Supplier Risk - PowerPoint PPT Presentation

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supplier central tm n.
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  1. Supplier CentralTM Executive Overview Jon Bovit, VP of Marketing & Strategy

  2. 2008 and BeyondSupplier Management Becomes Boardroom Issue Pfizer Blighted by Viracept Scare Supplier Bankruptcy Forces Chrysler Plant Closures By Corey Willims, Associated Press Writer THE WALL STREET JOURNAL China Plant Produced Key Ingredient for Baxter’s Heparin GM Sues Bankrupt Supplier for Access to Parts Satyam: A Timely Warning for Outsourcing Customers Protect Your Company Against Outsourcing Supplier Instability By Michael Murphy, Joshua B. Konvisser, Vipul N. Nishawala and Jonathan D. Butler MasterCard, Visa Notifying Consumers of Possible Security Breach Recalls of Chinese Auto Parts are a Mounting Concern Lead Paint Prompts Mattel to Recall 96,7000 Toys Published: August 2, 2007 Lenovo to Recall 526,000 NotebookBatteries The battery problem keeps exploding © 2009 CVM Solutions Confidential

  3. Mattel Case StudyAn Important Lesson about Supplier Risks Mattel to pay $12 million settlement for lead toys Posted: 9:23 PM Dec 15, 2008 First News of Lead Paint on Toys $12M Settlement Continued Recalls Lead Paint Prompts Mattel to Recall 967,000 Toys Published: August 2, 2007 Dec 10, 2008: MAT 14.96 28 26 24 22 20 18 16 14 12 @ 2008 Yahoo! Inc. 2006 Oct 2007 Apr Jul Oct 2008 Apr Jul Oct © 2009 CVM Solutions Confidential

  4. What is Supplier Management? All supplier information centrally available to all people,processes,andsystems that “touch” suppliers 1 2 3 Manage compliance and risk Goal is to reach 100%“suppliers under management” Post-contract Supplier Processes • Accounts Payable Enablement • Qualification & Compliance Management • Scorecards • Tier 2+ Analysis • Supplier Diversity • Risk Management • Pre-contract Supplier • Processes • Strategy • Requirements Gathering • Sourcing Process • Contract Management Process • Spend Analysis • Request Management Supplier Management Processes © 2009 CVM Solutions Confidential

  5. Where is the Problem?Over Time, Supplier Management Needs Grow 1 2 3 4 Supplier DBs • 1 to 5 Applications • 10 Excel Spreadsheets • 20%+ “out of date” • Marginal Cost per Supplier • 100s of Suppliers Costs Rise Over Time Risk and Uncertainty Increase Supply Chain Complexity Increases Data Quality Degrades Problem Gets Worse Over Time • Supplier DBs • 20 to100 Applications • 1000 Excel Spreadsheets • 60%+ “out of date” • 20X+ Cost per Supplier • 100Ks of Suppliers • Supplier DBs • 5 to 20 Applications • 100 Excel Spreadsheets • 40%+ “out of date” • 3X+ Cost per Supplier • 1000s of Suppliers © 2009 CVM Solutions Confidential

  6. What are the Current Issues?Different Groups have Different Needs • How do I measure and compare supplier performance? • How do I track supplier qualifications and compliance? • How do I audit suppliers? • How much am I spending with each supplier and by category? • How much contract leakage do I have? • How do I find new potential suppliers? • How do I handle all the requests? Sourcing Sustainability Supply Chain Procurement • How do I assess and monitor supplier risk? • How do I manage my programs? • How do I ensure participation? • How do I ensure accuracy? • How do we currently add/change suppliers? • How do I engage all suppliers to provide all required information? • How do I process changes? • How do I ensure accuracy and results? Risk Mgt Finance AP Diversity © 2009 CVM Solutions Confidential

  7. Get All Your Suppliers Under Management…“Total Suppliers Under Management” Manage & Maintain Evaluate & Assess 100% of Suppliers Under Management • Governance, Risk, and Compliance • Highest Potential Impact • High Collaboration Strategy & Planning Source & Contract Central Supplier Repository Strategic • Strong Business Impact • Manage Compliance • Manage Risk Tactical • Self-service • Data Quality • Process Controls • Spend Controls Transactional © 2009 CVM Solutions Confidential

