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Copyright 2008 www.SourceOneInc.com
Strategic Sourcing &
Cost Reduction
Procurement Service Provider
Specializing in:
Copyright 2008 www.SourceOneInc.com
Source One Can Help
Copyright 2008 www.SourceOneInc.com
Sourcing Challenges
Maximizing Savings Can be Difficult Do you know...
• If your internal sourcing team has the resources to adequately cover all categories?
• Whether savings are lost because you don’t have the time to get to all categories?
• The usage, suppliers, specifications and price paid for all categories of spend?• Who is spending within the organization?• What you are spending on beyond the top few categories?• Where different regions and divisions are overlapping their spend?• Whether negotiated savings are getting to the bottom line?• Whether suppliers are billing you accurately and consistently for agreed upon
price levels?• Whether you have maverick spend?• If you have multiple suppliers providing the same items/services at different price
points?• How the prices you are paying compare to other companies of similar size?
Copyright 2008 www.SourceOneInc.com
Procurement Service Provider (PSP)
Source One is a PSP who provides “domain” expertise and extended resources by supplementing the internal Procurement function without loss of control. We extend our clients’ capability to reduce costs through strategic sourcing, negotiation and procurement operational excellence. • Key Advantages: Additional resources without ongoing cost.
Client executes the contract and retains the supplier relationship.
Why use a PSP: “Close to 60% of C-level executives (CEO, CFO, CIO) say they are using or willing to consider using a PSP” (Aberdeen Group) because it has become too expensive and difficult to maintain domain expertise in every category of spend (especially indirect spend).• Key Advantages: Increased subject matter expertise and
assistance in implementation and driving compliance.
Copyright 2008 www.SourceOneInc.com
Benefits of Strategic Sourcing Services
Aggregated purchasing power allows us tosecure exceptionally competitive pricing.
Our leveraged buying enables us to:• Deliver cost-efficient options during the sourcing process• Obtain price concessions that are not available to the customer• Motivate suppliers to provide performance driven results• We greatly simplify your involvement in the sourcing process so you can
focus attention on other strategic priorities.• We are always identifying new ways that your suppliers can be more
effective at a lower total cost.• Bring the collective market knowledge of many companies to our clients
We work exclusively for our client. We do not receive commissions, fees or overrides from suppliers or agents.
Copyright 2008 www.SourceOneInc.com
Why Source One?
60% of our business resides in the SG&A (Indirect Spend) of our clients. Companies do not have the domain expertise or resources to adequately source the 100+ spend categories in Indirects. Annual savings of 20%+ are achieved year after year.
The remaining 40% of our business are the high profile COGS (Direct Spend), Logistics and Packaging with annual savings of over 12%. Again, this is measured invoice to invoice (hard savings)
Local, regional and global market and supplier intelligence.
Entrepreneurial attitude and boutique approach for customized sourcing strategy.
Focus on Supplier Relationships for sustainable low costs and excellence in service to all your locations.
Most of our clients are #1 or #2 in their respective field.
Copyright 2008 www.SourceOneInc.com
Why Source One?
16 years of specialized knowledge• Extensive Experience working with Decentralized Organizations• Tariffs, regulatory charges, commodities and logistics• Best Practices / Technology – Contract Management / Reverse
Auctions• Core Competencies - (Spend Analysis, Sourcing & Negotiations)• Knowledge of the Supplier Marketplace• Unfair Advantage
Single Source Solution
Leverage your time• You have smart people – lean organization• We can provide higher savings in a shorter period of time
Contingent fee structure based on measurable and tangible results
Optimize Time to Value
Copyright 2008 www.SourceOneInc.com
Cost Savings Process
Phase I - Baseline
Copyright 2008 www.SourceOneInc.com
Cost Savings Process (continued)
Phase II – Savings Realization
Copyright 2008 www.SourceOneInc.com
Project Team – Who Are the Players?
