Procurement Leaders and CombineNet 2012 Webcast: Featuring CEVA Logistics' CPO

Staying focused on procurement’s business value: CEVA’s CPO shares strategy

Jennifer SikoraVP Marketing

CombineNet, Inc

Steve HallModerator

Procurement Leaders

Simon Boggis FCIPSCPO & Executive Vice President Global

Procurement CEVA Logistics

25th September 2012 3:00pm BST | 4:00pm CEST | 10:00am EST

Copyright © 2012. CombineNet, Inc.

Next-Generation E-Sourcing for Increasing Spend Under

ManagementCombineNet Introduction

CombineNet Company Overview


Established in 2000.

Global: Offices in Pittsburgh, PA; London, UK; Hamburg, Germany. Partners for Latin America, Middle East, APAC.

Customers: Global 2000 spanning CPG, Food & Bev, Retail, Manufacturing, Transportation, and more.

The Company The Technology Customer Value

Capture >2X spend under E-Sourcing management.

Address complex spendswith advanced functionality.

Fast implementation and broad adoption for any type of user.

Nearly 100% see full payback after 1st sourcing event.

Best of Breed Solutions that improve Strategic Sourcing – holding 21 U.S. patents.

Software-as-a-Service (SaaS) delivery model for ease of adoption and scale

Easy integration into your environment to complement existing applications.

Best of Breed E-Sourcing Solutions


CombineNetSpend

Analysis

CombineNetContract

Management

CombineNet ASAP

CreateRFxpress for E-RFX or E-Auction

BidExpressive Bidding®Expressive FeedbackEvent Management

AwardScenario Analysis & Bid Optimization

Supporting End-to-End E-Sourcing for All Spend Categories with Advanced Technology Solutions

CombineNet ASAP® for Strategic E-Sourcing

SaaS-based Best-of-Breed product used by sourcing teams and their suppliers.

Speeds, simplifies, and centralizes the creation and management of sourcing events of any size, scale, or complexity.

For any spend category (direct materials, indirect materials, transportation, services).

Complements and enhances existing solutions and processes.

Key Differentiators:

Optimization Engine handles extensive data inputs; 21 patents.

Scenario Builder enables rapid and advanced ‘what-if’ analysis.

Expressive Bidding® and Expressive Feedback support an expressive, collaborative marketplace between buyers and suppliers.

Fast Implementation – 1 ½ day training, quick-start wizards, template uploads, event editing, and more enable fast, smooth adoption and immediate ROI.



Where Do Our Customers Use Us Today?

Based on FY2011 data

Across All Spend Categories:Direct, Indirect, Transportation, Packaging, Services

- Spends Sourced (sampling) -ChemicalsCommoditiesFats & OilsFood IngredientsRaw MaterialsResinsSteel

Capital ExpensesConstruction Mat’sDisplaysFleet VehiclesOffice SuppliesMarketing/MediaTelecom/IT Equip

Air FreightDrayageOceanLTLParcelTruckloadRail/Intermodal

Armored Car SvcsFacility ServicesLaborLegal ServicesMeetingsPrintingTreasury/Finance

Bottles/VialsCansCartonsCorrugateFlexible FilmsPrinted LabelsPallets

From the Routine… 51% of events have <100 items

… To the Complex 20% have >1,000 items 20% have >50 suppliers 18% have >10,000 bids

Increasing Spend Under Management:Large European Conglomerate

>1,000 e-sourcing events conducted annually.Ariba user since 2007.Adopted CombineNet in January 2011.More than 2X Increase in Corporate Spend Managed between years 1 and 2 since implementing CombineNet ASAP.


$7.5 Billion E-Sourced in 2012

(projected)

Ariba CombineNet

2010 2011 2012012345678

Customer Example #1:$ Billion in Spend Managed Annually

Increasing Spend Under Management:Large Retailer

Procurement organization tasked with capturing non-merchandise (Indirect) spend.Long-term Procurement Suite user.Adopted CombineNet ASAP in 2010:– Captured “Sacred-Cow” spends

including Transportation.– With CombineNet ASAP, able to

leverage the collective spend across all stores in sourcing events.

