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transcript
Procurement Journey to Excellence Stakeholders Management
NEVI, June 2013Kees Gerretse
CPO Tata Steel Group
Roadmap to Procurement Functional Excellence
Agenda
─ Tata and Tata Steel Group─ Procurement overview─ The journey ; Benchmark
Vision and principlesOperating model and stakeholdersRoadmap and projects
─ Achievements─ Next challenges
Total transformation project of Procurement Function
3
Tata Group is one of the world’s fastest-growing and most reputable corporations
Tata Group
• Tata businesses span 7 major industry sectors
• India’s largest private sector employer, with over 425,000 employees worldwide
• Operations in more than 80 countries• Total revenue in 2011-12: $83.3 billion• International revenues (from outside India) grew from
$3.2 billion in 2003-04 to $48.3 billion in 2011-12 (= 58% of Group revenues)
• Tata ranked the world’s 45th most valuable brand in 2012 at $16.34 billion (Brand Finance)
• Rated the world’s 11th most reputable company in 2009 (Reputation Institute)
4
Tata Steel is one of Tata’s largest companies
Largest companies
• Tata Steel• Tata Motors• Tata Consultancy Services• Tata Power• Tata Chemicals• Tata Global Beverages• Tata Communications• Indian Hotels
5
Tata Steel Group is a top 12 steel producerand a Fortune 500 company
• 2007: Tata Steel acquired Corus
• 2010: Corus rebranded to Tata Steel
• Tata Steel Group:• Annual crude steel capacity
of 27 million tonnes• Around 81,000 employees• Manufacturing operations in
26 countries across 5 continents• Present in both mature to emerging markets• Serving customers all across the globe • Turnover 2011-12: $26.13 billion
(2010-11: $26.6 billion)
66
Steel making operations
Distribution and downstream assets
Mining assets and projects
NML Canada(iron ore)North America
WesternEurope
Scandinavia
CIS
WesternAfrica
Ivory Coast(iron ore)
South Africa
Latin America Mozambique
(coal)
Turkey
CEE
China Japan
Australia(coal)
INDIA
Jharkhand
Oman(limestone)
Hong Kong
New Zealand
Sales and commercial centres
SE Asia
Tata Steel is present in both mature anddeveloping markets worldwide
What did we buy?
7
ORE
COAL
SCRAPSTEEL & EXTERNAL PROD.
PROCESSING
TRANSPORTMAINTENANCE SERVICES
RAW MATERIALS
MRO ‐ GOODS
ENERGY & UTILITIES
CAPITAL INVESTMENT
ALLOYS
REFRACTORIES
SITE & FACILITY SERVICES
PRODUCTION SERVICES
CORPORATE SERVICESMETALS
INDUSTRIAL MIN & FLUXES
CHEMICALSPAINT & COATINGS
IT SOFTWARE, HARDWARE AND TELECOM
INDUSTRIAL GASES ROLLS PACKAGING LEGISLATIVE & DISCRETIONARY SPENDCOKE
#
Total = £11bn
Who spend how much?
8
0
500.000.000
1.000.000.000
1.500.000.000
2.000.000.000
2.500.000.000
3.000.000.000
3.500.000.000
TS India TS UK TS MLE TS Raw Material TS Thailand Natsteel Singapore
TSG Spend 2013/14£GBP
Total = £11bn
Tata Steel Procurement journey
The integration and evolution of the procurement function continues to drive value creation through SRM
Mining acquisition
and partnerships
9
Procurement Operating Model
Information Exchange
Synergy Achieved> $100m
Synergy Targets
Lead Buyers Appointed
Value CreationIn hubs >$100m
H2 move beyond network
organisation?
H2 include NatSteel & TSTh
effectively?
H2 create global structure to
support TSG?
