Spot-buying Automatization - e-Sourcing leverage Ostrava, 6th November 2014

Tom Veit

(Head of Procurement Central & Western Europe)

© SABMiller 2014

Agenda

What Does it Mean Spot-Buy Activity (Key Highlights)

Real Examples of Spot-buy Activities

How to Automatize Spot-Buys

Key Enablers for Efficient Operational Procurement

Spot-buying and e-Sourcing

Questions and Next Steps

How to Properly Manage also Tactical Pocurement Activities

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What is Spot-buing activity

Spot Buys are purchases for goods/services that are:

Not covered by an existing contract or written agreement with suppliers

Covered by a contract or written agreement (from a terms and conditions

perspective) but no price is (yet) agreed with the suppliers

Below a certain pre-defined value (higher values should be covered by Category

Management)

Requiring (respectively benefit from) an individual RFQ/negotiation process

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SAB Miller Definition

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Spot-buing

Spot Buy activities are:

Very often managed by business instead of Procurement or Purchasing dept.

e-Sourcing tools mostly not used

High risk of wasting your money through friendship between supplier and business

Even if this activity is based on valid contract,

further negotiation needed

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Key Highlights

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Few standard examples of Spot-buy activities

We can find Spot Buy activities in many category groups:

Financial services (operational or fin. leasing, consultancy, ..)

Marketing (Printing services, gifts and other 3D materials, ATL/BTL services)

MRO (chemicals, laboratory equipement, consumables)

Packaging materials (mainly printed materials like labels, foils, corrugated,..)

Office supply (stationary, furniture,..) and many others..

Crucial is to get full alignment with key business partners

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Examples

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What does it mean Spot Buy Automatization

Spot Buy Automatization means:

Aggregation of small ad hoc deals into bigger strategic sourcing projects

Aggregation of small request on repeated bases into e-Catalogue

Building of preferred supplier bases for every spend category

Spot-Buy execution using primarily only preferred supplier bases

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How Can we Leverage e-Sourcing Tools

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Key enablers for high Spot-Buy efficiency

Right procurement penetration within the business (operational procurement team)

Spot-buy specialist role fully embedded in procurement team

Full spend visibility incl. details about buying channels

Ready to use spot-buy instructions per each category

Standards and processes for operational procurement

e-Sourcing tool available

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Hits and Tips

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How to leverage e-Sourcing in Spot-Buy area

For majority of spot-buy activities we can use e-Sourcing tools.

Benefits:

Better business condition (mainly price)

Reduced time for preparation on our side (activity on repeated basis)

Harmonised and standardised approach

Health relationship with suppliers

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e-Sourcing Benefits

e-Sourcing in Case of Aggregation of ad-hoc Deals Case Study I.

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e-Sourcing in Case of e-Catalogue extension Case Study II.

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e-Sourcing in Building Preferred Supplier Base Case Study III.

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e-Sourcing in Spot-Buy Execution Case Study IV.

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© SABMiller 2014

Thank you for any further question...

Back-up slides