Status Meetings Held weekly with client
sponsor, commodity owner and Source One keep the project on track and everyone informed.
Best of the Best Working together in a
collaborative effort, we can achieve more together than either of us can achieve apart.
Extended TeamExtended Team
CoreCore Team* Team*
OtherOtherInterested Interested
PartiesParties
Off-Site TeamOff-Site Team
Copyright 2008 www.SourceOneInc.com
Project Team – Organization and Responsibilities
Responsible for Data Collection, Spend Analysis, Market Research and other tasks as assigned.
Project Managers oversee the day to day project activities They are responsible for the execution of the project plan, status reports and project results.
Steering Committee assures that the project stays on track and is responsible for communication to the extended team.
Steering CommitteeSteering CommitteeClient Sponsor & Source One DirectorClient Sponsor & Source One Director
Project ManagementProject ManagementCommodity Owner & Source One Project ManagerCommodity Owner & Source One Project Manager
Core TeamCore TeamDesignated Client Personnel & Source One AnalystsDesignated Client Personnel & Source One Analysts
Copyright 2008 www.SourceOneInc.com
Project Team
Project Staffing – Source One• Chief Supply Strategist• Director of Strategic Sourcing• Project Manager• Team of analysts
Project Staffing – Client• Project Executive / Sponsor (2% time commitment) • Project Manager (5% time commitment)• Business Resources (as required)
Primary assistance needed by Source One during the data collection phase and at key decision points (project milestones). Client can determine the level of involvement that makes sense based upon their business constraints.
Copyright 2008 www.SourceOneInc.com
Critical Success Factors
Sponsorship * Sponsorship * Sponsorship
Precision Priority Collaboration – client, supplier & Source One Creativity Objectivity Flexibility Experience
We operate in a “no stone left unturned” environment. Markets are always changing.
Copyright 2008 www.SourceOneInc.com
Representative Savings
Savings Category Savings %
Advertising 16%Benefits & Insurance 12%Cash Management 90%Chemicals 15%Collection Outsourcing 18%Construction Materials 8%Containers/Fiber & Plastic 11%Containers/Steel 16%Copiers/Faxes 25%Corrugated 12%Credit Services 23%Data Base Marketing 48%Electricity 8%Equipment Leasing 5%Facility Maintenance 20%Forms 22%Freight - FTL, LTL. Ocean & Air 19%Fuel 9%Hazardous Material Removal 20%Information Technology 11%Industrial Equipment 12%Ink & Toner Supply 18%Invoice Outsourcing 11%Janitorial Services / Supplies 30%Landscaping 19%Lockbox 6%Lubes and Greases 8%Market Research 50%
Savings Category Savings %
Mechanical Equipment 7%Merchant Accounts 23%MRO 20%Natural Gas 11%Office Supplies 14%Office Furniture 12%P-Cards 12%Packaging Supplies - 11%Pallets 8%Payroll Services 11%Printing 13%Propane 25%Relocation Services 9%Security Services 5%Security Equipment 21%Software 48%Small Parcel 17%Storage 7%Telecommunications 50%Telecommunications Equip/Maint 22%Temporary Staffing 9%Trash Removal 14%Travel (Airfare, Hotel, Auto Rental) 14%Truck Supplies & Parts 15%Uniforms 26%Wireless 30%
Note: Highlighted areas represent recent significant market interest
Copyright 2008 www.SourceOneInc.com
Source One ‘End to End’ Service Offerings
SpendAnalysis/SourcingStrategy
SupplierRationalization
& StrategicSourcing
ContractManagement
CommoditySpecification
&Benchmarking
Procurement/Process
Reengineering
e-Procurement
e-Sourcing/Reverse
Auctioning
PaymentProcessingSupplier
Management
SupplierQualification
Benchmarking/Opportunities Assessment
Development/TrainingSupplement Internal Competency
Contingency Based Cost Reduction
Copyright 2008 www.SourceOneInc.com
Recent Awards and Testimonials
Gartner Group • “2008 Cool Company in Procurement” – March 25, 2008
ThomasNet.com (World’s Largest Industrial Web Site & Directory)• Exclusive Strategic Sourcing Provider• Exclusive Tools Provider (Announced at ISM Conference in May 2008)
Supply and Demand Chain Magazine – Executive 100• “Forefront of Innovation Award” 2006, 2007 & 2008
Outsourcing-Journal.com• Feature Article Published in May 2008• “Source One’s team are outstanding businesspeople…They bend over backwards for our
needs, and they…are incredibly collaborative, honest, fair-minded and ethical.” John Ragazzini – Chief Financial Officer, Spraylat Corporation
• “They understand and adapt to our culture instead of trying to change our culture…They understand our needs and how we go about doing things, and they are flexible to adapt to that.”
