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NAPM

International PurchasingConference &

Educational Exhibit

New Orleans

30 April 2000

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All Slides Available Monday at

tompeters.com

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WOW!

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Larry > Bill

=Your Moment!

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No Wiggle Room!

Incrementalism is

innovations worst

enemy.Nicholas Negroponte

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It means nothing

less than the total

reinvention of

this company.

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Jacques New New Ford

Ford + MSN CarPointFord + Yahoo!

Ford + OracleFord + HP/MCIWorldcom

Etc.

Etc.

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NAPM: Not Purchasing!NAPM: Not Supply Chain Mgt.

NAPM = TE/IR!*

*Total Enterprise/Industry

Reinvention!

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Forget > Learn

The problem is never

how to get new,

innovative thoughts into

your mind, but how to getold ones out.Dee Hock

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Brand Inside

Brand Org!

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108 X 5vs.

8 X 1*

* 540 vs. 8

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The Pincer 5

Destructive entrepreneurs/ GlobalCompetition

White Collar Robots

THE INTERNET![E.g.: GM + Ford + DaimlerChrysler]

Global Outsourcing[E.g.: India, Mexico]

Speed!!

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RR on Sara Lee

The most profitable

businesses in the future will actas knowledge brokers, linkinginsights into whats available

with insights into thecustomers individual needs

and preferences.

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The &-!!+#$% in the middle*

Jim Clark on Healtheon/WebMD

* twixt docs, patients, insurers and providers;$275B of $400B in waste; source: Michael Lewis,

The New New Thing

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[ Incidentally

CEO Jeff Arnold

Age: 30First Start-up: Age 24]

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We want to be the

air traffic controllers

of electrons.Bob Nardelli,

GE Power Systems

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Buzzsaw.com

Builders, Owners, Architects,

Contractors, Suppliers

$4Tindustry

5,300 commercial bldg.-projectspecs on-line; +70 per day

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Message

Supply Chain Integrationdemands total reinventionof the corporate structure,

systems and culture.

E.g.

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E-business is the

final nail in the coffinfor bureaucracy atGE.

Jack Welch/

GE Annual Report 2000

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Hyperlinks subvert

hierarchy!The Cluetrain Manifesto

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Magic![Inter]networked Markets

meet

[Intra]networked Workers

Source: The Cluetrain Manifesto: The End of

Business as Usual

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The Character of the Web,

perThe Cluetrain Manifesto

HyperlinkedDecentralized

Hypertime

Open, direct accessRich data

Broken [no one owns it or controls it]Borderless

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[ Words to Live By

Hierarchy is anorganization with its face

toward the CEO and its ass

toward the customer.Kjell Nordstrom and Jonas Ridderstrale,

Funky Business]

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Brand Inside

Brand Work!

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Why are there nobooks on how to create

a Cool, Rocking,

WOW-producing

Purchasing

Department?

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Youare theRock Stars

of theB2B Age!

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[I.e.: Welcome to the Y2K

New Orleans Jazz and

Real Cool Purchasing

Dudes Festival!]

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Reward excellent

failures. Punish

mediocre

successes.Phil Daniels, Sydney exec

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You really got to me. Somany of our information technologyprojects take on a life of their own,

and I know theyll never end up asmore than mediocre successes.

CEO, F100 financialservices company (10-98)

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Every project we take

on starts with a question:How can we do whats

never been done

before?

Stuart Hornery, CEO, Lend Lease

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The greatest danger

for most of usis not that our aim is

too high

and we miss it,but that it is

too lowand we reach it.

Michelangelo

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Brand Inside

Brand Talent!

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Issue Y2K

The Great Warfor Talent!

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There is no talent shortage

if

you are a GPTW*

*Great Place To Work

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Our business needs amassive transfusion of

talent. And talent, I believe,

is most likely to be foundamong non-conformists,dissenters and rebels.

David Ogilvy

??????????????????

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??????????????????

He grew his hair long, played

guitar in a rock band, chasedgirls, got into trouble. At age 17

he was flogged by his housemaster, who described him as

the most difficult boy Ive ever

had to deal with.

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Tony Blair*

*talk/May 2000

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Brand Outside

Context:

No Commodities!

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The surplus society has a surplus ofsimilarcompanies, employing similar

people, with similareducationalbackgrounds, coming up with similar

ideas, producing similarthings, withsimilarprices and similarquality.

Kjell Nordstrom and Jonas Ridderstrale,Funky Business

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We make over three newproduct announcements a

day. Can you remember

them?

Our customers cant!Carly Fiorina

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Were getting better at [SixSigma] every day. But we really

need to think about the customersprofitability.Are customers

bottom lines really benefitingfrom what we provide them?

Bob Nardelli, GE Power Systems

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Message (Bud): Thedistributor is dead.Long live the

value-added,

knowledge-intensive

business partner.

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Brand Outside

Strategy 1:

Leadthe Customer!

