sabmiller procurement cips, zug speaker...sabmiller procurement transformation cips march 2015 20 no...

Transforming Procurement in a Decentralized FTSE Top 10 Company

SABMiller ProcurementCIPS, Zug

March 2015

© SABMiller 2014 2SABMiller Procurement Transformation CIPS March 2015

SpeakersSpeakersSpeakersSpeakers

Katharina Stenholm, CEO

• Joined SABMiller Procurement as VP Brewing Raw Materials in April 2010, from the Polttimo Group where she was CEO.

• VP Business Transformation in SABMiller Procurement from 2013 -2014, appointed CEO in Nov 2014.

• Katharina has a PHD in Biotechnology and Applied Biochemistry.

Jim Ridgwick MCIPS, Global Head of Capability & Procurement Excellence

• Joined SABMiller Procurement in March 2011, from Deloitte’s Supply Chain & Procurement Management Consultancy practice in London and Shanghai where he was a Senior Manager.

• He is driving Procurement Excellence across SABMiller’s Procurement function and notably through its Transformation programme.

© SABMiller 2014

Have you heard of SABMiller?Have you heard of SABMiller?Have you heard of SABMiller?Have you heard of SABMiller?

2nd largest brewer 2nd largest brewer 2nd largest brewer 2nd largest brewer in in in in a market which has seen consolidation among key playersa market which has seen consolidation among key playersa market which has seen consolidation among key playersa market which has seen consolidation among key players

3SABMiller Procurement Transformation CIPS March 2015

2003 2013

© SABMiller 2014

Which one of these beers is from SABMiller?Which one of these beers is from SABMiller?Which one of these beers is from SABMiller?Which one of these beers is from SABMiller?

4

As the name suggests, ("Urquell" in German or "Prazdroj" in Czech both mean "the ancient source")

Pilsner Urquell is the original pilsner and first pale lager beer.

It was immensely successful – nine out of ten beers produced and consumed in the world are derived from the original Pilsen beer.

SABMiller Procurement Transformation CIPS March 2015

© SABMiller 2014

Which are the bestWhich are the bestWhich are the bestWhich are the best----selling 5 beer brands of the world?selling 5 beer brands of the world?selling 5 beer brands of the world?selling 5 beer brands of the world?

5

1.

103m hl

2.

53m hl

3.

51m hl

4.

44m hl

5.

41m hl


© SABMiller Internal Use / Confidential / Secret

3333rdrdrdrd Party SpendParty SpendParty SpendParty Spend

Brewing Materials

+ Sustainability

Malt & BarleyHops

Process MaterialsAdjuncts

SugarFiltration

Stabilisation

Packaging Materials

Glass BottlesCans

PlasticsClosuresLabels

SecondaryTertiary

Supply Chain & Logistics

FreightFleet

EquipmentParts

Site ServicesCivil

Warehousing

Marketing & Business Services

MediaAgency Fees

POS MatsConsultancy

TravelNetworks

Hardware / Software

© SABMiller 2014

AgendaAgendaAgendaAgenda


Local & decentralised!

Transforming Procurement

A deeper look

Learnings

What’s next…..

© SABMiller 2014

Who we areWho we areWho we areWho we are

• Group revenue of $27 billion

• >70% of profit from developing economies

• 95% of lager volumes from No. 1 or 2 market share positions

• SABMiller brews over 200 beer brands in more than 75 countries around the world.

• 70,000 employees

• Strategic partnerships with The Coca-Cola Company: joint venture with Molson Coors in the US


© SABMiller 2014

Becoming a global brewerBecoming a global brewerBecoming a global brewerBecoming a global brewer


1895 2012

© SABMiller 2014

Group Strategy from 2009Group Strategy from 2009Group Strategy from 2009Group Strategy from 2009


© SABMiller 2014

Procurement was also decentralisedProcurement was also decentralisedProcurement was also decentralisedProcurement was also decentralised

11

Glo

ba

lR

eg

ion

al

Loca

l

Where we started 2009

R R R

Limited collaboration across

regions

Very limited sourcing above

market

• As with all functions, each country had their own Procurement team

• Sizes varied from a couple to over 60 people

• There were no global procurement roles

• Councils were established to collaborate above country and above region


© SABMiller 2014





A deeper look

Learnings

What’s next…..

