patrick hopkins, coca cola bottling procurement director on how coke streamlined procurement process
DESCRIPTION
How Coca Cola streamlined procurement.TRANSCRIPT
Patrick Hopkins Coke Consolidated
Transforming Indirect Procurement
Coca-Cola History
Secret Formula Sold to Asa Candler Thought Coke in bottles was “stupid” and sold bottling rights for $1.00
Consolidated Begins First with Dasani and
Fridgepacks One of 64
Independent Bottlers
Famous Contour Bottle
Sold to Investors Globalization
Atlanta Pharmacist Dr. John Pemberton
1888 1902 1916 1919 1886
No visibility to indirect spend detail • Half of indirect on credit cards
Six disparate order/payment processes Use of non-approved suppliers
• Verbal commitments with non-established suppliers, late and duplicate payments, uninsured liabilities
Procurement Opportunities No visibility to indirect spend detail
• Half of indirect on credit cards
Six disparate order/payment processes Use of non-approved suppliers
• Verbal commitments with non-established suppliers, late and duplicate payments, uninsured liabilities
Procurement Opportunities
Use of non-standard, non-approved materials E-commerce solution not widely embraced Significant shopping prior to buying
Procurement’s Mission
Put the right materials and services
In the right hands
At the right place
At the right time
At the right cost
All the time
87% LIES HIDDEN UNDERWATER
PRICE
COST TIME
OPPORTUNITY RISK
Product Liability
Energy Consumption
Safety & Environmental Impact
Contract/SLA Administration Costs
Stock Buy Back Agreements
Consignment Inventory
Error Correction/Customer Support Dedicated Inventory
Training Bin Stocking
Cost Savings Programs
Technical Support Data Management Costs (Pricing, Catalogs)
Technology Enablers (Catalogs, Internet Capabilities) Data Transmission Costs (EDI vs. Paper)
Purchasing Processing Time
Receivables, Accounting Timeliness & Accuracy Desktop Delivery
Requisitioner’s Time
Delivery Performance (Timeliness & Accuracy) Payment Terms & Methods Rebates/Discounts
Shipping/Delivery Costs
Warranty Costs & Benefits
Compatibility with Existing Equipment/Modification Costs
Ongoing Maintenance
Installation Costs
Operating Life Expectancy – Mean Time Between Failures
Spare Parts Purchase & Inventory Holding Fees
Regulatory Compliance
Procurement Transformation Strategy Consolidate Supply Base
• Higher spend = lower mark up • Rebates, incentives, MSAs, terms, insurance…
Standardize Materials & Services • Higher unit volume = lower unit price • Lower inventory, higher quality,
longer life…
Automate Processes • Automation = employee & supplier productivity • Simplify, eliminate, combine
Four E-Procurement Truths
1. The product must be in the catalog
2. Users must be able to find what they need
3. The data must be right
4. Users must want to use the system
So, Why Coupa?
Why Not SAP?
Achieving the 4 E-Procurement Truths 1. Items must be in the catalog
• Internally hosted – Smaller suppliers, smaller scope – Quicker system response – Shared burden between supplier and customer
• Punch-out – More burden on supplier – Must be able to control scope, price – Retrieval to cart process varies
An Unlimited Selection of Limited Options
Achieving the 4 E-Procurement Truths 2. Users must be able to find what they need
• Demands an intuitive, uncomplicated, simple process
• Demands master data excellence in accuracy, consistency & clarity
• Demands ‘uniqueness’
• Demands fast response time
100% Confidence 100% of the Time
Achieving the 4 E-Procurement Truths 3. The data must be right
• Visibility to correct price • Inventory availability • Description & all MD accuracy
& consistency • Delivery accuracy • Billing accuracy • Accounting accuracy – P&L
What Does it Cost if it’s Wrong?
Achieving the 4 E-Procurement Truths 4. Users must want to use the system
• Process must be: – Easy – Intuitive – Fast – Mobile – Pleasant – Successful
Easier than a P-Card
Capture & visibility of spend • Integration to SAP
Mobility that’s device agnostic Process discipline – 3-way match
• Requires receiving but eliminates T&E process
Unlimited supplier expansion • Critical to displace P-cards
Cloud solution pleases ISS Positive user response & adoption
• Highest user rate vs. P-cards
Results
J A S O N D J F M
2012 2013
Questions?