Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Supply Chain Management:

Costly Mistakes & Success

Metrics for CFOs

• Identify specific opportunities to improve your company’s

negotiating power and mitigate contract leakage

exposures

• Improve your supply chain network from choosing better

partners to managing supplier relationships more

effectively

• Evaluate the metrics your company uses to measure

supply chain efficiency

After attending this event you will be able to:

Learning Objectives

Proformative is the leading professional development resource for

corporate finance professionals.

Announcing the new Proformative Academy:

• On demand video courses taught by peers and SMEs

• Over 170 finance and accounting courses and growing rapidly

• CPE for CPAs, CMAs, CTPs, and CIAs

Check it out at www.ProformativeAcademy.com

Welcome to Proformative

Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Supply Chain Management: Costly

Mistakes & Success Metrics for CFOs

Deborah Stanton, Executive Managing

Director, CAPS Research

• ASU ranked among the top 100 world universities

• Supply Chain Management department ranked #3 in the U.S.

• The world’s first supply management association

• Publishes the monthly ISM Report On Business®

• Established in 1986 as a research

center in the W. P. Carey School of

Business and in partnership with the

Institute for Supply Management

• A non-profit organization advancing the profession of

supply management through outstanding research,

benchmarking, and peer-to-peer networks

• Companies/corporations join CAPS Research as Member

Companies to receive benefits

Introduction

Supply Chain Management Trends and

Benchmarks

Five Costly Mistakes in the Area of Supply Chain

Management

Five Steps for Getting the Most Value from your

Supply Chain Partners

Q&A

Agenda

Supply Management

organizations are positioned more

strategically within the

Corporation• 82.1% report

directly or one level down from CEO

• 20% report to the CFO

11.6%

70.5%

Number of Levels in between CPO and CEO

0 1 2 3LEVELS:

2014 Benchmarking

Supply Chain Management Trends

Average 85.5% of a company’s external spend is managed by Supply Chain Management

Source: CAPS Research 2014 Cross-Industry Report of Standard Benchmarks

Supply Chain Management Trends

1. Tactical vs. strategic focusTactical Strategic

Consumed doing purchase orders – “the paper-pushers”

Never touch a purchase order; focus on development and execution of sourcing and category/commodity strategies

Reactive to the business – “waiting for the phone to ring”“3 bids and a buy”

Proactively engaged with the business on major projects and initiatives; strategic business alignment; bringing solutions to the business

Only involved with non-criticalspend areas

Driving sourcing/category strategies for all critical spend areas, i.e. Marketing, I.T., Legal

Only focused on cost reduction, deal by deal

Managing total cost, driving maximum value from suppliers, enabling competitive advantage

Desperate systems and technology solutions – “the supplier tells me what I spend with them”

Great spend visibility across entire enterprise; e-sourcing tools; automated tools for supplier performance management, contract management, risk management

Five Costly Mistakes

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Aerospace FinancialServices

Manufacturing Petroleum Utilities

% of Supply Management Employees that are Strategic vs. Operational (2014)

% of SMEs that are Operational % of SMEs that are Strategic

Tactical vs. Strategic

2. Expect to look at the data differently

• Visibility of your external spend across the entire

enterprise

• Spend grouped by category codes (not GL)

• Metrics you should be asking about:

How many suppliers do we have? Are they

segmented? How are they managed?

How many suppliers make up our top 80-90% of

spend? How do we identify critical suppliers?

What is your supply management ROI?

Cost savings…what is the budget impact?

How are we managing supplier risk?

Five Costly Mistakes

Thank you for your interest in this presentation.

View the on-demand webinar or download the full

presentation at:

www.Proformative.com

Supply Chain Management: Costly Mistakes &

Success Metrics for CFOs