THE EUROPEAN INSTITUTE
Transcript of THE EUROPEAN INSTITUTE
Page 1© EIPM 2011– All rights reserved
THE EUROPEAN INSTITUTEO F P U R C H A S I N G M A N A G E M E N T
Purchasing Strategy
R’’evolution”
Frédéric Schwaller
Paris X-Achat 28th March 2011
Page 2© EIPM 2011– All rights reserved2
Sponsored by:
EIPM foundation in December 1990
Created by companies for serving companies:
Aérospatiale
Alcatel
Amae
Bull
Cerestar
Herberts
Nokia
Pechiney
Philips
Renault
The European Union
The region Rhone-Alps
The Haute Savoie Department
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The EIPM Today
• The EIPM is a companies driven school
• The EIPM is a school managed as a company
• The EIPM is a School for executives specialised in
Purchasing & Supply Management
• The EIPM leads Research activities, Education and
Trainings
• The EIPM holds the MBA accredited by Association of
MBAs
• The EIPM trains every year more than 4000 participants
in 9 different languages
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What is Strategy … ?!?!?
Michael E Porter & Peter Kraljic
• Purchasing&Corporate Strategy alignment
• Purchasing Organisation & Talents
• Tools to define a Purchasing Strategy
The past years Purchasing Strategy
« R’’evolution’’ » HCM ? CSR ?
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Methodological Approach
• Strategic Mapping :
Portfolio Analysis – Porter 5 Forces
Kraljic Matrix Evolutions
• Levers or Tools :
E-Tools – Long and Short term Contracts-
Negotiations-SRM-IPO’s-PC Cards-M&A-
SLA’s-
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COMPANY STRATEGY
Risks (& costs) reduction
Adapt offer / Innovate
Rationalize / simplify platforms
Reduce costs to secure the
profits
Encourage supplier
innovation to support
customer offer adaptationDifferentiation
Market shares /
NBI
A Purchasing Strategy to support
Company Strategy
Purchasing Strategy
Support
adaptation
efforts through
supplier
innovation• Technology watch
• Supplier involvement
• Supplier innovation
• Sustainable
development levers
Extensive customers needs coverage
(Diversified economic model)
Procurement Inputs
Reduce costs• Bundling
• Competition
• Negotiation
• Specifications
• Standardization
• Demand
Red
uce risks
•Key suppliers m
apping
•Supplier risks m
onitoring
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Autonomy - Flexibility
Purchasing Organisations
+
Eco
no
my o
f S
ca
le(1)
(3)
(2)1 2 3Companies
Product
Project
(4)1 2 3Companies
(5)
Location
Act.
Centralisation
Coordination
Decentralisation
One Location Multiple Locations
-
+
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New Purchasing Organisations
• To master design risks, to minimise costs and to serve as
the purchasing interface
• Transversal organisation project or delocalised in the
design centres
• Engineers / Technical aware of costs
• To optimise the best design choices, to buy thanks to a
suppliers market knowledge
• Centralised and delocalised organisation
• Purchasing Group Leader with a perfect market approach
• To master the continuous flow in the supply chain
• Delocalised structure (plant)
• Logistics
Upstream Purchasing
Engineer
Sourcing Expert
Purchasing Agent
Supplier Account Manager
• Supplier's data co-ordination
• Dependency analysis
• Negotiation
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Analysis of the supplier market
Porter 5 forces – how « difficult » is the market
Suppliers
New
Entrants
Customers
New
Substitutes
Supplier
Market
Barriers
• Legal
• Economical
• Technological
• Political
• Environmental
Low Overall
Market difficulty Hight
TRENDTomorrow
Today
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Peter Kraljic Model How to build a
strategy per category ?
Business Impact & Criticality
Low
Supply>Demand Supply<Demand
Market Difficulty
Supply risk
II
Leverage
I
Routine
IV
Strategic
III
Bottleneck
High
High
Low
KPI & Weight
KPI & Weight
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Creating Value towards Strategy
• Measurement of Strategic Value Creation : KPI’s
• Security (Contract, Delivery, Quality)
• Costs ( Secured Market Price)
• Innovation ( Technology-Product-Process)
• Sales (New Product Launch)
• Ergonomy (Ease of use)
• Delivery ( Leadtime Packaging)
• Environment (Carbon Footprint Reduction)
Page 13© EIPM 2011– All rights reserved
EIPM Annual Conference Archamps December 2010 :
360° Change on Strategic Focus
‘‘Value Creation’’
• Axe 1: Bottom Line
• Maintain & Develop with CSR & Sustainability
Savings Measurement
• Axe 2 : Top Line Growth (Sales Growth)
New &additional indicators (KPI’s)
People- Innovation-Services-Products-
Environment-Organisation
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Panel Discussion
What are the differentiators within Purchasing Sectors
Strategies writting & implementation ?
• Purchasing Strategy in Construction (SLA& EPCM)
• Purchasing Strategy in FMCG & (Retail)
• Purchasing Strategy in Insurance & Banking (Services)
• Purchasing Strategy in Raw Materials (Commodities)
• Purchasing Strategy in IT/Telco