Value Republic

Where less is more

content

• Reality of today

• Common opportunity gaps

• 3 ways to close the gap

• Value Republic:

• Who we are• How we can help you• References

Reality of Today

Difficult Economic Climate

Ambition :

at least maintain EBITDA

Increase Sales/Margins

Reduce Expenses

Find new opportunities for optimization

Decreasing sales

due to the crisis

The quick wins

have already been

captured

Common Opportunity Gaps

Budgeting- Taking historic budgets and volumes for granted

- Lack of transparency and methodology

- Lack of consistency between departments

- No shared responsibility

Savings- Lack of consistent calculation methodology

- Uncontrolled reinvestment

- Between 2-3% of the global spend

Return on Investment- Lack of measurement

- Insufficient supplier management (e.g. SLA’s, KPI’s)

- No or little understanding of the value

- Often > 1 year

Organization- Purchasing coverage (60%) by procurement department

- Lack of resources and expertise (especially Indirect)

- Lack of compliance to procedures

- Misperception of Procurement internally

Ways to Close the Gap

Positive Impact on

EBITDA

1. Optimizing Volumes

2. Optimize prices

3. Effectively reinvest savings

1. Optimizing the volumes

Stop Spending

BuyAlternative

Buy Better

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1.1 SPEND MANAGEMENT

Spend Price Volume= X

• Spend Management is a combination of controlling cost and volume

requires the entire organization to justify each € spent

controlling costs without controlling volume is only a partial

solution, because it reflects only the effectiveness of Purchasing

• Spend Management uses a methodology that provides the

transparency necessary to actively manage the spend: Zero Based

Budgeting (ZBB)

Responsability of

purchasing

Budgeting policies

and processes

1.2 BENEFIts of SPEND MANAGEMENT

SPEND MANAGEMENT

Shared responsibility

Supports the organization in

monitoring processes and performance

Convert non revenue generating

money into revenue generating

money directly impacting the bottom line

Gives full transparency of

indirect costs

Allows a thorough understanding of

expenditure

1.3 Press articles

“Having each expenditure or item justified as to need or cost: Zero-based budgeting requires its practitioners to justify every dollar they spend.” (Wall Street Journal)

“An approach to corporate, annual plan, budgeting in which all departmental annual budget requirements must be estimated and justified from the ground up, rather than by adding a percentage allowance to last year's approved budget or actual expenditure.”

(Wideman Comparative Glossary ofProject Management Terms)

2. OPTIMIzing prices

• E-auction

• E- catalogues

• Automatisation of Procurement Procedures, including governance, social responsibility, ...

E Tools

• Change the perception of Purchasing

• Develop a cost awareness among internal customers

• Address unexplored categories in Indirect (Marketing, Training, Insurance, ...)

Purchasing coverage

• Specific Procurement Procedures by category

• Usage of professional tools to support procedures

• Monitoring of consumption

Policies and process

Identified and validated savings

3.Reinvestment of savings

Capturing savings

ReinvestmentIntegration in

financial results

Value Republic

•Who We are

•How we can help you

•References

A service company

- Advice on Buying and Budgeting

- Procurement Center

- Training Academy

A networking place

- Quarterly Parliament Meetings

- Bi-Monthly Senate Sessions

- Yearly State of the Union

A state

- Led by the continuous search and creation of value

- Composed of citizens with strong professional and ethical skills

Who we are

Who is Value Republic

• E-sourcing tool

• E-sourcing Strategy

• Sourcing Event management and

setup

• Training

• Tale spend

• On top projects

• Long term suppliers

• Flexible manpower

• Profit sharing

• Consultancy

• Interim Management

• Procurement training

• Spend Management

• Core working Capital Management

Budgeting Procurement

E-Solutions2Source

2Source activity

In practice

Your spend = Our spend

Build Understanding of Requirements and Current situation:

- Current Requirements

- Existing contracts and agreements

Negotiation on the base of:

- Total cost of ownership

- Service Level Agreements

- Respect of business ethics

Recommendation including:

- Cost

- Quality

- Supply Base view

Our Remuneration is on the base of Savings achieved!

References

We happily bring you in contact with one of our clients on request

Your advice, your thoughts for a next step?

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