnected supply chains and

ultimately supply networks. Yet, at the same time,

traditional cost metrics drive

most Supply Management organizations, not innovation measures

– and in some

situations, rightfully so.

But cost alone will not create a winning business

proposition

in a world where competition quickly duplicates leading products

and customer expectations continually change.

䇾

„Focus means balance.

We can

䇻

t say as procurement that we just want to be

innovative and forget the rest;

neither can we do the rest and forget

innovation.

䇾

27 27

Integration in New

Product Development

Source: Fraunhofer

Value Analysis/

Target Costing

Low Cost Country

Sourcing

Switch of supplier

Price negotiations

Supplier consolidation

E-Auctions

Fully disagree

Disagree

Neutral

Agree

Fully agree

PHARMA

Pharma Outsourcing in India

29

CONFIDENTIAL

!

30

It's not about money. It's

about the people you

have, how you're led, and

how much you get it.

31

Crisis

management

Fix on

failure

Risk

mitigation

Risk

prevention

Elimination of

root causes

fight fires after

risks turn into

full-blown

problems

early

detection and

quick reaction

when risks

materialize

have

contingency

plans, but do

nothing to

eliminate

them in the

first place

identify risks

and prevent

them from

becoming

problems

remove factors

that make

risks possible

32 Procurement Programmes Procurementin cooperation with internal client Procurement Initiative corporate-wide contribution

- 

C u sto m er Green Warehousing

-

 

Inbound

logistics

-

 

Sourcing /

-

 

Procurement

- 

Su p p lie r Green Packaging

-

 

Internal

-

 

Value Chain

-

 

Outbound

Logistics

- 

_Su p p ly Ma n ag em en t Org.

 

-

In_te rn al

- 

Client Environmental friendly Product Design Green IT Green Energy Reverse logistics Green Meeting Supplier

Management Assessment Life Cycle

Reuse & Recycle Environmental Sourcing _Waste elimination Green Transportation

Value Creation

Global Supply

Networks

Risk Management

Performance &

HRM

Governance

Strategy &

- Sourcing of Innovations - Integration in NPD - Early Supplier Involvement - Glocal Sourcing - Offshoring & Emerging Markets - Global Supplier Coordination - IPOs

- Supply Chain Risk Management - New Methods in Performance Measurement - Incentivisation & Alignment

Strategic Research Topics

- Capability Development - Retention - Training -  Category Management - Demand Management -  Procurement Organisation

Enabling Research Topics

Corporate Social

Responsibility

- Product Stewardship in SCM - Environmental Proactiveness - Code of Conducts & Supplier Compliance

Sourcing

Strategies

- Outsourcing - Supplier Portfolios - Cost Management - SRM and Supplier Selection

Technologies &

Techniques

- Contracting - E-Auctions - E-Procurement

Scientific Research – Currently ongoing collaborations

Per Agrell UCL Lieven Quintens University of Maastricht Marc Sachon IESE Ram Narasimhan Michigan State University Martin Lockstroem CEIBS Tobias Schoenherr Michigan State University Sriram Narayanan Michigan State University Santosh Manapatra

Clarkson University of Northern Antony Paulraj Florida

Philippe Chevalier

UCL Protopappa-Sieke Margarita EBS Business School

Michael Henke

EBS Business School EBS Business School Richard Pibernik Christoph Bode ETH Zurich Nottinham Business Bart MacCarthy School Kurt Jörnsten Norges Handelshøyskole Andreas Norrman Lund University Arash Azadegan New Mexiko State

University

Americas

Europe & Asia

Vaidy Jayaraman University of Miami Guillaume Roels UCLA Per Semal UCL

Mathieu Van Vyve UCL

Aadhaar Chaturvedi U of Namur

37

3  „why sourcing & procurement䇾

3 

~50% of value creation is outsourced, in leading firms upto 100%.

3  " Sourcing handles the biggest budget in a firm

Cultivate and harvest innovation

?

Manage

biggest

budget

Avoid disruptions

Manage

high

complexity

The importance of

Sourcing &

Procurement in

4 pictures

38

3

 

Still not convinced?

3

 

In sourcing &

procurement you will!

• 

Job market

Why you might like

a career

in Sourcing &

Procurement

Most international job in a firm

Unique capabilities learned at UCL

Impact

from day

1 on

Fast track

career due to

better skills

M. Marcel Laubacher

Vice-President Global Sourcing and

Procurement

GSK Biologicals

Key role of procurement in global

organisations

PROCUREMENT FUNCTION DEVELOPMENT

•

 

ACCELERATED DEVELOPMENT IN THE LAST 25 YEARS

•

 

DIFFERENCES OF MATURITY BETWEEN SECTORS

•

 

GROWING RESPONSIBILITIES IN A MORE UNCERTAIN

& COMPETITIVE LANDSCAPE

VALUE CREATION AT THE HEART

•

 

THE FUNDAMENTALS :

•

 

Availability, quality, service and cost

•

 

STRATEGIC SOURCING & CATEGORY MANAGEMENT

•

 

RISK MANAGEMENT

THE NEXT LEVEL

•

 

NEW VALUE CREATION OPPORTUNITIES

•

 

BUSINESS PROCESS OUTSOURCING (BPO)

•

 

SUSTAINABLE PROCUREMENT

Signature Ceremony

&