  8. Supplier Management ProcessWhere are the Supplier Risk & Performance Impacts? Strategy and Planning Source andContract Manage andMaintain Evaluate andAssess Financial DueDiligence On-boarding andData Gathering PerformanceScorecard Capable Suppliers Financial AssessmentIncluding Liens, Judgments Security DueDiligence Quarterly RiskAssessments Available Suppliers Define OverallRisk Profile Corrective ActionPlanning Market Conditions Insurance Verification Define AssessmentTeam OSHA ViolationHistory Supplier Audits Customer Demand OFAC and DebarmentReview Risk MitigationExecution Risk Planning Contract Terms Risk EPA and RegulatoryCompliance Risk MitigationPlanning © 2009 CVM Solutions Confidential

  9. Supplier RiskIt’s Not Just about Credit Rating Anymore Do your suppliers carry sufficient insurance? Are your suppliers under financialstress? Can they perform? 2 1 Insurance Financial Stability Is my confidential information secure? Continuity for disasters? Security & Continuity 3 Does a suppliers’ failure pose risk to your production? 7 Production Impact Health & Safety Performance Are suppliers meeting your expectation on delivery, cost, quality, scale? 4 Do your suppliers meet your safety standards? Regulatory 6 5 Do your suppliers have the necessary certifications? SOX? US Patriot Act? © 2009 CVM Solutions Confidential

  10. How Many People do I need to Manage Suppliers & Risk? 1 2 Too many specialties required! How can wemanage it alone? © 2009 CVM Solutions Confidential

  11. Supplier Risks Increase Across Supplier Tiers • Supplier risks become magnified • Supplier risks can be hidden • How can overall supplier risk be measured? Your Organization Business Unit1 Business Unit2 Tier1Supplier Tier1Supplier Tier1Supplier Tier1Supplier Tier2Supplier Tier2Supplier Tier2Supplier Tier2Supplier Tier2Supplier Tier2Supplier Tier2Supplier Tier2Supplier Tier2Supplier Tier2Supplier Tier2Supplier © 2009 CVM Solutions Confidential

  12. What does it Cost to Manage a Supplier? Total SupplierManagement Costs e.g. $500+ per Supplierper year* Spend RelatedSavings Process Costs Source &Procure Process Costs Non-Contract AddressableSpend AP Process Costs OtherGroups Costs SpendLeakage $1M+ per year $200 per Supplier per year Risk Direct Costs Data MgtCosts Systems Costs Communication Costs Supply Disruption Fines, Legal Brand Risk $300 per Supplier per year $1M+ per Incident** **A. T. Kearney estimates $10M to $34M per bankruptcy *Calculation based on CAPS Research Benchmarks © 2009 CVM Solutions Confidential

  13. Business Challenges Addressed by Supplier Data Services © 2009 CVM Solutions Confidential

  14. Supplier Data EnrichmentThe First Step in Enterprise Supplier Management Journey • Cannot manage suppliers without clean, quality, and up-to-date data • Best practice says start with data enrichment before deploying supplier portals and other projects • Halt the perpetuation of bad data across the enterprise © 2009 CVM Solutions /Confidential

  15. Supplier Management Critical RequirementsWhat do you Need to be Successful? TechnologyRequirements DataRequirements ServicesRequirements Accurate, Validate,and EnrichedEnterprise Supplier Data SupplierSelf-service Portal Supplier On-boardingServices Accurate, Validate,and EnrichedSupplier DiversityData Supplier ManagementProcess AutomationFramework Supplier DiversityProgram Management Supplier Risk andComplianceManagement SPM ProgramManagement Integration, Security, Workflow, etc. Supplier Risk Data Supplier Diversityand CSR Management Supplier RiskAssessment Service Tier 2 Supplier Data • Supplier Support • Services • Easy EngagementModel (Self-service) Scorecards,Performance, andContract Management © 2009 CVM Solutions Confidential