2007 2009
Vision & principles
Central and lead buying
2008 2010 2012
SRM
Category lead
organisation
ProcurementOperating
Model
Regional integration
2014
Tactical Strategic
Group IT strategy
deployment
Capability impr / proc academy
10
Procurement Global Operating Model
Operational Processes
1 ‐ Strategy & Direction1.1Procurement
Strategy & Vision
1.2Principles, Standards & Policies
1.3Targets Setting &
Measures
2 ‐Managing Procurement2.1
Capability & Capacity Planning
2.2Roles &
Responsibilities
2.3Procurement Roadmap
2.4Procurement &
Business Planning
6 ‐ Supplier Relationship Mgmt6.1Supplier Value
Creation
6.2Supplier
Relationship &Performance
Supp
liers
4 ‐ Internal Customer Management4.1
Business Engagement Strategy
4.2Stakeholder Management
4.3Compliance Management
Day to Day
Group
Businesses & Functions
3 ‐Managing Categories3.1Category Strategy &
Target Setting
12 3
3.2Category Approach Activity Definition
1 2 33.3Hub & End User Involvement
Categories
Strategic Execution
Category / Hub Level
7 ‐ Transactional Systems & Procedures7.1
Business Spend
Commitment
7.2Order
Placement & fulfilment
7.3Supplier Payments
7.4Benefit
Tracking & Realisation
7.5Master Data
7.6Spot Buying
7.7Short Term Demand Planning
Hub Led5 – Managing Spend and Benefit Realisation
5.1Source To Contract
5.2Spend &
Compliance Reporting
5.3Commercial Risk Management
5.4Contract Execution
Management
5.5Strategic Supplier
Management
Category Led
Procurement Integration and functional excellenceFocus on:
• Governance
• People and processes
• Supplier- and end user engagement, SRM/TCO/SVM
• Enablers, e.g. IT roadmap
In order to make the function more effective and efficient
Overview of Strategy Development - Procurement
Global external benchmarking
Tata Steel Group
Tata Steel India
Tata Steel Europe
NatSteel
Asia
Tata Steel
Thailand
McKinsey & Company 5
Working D
raft -Last Modified 04/10/2010 10:53:02
Printed 04/10/2010 10:44:34
|
? Mindsets andaspirations
? Strategic value chain impact
… With the GPE score improving for many sites since 2006/8
Drivers
Average
SOURCE: GPE Team of McKinsey
? Strategic alignment and posture
? Talent management
? Category purchasingprocesses
? Organizational structure
? Cross-functional collaboration
? Knowledge and information mgmt
? Performance management
? Category value-creation strategies
Capabilities and culture
Category management and execution
Structure and systems
Strategic alignment & posture
Top quartileMetals
3.3
4.1
4.0
3.7
3.1
3.7
3.2
3.3
4.0
4.1
3.6
Overall Summary
Central & Global(n1=8)
3.2
3.5
3.1
3.8
2.9
3.2
3.4
3.0
3.6
4.0
3.4
2008 results:3.2 Corus3.3. TSI
Areas of relative strength
Tata Steel UK(n1=7)
3.0
2.9
2.8
3.4
3.4
3.0
3.4
3.0
3.3
2.3
2.7
Tata Steel India(n1=4)
3.3
3.5
3.6
3.5
3.7
2.8
3.1
3.0
3.5
4.1
3.4
Tata Steel NL(n1=5)
3.7
2.8
3.3
3.7
2.9
3.4
3.5
3.3
3.0
4.2
3.4
Tata Steel Thailand(n1=5)
2.7
3.3
2.5
2.3
2.0
2.0
2.4
2.0
2.8
3.7
2.6
NatSteel(n1=3)
3.3
2.5
2.0
2.8
2.6
2.3
3.0
3.7
2.0
3.3
2.8
1 Number of interviews
TSG 2010 weighted averagescore of 3.3Feeds used to
develop the procurement
strategy
Raw Materials
Bulk ShippingAlloys
ScrapRefractories
EnergyMetals
MineralsRolls
Paint
MRO Goods
Services
CorporateServices
CapitalSteel
OtherTransport
Categories & Markets
Global best practice & trends
Tata Steel Corporate & Business objectives
1McKinsey & Company 5
Working D
raft -Last Modified 04/10/2010 10:53:02
Printed 04/10/2010 10:44:34
|
? Mindsets andaspirations
? Strategic value chain impact
… With the GPE score improving for many sites since 2006/8
Drivers
Average
SOURCE: GPE Team of McKinsey
? Strategic alignment and posture
