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bioMbioMéérieux Supplier Coachingrieux Supplier Coaching

How to How to becomebecome an attractivean attractive customercustomertoto your your suppliersupplier

Alexandre VIAL

Denis-Pierre CUCHE

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ContentsContents1. bioMérieux2. CRECI3. Coaching process and its purchasing implementation

Key concepts• Coach of coach, team coach and individual coachingImpacts on supplier relationship • Improving attractiveness

4. bioMérieux practical implementationSupplier Day TEAM ValuesTEAM pyramideBasic of Performance

5. Conclusion

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bioMbioMéérieuxrieuxVision : To be a world leader by contributing to greater efficiency oftreatment and of public health

Activity : in vitro medical diagnostic

Sales : 1bn € (14% R&D)

People : 5 500 (900 R&D…)

Export : 80%

Market : Clinical 90% - Industrial 10%

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Purchasing MissionPurchasing Mission

- To Optimize overall bioMérieux Purchases :

SecurizationQualityTotal CostServiceInnovationCompetitive Advantage

Bet

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Market SupplybioMérieux Optimized Needs

500 M€

50 p

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Purchasing VisionPurchasing Vision

- Purchasing Excellence for Value Creation

Contributing to create Value for bioMérieux’s customers and shareholders by using the best potential or available resources of the market

SuppliersSuppliers bMxbMx

ShareholdersShareholders

CustomersCustomers

SupplierSupplier’’ssSuppliersSuppliers

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Purchasing Contribution for Value creation Purchasing Contribution for Value creation

To support RONA (EBIT,WCR…) . Purchase price

. Total cost

. Supplier accounts

. Stocks

. Capex / Investments / Assets (outsourcing)

To support GROWTH . Innovation(+ sales, + selling price) . Time to Market

. Project ManagementTo support Image . Quality

. Service / Customer Service Rate

. Innovation

. Competitive Advantage

. Ethical and demanding behaviour

Purchasing Performance Purchase Price

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Be and remain AttractiveBe and remain AttractivebioMérieux does not look Sexy at first glance:

- Small business

- High Quality expectations (FDA)

- Complex specifications

Changing supplier is “very difficult”

- Validation constraint

- Undefined specifications

- Registration

Long term relationship

- Long life cycle

Be an remain attractiveBe an remain attractive

Pharma constraints

High tech industrial products

Competitive Market

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CRECICRECIVision : To enhance performance by developing people management and motivation

Activity : Audit, Consulting, Training, Coaching

People : 80 p

Sales : 13 M€

Market : companies 80%, sport 10%, administration 10%

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CoachingCoaching

Coaching Improving individual and collective performance

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Getting into the skin of the CoachGetting into the skin of the Coach……

• Actions from the CoachGettingGetting intointo the skin of the coachthe skin of the coach

To visualize all the players(existing, potential, direct et indirect)Building an environment

Agreed relationship, trust,Common space

• Best practices for supplier coaching

Best understanding of the Company awareness, consummer awaitings

Vision of the futur and perspectives

Concept

Results

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Supplier DaySupplier Day

PurposePurpose Launching of TEAM (purchasing excellence plan)

AttendersAttenders 100 bioMérieux main suppliers : 150M€100 internal customersPresident + Executive Committee

AgendaAgenda Presentation: President, VP Finance,VP Quality, VP SCH, VP R&D,VP Purchasing,VP Manufacturing

Workshop: Showroom, Production floor, Supplier case “Lean Manufacturing “Open discussion…

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PresentationPresentationMessageMessage: give sense to our TEAM plan

• To attract curiosity /appeal /motivate the supplier

““bioMbioMéérieux is an attractive customerrieux is an attractive customer”

• To render explicit/to give details/ to render legitimate the high level of expected performance

“ I understand why I understand why bioMbioMéérieuxrieux’’expectationsexpectations appear higher and higherappear higher and higher”

• To enable the supplier to standardize, to measure itself to our expectations ““I know where I am I know where I am positionnedpositionned and what I need to doand what I need to do””

•• To share the chosen path, the rules, to participate in the action

““I prepare an action plan that I shall present to my buyerI prepare an action plan that I shall present to my buyer””

Awaited resultsAwaited results: At the end of the day supplier must :Understand

Adhere

contribute

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To be legitimate CoachTo be legitimate Coach……

• Actions from the CoachTo To bebe legitmatelegitmate coach in front of all coach in front of all

actorsactors

Understanding and finding« real motivation »To reconcile interests

• Best practices for supplier coaching

Acting on « motivations »: money, amounts, face value, potential, reference, ethic/values, long term, riskmanagement, technologicalpassionTo link them to the resultsTo meet and make others meetthe deadline

Concept

Results

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TEAM ValuesValuesTTransparence/Transparency : means for us

To facilitate open communication and share of informationTo exhibit ethics and objectivity when speaking and behaving« doing what one says and saying what one does »

