This document discusses NSG Group's transformation of its procurement function through the use of Ariba solutions. NSG Group is a global glass manufacturer with 29,000 employees. In 2007, NSG's procurement was disconnected, transactional, and provided low value. Through implementing Ariba's sourcing, contract management, supplier performance, and e-invoicing modules globally, NSG has centralized procurement, increased spend visibility, and reduced supplier numbers. Ariba has helped drive cost savings, standardize processes, and make procurement a more strategic function for NSG. Key benefits for NSG include cost savings, improved contract management, a global supplier database, and efficiency gains from electronic invoicing.
Transforming Procurement into a Strategic Value Driver – NSG Group
1. NSG Group and Ariba
Transforming Procurement into a Strategic
Value Driver
Ariba Commerce Summit – London 15 th January 2013
2. NSG Group overview
• A global glass technology leader
• Sales of JPY 577,212m (€4933m) in FY11
• Principal manufacturing operations in 29 countries, with
sales in approximately 130 countries
• Approximately 29,000 employees
• Leading manufacturer of functionalised architectural glass
• Supplier to every major car maker in the world
• Leading position in glass for solar energy sector
• Leading player in technical glass for touch-screen displays
and optical devices for printer/scanner applications
A global leader in glass for Automotive, Architectural and Technical
applications 2
4. Systems Landscape
Europe
North America ♦ SAP (2 instances) Japan
♦ SAP ♦ Some Legacy systems ♦ SAP (Japan Instance)
♦ Legacy
SE Asia
South America
♦Legacy / SAP (Malaysia)
♦Legacy systems
♦SAP roll-outs in 2011
♦SAP roll-outs in 2010-11
Ariba Contract Management, Sourcing and Supplier Modules
Rolled Out Globally – Ariba eInvoicing in Europe
5. NSG Procurement – 2007
Disconnecte Maverick
d
Manual Too many of the wrong people
Transactional , poor control, disconnected, low value-add, low ambition
6. NSG Procurement – 2007
Organization People
• Disconnected ‘Purchasing silos’ • Variable leadership/ability to
• Immature Global sourcing influence the business
• ‘Maverick’ buying • Transactional focus > 70% of time
• Poor resource match to spend/value • 430 people, < 20% graduate
opportunity • Poor credibility with the business
• No defined strategy / ‘house style’ • Lacking ambition
Process Technology
• Inconsistent / incomplete • Patchwork of legacy systems
• Paper & people intensive • Low priority
• Poor PO compliance <50% indirects • Failed eProcurement
• Variable risk mgt approaches implementations
• Supplier proliferation
Poor foundation for effective technology adoption
7. NSG Procurement – 2012
Matrix Organisation Increasing Skill Level
Global Supplier Development Extensive
eProcurement
More Strategic, integrated, much more credible
8. NSG Procurement – 2012
Organization People
• Matrix by category & region • Category Directors as leaders and
• Dedicated category teams influencers ( >70% turnover)
• Centralised/ dedicated P2P teams • <40% of time on transactional
• Aligned/ Integrated with BU’s • 320 people, > 50% graduate
• Specialised Process & Systems and • Graduate development programme
Supplier Development teams • Fewer and better…more to do!