Joe Hradil – Chief Information Officer, Bradco Supply
Copyright 2008 www.SourceOneInc.com
In Summary
Our Job is to Help You:• Reduce Spend• Reduce Cost & Cycle Time• Improve Customer Satisfaction• Grow Revenues and Profits
We can tailor our participation and focus based on:• Work Scope & Opportunity• Equitable Sharing of Risks/Rewards
And our fees are contingent on achieving cost savings results while maintaining quality & service!• Supplier/Contract implementation and expenses are included
Copyright 2008 www.SourceOneInc.com
Frequently Asked Questions
Q: Do I need to change suppliers to reduce costs?A: No. In 60% of projects, our clients retain their original suppliers, but still
reduce costs. Many times the client does not want to take on the risk or costs associated with the transition to a new supplier. In some cases, the potential savings from an alternate supplier are so compelling that the client asks us to perform additional supplier qualification and testing before starting a transition process.
Q: How much time and resources do I need to dedicate to this initiative?A: Our goal is to minimize your time involvement in the project. Our resources
will gather data, perform market research, conduct negotiations and provide savings recommendations.
Q: Do I have to implement the supplier with the highest savings?A: No. The decision is completely up to you as to the supplier that will be
implemented. We provide the savings options and you choose the one that best fits your operation.
Copyright 2008 www.SourceOneInc.com
Frequently Asked Questions
Q: Is Source One compensated on soft dollar savings under the contingency model?
A: No. At the end of each engagement, we report soft dollar savings, cost avoidance opportunities, potential process improvements and hard dollar savings. We are only compensated for actual hard dollar realized savings.
Q: Will the work be performed on site or remotely?A: Most of our work is performed from our offices. This minimizes disruption to
your operations and staff, and many clients do not have the space to “house” our staff. We will be on location (both client and supplier) at key times though during the project and also at other times as required.
Copyright 2008 www.SourceOneInc.com
2008 Active Customer HQ Map
Copyright 2008 www.SourceOneInc.com
Our Guiding Principles
Reward for Value – It’s a matter of principle and practicality… Our contingency model holds us accountable for achieving results.
Exceed Expectations – Continually move the bar higher.
Treat People as People – People are not customers, employees, suppliers. People are people. Treat them well!
… Always with Integrity
… And Do it Together
Copyright 2008 www.SourceOneInc.com
About Source One Management Services, LLC
For over 15 years, Source One has been providing on-demand resources to help companies realize rapid and sustainable savings in over 100 categories of
procurement. Engagements may include strategic sourcing, spend analysis, spend management, identification of alternate suppliers, market and supply research, RFP
management, price and terms negotiations, contract recommendations, project management and implementation. Source One also owns and operates the free
procurement tool website, www.WhyAbe.com, which provides free RFX and Reverse Auction Tools, Contract Management, and Stores for suppliers.
For More Information Contact:
Source One Management Services, LLC
724 Fitzwatertown Road
Willow Grove, PA 19090
Steven Belli
(267) 913-6264
www.sourceoneinc.com