9th September 2010
09:45 Welcome and Introductions Gwynne Richards - O&PF Chairman, Jo Godsmark -
Event organiser
10:00 Logistics Procurement – the FMCG perspectiveMalcolm Pope, Premier Foods
10:30 How Procurement adds value across the Supply Chain Rachel Stretch, M&S
11:00 Logistics Buyer’s toolkit: data that can help youKirsten Tisdale, Aricia
11:20 Coffee
11:40 Logistics Procurement – the 3PL perspectiveBrian McDill, Norbert Dentressangle
12:10 E-tools for Logistics ProcurementJoe Critchley, Trade Extensions
12:45 Panel discussion
13:15 Networking lunch
Rachel StretchHead of Procurement - Logistics
Adding Value through Procurement
9th September 2010
The next 20 minutes…
� Being a Buyer
� M&S
� Our Procurement Team
– The CEO expects
– Tender, Negotiate, Contract
– What we look for…
� Logistics
� Q&A
Being a Buyer…
� 10+ years in Procurement
– Met Police
– Bunzl
– DaimlerChrysler
� Current role: Head of Logistics Procurement at M&S
– £600m p.a
– UK & International
– 3PL
– Freight
– Capital Assets
– Services
� Many many diverse Stakeholders
� Retail timescales often apply!
M&S
� 125 (and a bit…) years old
� Over 21 million customers per week
� 76,000 employees
� 690 UK & 300 International stores
� 2,000 merchandise suppliers globally
Source: www.marksandspencer.com
M&S
� UK No. 1
– womenswear & lingerie
� Growing market share
– menswear, kidswear & home
– 49% of business
� M&S Foods bought by 1 in 2 UK households
– 51% of business
� Plan A
– to become world’ s most sustainable retailer by 2015
The CEO expects….
Importance of Procurement to Overall Business(Response Average; 1 Low, 4 High)
CEO Expectations of the Procurement Organization(Response Average; 1 Low, 4 High)
Cost Reduction
Value Beyond Cost
Cost Reduction Projects
Innovation & Growth Projects
Risk Management Projects
Value Chain Optimization Projects
Sustainability Projects
Impo
rtan
ceD
egre
e of
Val
ue R
ealiz
atio
n
3.1
3.4
3.4
3.1
3.7
3.5
3.7
2.1
2.9
2.7
3.3
2.4
2.5
2.8
PresentFuture
1.1x
1.3x
1.3x
1.5x
1.2x
1.4x
1.3x
Source: A.T. Kearney AEP Study
Procurement: Key Facts
� Annual Spend: £1.5bn
� Centralised Team of 20
� 5x Categories
– Logistics
– IT
– Stores
– Corporate
– Strategy
� Tendering, Negotiating, Contracting
� Report to CFO
� No Mandate
Procurement: Benchmarking
Company Spend (£)
# Buyers
Comments
Lloyds £4.5bn
300 Bringing together 2 major procurement functions – Lloyds TSB & HBOS
Barclays £2.8bn
150 Global Indirect Spend
O2 £2.5bn
60 Direct & Indirect (e.g. handsets, print)
Sainsburys
£2.3bn
50 Goods & Services not for Resale
Royal Mail
£2bn 80 Direct & Indirect
M&S £1.5bn
20 Goods & Services not for Resale
Met Police
£0.8bn
65 Procurement mandated under OJEU
World Class Experience
Why Tender & Contract?
� Benchmarking
� Cost Focus Reputation
� Contract Consolidation
� Challenge (Internal & External)
� Negotiation Insight
� Risk
� Protection
� Clarity
“Bill in Supply Chain sure regrets the day he said to
Procurement ‘Then why don’t you show me how it’s done?”
What makes a great Negotiation?
� Have a Plan!
� Understand Negotiation skills
� Don’t negotiate just on Price
� Get inside their head
� Go Fox Hunting & Manage your Foxes
� Create Win-Win situations
� Create satisfaction
� Be willing to practice
� Recognise Verbal and Non Verbal clues
They got me exactly where I wanted to be
Soft Exposing Giveaways!
When Sales say….
� “My opening offer is……”
� “How about 20 to 25?”
� “We can do it for 50?”
� “The list price is….”
� “We were looking for…”
� “I would be happy with that”
What Procurement hear is….
� And there is more to come…
� Meaning 20
� Or less if you would like?
� The price is negotiable
� Although I don’t expect to get it
� I’m getting a great deal!
Non Verbal Language
You do…..
� Steepling of fingers
� Fast Blinking
� Tilted head, knuckles under chin
� Head scratch
� Hand on back of neck
� Fiddling with glasses
� Specs taken off and put on table
You mean….
� I’m supremely confident
� I’m very alert, or I’m lying
� I’m interested
� I’m uncomfortable with this
� I’m annoyed
Transformation: Logistics
����
3PLs
paid
on
results
Warehouse consolidation International Supply Chain
���� Product handled twice���� 100 sites
���� Product handled once���� 4 sites ���� All Product sent via UK
hub���� Product sent direct to
country of sale
£150m
p.a.
Efficiency Contract Renegotiation
���� Too many trucks���� Lots of manual processes
���� Fewer trucks���� Streamlined processes���� Minimum 3% savings p.a. ���� 3PLs paid more as
costs rise
“To fundamentally rebuild our supply chain, deliver £150m p.a. of savings
and improve service to our customers ”
Adding Value in Logistics Procurement
� Bradford DC
� eComm Negotiations
� Tenders & Contract renegotiations
– Food Logistics
– GM Logistics
– Home Delivery
� Deep Dives
– Transport
– Freight
– International
� £35m savings delivered
– focused on efficiencies & contracts
Bradford: Some Trivia
� 1.1 million sq ft
� First of 4 huge new sites
� 134 Loading Bays
� Serving all M&S stores
� 205 days to construct
� Opened in July 2010
� 1200 employees
Thank You & Questions