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Orange County Convention Center

Orlando, Florida | May 15-18, 2011

Global Procurement Transformation at INVISTA

Gerald Beachum

INVISTA S.à r.l.

Michael Cheatham

Deloitte LLC

Real Experience. Real Advantage.

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INVISTA S.à r.l.

INVISTA: one of the world’s largest integrated producers of polymers and fibers

Primarily nylon, spandex and polyester applications

Operates in more than 20 countries

Subsidiary of Koch Industries, Inc. acquired from DuPont in 2004 & combined with KoSa

History of innovation and leadership

Enriching daily life: clothing, carpets, luggage, plastic bottles, automobile parts, airbags and

more

More than 700 unique patents & significant intellectual property

Focus

Creating long-term value for customers and society

Using resources more efficiently

Protecting the environment and the safety and health of our employees and others

Minimizing waste and improving the environmental, health and safety

aspects of our products and processes

Hiring and retaining talented and committed employees

Pursuing growth through acquisition and expansion

Real Experience. Real Advantage.

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Qualifications

Deloitte Consulting, LLP

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▪ Deloitte is recognized by our clients and external analysts such as Kennedy Consulting Research and Gartner

as a market leader in Supply Chain Transformation

▪ Our Supply Chain Transformation growth rate, practice size, market momentum, and depth & breadth of

capabilities out-perform our competitors

▪ Our broad experience in Supply Chain Transformation across major industry sectors provide us with a

differentiating position to deliver industry-leading solutions

▪ We offer a strong multidisciplinary approach that spans strategy & vision, organization, process, and

technology

▪ Our professionals are hands-on who have served as trusted advisors to executives

▪ Our professionals understand the interdependencies that exist between the supply chain and the linkage to

supporting the overall corporate strategy

▪ Our commitment to our clients include access to timely, valuable thought leadership concerning the issues

faced by Supply Chain executives

▪ We actively share our experience with the Supply Chain community through multiple channels

(examples….Regional Executive Roundtables, Webinars, Surveys, Points of View, and Conferences)

Market

Leader

Breadth &

Depth

of Service

Thought

Leadership

Top Talent

Reasons

As a full-service professional services firm and a recognized market leader, we are well positioned

to assist our clients in solving complex transformation issues and deliver shareholder value.

Real Experience. Real Advantage.

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Learning Points

Transformation Requires a Holistic Vision

Transformation Requires an in Depth Understanding

SAP Applications Can Be Very Effective Tools to

Enable the Journey When They Relate to the

Business Requirements

Real Experience. Real Advantage.

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Procurement Global Vision

Strategic Sourcing

Implement a global sourcing capability for products, equipment and

services where significant value is created through effective supplier

development, aggregation and leveraged market competition through

new system tools.

Efficiency and Automation

The efficiencies to facilitate this strategic sourcing will be gained

through utilization of electronic vender collaboration, improved

internal knowledge systems and automation of +80% of purchases made

directly online by INVISTA consumers.

Talent

Success will be driven by developing the talent capable of and willing to

drive the change from transactional procurement to strategic sourcing.

Real Experience. Real Advantage.

[ INVISTA’s Procurement Transformation Focus

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SOURCING

PROCUREMENT

Identify

NeedCreate Requisition

Route Approval

Create Purchase

Order

Coordinate

Delivery

Receive Goods/Services

Authorize Payment

& Settlement

Analyze SpendDefine Sourcing

Strategy

Negotiate Contract

Qualify vendors

Manage Contract

VENDOR

MANAGEMENTDevelop Preferred

Supplier Relationships

Initiate Relationship

& Facilitate

CommunicationDefine Performance

Expectations

Manage Performance

Assess Relationship

Three Major Functional Areas:

Real Experience. Real Advantage.

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Transformation

Develop Broad Understanding of the Vision

Document All Processes Related to the Vision

Understand the Current State

Document the Gaps

Define the Improved Processes

Define the Paths to Achieve Improvement

Strategic Sourcing

Analytics

Data Management

Transactional Procurement

Change Management

Continuous Sponsorship for Improvements

Talent Must Keep Pace with Processes and Tools

Real Experience. Real Advantage.

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Strategic Sourcing Processes and Tools

Drive for Significant Value Creation

Electronic Auctions and Negotiations

Strategic Project Deliverables

Accurate Estimates

Creditable Results

Supported by Our Business Leaders

Contract Management

Cycle Time Reduction

Tools for Enablement

e- Sourcing

Spend Analytics

Key Performance Indicators

Enterprise Portal

Real Experience. Real Advantage.

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Efficient Procurement Processes & Tools

Standardize Processes and Guidelines to Eliminate Waste

Automation of Purchases

Electronic Communication

Vendor Collaboration

Efficient Invoice Management

Business Process Tools

Automation within ERP Systems

SAP Supplier Relationship Management

SAP Supplier Self Service Portal

SAP Master Data Management

Vendor Invoice Management – OpenText

Technical Project Management -

SAP Solution Manager for Work Stream Activity

Real Experience. Real Advantage.

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ResultsMajor Area Business Case Benefit Driver Goal 2010 Comments

Strategic

Sourcing

Savings vs. Procurement Spend 4.3% 5.3%

Auction Savings for Sourced Purchases 10 - 20% 15%Project = 10%

2010 Goal 20%

Contracts Created ~60/month

Transactional

Procurement

Automatic Purchase Order Items- Materials 54.3%Historically 32%

Continuing to Improve

Automatic Purchase Order Items– Services 19.5%Historically 2.5%

Continuing to Improve

Total Automatic Procurement Purchases 80% 48%

173,370 Automatic PO

Line Items

Historically 26% - Improving

Purchase Order Price Changes44,404

23% of PO’s

Historically 44% - Improving

Electronic & ERS 34.2% 98,105 Electronic + ERS

Blocked & Parked Manual Invoices (US & CA)19.0%

Improving During 2010

Vendor

Portal

SAP e-Sourcing Vendor Contacts ~5,600

Order Acknowledgment, Reports, Quick Bids 215 Vendors

Real Experience. Real Advantage.

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Key Learning's

Transformation Requires a Holistic Vision

Transformation Requires an in Depth Understanding

SAP Applications Can Be Very Effective Tools to

Enable the Journey When They Relate to the

Business Requirements

Real Experience. Real Advantage.

[

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