? Talent management
? Category purchasingprocesses
? Organizational structure
? Cross-functional collaboration
? Knowledge and information mgmt
? Performance management
? Category value-creation strategies
Capabilities and culture
Category management and execution
Structure and systems
Strategic alignment & posture
Top quartileMetals
3.3
4.1
4.0
3.7
3.1
3.7
3.2
3.3
4.0
4.1
3.6
Overall Summary
Central & Global(n1=8)
3.2
3.5
3.1
3.8
2.9
3.2
3.4
3.0
3.6
4.0
3.4
2008 results:3.2 Corus3.3. TSI
Areas of relative strength
Tata Steel UK(n1=7)
3.0
2.9
2.8
3.4
3.4
3.0
3.4
3.0
3.3
2.3
2.7
Tata Steel India(n1=4)
3.3
3.5
3.6
3.5
3.7
2.8
3.1
3.0
3.5
4.1
3.4
Tata Steel NL(n1=5)
3.7
2.8
3.3
3.7
2.9
3.4
3.5
3.3
3.0
4.2
3.4
Tata Steel Thailand(n1=5)
2.7
3.3
2.5
2.3
2.0
2.0
2.4
2.0
2.8
3.7
2.6
NatSteel(n1=3)
3.3
2.5
2.0
2.8
2.6
2.3
3.0
3.7
2.0
3.3
2.8
1 Number of interviews
TSG 2010 weighted averagescore of 3.3
Stakeholders
Governance
Procurement Roadmap
Processes Systems/ToolsManaging the Spend
Year #1 Year #2 Year #3
Vision
SavingsReconfirm savings rules
100% visibility: Common definition of spend
100% visibility: Master data/sourcing codes
Maverick Buying : Define term and est. as is
Savings : Agree process for target settingRisk Mgmt
: Fit with group policies
Inventory : Define SMT view & options
Savings : Deploy common savings report tool
Capital Spend : Agree group policy
Maverick buying : Utilise approp tools
OP model L1 : Refresh Operating Model
Share & Learn : Define best practice approach
OP model L2 : Develop & roll out
End User Engmt : Define overall framework
Contract Mgmt : Define as is
SRM : Define scope & tools & approach
Contract Mgmt : Dev. framework of models
SRM : Provide module rollout
ISO : survey of network & action plan
SAP : Finalise UK implementation
Eproc : Map as is and define best practice
IT needs : define proc governance
SAP : Dev global repoting template /tool
IT needs : Create portfolio of proc needs
SAP : Clarify rollout at smaller sites
ISO : Review objective of accreditation
TBEM : Define as is and action plans
Lead buyers to identify network
SMT to confirm lead buy network & support implementation
Comms plan to stakeholders incl op model implications
Central group –Define competence & job descriptions
Central group –Define & roll out competence model
Define review process and coverage of people
Identify critical positions and succession approach
Ensure models for development etc for non central team
Succession planning & Mgmt Dev linked to wider group
Deployment of policy to non central team
Dev comms plan for procurement as career
International talent mgt policy from HR
Deploy Comms plan for procurement as career
TSG compliance guidelines (CSR,CoC etc)
Describe & confirm process, rules & respons of lead/local/central
Review corp authority policies
KPI tree & review process defined
OP Model updated
Agree corporate proc policies
I will ask Inge to schedule a meeting to review the slides which I will then address in the GPMT.
2012-13 2013-14 2014-15
Strategy Development -
Supplier Relationship Management and End User Engagement
People and Organisation
Systems Strategy
Deploy common toolkit and database
Deploy standards for supplier performance measurement
Deliver solutions to identified information needs
Develop Supplier Award programme
Value creation activity with suppliers and end users in all hubs
= GPMT Review
Develop GPMT kpis and monitors
Implement Procurement Academy Talent development programmes progressed through Procurement Academy
Create and embed sharing and learning programmes – KEGs, secondments, etc.