EExigence / Demand : means for usTo challenge ourselves in order to perform at a higher levelTo meet commitments and have them met by the team, the company and the suppliers

AAmélioration Continue / Continuous improvement : means for usTo promote synergy and to support changesTo have an open mind, to be receptive of continuous changes for improvementTo challenge what is existing

MMembership / Appartenance : means for usA team labeled as a model, a Reference representing a performing recognized and respected

department.A motivated team proud to build and to represent altogether « the bioMérieux’s Purchasing

Stamp » for the coming years …To respect and to promote bioMérieux’s Values

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Transparencyransparency

bioMbioMéérieuxrieuxRules/Process

Respecting our commitments

SupplierSupplierChanging processes, goods, raw

materials,…(ref CGA)

Cost factor

Financial structure

Side tracked/risks for quality and delays

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Exigencexigence((demanddemand))

bioMbioMéérieuxrieuxLet’s respect our commitments

SupplierSupplierMeet your commitments

Competitiveness

Conformity/Quality

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Ammééliorationlioration continuecontinue((ContinuousContinuous ImprovementImprovement))

SupplierSupplierCommit yourself

Sharing your progress

bioMbioMéérieuxrieuxNew Dynamic

TEAM

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Membershipembership(appartenance)(appartenance)

SupplierSupplierBeing selected

Sharing your development, innovations and suggestions

Sharing our values

Let’s contribute together to public healthcare improvement

bioMbioMéérieuxrieuxSharing our development

Let’s stimulate yourcompetences

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To be credible as a CoachTo be credible as a Coach……

Actions Actions fromfrom the Coachthe CoachTo be credible as a coach

To visualize progress and potentialsTo define a strategy, by building objectives, and setting rules withina scope of actions

• Best practices for supplier coaching

Making improvement (buyerresponsability for supplier performance):

InnovationQualityProcessesProductivityProfitabilityCompany developmentCo-dévelopment, licenses

To make it knownValue creation for both parts

Concept

Results

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TEAM PlanPlan

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TEAM PyramidPyramidExcellence Targets

Aim : Purchasing Excellence for Value Creation

Values : T.E.A.M.

Implement A World Class

Purchasing Organization

ReinforcePurchasing Awareness

Within the Company

OptimizeRelationships

WithInternal Customers

OptimizeRelationships

WithSuppliers

Strategic Initiatives 2005/2006Low Cost CountriesNew SuppliersProgress AgreementbMx Purchasing Stamp

5 LeveragesGroup SynergyUpstream InvolvementE-AuctionsVA/VE + Lean Manufacturing + supplier suggestion

TrainingTeam Spirit / Share Know-HowSupplier Performance MonitoringReporting / Communication

Quality > 99.5%Securization : 80% Service : 95% / 0

Innovation : 10% Economic Perf. > 12M€ Competitive Adv. : 2%

Core Strategies

TTransparence EExigence AAmélioration continue MMembership(Transparency) (Demand) (Continuous Improvement) (Appartenance)

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GettingGetting performances as a coachperformances as a coach……

• Actions from the CoachGetting performances as a

coach

Simplifying priorities in order to meet on strategies (effort sharing)

Giving everyone a role(organization and functioning mode)

• Best practices for supplier coaching

Level of expectations :Minimum level

Searching for competitiveadvantage in line with the area of expertise or supplier skillsCreating « change »

Concept

Results

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Key concept

Basics of PerformanceBasics of Performance

Suppliers

InternalCustomers

PurchasingTeam

Demands Market supply

Organization + Méthods + Skills + Motivation= Performance

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CoachCoach qualitiesqualitiesFlexibility

To manage various relationships, internally and externally• Personal or supplier Power• IE: To manage stars

ExpectanciesOpening up

Externally, benchmarking

Taking a step backCommunication : To give and absorb information

Key factor : Co-responsabilityMy performances are those of my suppliers

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Organisation

bioMérieux BuyerBuyer IDID

Average Age : 36 years

10 nationalities

65 % male pour 35% female

90 % of post graduate (16% PhD)

50% engineers

25% biologist

25% business

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Organisation

BuyerBuyer’’s Backgrounds Background

Warner Lambert Co.

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BuyerBuyer ‘‘s s RoleRole and and ResponsabilityResponsability

Follow the bioMérieux Purchasing Process

Define his portofolio strategy

Key contact for the supplier

Single point negociator

He is responsible for the supplier performance

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BuyerBuyer coachcoach

Buyer is like a Football coach :

Assume ambitious targets

Define the strategy

Build his team (internal / external)

Share the objective

Motivate

Enhance the performance

Re-adjust team and strategy according to the results

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ConclusionConclusionGrowth of the existing practice (not a revolution)

To give power to the relationshipLearning curve (eager to progress, to learn from

experience…)

Valuable for every player (suppliers, customer, buyers…)Cross fertilization New role for the buyer

Coaching is not givenNew buyer profileNew assessment To be used on purpose

Exciting process to enable to develop our functionExciting process to enable to develop our function