Estimated 225% Increase in Spend E-Sourced in 2 Years


Ariba/SAP CombineNet

2010 2011 20120

0.5

1

1.5

2

2.5

3

3.5

Customer Example #2:$ Billion in Spend Managed Annually

We Do this for Companies Just Like Yours


A Wide Variety of Customers across All Industries

http://www.mcbride.co.uk/

http://www.crowncork.com/

http://www.maersk.com/

CEVA’s Procurement function:Creating superior value

Simon Boggis FCIPSChief Procurement Officer

CEVA in a nutshell

11

Revenue: €7 billion

Employees: over 51,000

Locations: over 1,000

Presence: in over 170 countries

Combined storage space: 10 million sq m

Figures for Year Ended, 31 December 2011

CEVA's Procurement function | Creating superior value

Balanced sector portfolio

12

Automotive 28%

Technology 22%Consumer & Retail 21%

Industrial 16%

Other 7%

Energy 6%


Strong and diversified customer base


CEVA’s Procurement functionDiverse global team

Global team

•Diverse community of procurement professionals•Experienced team with category expertise driving thought leadership and shared best practices•Center-led eSourcing program and strategy.

Rigorous process

•Five step sourcing methodology•Supplier performance management•Balanced scorecard (including risk evaluation).

Supported by innovative technology

•Spend Analysis – C-GAP•eSourcing Solutions•BAIT – savings tracking solution•GUARD – asset redeployment solution.

• Category Management: global, regional and local approach• Supplier Relationship Management: think globally, act locally• Risk Management: assessment, management, monitoring• Global Procurement Accredited by Chartered Institute of Purchasing and Supply


Market conditions are driving requirements for innovative sourcing solutions

• Requirements for better quality and more adaptive service and products

• Demand for higher flexibility in operations

• Ability to foster options and stay flexible – taking into account such “soft factors” as safety, quality, environmental concerns and overall supplier stability

• More demanding end customers

• Classic strategic sourcing modelsare inflexible and in fact limit the options that are on the table

• Traditional sourcing approaches limit the ability of suppliers to suggest or propose alternatives to a standard specification

Increased complexity of the supply chain

Today’s supply chain

Early 2000s supply chain

• Component standardization allows production to be spread globally to optimize costs

• Multi-country sourcing with consolidation hubs before shipping to end customers

• Supply chain control and visibility are critical

• Compliance to regulations throughout the supply chain

Globalization driving increasing complexity

CEVA’s eSourcing evolution (2008 – 2012)

2007 2008 2009 2010 2011 20120

20406080

100

Number of e-Auctions

Advanced eSourcing Traditional Sourcing E-Auctions, Online RFX

• 2008 – Limited Experience. 100% of e-Auctions supported by Global Procurement. Limited Number of eSourcing Champions.

• 2009 & 2010 – Advancing. 20% of addressable spend covered by eSourcing. 51 events conducted in major BUs. eSourcing Policy.

• 2011 - Building Business Unit competency and eSourcing confidence. 75 e-Auctions completed in 2011 covering over €152 million spend. Global three year eSourcing strategy .

• 2012 - Strategic approach for category eSourcing. Increase value proposition for Business Development and Ocean. Accelerate benefits delivery through Advanced eSourcing - CombineNet.

Completed Categories Ongoing

Ground Transportation Packaging Optimization

Temporary Labour Intermodal

Office Supplies and Print Payroll

Packaging

Transport Modelling:

Ground Rail Ocean Air

Security

Fuel Margins

Outsourcing

Marketing

Hardware

Warehouse Racking


Where do we want to be in 2013?