Programme to encourage innovation – e.g. GPMT-sponsored submissions to Innovista and TSE CEO Awards
Standardise job specificationsCapability assessment of analysis requirements
Establish common tools to support efficient sourcingConvergence strategy for regional ERP systems to drive towards a common best P2P process
Deploy GPMT governance to implement IT Roadmap
Determine information needs at Group level (spend, supplier, master data) and programme to deliver
Develop Group master data capability for process efficiency – systems and organisation
Embed Lead Buying approach across existing categories Review Lead Buying portfolio and extend where appropriate
Develop and deliver Rightsizing activities
Develop tools and systems to support effective and efficient Procurement
Drive Supplier Plan coverage (by spend) across Group
Deploy Responsible Procurement policy
3 year roadmap to excellence
15
Objective Goal CommentsEnsure that Group
Procurement is a safe and healthy place to
work
Zero LTA and sickness rate of 2% in function
Health & Safety remains a critical priority. Whilst risks are lower than operations, there are risks nonetheless that we need to manage
To source responsibly 100% compliance to Responsible Procurement Policy
With the launch of the Responsible Procurement Policy, the activities here will support the realisation of this policy and will include audits, surveys and increasing consideration of sustainability in sourcing decisions
Ensure best value from supplier relationships
Defined relationships with suppliers cover more than 80% of
the spend base
The SRM toolkits have been tested and deployed; the emphasis now will be actions and measures that demonstrate the value creation opportunities that exist with the supplier base.
To deliver Group savings target
Group Target (TSE from CEO; TSL/TSTh/ NatSteel from MD
TSL)
Savings may not be the absolute driver for the function, but they remain a constant feature. Each team and hub will have targets to achieve and plans behind these in category strategies and sourcing plans.
Ensure security of supply whilst optimising stocks
of raw materials
Risk Management tools ensure no disruption events to production
supply chains
Commodity price volatility and supply chain shocks are real issues for all producers; the Procurement teams need to deploy multiple strategies to deal with differing objectives in hubs and the state of various commodity markets.
Create global functional excellence
Top quartile of McKinsey benchmark for all parts of TSG
Procurement (score of 3.6)
The development of the Operating Model, the use of the Procurement Academy for training, Management Development platforms and the implementation of best practice in all processes must be constantly worked on if the function is to realise the value creation targets it has been set.
To have world class systems to support global procurement
Common global infrastructure to cover ERP & e-sourcing
Moving to category management drives sourcing as the main activity, not purchase to pay. Therefore systems need to be in place to make sourcing efficient as well as effective. A global approach will be used with SAP as the primary platform for the whole source to pay process.
Common global infrastructure to cover reporting, information
management and MDM
To ensure the sourcing process is faster, more effective and results measured, the approach to data quality and reporting has to be stepped up and the use of BI and MDM exploited for the organisation.
Annual Plan Objectives – OGSM Procurement & Transport Annual Plan 2012-13
SRM will be at the heart of Procurement’s objectives and activities
17
Top management engagement
End user engagement
Change leadership
Supplier engagement
Spend analytics
Category strategies
Procurement Academy
Performance management
Across these Operating Model sections TSG’s SRM approach creates the right focus in managing supplier relationships
TSG’S SRM PROCESSES AND TOOLS
Note that a category strategy is a key pre-requisite for the entire SRM process, and that the SRM process may itself generate inputs to category strategies
Pre-screening Segmentation KPI setting Value management
1. 2. 3. 4. Tools Detail Regular
supplierKey
supplierStrategic partner
Potential partner
Supplier Relationship matrix
Which TSG contacts involved in relationship?Which senior managers involved?How are KPIs governed?
If plan to develop
to strategic partner; treat as
partner, if not treat
as regular supplier
Risk mitigation plan Is there a risk plan either in the category strategy or through the contract sourcing processes? If not we will direct to existing tools.
Value creation process
Standardized process to identify and deliver value creation projects
Managing exit checklist
A checklist for managing the exit process of a supplier
Value recovery process
Tools Detail Regular supplier
Key supplier
Strategic partner
Potential partner
Supplier Relationship matrix
Which TSG contacts involved in relationship?Which senior managers involved?How are KPIs governed?
If plan to develop
to strategic partner; treat as
partner, if not treat
as regular supplier
Risk mitigation plan Is there a risk plan either in the category strategy or through the contract sourcing processes? If not we will direct to existing tools.
