As Procurement organizations optimize and automate sourcing and procurement processes to handle Indirect Spend, there is a renewed focus to extend the same automation to Direct Material Spend. With increased globalization, outsourcing and raw material cost inflation, controlling Direct Material spend is key to driving sustainable savings and improve risk mitigation.
Join this session to hear from Ardent Partners and key Ariba customers who leverage extensive collaboration and automation to capture more direct & indirect spend and drive sustainable savings and risk mitigation in their supply chains.
Welding Electrode Making Machine By Deccan Dynamics
Direct Materials Sourcing Strategies
1. #AribaLIVE
Direct Materials Sourcing and Procurement
Strategies to Drive Accelerated Savings
and Improved Risk Mitigation
@ariba
Speakers
• Lois Fresne – Oriflame
• Sundar Kamakshisundaram – Ariba, an SAP Company
22. Supplier evaluation hierarchy in three levels
Supplier approval stage
Supplier performance stage
Project performance stage
CSQA I E
Quality Technical Financial Sustainability
CSQA I E
23. Supplier requirements defined within four
approval building blocks
A Excellent
B Good
C Acceptable
D Poor/Weak
E Unacceptable
Minimum of C score is required to be an Oriflame supplier
Quality Technical Financial Sustainability
Owner Quality
R&D
Technical services
Packaging
Procurement Quality
Scope of
evaluation
Quality processes
and systems
Production
equipment and
processes
Financial solidity
and liquidity
Social and
environmental
processes and
systems
25. Direct Spends focus on Projects for New
Product Launches
NPD
2014-04-07 Copyright 2011 By Oriflame Cosmetics SA
Newness target >20% per Catalogue
> 400 new products a year
> 5 000 RFQs sent in 2011 before Ariba implementation
• Multifunctional Team work by categories
Cosmetics categories, Accessories & Wellness
• Product development of hundreds of products
• New Formulas & New Components (Capex)
• Support Marketing in new concept briefs
• Allocate New Products to Suppliers OTIF
26. The Oriflame Stage & Gate Process
Idea
Generation
Develop
Project
Implement
Project
Produce
Design
Project
G1
G2
G3
G4
G5
Identify
opportunity
Set targets
Order
components
Make products
Ship products
Define product
Design
Formula
Design
Packaging
Investigate
suppliers &
RFI
Award
suppliers
Build tools
Approve
Packaging
Approve
Formula
Develop
formula
Develop
Packaging
RFQ process
Cost productCost
Estimations &
OCSA Target
2014-04-07 Copyright 2011 By Oriflame Cosmetics SA
Procurement activities
New product Development Process
32. Summary - Wrap Up
Balance Cost Reductions with
Risk Mitigation
Build Collaborative Relationships with
Suppliers for maximum impact
Leverage Business
Networks to provide
transparency
ACCELERATE SAVINGS, IMPROVE COMPLIANCE & MITIGATE RISK!
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