  16. © 2009 CVM Solutions Confidential

  17. CVM Corporate Overview © 2009 CVM Solutions Confidential

  18. CVM Leadership in Supplier Management • 49% of the 2008 Fortune 100 use CVM • 51% of the 2009 DiversityInc Top 100 use CVM • #1 in supplier management portals deployments • #1 in supplier diversity © 2009 CVM Solutions Confidential

  19. CVM Solution Overview Supplier Central • CVM Supplier CentralTM 6.0 redefines the next generation supplier management platform combining technology, data, and managed services into a one-stop shop for customer supplier management needs. • With the release of 6.0, CVM has focused on 4 main areas: • Lowering Costs • Mitigating Supplier Risk • Industry Focus • Next Generation CVM Master Supplier Database Supplier On-boarding SpendData SupplierRisk Data Compliance PM Tier 2 PM Managed Services Data Supplier Diversity Data TM RiskPM Technology Enterprise Data with Linkage Vendor Central Performance Central Diversity Central RiskCentral CVM Master Supplier Database © 2009 CVM Solutions Confidential

  20. CVM Targeted Solutions Overview 1 2 3 4 CVM Supplier CentralTM Enterprise Supplier Management Vendor Master Management Supplier Risk Management Supplier Performance Management Supplier Diversity Management © 2009 CVM Solutions Confidential

  21. Supplier Risk Solution Lifecycle © 2009 CVM Solutions Confidential

  22. CVM Risk Solutions in the News © 2009 CVM Solutions Confidential

  23. CVM Master Database – Data Elements Summary Firmographic Information Commodity Information • Name, address, telephone • Contact information • Revenues • Employees • SIC codes • NAICS codes Corporate Linkage Diversity Information • Parent/child • Location/headquarters • Joint ventures • Certificates • Expiration dates • Ethnicity © 2009 CVM Solutions /Confidential

  24. Before CVM Data Enrichment and After Before After © 2009 CVM Solutions Confidential

  25. Why Use CVM for Supplier Data Services? UniqueData UniqueApproach SupplierFocus © 2009 CVM Solutions Confidential

  26. CVM Unique Data • CVM knows which suppliers are the most important to the F1000 and large organizations • CVM combines the best data sources to create the most accurate supplier database in the industry • All supplier data adds/updates go through a strict process before being added to the CVM Master Database Collect Release to Production Match QualityAssurance Analyze& Verify Add orUpdate © 2009 CVM Solutions Confidential

  27. CVM Unique Approach and Process • High target service levels: • Strategic Suppliers: 95%+ • Tactical Suppliers: 90%+ • Transactional Suppliers: 80%+ • CVM’s QA process performs both a match and data accuracy verificationon records we evaluate • Value-added Executive Summary Reports • Ensure data is delivered in proper format and is usable (i.e. loads, etc.)by the customer • Identify potential new diversity suppliers to maximize diversity spend capture Initiation and Acquisition Report and Delivery Cleanse QualityAssurance AutoMatch © 2009 CVM Solutions Confidential

  28. CVM Focused on Supplier ManagementIt’s All We Do • Focusing only on supplier data allows CVM to gain deep understanding and expertise with gathering, analyzing, and supporting supplier data projects • CVM understands the priorities and needs of procurement, sourcing, compliance, risk, diversity, and supply management organizations © 2009 CVM Solutions Confidential

  29. Why CVM Solutions for Supplier Management? • Proven delivery of Tier 2 programs Suppliers Beyond Tier 1 • Technology, data, and managed services for Tier 2 Easy Supplier Engagement Model • Supplier self-service portal • Supplier focused wizards and up-front data validation • Proactive supplier follow-up and hand-holding Accurate and Validated Supplier Data • Existing large supplier database • Proven data quality and cleaning processes • Regular data refreshes and re-validation Supplier Data Enrichment Services • Risk assessment and supplier diversity services • Supplier data enrichment with corporate linkage Supplier Management Process Automation • Sourcing request management • Workflow and business process management • Business rules Fast, Easy and Cost Effective Deployment • Implementation measured in days and not months • Proven delivery of managed services © 2009 CVM Solutions Confidential