Value creation process
Standardized process to identify and deliver value creation projects
Managing exit checklist
A checklist for managing the exit process of a supplier
Value recovery process
0.
Category preparation
• Select part of category to apply SRM to
• N/aSRM tools
Activities
TSG’s approach to Strategic Supplier Management
• Select suppliers for segmentation exercise
• Pre-screen tool
• Execute segmentation
• Segmentation tool
• Set KPIs for suppliers in all segments
• KPI model• Set KPIs process
• Create supplier plans • Define value management
per segmented supplier
• Value management toolbox – Supplier relationship matrix– Processes for value
creation & recovery– Exit management checklist
Transformation KPI’s
• Double saving opportunities, transparent in benefit tracking System; Link to P&L
• # TCO/SVM projects part of SRM roll out
• Contract coverage, spend segmentation, # strategic suppliers
• Cost of the function (cost and FTE); 20% efficiency improvement
• Competence/skill assessment. Split strategic and transactional sourcing
• Tata Steel Group Procurement Academy
• Compliance procurement operating model
• Working Capital stores and Raw Material
18
Decision tree for degree of centralisation of purchasingDecision criteria:
1) Procurementvolume
2) Business/sitecommonality
3) Supplier common-ality across commo-dity categories 4) Usage mix
1
2
3
4
4
3
Low
High
Cross-business coordination needs
Structural mechanism
• Centralized purchasing
• Local purchasing
Product/service items/groups within a natural supply market*
Large
Small
Multiple site/BU
Single site/BU
Common suppliers
Unique suppliers
Common suppliers
Unique suppliers
Even dis-tribution among users
Even dis-tribution
Majority user
Incr
easi
ng c
oord
inat
ion
requ
irem
ents
Majority users
* Local, regional or globalSource: McKinsey
Reference: Building a world-class purchasing organization and superior sourcing capabilities; Khosro Ezaz-Nikpay
• Lead buyer
Principles for Category Management
Category Management Overview
21
Category Approach in Organisation Procurement ApproachOre TSG Central Buying
Coal TSG Central Buying
Coke TSG Central Buying
IT TSG Central Buying
Inbound Shipping TSG Central buying
Outbound Shipping TSG Lead Buying (Central in TSE)
Logistics & Transport TSG Lead buying(Central in TSE)
Alloys TSG Lead buying(Central in TSE )
Metals TSG Lead buying (central in TSE)
Industrial Gases TSG Lead buying (central in TSE)
Refractories TSG Lead buying
Rolls TSG Lead buying (central in TSE)
Scrap Hub Lead buying
Minerals Hub Co-ordinated
Energy Hub Co-ordinated (central in TSE)
MRO Goods Hub Co-ordinated
Services Hub Co-ordinated
Corporate Services Hub Co-ordinated
Paint Hub Co-ordinated (central in TSE)
Procurement Organisation
22
IT (Lead Buying)
Group Director, Shipping & Logistics Operations
Amitabh Panda
Director Raw Material & Process Consumables
Anthony Farrand
Director Procurement Development
Dennis Houdijk
Director Procurement UKKen Milne
Director Procurement Mainland EuropeJacob Gerkema
Chief Procurement Tata Steel LimitedAmitava Bakshi
Head, Corporate Supply Chain Mgt, NatSteelMiss Tan Man Ee
Vice President Procurement Tata Steel Thailand
Kuhn Paytoon
MD Tata SteelHM Nerurkar
Group Director ProcurementKees Gerretse
Supported by offices in Shanghai, Prague and New York. Linked to Tata Steel International.
