sourcing excellence - aau.dk · cost reduction by 10% can ... volume needed to generate a...

SOURCING EXCELLENCE

Morten Munkgaard Møller - 1

”To be innovative, you need innovative suppliers” (Loewe CEO)

” “Sourcing & logistics would remain the darkest continent of business - the least exploited area of business for competitive advantage”

(Peter Drucker)

Kommerciel Baggrund 2008-2010 DILF, Procurement Practice, Director

2005-2008 LEGO System A/S, Global Procurement, Director

2005-2003 Arla Foods amba, Global Procurement, Process Manager

2003-1998 Bang & Olufsen A/S, Global Procurement, Project Manager

1996-1998 IBM, trainee

Akademisk Baggrund

2010- Aalborg University, Center for Industrial Prod., Associate Professor

2005-2010 Aarhus School of Business, Part-time Associate Professor

2005-2006 Aarhus University, Assistant Professor

2001 Stanford University

1998-2002 Ph.D in Supply Chain Management

1990-1995 M.Sc., Aarhus School of Business

Hvem er jeg?


Sourcing Excellence - Research Group


Ph.D-student

Morten Munkgaard

Møller

John Johansen

Anders Peder

Lysholm Hansen

?

Nina Lidegaard

Lars Mikkelsen

Associate Professor External, Associate

Professor Professor

Ph.D-student

?

Ulla Normann

Christensen

Ph.D-student

Linda Nhu

Larsen

Ph.D-student

Chris Ellegaard

External, Professor

CO

RE

TE

AM

AS

SO

CIA

TE

D T

EA

M

Background I – where we came from..

Value added

0%

1970s 1930s 1990s 2000s 2010s

100%

Internal task dominates the

organization

External task dominates the

organization


1940s-1960s

Logistics

1970s

Purchasing as an

administrative

function

1980s

Purchasing as supply

chain management

1990s

Supply Management

& Strategic Decision

Making

2000s

Outsourcing & LCC

sourcing

2010s

Sourcing Excellence

& Strategic

Purchasing

- The growing role & importance of procurement and sourcing…

80%

20%

Background II – why focus on procurement?


…Highly leveragable

One of the fastest ways of improving the

bottom line…

Cost reduction by 10% can double the profitability!!!

The way average cost are

But…

10%

50%

15%

25%

The way cost are adressed

• The impact of procurement can be even more powerful when the context of enterprise profit margins are introduced

• An enterprise´s profit margin, or more specifically, its net profit margin is the ratio of its bottom-line profits to its total revenues

• Below figure represents the average sales volume needed to generate a bottom-line impact (or profit) of $10 million.

• It is an interesting exercise for CPOs to take their delivered savings (actual or targeted) and evaluate the in the context of their employer´s actual profit margin

• This may help inform executives as to the relative value of investments made in procurement

As is, one dollar saved is in fact much more

than a dollar on the bottom line…

Below figure represents the average sales volume needed to generate a

bottom-line impact (or profit) of $10 million

Background I+II – where we come from..


- The growing role & importance of procurement and sourcing…

A

Degree of leverage by

Procurement activities

Degree of outsourcing

100% 90% 80% 20% 60% 10% 70% 50% 40% 30%

0%

5%

10%

20%

30%

40%

50%

60%

% of SPEND OUTSOURCED

PR

OF

IT M

AR

GIN

S

B

C D

A

B

C

D

Transactional: Very low strategic significance

Cyclical: Low/medium strategic significance

Operational: Medium/High strategic

significance

Critical: Very High strategic significance

Source: Cox, 2008

Software

Service

Automotive

Oil & Gas

Computer

Manufacturing

Telecom

Retail

Pharmaceuticals

HD-uddannelsen

I Strategisk Indkøb og

Sourcing….


HD-Uddannelsen – (Danfoss version)


Graduate Diploma Main theme

DAY 1: DAY 2: DAY 3: DAY 4: DAY 5:

Role & Organisation Category Management Supplier Management Business Negotiation Sourcing of Technology

Educational Period:

Date: XX Time: 09.00-18.00

Date: XX Time: 09.00-18.00

Date: XX Time: 09.00-18.00

Date: XX Time: 09.00-18.00

Date: XX Time: 09.00-18.00

Course Agenda: Development of the Procurement function

Where do we come from?

Main theories within Procurement

Organization of the Procurement Function

Performance Mgmt.

The concept of Category Management

Reverse Marketing – the purchaser as sales

Categorizing goods & services

Supplier Preferencing

Sourcing Levers

Category Strategy

SRM versus CRM

Different modes of Supplier Relationship Management

Supplier Development and/or exit

Supplier attractiveness

Competition for supplier resources

On-stage & off-stage negotiation

Interest vs. positions

ABC of negotiations

The strategy ladder

The importance of preparation

Exercises

Sourcing of Technology, R&D & capabilities

Supplier involvement in New Product Development

Different types of early involvement

Challenges in NPD & supplier involvement

Main Topics covered:

Background of Procurements new & increased role in the company

Roles & responsibilities of Procurement

Organisation & Performance Mgmt. within Procurement

Origins of Category Management (CM)

CM in industrial firms

Challenges with CM

Stakeholder Mgmt

How to create an Category Strategy

Spend & Market Analysis

Supplier Relationship Management

Supplier Development

Supplier Attractiveness

Segmenting suppliers

Differentiated supplier approaches

The negotiation process

Preparation –

At the table…

Communication strategy

Personality Profiles and their consequences

Different types of involvement in NPD

Sourcing of R&D compared to Production

Case: Sourcing of Technology at B&O

Capability Portfolio Models

Main models, concepts & theories used:

The concept of Value

Two main drivers behind the evolution of procurement

Procurements strategic contribution

Models of organisation

Krajljic´s Portolio Model

Stakeholder Mgmt. Models

Supplier Preferencing

The Purchasing chess-board

Bensaous Portfolio Model

Network Theory

Resource-based view

Contingency theory

Johari-model

Interest vs. positions

Win-win or…?

Prisoners Dilemma

Preparation tools & techniques

The NPD-process

Møller´s Portfolio model

Supplier involvement in NPD

Competence development

Evaluering fra andet hold – HD-uddannelsen


Spørgsmål


sourcing excellence - aau.dk · cost reduction by 10% can ... volume needed to generate a...

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