Transforming Procurement 2012 _Peter v2 0

© 2011 Marina Bay Sands PTE LTD

PAGE

From transactional to strategic procurement:

An Integrated Resort case study

Peter Woon

Transforming Procurement 2012

12-13 September 2012

a) Gain insights on the

complexity associated

with purchasing for an

Integrated Resort

b) Transformation of

procurement value chain

Takeaways

Agenda


PAGE

Introduction : Marina Bay

Sands Integrated Resort

Evolution of Procurement organization from the pre-opening phase

Complexities associated

with Procurement

@ MBS

Transformation Levers

Q&A


Page 2

Introduction : Marina Bay Sands Integrated Resort

THE VENETIAN

USA, LAS VEGAS (1999)

THE VENETIAN MACAO (2007)

MARINA BAY SANDS SINGAPORE (2010)

LAS VEGASBETHLEHAM

MACAO

SINGAPORE

SANDS COTAI CENTRALMACAO (OPENING APRIL 2012)

A Global Approach To Doing Business…

MBS : Multiple Business Segments

• > 2500 Rooms, Largest Hotel in SingaporeHotel

• Mall Mgt., 20 F&B EstablishmentsRetail Mall + F&B

• > 600 Tables , 1500 SlotsCasino

• 2 Theatres and a MuseumEntertainment

• 1.3 Million sq. ft. of meeting space , Asia’s Best MICE HotelMICE


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Evolution of the Procurement organization from the

pre-opening phase

P&SC Evolution – Pre Opening to Today


Pre Opening Phase Operational Phase

P&SC Evolution – Pre Opening


Business

People

Systems

Fulfillment

<10 TMsBuyers Only

Basic Purchase to Pay

Pre Opening Phase

P&SC Evolution – Operational


Business

People

Systems

Service Levels

~ 100 TMsP&SC

Source to Pay , QMS , WMS

Operational Phase


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Procurement Complexity at MBS

� Demand for SKUs, Orders

Internal Complexity Drivers : Demand Portfolio

� 27.5 % Increase in New SKU addition requests in 2011

� 27.5 % Increase in New SKU addition requests in 2011

� 125 % Increase in the # of PO.s YoY� 125 % Increase in the # of PO.s YoY

Internal Complexity Driver : Increasing Scope

� CEOs Expectation from the Procurement Function

Then

Now

Cost Savings

Risk ManagementInnovative

Procurement :Product Dev.

Sustainability

External Drivers of Complexity

�Price and Market Volatility

�Increased Regulation

�Intensifying resource

competition0

50

100

150

200

250

300

Jan-07

May-07

Sep-07

Jan-08

May-08

Sep-08

Jan-09

May-09

Sep-09

Jan-10

May-10

Sep-10

Jan-11

May-11

Sep-11

Jan-12

Commodity Price Index

Food and Beverage Crude Petroleum

Food and Commodity Prices Volatility …


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�Three Key Areas of Focus

Category Management : Spend Snapshot

� 50 – 50 Split between direct and indirect

� The spend is divided between 8 key categories.

F&B24%

Indirect (Services)

51%

Others25%

Direct vs Indirect (Jan-Jul 2011)

Market Benchmarking

Global Category Steering Committee

Property Based Category Managers

� Steering Committee headed by Corporate CPO

� Base Case analysis of all major categories across properties done on a 24 month cycle

� Category dashboards and knowledge management solution are being used to build and retain expertise

Category Management @ LVS

Category Management Strategy

Food and Beverage

Hotel Supplies

ServicesMarketing, Advertising and

Print

Facilities

Other 1

Other II

General Supplies

Sustainability and Energy

-6

-4

-2

0

2

4

6

-5 -4 -3 -2 -1 0 1 2 3 4 5 6Ease of Implementation

Strategic Value Priority 1Priority II

Priority II1Priority 1V

bCategory Management @ MBS

SUPPLY

POWER

DEMAND POWER

Change Nature of Demand

Manage Spend

Seek Joint Advantage

Leverage Competition

Wine -Rest

Fine Wine

Wine

Applying Purchasing Chessboard

bPurchasing Chessboard @ MBS

HIGH

SUPPLY

POWER

HIGH DEMAND POWER

Profit Sharing

Value Based Sourcing

Strategic alliance

Project based Partnership

Collaborative Cost Reduction

Supplier Fitness Program

Collaborative Capacity Mgt.

Supplier Development

Value Chain Reconfig.

Sustainability

Revenue Sharing

Supplier Tiering

Virtual Inventory Mgt.

VMI

Total Lifecycle Concept

Process Org,

Fine Wine

Adapted from : AT Kearney Purchasing Chessboard

Systems Transformation Objectives

1)Reduce maverick Buying ,

II) Increase Spend Under Management

User Experience

1) Reduce transactional overload on Buyer

Buyer Overload

I) Improve end user engagement by improving spend visibility

Spend Visibility

E-Sourcing Catalogue Contract E-Invoicing

P2P WMS QMS

Reporting and Analytics

Finance

Supplier Portal

Single e-Source to Settlement Platform

Systems Transformation Plan

The People Challenge


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1

2

3

4

5

6

Current Deployment Future

Non -Value adding(Transactional)

FTE

Src : AT Kearney

0% 10% 20% 30% 40%

Supporting End UserDepartments

Administrative

Manage PurchaseOrders

Place Purchase Order

Develop and ExecuteSupplier and…

UnderstandingCustomer Demands

Strategic Skilled Transactional

0% 10% 20% 30%

Supporting End UserDepartments

Administrative

Manage PurchaseOrders

Place Purchase Order

Develop and ExecuteSupplier and…

UnderstandingCustomer Demands

Strategic Activities

Talent Acquisition at MBS

� Talent acquisition for non traditional categories

� Leadership and Talent Pipeline

Universities

InternalIndustry

Consultancies

250 Applications

15 first round interviews

5 second round interviews

2 Job Offers

Talent Development at MBS

Functional Skills : Contract Mgt , Negotiations , Systems Training

Professional Skills : Project Management , Six Sigma

Leadership and Soft Skills

Leadership Opportunities across functions

Leadership Opportunities within global procurement

Thank You

SRM

Direct Buying

Tier2

Tier 1

MBS

Sustainability

Sustainable Sourcing

Product Dev.

Non Traditional Categories

TCO and Carbon Foot Print Analysis

Direct

Logistics

Inventory

P2P

Category Management

Procurement Transformation at MBS

Questions ?Peter Woon Marina Bay Sands Pte [email protected]

Transforming Procurement 2012 _Peter v2 0

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