© SABMiller 2014

Transforming Procurement….Transforming Procurement….Transforming Procurement….Transforming Procurement….


The challenge faced …..the solution ….how we did it

• Supply markets globalising

• Competitive threat

• Ineffective collaboration above

country

Significant lost opportunity

20

10

-20

12

20

13

-20

15

© SABMiller 2014

….the solution….the solution….the solution….the solution

14

• “Trinity Procurement” established• Focus on strategic sourcing• Location selected was Zug with regional satellites• At its peak it was 80 global category managers and

~10 regional category managers in in each regionGlobal

Global & Regional

Sourcing teams

R R R R

Glo

ba

lR

eg

ion

al

Loca

l

Early successes:

� Pathfinder function in SABMiller to leverage global skill

and scale

� Put Procurement on the map

� Significantly exceeded financial benefits targets from

building great teams

� Procurement’s role in the Sustainability agenda

established

Establish a strategic procurement unit in SwitzerlandEstablish a strategic procurement unit in SwitzerlandEstablish a strategic procurement unit in SwitzerlandEstablish a strategic procurement unit in Switzerland


© SABMiller 2014

…how we did it…how we did it…how we did it…how we did it

15

Capability highlightsCapability highlightsCapability highlightsCapability highlights

2010 2011 2012 2013 2014 2015

Strategy

People

Process

Technology

Strategic Sourcing

Ways of Working

Supplier

Accreditation

Value realisation

tracker

Sievo Benefit

Forecasting

100Cat Mgrs

400 Suppliers

Benefits

Methodology

KPI

framework

Commercial

Value Levers

Category

Strategies

developed

1


© SABMiller 2014

Transforming Procurement….Transforming Procurement….Transforming Procurement….Transforming Procurement….


The challenge faced …..the solution ….how we did it

• Supply markets globalising

• Competitive threat

• Ineffective collaboration above

country

Significant lost opportunity

20

10

-20

12

20

13

-20

15

• Could get money on the

table but harder to get

money in the bank!

• Successful for big direct

spend, less traction with

fragmented indirects

• Inefficient and duplicated

transactional procurement

• Distance from country

customers

© SABMiller 2014

….the solution….the solution….the solution….the solution

17

Transform Procurement into a globally integrated functionTransform Procurement into a globally integrated functionTransform Procurement into a globally integrated functionTransform Procurement into a globally integrated function

One Globally Integrated Function

One Globally Integrated Function

Glo

ba

lR

eg

ion

al

Loca

l

“Trinity” before Northstar2012

Today2015+

Global

Global & Regional

Sourcing teams

Global Sourcing

R R R R

Global POC Network

Buy-Sell

R R R R

• All Procurement headcount reporting into a CPO

• Operational and strategic procurement brought together

• Transactional elements industrialised into operations centres (POCs)

• Buy Sell capability to increase transparency and centralise risk


© SABMiller 2014

…how we did it…how we did it…how we did it…how we did it

18

Capability highlightsCapability highlightsCapability highlightsCapability highlights

2010 2011 2012 2013 2014 2015

Strategy

People

Process

Technology

650+

Strategic Sourcing

Ways of Working

Procurement

Handbook

Supplier

Accreditation

POCs in place

Global Procurement Policy

P2P Policy

Value realisation

tracker

Sievo Benefit

Forecasting

CombineNet and Ariba

Sourcing & ContractsGlobal ERP template

100Cat Mgrs Total

Process and Technical

Value Levers

400 Suppliers

100k Suppliers

Benefits

Methodology

Procurement Portal

New roles

defined

Regional

Heads in

place

Reporting

line to CPO

KPI

framework

Spend under

Procurement

Management

accelerated

Commercial

Value Levers

Category

Migration

defined

Category

Strategies

developed

1 2


© SABMiller 2014





A deeper look

Learnings

What’s next…..