• Penetration of eSourcing tools: exceeds 50% of the total addressable spend of the BU projects in the budgets• Country eSourcing Competencies - at least one ‘proficiency level 1’ within four geographical regions (Northern Europe, SEMEA, Americas, Asia Pacific)

• Drive maximum value from advanced eSourcing solutions (CombineNet)• Realize business wide engagement• Drive eSourcing excellence through organizational capability and impeccable execution

eSourcing Strategy Implementation Objectives

Deliverables

Performance Metrics

• eSourcing integration with analytics tools

• Business Units self sufficient

• Reporting of eSourcing savings

• Extended collaboration with functions and operations teams


CEVA’s strategic approach for category eSourcing Co

mpl

exity

Value/Spend

Advanced e-Sourcing Advanced e-Sourcing

Traditional e-SourcingQuick Wins/Supplier Margin Reduction

Traditional & Advanced e-Sourcing - Maximize Commercial Advantage

Hig

h

High Low

D

AB

C

High complexity and low value/spend initiatives

High complexity and high value/spend strategic initiatives

High value/spend and low complexity initiatives

Low complexity and Low value/spend


Why advanced eSourcing? Categories Sourced with CombineNet

UK Ground Transportation (FTL) Australia and New Zealand Forklift Trucks European Pallets

• €27 million spend, 1,360 Lanes, 42 Suppliers

• Six sites, 119 starting postcode locations

• Five percent savings identified• The right balance of cost and

supply chain value achieved• Stronger carrier relationships

through system engagement• Fast time to market - saved two

to three weeks of data crunching

Key Differentiators:• Suppliers can add value through expressive, creative and alternative bids (equipment type, transit time, volume offers, discounts, capacity levels, rebates)• TCO Modelling – rates, accessorial, fuel• Flexible RFI - analysis of all KPIs (capacity, service levels, sustainability safety and risk factors• Flexible scenario analysis and award optimization - rapidly review the data and compare different possible award outcomes• Real time Expressive feedback – configurable ways to show suppliers their competitiveness • Flexible Training: web-based training for buyers and participating suppliers, comprehensive user guides.

• Netherlands, Belgium, Germany, France

• Top 10 pallets with historic volume of 240,000 pallets, Spend - €1.2 million

• Seven European suppliers engaged

• Nine percent savings identified - RFX advanced sourcing.

• Non price attributes captured: min volume, lead time, payment terms.

• 237 Forklift leases• 20 CEVA sites impacted• Suppliers bid on same template

structure• Comprehensive specifications

made possible• Enabled packages to provide

lower-cost options• Supplier feedback enabled• Savings TBC.

Global spend analytics:Transforming data into value

The value of data with integrity

Data

Challenge• Having a single

source of the truth for both identifying opportunities and measuring cost reduction success

• Ability to implement and track progress on areas such as working capital, contract compliance and invoice rationalization programs

CEVA’s Solution• Spend analysis -

CEVA’s C-GAP - the first and the last step of the strategic sourcing process that drives total value

• “Companies that do Spend Analysis save 67% more than companies that do not.” Aberdeen Group

Benefits• Acceleration of

Sourcing Initiatives

• Driving NWC Improvements

• Supplier rationalization

• Invoice rationalization

• Procurement compliance

• Customer development opportunities


Criticality of data integrity:Data that is processed, organized and structured


C-GAP

ERP ecosystems External Business Risk Data

Integrating spend analysis with eSourcing:Transport modelling illustration

• Scenario building/analytics and optimization enables:

• Information orchestration to meet desired end state•Set-up of agile, scalable solutions to

rapidly sense and respond to changes in customer requirements•Risk mitigation by managing

promotions, demand, seasonal product and ‘early buy’ opportunities• Information visibility to facilitate fact-

based decisions.CEVA's Procurement function | Creating superior value

Compliance

Carrier management

SustainabilityMarket intelligence

Risk scorecard

Working capital

Conclusion

• Procurement professionals assisted with advanced sourcing tools should yield far more than just cost reduction

• In order to continue to advance the procurement profession and delight customers we must continue:- Doing things better- Pushing the boundaries where we never could do before - Ensure continuous innovation is a catalyst for creating superior value.



Q & A

Jennifer SikoraVP Marketing

CombineNet, Inc

Steve HallModerator

Procurement Leaders

Simon Boggis FCIPSCPO & Executive Vice President Global

Procurement CEVA Logistics

25th September 2012 3:00pm BST | 4:00pm CEST | 10:00am EST

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