Process Technology
• Complete and (mainly!) consistent • Ariba: for everyone, everywhere
• > 90% global spend visibility • Mandatory use of Sourcing &
• > 98% PO compliance Contract Management
• Robust risk management approach • Ariba eInvoicing: > 45,000
invoices, > 90% touch-less
• > 70% reduction in supplier number
A solid foundation for technology uptake
8
9. NSG and Ariba
Internal
Stakeholders
Category Management Sourcing
Category Strategies RFX/eAuction
Savings Projects Standard Templates
KPIs
Info and Knowledge Sharing
Contract
Management
Multiple Instances Approvals
Contract Authoring
+ Legacy Standard Clauses and
Templates
eInvoicing Supplier
PO
Invoice Performance
Management
Certificates
Supplier Audits
Sustainability
s
10. Ariba Sourcing is delivering for
NSG…
Examples of where Ariba has supported our activity in FY12:
28% €400K 24%
Step Change in User Adoption
FY11 FY12 FY13 (run
rate)
Sourcing Events 15 529 >1,000
Contracts 166 2,296 >3,000
Users <30 >250 >650
Progress is being made but there is still much room for improvement
11. Also used for Huge, Complex
Events… Facilities Management Project :€125m, 29 countries,
Global Integrated
>400 sites
RFI with scoring for
supplier qualification
and selection
RFP with
qualified
suppliers
Full Project Management
for Due Dilligence and
Implementation Stages
Ariba is our chosen tool for strategic and highly complex events
12. Ariba Contract Management
Ariba is the sole database used for Procurement Contracts :
• Internal and external auditors will only check Ariba for
contract compliance
• Contracts approval; from weeks previously to gain physical
signatures to hours online today
• Contract approvers automatically identified by the system by
using the base data of the contract
• Business, Finance, Procurement and Legal Departments are
all engaged in the Contract Approval Process
• Next steps are to explore contract authoring and clause
libraries within Ariba
• Dashboard reporting gives clear visibility to Category
Directors
Ariba use for Contract Management is mandated in FY13
13. Supplier Performance
Management
• One global Supplier Database in Ariba
• Single “source of truth” for Supplier Information
• Supplier Evaluation
• Six monthly supplier audits now done in Ariba
• Covering supplier risk, certifications, code of conduct
compliance, delivery and quality:
Ariba supports achievement of our sustainability targets
14. E-Invoicing - progress to date
POs
Invoices Transactions via Ariba
Suppliers
50000 400
375
45000
350
40000 325
300
35000 275
250
number (cum.)
30000
225
suppliers
25000 200
175
20000
150
15000 125
100
10000 75
50
5000
25
0 0
Weeks since Go-Live
Over 375 suppliers enabled for eInvoicing
Over 45,000 invoices since Go-Live
Over 90% “Touch-less” Invoices
15. Information & Knowledge Management
Global data sharing across a common
platform
This file is 15mb in size and cannot be emailed
Instant, global access is available via Ariba
No need for remote servers, Sharepoint etc.
Access available via Network Single Sign On
Category Management
All Category Strategies are now held in Ariba
Instant access for CPO to all strategies
Strategies managed with staging gates, phases and
approvals
Access being extended to key stakeholders outside of
Procurement
Real-time information sharing across countries, time zones and
functions improves quality and speed of decision making
16. Dashboard Reporting
• Category and Regional Directors have specific dashboard tabs
• ‘One click’ navigation to their key procurement information
• CPO has overview tab containing all information
• Easy drill-down into each area of data
• Clarity and ease of access of information has helped to drive
adoption
Real-time dashboard data helps Category and Regional directors
drive adoption
17. Key benefits from Ariba tools
• Incremental, repeatable savings from eSourcing events
vs. traditional methods
• Robust contract management and approval processes
• Global database of suppliers – supporting
rationalisation and sustainability goals
• Electronic invoicing supporting efficiency gains in
invoice processing and WC management
• Global, secure knowledge database. Supporting
effective document management and compliance
• Establishing/supporting standard processes and
building organisational capability
18. Key challenges and learning
points
• Technology is not a ‘quick fix’ …organisation design, team
capability and attitude needs to be right
• Recognise success …but be tough on those who try to opt out
• Recognise and support learning and transition difficulties…up to
a point …then just get on with it!
• Organisational culture can hinder progress…be aware of the
need to engage/challenge other parts of the business as well as
your own team
• Discipline is required
• Use all the Ariba tools…re-inforces the message ” this is the way
we do things around here”
• Biggest benefits start to flow when everyone uses the tools …
everywhere
• Make performance visible…set objectives and KPI’s to drive
improvements …use the dashboards
Establish the right foundation with no opt-out allowed
19. NSG Procurement – 2014…and
beyond!
• Fewer/ better people working in specialised buying
and transactional hubs
• Procurement as a Centre of Excellence … seen as a
key development function for the best and brightest in
the organisation
• Influential, innovative and challenging
• Internal consultants/project managers
• Linked by and leveraging smart technology…
Fewer and better people, leveraging smart technology; change
agents, challenging and ambitious
20. NSG Group and Ariba
Transforming Procurement into a Strategic
Value Driver
Ariba Commerce Summit – London 15 th January 2013