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Wealth in this new regime flowsdirectly from innovation, not

optimization. That is, wealth is not

gained by perfecting the known,but by imperfectly seizing the

unknown.Kevin Kelly, New Rules for the New Economy

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My NAPM Message 04.30.00

LEADERSHIP!

PERIOD!

Brand Outside

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Brand Outside

Strategy 2:

Use E-Commerceto Re-inventthe

Business! In the network economy the

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In the network economy, the

Website becomes the companysprimary interface to the customer.

The user interface becomes the

marketing materials, store front,store interior, sales staff and post-

sales support all rolled into one.Jakob Nielsen,

Designing Web Usability

Tomorrow Today: Cisco!*

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y

70%

Save $500M (service and techsupport)

Customer Engineer

Chat Rooms($1B?)

C.Sat e >> C.Sat H*Earths MVC

Ch Pi ki

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Cherry PickingVertical Markets

Plasticsnet.com: $370B;sellers pay $5K to $8K for

storefront; 5% to 10% cut

Hook: community services(database, catalogs, forums,

industry job bank, etc.)

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Message

COMMUNITY!/COMMUNITYSERVICES!

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Begin by filling the stadium.Then offer more and more

services. Hopefully, as you addmore on top, the site becomesmore integrated with the work

process, until it is invaluable.Carl Bass, CEO, Buzzsaw.com

Community

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Somewhat mediated, segmentedchat rooms (must be managed/ seeded)

User-friendly technical/ professional infoIndustry intelligence

Some very timely stuff/ attractorsHotlinks by the gazillion(to professional and unrelated stuff)

Expert/ advisor opinions (info, chats, etc.)Opportunity for users to build

own Web page

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Message

B2B is notthe costcutting program du jour!

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Message

Remember the

Soft stuff!*

*Soft = Hard [Waterman & Peters]

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Message [Paradox]

TRUST RULES!

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Speaking of

paradoxes

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B2B

1999 2004: 50X

2004: $7.4

Source: GartnerGroup

(per Reuters 1-26-00)

T

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GM/Ford/DaimlerChrysler (02-27)

Auto parts supply Co.

$240B (+$500B)

I.P.O.

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Goal?Drive profits to

zero!*

*Remember AMR and dynamic pricing.

Anne Busquet/ American Express

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Anne Busquet/ American Express

Not: Age of the Internet

Is: Age of Customer

Control

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Jack on the Webs Naked Truth

You desperately want to haveenough technology in your

product offering, so that you dont

end up being in a commoditysituation.

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Where does the Internet rank

in priority?Its No. 1, 2, 3,

and 4.

Jack Welch

There are 2 Kinds of

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There are 2 Kinds of

Defense*vs.

Offense**

*Fend off upstarts.

**Reinvent our marketspace!

Jargon Bath!

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Bureaucracy free Systemically integrated

Internet intense Knowledge based

Time and location free

Instantly responsive Customer centric

Mass customization enabled.

Translation

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Bureaucracy free = Flat org, no B.S.Systemically integrated = Whole supply chain

tightly wired/ friction freeInternet intense = Do it all via the Web

Knowledge based = Open access

Time and location free = Whenever, whereverInstantly responsive = Speed demons

Customer centric = Customer calls the shotsMass customization enabled = Every productand service rapidly tailored to client

requirements

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Brand Outside

Strategy 3:

Its the Experience!

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Experiences are asdistinct from servicesas services are from

goods.Joseph Pine & James Gilmore, The

Experience Economy: Work Is Theater &

Every Business a Stage

The [Starbucks] Fix Is on

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We have identified a third

place. And I really believe thatsets us apart. The third place is

that place thats not work orhome. Its the place our

customers come for refuge.

Nancy Orsolini, District Manager

Experience: Rebel Lifestyle!

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What we sell is the ability for a

43-year-old accountant to dress inblack leather, ride through small

towns and have people be afraidof him.

Harley exec, quoted in Results-basedLeadership

Mantra: Any good can be ing-ed

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the drivingexperience

the pumpingexperiencethe sittingexperience

the readingexperiencethe washingexperience

the cookingexperience

Joseph Pine & James Gilmore, The Experience

Economy: Work Is Theater & Every Business a Stage

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Think

Supply Chain-ingB2B-ing

This is the end of the pure

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This is the end of the pureproduct era. For instance, car

makers are beginning tounderstand that the car is a

platform for delivering servicesthat drive the customer

experience.Carly Fiorina, HP @ Comdex 99

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Brand Leadership

Passion Rules!

Brand Leadership!

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A key perhaps the key

to leadership isthe effective

communication

of a story.Howard Gardner

Leading Minds: An Anatomy of Leadership

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Brand Leadership:ENTHUSIASM RULES!

I am a dispenser ofenthusiasm/ Ben

Zander

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Message to NAPM:You are

Re-invention

Evangelists!

Ann Richards Dogma

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g

Show up!

Know your message!

PUT YOURSELF

AT RISK EVERY DAY!

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This is yourmoment. This is

your game to lose or WIN. Now!