CEVA s Procurement function: Creating superior value. Simon Boggis FCIPS Chief Procurement Officer

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CEVA’s Procurement function:

Creating superior value

Simon Boggis FCIPS

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CEVA in a nutshell

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Figures for Year Ended, 31 December 2011

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Balanced sector portfolio

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Automotive 28%

Technology 22% Consumer & Retail 21%

Industrial 16%

Other 7%

Energy 6%

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Strong and diversified customer base

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CEVA’s Procurement function

Diverse global team

Global team

• Diverse community of

procurement professionals

• Experienced team with

category expertise driving

thought leadership and

shared best practices

• Center-led eSourcing

program and strategy.

Rigorous process

• Five step sourcing

methodology

• Supplier performance

management

• Balanced scorecard

(including risk evaluation).

Supported by innovative

technology

• Spend Analysis – C-GAP

• eSourcing Solutions

• BAIT – savings tracking

solution

• GUARD – asset

redeployment solution.

• Category Management: global, regional and local approach

• Supplier Relationship Management: think globally, act locally

• Risk Management: assessment, management, monitoring

• Global Procurement Accredited by Chartered Institute of Purchasing and Supply

CEVA's Procurement function | Creating superior value

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Market conditions are driving requirements for

innovative sourcing solutions

• Requirements for better quality and

more adaptive service and products

• Demand for higher flexibility in

operations

• Ability to foster options and stay flexible –

taking into account such “soft factors” as

safety, quality, environmental concerns and

overall supplier stability

• More demanding end customers

• Classic strategic sourcing models

are inflexible and in fact limit the

options that are on the table

• Traditional sourcing approaches limit

the ability of suppliers to suggest or

propose alternatives to a standard

specification

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Increased complexity of the supply chain

Today’s supply chain

Early 2000s supply chain

• Component standardization allows production to be

spread globally to optimize costs

• Multi-country sourcing with consolidation hubs before

shipping to end customers

• Supply chain control and visibility are critical

• Compliance to regulations throughout the supply chain

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CEVA’s eSourcing evolution (2008 – 2012)

0 50 100 2007 2008 2009 2010 2011 2012

Number of e-Auctions

Advanced eSourcing

Traditional Sourcing E-Auctions, Online RFX

• 2008 – Limited Experience.

100% of e-Auctions supported by

Global Procurement. Limited Number of eSourcing Champions.

• 2009 & 2010 – Advancing.

20% of addressable spend covered

by eSourcing. 51 events conducted in major BUs. eSourcing

Policy.

• 2011 - Building Business Unit competency and eSourcing

confidence

. 75 e-Auctions completed in 2011 covering over

€152 million spend. Global three year eSourcing strategy .

• 2012 - Strategic approach for category eSourcing.

Increase

value proposition for Business Development and Ocean.

Accelerate benefits delivery through Advanced eSourcing -

CombineNet.

Completed Categories

Ongoing

Ground Transportation Packaging Optimization Temporary Labour Intermodal Office Supplies and Print Payroll Packaging Transport Modelling:  Ground  Rail  Ocean  Air Security Fuel Margins Outsourcing Marketing Hardware Warehouse Racking

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Where do we want to be in 2013?

• Penetration of eSourcing tools: exceeds 50% of

the total addressable spend of the BU projects in the budgets

• Country eSourcing Competencies - at least one

‘proficiency level 1’ within four geographical regions (Northern Europe, SEMEA, Americas, Asia Pacific)

• Drive maximum value from advanced eSourcing

solutions (CombineNet)

• Realize business wide engagement • Drive eSourcing excellence through

organizational capability and impeccable execution

eSourcing Strategy Implementation

Objectives

Deliverables

Performance Metrics

• eSourcing integration with analytics tools • Business Units self sufficient

• Reporting of eSourcing savings

• Extended collaboration with functions and

operations teams

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CEVA’s strategic approach for category eSourcing

Com

p

le

xity

Value/Spend

Advanced e-Sourcing

Traditional e-Sourcing

Quick Wins/Supplier Margin

Reduction

Traditional & Advanced

e-Sourcing - Maximize

Commercial Advantage

Hi

gh

High

Low

D A B C

High complexity and low

value/spend initiatives

High complexity and high

value/spend strategic initiatives

High value/spend and low

complexity initiatives

Low complexity and

Low value/spend

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Why advanced eSourcing?

Categories Sourced with CombineNet

UK Ground Transportation (FTL) Australia and New Zealand

Forklift Trucks European Pallets

• €27 million spend, 1,360 Lanes,

42 Suppliers

• Six sites, 119 starting postcode

locations

• Five percent savings identified • The right balance of cost and

supply chain value achieved

• Stronger carrier relationships

through system engagement

• Fast time to market - saved two

to three weeks of data crunching

Key Differentiators:

• Suppliers can add value through expressive, creative and alternative bids (equipment type, transit time,

volume offers, discounts, capacity levels, rebates)

• TCO Modelling – rates, accessorial, fuel

• Flexible RFI - analysis of all KPIs (capacity, service levels, sustainability safety and risk factors

• Flexible scenario analysis and award optimization - rapidly review the data and compare different

possible award outcomes

• Real time Expressive feedback – configurable ways to show suppliers their competitiveness

• Flexible Training: web-based training for buyers and participating suppliers, comprehensive user guides.

• Netherlands, Belgium, Germany,

France

• Top 10 pallets with historic

volume of 240,000 pallets, Spend - €1.2 million

• Seven European suppliers

engaged

• Nine percent savings identified -

RFX advanced sourcing.

• Non price attributes captured:

min volume, lead time, payment terms.

• 237 Forklift leases • 20 CEVA sites impacted

• Suppliers bid on same template

structure

• Comprehensive specifications

made possible

• Enabled packages to provide

lower-cost options

• Supplier feedback enabled • Savings TBC.

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Global spend analytics:

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The value of data with integrity

Data

Challenge

• Having a single

source of the truth

for both identifying

opportunities and

measuring cost

reduction success

• Ability to

implement and

track progress on

areas such as

working capital,

contract

compliance and

invoice

rationalization

programs

CEVA’s

Solution

• Spend analysis

-CEVA’s C-GAP - the

first and the last

step of the strategic

sourcing process

that drives total

value

• “Companies that do

Spend Analysis

save 67% more

than companies

that do not.”

Aberdeen Group

Benefits

• Acceleration of

Sourcing Initiatives

• Driving NWC

Improvements

• Supplier

rationalization

• Invoice

rationalization

• Procurement

compliance

• Customer

development

opportunities

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Criticality of data integrity:

Data that is processed, organized and structured

C-GAP

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Integrating spend analysis with eSourcing:

Transport modelling illustration

• Scenario building/analytics and

optimization enables:

• Information orchestration to meet

desired end state

• Set-up of agile, scalable solutions to

rapidly sense and respond to changes in

customer requirements

• Risk mitigation by managing

promotions, demand, seasonal product

and ‘early buy’ opportunities

• Information visibility to facilitate

fact-based decisions.

Compliance Carrier management Sustainability Market intelligence Risk scorecard Working capital

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