CEO Tata Steel EuropeK Kohler
Manning AP-FY13-TSE 388- TSL 95- SEA 80- other 35
598
Functional excellence & world class performance
• Regular benchmarking to evaluate performance and opportunities to improve
• Established multi year excellence and IT roadmap
• Functional excellence projects for Tata Steel Group procurement led by central procurement development team and supported by local proc dev community
23
• Established a truly global community with a culture open for ambition and change
• Local presence engaging with hub stakeholders
McKinsey & Company 5
Working D
raft -Last Modified 04/10/2010 10:53:02
Printed 04/10/2010 10:44:34
|
? Mindsets andaspirations
? Strategic value chain impact
… With the GPE score improving for many sites since 2006/8
Drivers
Average
SOURCE: GPE Team of McKinsey
? Strategic alignment and posture
? Talent management
? Category purchasingprocesses
? Organizational structure
? Cross-functional collaboration
? Knowledge and information mgmt
? Performance management
? Category value-creation strategies
Capabilities and culture
Category management and execution
Structure and systems
Strategic alignment & posture
Top quartileMetals
3.3
4.1
4.0
3.7
3.1
3.7
3.2
3.3
4.0
4.1
3.6
Overall Summary
Central & Global(n1=8)
3.2
3.5
3.1
3.8
2.9
3.2
3.4
3.0
3.6
4.0
3.4
2008 results:3.2 Corus3.3. TSI
Areas of relative strength
Tata Steel UK(n1=7)
3.0
2.9
2.8
3.4
3.4
3.0
3.4
3.0
3.3
2.3
2.7
Tata Steel India(n1=4)
3.3
3.5
3.6
3.5
3.7
2.8
3.1
3.0
3.5
4.1
3.4
Tata Steel NL(n1=5)
3.7
2.8
3.3
3.7
2.9
3.4
3.5
3.3
3.0
4.2
3.4
Tata Steel Thailand(n1=5)
2.7
3.3
2.5
2.3
2.0
2.0
2.4
2.0
2.8
3.7
2.6
NatSteel(n1=3)
3.3
2.5
2.0
2.8
2.6
2.3
3.0
3.7
2.0
3.3
2.8
1 Number of interviews
TSG 2010 weighted averagescore of 3.3
What are we doing to face this challenge?
• Major projects
Regional integration (EPP, PRIDE)
SRM deployment
Procurement Academy
Responsible Procurement
Procurement Operating Model
Data Quality & Reporting
Performance Management
CSR deployment in procurement
Communications & Profiling
24
Projects – Procurement Academy
Procurement Academy
• Improving the functional skills of the function through identifying skill gaps and offering training to close these gaps
• Sponsor: Elly Oude Elferink (H. vdHoogen)
• Skills matrix developed for Procurement skills + Generic Business skills.
• Now validation phase: jobs are plotted by working group members
• Roll out to be completed by end of FY14
25
Stakeholders network ; Connection
To communicate and challenge stakeholders
─ Central – and leadbuying on different locations─ Sharing and learning in the function─ Global, regional and local suppliers─ Local end users ─ Finance, supplychain,sales and marketing , executives─ etc
Projects – Communications & Profiling
Communications & Profiling
• Value creation through improved communication within the function, to Tata Steel stakeholders and to wider supply base via clear and consistent messages.
• Owner: D Houdijk(R Keeble/A Little)
• First Group Procurement messages to go live in May and June 2013
• Further communication channels to be implemented throughout 2013
27
Achieved in 2 years transformation process
• One fully integrated procurement organisation ; centre led function manage on executive level
• One global operating model
• Full global category management (70 % central/lead buying)
• Professional SRM introduced , split transactional and strategic sourcing ; set up shared service in India and downstream
• Improve end user engagement/ cross functional working
• Established global spend visibility
Resulted in :
• More then doubling savings/TCO in last 3 years (300 m$ to 700M$.
• Reduced cost of the function with 15% , next year 10% again.
• Reduced spare part WC with 25% and Raw Material WC with 33%
Next phase; step change
Crisis still not over and continues in steel
─ Cash / spend management─ Procurement to challenge more─ Have the right people to be able to do this; competence
management─ Further efficiency ; Pan European integration of new categories,
also in India and SEA─ Split further transactional; and strategic sourcing. ─ IT landscape; automation & integration supplychains, improve
planning; more offshoring and SSC
Thank you
Back up
Procurement financial benefits FY13
32
impact in m£ EBITDA1 Cost mitigation Cash Total realized
RM & PC-EU 101 1 102RM & PC-Asia2
Scrap-Asia2
Scrap-EU2
Shipping & Logistics – EU 49 5 54Shipping & Logistics – Asia2
UK 64 32 11 107MLE 31 18 5 54India 31 n.a. 31TSTH 7 n.a. 7Natsteel 25 n.a. 25IT (Group) 2 n.a.