© SABMiller 2014

Organisation structureOrganisation structureOrganisation structureOrganisation structure


No major change in headcount numbers, resource mix very differentNo major change in headcount numbers, resource mix very differentNo major change in headcount numbers, resource mix very differentNo major change in headcount numbers, resource mix very different

Central Organisation

(Zug)

Regional / Country Organisation

Global Head of

Procurement

VP Packaging

VP Brewing Materials

VP Supply Chain & Logistics

Group Head of Supply

Chain & HR

Europe

Head of

Procurement

Region Supply Chain /

Finance Director

Strategic Procurement Organisation

Regional Operational Procurement

VP Marketing & Business

Services

LatAm

Head of

Procurement

Africa

Head of

Procurement

AsiaPac

Head of

Procurement

Head of HR

Country Procurement Support

Capability Development and

Support Functions

Country

Procurement

Support

Proc Ops Centre

Regional/Local

Category

Management

Reg Op ProcurementCap Dev &

Support

VP Finance & Operations

Global Business

Services (GBS)

Sourcing Support

© SABMiller 2014

Procurement Operations CentresProcurement Operations CentresProcurement Operations CentresProcurement Operations Centres: : : : Transactional Core of the new Global Procurement Model

Reporting and

Compliance to

Policies

Spot Buys

Contract

Enablement (e.g.

Catalogues)

• Free capacity in strategic teams

• Full visibility and control of every

purchasing transaction

• Enabled with Category Manager’s

instructions

Transforming ProcurementTransforming ProcurementTransforming ProcurementTransforming Procurement


21

© SABMiller 2014

Competency upliftCompetency upliftCompetency upliftCompetency uplift


We embarked on a major training programme across our We embarked on a major training programme across our We embarked on a major training programme across our We embarked on a major training programme across our 666655550000+ + + + employeesemployeesemployeesemployees

Org. Design

Job Roles

Competency Framework

Training Curriculum

Training Modules

Train the Trainer

Roll-out

Strategic Procurement:

In Country Procurement:

• 16 modules ~ 4 days ~ 676 total days of training

delivered

• 17 modules ~ 4.5 days ~ 1368 total days of training

delivered

Operational Procurement:

• 18 modules ~ 5 days ~ 560 total days of training

delivered

© SABMiller 2014

Key enablersKey enablersKey enablersKey enablers


Major building blocks of the new operating model Major building blocks of the new operating model Major building blocks of the new operating model Major building blocks of the new operating model includedincludedincludedincluded

Procurement Handbook

Knowledge Centre

Global Procurement Policy

“How to buy” Portal

Consistent ways of

working

Knowledge & best

practice sharing

Procurement mandate

Customer experience

© SABMiller 2014

Procurement Transformation can be done at speed, butthere are several hard requirements to be metbeforehand:

• High calibre transformation team under trusted business leader

• Early, focused and frequent stakeholder engagement from ExCom down to Country MD/FD to create strong sponsorship in region

• Clear vision around Spend under Management and Benefit delivery

• Use consultants selectively. Use the transformation programme to build in-house capability.

• Manage the design process tightly and have a Design Authority in place to deal with and change requests.

The rewards outpace the investment by far.

25

Change Management approachChange Management approachChange Management approachChange Management approachKeep close to your stakeholdersKeep close to your stakeholdersKeep close to your stakeholdersKeep close to your stakeholders


© SABMiller 2014 27

Capability development beyond the transformation Capability development beyond the transformation Capability development beyond the transformation Capability development beyond the transformation programmeprogrammeprogrammeprogramme


© SABMiller 2014 28

Capability build is the critical bridge between strategy Capability build is the critical bridge between strategy Capability build is the critical bridge between strategy Capability build is the critical bridge between strategy and performance and performance and performance and performance


Cap

ability

Deliver

ed

YearF10- F14 F15 – F16 F17 – F20

Trinity Procurement & Country Teams

Globally Integrated Procurement

Procurement Excellence

Buy-Sell Piloting & Scale-up

Op. Centres (POCs) & Global

Procurement Policy (GPP) rolled-out

Supplier Management Ways of WorkingStrategic Sourcing Ways of Working

High proportion of Spend

Transacted through Buy-Sell

Comprehensive Supplier Partnering

Programme

Centre-Led Sourcing Model

Seamless Source-to-Pay Service

Demand Management (through

Closed Loop Value Realisation)

Ways of Working with the Business Procurement Business Partnering Business Integration with Joint Goals

Cash & Cost FocusTotal Value Focus

(Innovation, Sustainability, Quality, Capacity, Risk, Service, TCO)

© SABMiller 2014

Thanks for listening!Thanks for listening!Thanks for listening!Thanks for listening!Any questions?Any questions?Any questions?Any questions?


sabmiller procurement cips, zug speaker...sabmiller procurement transformation cips march 2015 20 no...

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