Total 338 17 355
1EU EBITDA savings tracked in OGSM refer to baseline FCII-FY112 Savings not reported separately in FY13
Price Focus
Development
Valu
e C
reat
ion
As we focus on value Our users, functions and suppliers work more closely
Proc User
Suppliers
Proc User
User
The source of value has changed …
Changing Procurement Objectives
33
• The shift from price to value has been underway for some time & Procurement teams have adopted new methods of working
• It is now the dominant method to drive improvement
• This has implications for resources in both Procurement and businesses
ProcurementProcessFocus
ProcUser ValueFocus
Group Procurement OGSM Benefits & Free cash2
20
30
0
11
60
5
1
24
1
5
20
1
2
10
11
74
2
42
4
3
30
97
0
139
6
68
12
9
7
5
020406080
100120140
160180200220240260280300
PUKOwned
PUKBusiness
PMEOwned
PMEBusiness
S&LoBusiness
S&LoOwned
RM&PCBusiness
RM&PCOwned
Total
DoH1
DoH4
DoH2
DoH5
DoH3
Annual plan target 205 m£ business owned, 111 procurement owned282
2 Total of OSGM strategies with EBITDA impact and Free cash
Procurement & Transport Annual Plan 2012-13
Responsible Procurement Policy
Launched in 2011, this will guide the approach to procurement in 5 key areas that represent greater responsibility in sourcing, namely
• Fair Business Practice • Environment • Human Rights • Local Community Development • Health & Safety
Allocation of Headcount to Activity 2013/14
Servicing area / aActivity
Group Procurem
ent
MLE2 UK (inclDownstr
eam Ops)
MLE Downstream Operations
India Thailand Singapore Total
Group Director 3 3
RM & PC 30 1 31Shipping & Logistics 32 32
Procurement UK3 159 159
Procurement MLE1,4 87 31 118
Development 5 5
Kalzip 17 17
India 88 88
TSTH 51 51
Natsteel 24 24
IT 12 12
Total 82 87 159 48 89 51 24 5411 Procurement MLE includes 2.5 FTE UK energy3 5 FTE for EPP not included4 MLE numbers are FTEs instead of headcount
Projects – European Procurement Programme (EPP)
European Procurement Programme
• The European Procurement Programme is an 18 month programme which is designed to integrate the processes, systems and organisation of Procurement across Tata Steel in Europe, aligned to the principles of category management.
• Owner: Ken Milne
• Work streams are being set up covering European Category Management, Organisation Design, Capability, Processes and IT. A Programme Management Office has been established under a steering Group that includes the key leaders of the Procurement organisation across Europe.
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Projects – P.R.I.D.E
Project PRIDE – includes integration of KPO
• Project P.R.I.D.E. is a journey towards a best in class procurement organization entailing three key focus areas processes, systems and organisation of Procurement across Tata Steel in India – including the integration of KPO.
• Owner: Amitava Bakshi
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Plant warehousing
structure & design
Organization& Governance
redesign
Procurementprocess
excellence
Best in class Procurement Organization
• Demands on procurement function significantly increased, driven by increasing business complexity at Tata Steel. The project will address processes, organization and plant warehousing
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Projects – SEA integration feasibility study
SEA integration feasibility study
• Following the global integration initiatives in Europe and India a feasibility study is planned to to identify the potential value of integrating category management cross SEA.
• Owner: K. Paitoon and Tan Man Ee
• A charter for the feasibility study is drafted and it is expected to complete the study by June/July 2013
Projects – Global SourcingStreamline Global Sourcing activities in order to boost Value Creation & GS savings
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• Dedicated teams in China and Eastern Europe to support procurement hubs
• A number of challenges did not support increasing GS spend• Now commitment of GPMT & end-users on GS• Through dedicated & trained teams embed GS processes in TS
organisation (hubs and GS regions).
Together we make the difference