In this panel discussion, you will learn how Best-in-class companies leverage collaborative Supplier Management to mitigate supply chain risk and improve overall supplier performance. The session will examine proven techniques to become "Customer of Choice" even in the tightest of supply markets by building supplier management initiatives that provides transparency, fosters collaboration, and shared risks and incentives with key suppliers.

1. “Smarter Supplier Management” –
Improving Supplier Performance through
Better Collaboration and Monitoring
© 2013 Ariba, Inc. All rights reserved.
Speakers:
Neil Campbell – Aviva
Gilles Poirier - Solvay
Moderator:
Sundar Kamakshisundaram – Ariba, an
SAP Company

2. #AribaLIVE
Agenda
• Introduction
• Panel Discussion
• Key Takeaways
• Q & A
© 2013 Ariba, Inc. All rights reserved.2

3. #AribaLIVE
Defining Supplier Management…
© 2013 Ariba, Inc. All rights reserved.3
Supplier
Portals
Vendor Master
Management
Risk
Management
Diversity/Green/
Corporate
Responsibility
Registration &
On-boarding
Process
Performance
Management
Supplier
Management
or SRM
Supplier
Discovery
“Supplier Management” is multi- faceted and
touches many aspects of Business Commerce
• Supplier Information Management that unifies
platform, process and supplier profiles across the
company and keeps it current, complete and correct.
• Highly usable web-based portal for suppliers to register
and manage information collaboratively with customers
• Supplier Performance Management capabilities
including Process Workflow and approvals, Surveys
and scorecards, flexible role based dashboards and
customizable reports
• A Robust technology platform that seamlessly
integrates in-context Supplier info such as Parentage,
Financials, Diversity and Sustainability to manage and
mitigate Supply Risk
• A unified Supplier Record merging data and process
flows to third party systems and data sources

4. #AribaLIVE
Supplier Management Processes from
Hackett’s Perspective…
Supplier Stratification Governance
Supplier Performance
Management
Supplier Development
and Collaboration
How should supplier
relationships be stratified
based on strategic
importance to prioritize
resources and tailor
management processes?
How should supplier-facing
staff be organized and
internal collaboration and
supplier interactions be
conducted?
How should supplier
performance be managed
across different supplier
types and strata to
maximize performance?
How should capabilities of
existing suppliers be
developed to deliver
continuous improvement
and ongoing cost
reduction?
• Supplier Stratification
Definition
• Supplier Stratification
Criteria
• Supplier Stratification
Process
• Team Structure and
Roles
• Ongoing Governance
• SRM Competency
Management
• Function KPI
Development
• Supplier Performance
Target, KPI and
Scorecard Definition
• Ongoing Supplier
Measurement. Includes
Cost, Quality, Risk, etc.
• Supplier Development
Needs Definition
• Supplier Development
Program Definition
• Ongoing Supplier
Development
“Key processes, definitions, tools, and roles to drive
coordinated proactive management of suppliers across the business”
Transactional Suppliers
Strategic
Enterprise
Partners
Strategic Suppliers
Core Suppliers
Transactional Suppliers
Strategic
Enterprise
Partners
Strategic Suppliers
Core Suppliers
Transactional Suppliers
Strategic
Enterprise
Partners
Strategic Suppliers
Core Suppliers
Transactional Suppliers
Strategic
Enterprise
Partners
Strategic Suppliers
Core Suppliers
Strategic
Suppliers
Basic Suppliers
Core
Suppliers
Basic
Suppliers
Non-Preferred
80%
Financial
Value
20%
Financial
Value
Strategic
Company-
Wide Partners
Strategic
Company-
Wide Partners
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Supplier Team Member
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Initiative
Management
Roles
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Company Supplier
Company Supplier
Company Company
Supplier
Company
Supplier
Company
Supplier
Initiative
Management
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Supplier
Operations Management Team Roles
Executive
Management
Team Roles
Business Office Roles
Relationship
Leads Roles
Financial
Performance
Management
Contract
Management
Communications
Management
Legal & Audit
Support
Relationship
Management Lead
Executive
Sponsor
Executive
Sponsor
Relationship
Management Lead
Risk
Management
Performance
Management
Customer
Satisfaction
Management
Escalation
Management
Operations
Management
Company Supplier
Company Supplier
Company Company
Supplier
Company
Supplier
Company
Supplier
Initiative
Management
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Company
Supplier
Supplier
Company Team Member
Supplier 1
Supplier 3
Supplier 2
JointJoint
capabilitycapability
investmentinvestment
IntellectualIntellectual
capitalcapital
sharingsharing JointJoint
processprocess
improvementimprovement
Systems &Systems &
processprocess
integrationintegration
MultiMulti--
suppliersupplier
collaborationcollaborationCapabilityCapability
acquisitionacquisition
by supplierby supplier ValueValue
creationcreation
opportunityopportunity
JointJoint
capabilitycapability
investmentinvestment
IntellectualIntellectual
capitalcapital
sharingsharing JointJoint
processprocess
improvementimprovement
Systems &Systems &
processprocess
integrationintegration
MultiMulti--
suppliersupplier
collaborationcollaborationCapabilityCapability
acquisitionacquisition
by supplierby supplier ValueValue
creationcreation
opportunityopportunity
Supplier Scorecard
Functional Area / Category:
Site:
Scorecard Date:
Status Definition Supplier Representatives:
Good Meets or exceeds performance target
Fair Does not meet performance target; acceptable variance; improvement needed Company Representatives:
Poor Unacceptable variance from performance targets; action required
Invalid Invalid percentage data has been entered into the cell
KPI
KPI Wt. Metric
Metric
Wt.
Metric
Total
Data
Source
Score
Range
Accept-
able Range
Last
Yr
Last
Qtr
Last
Mo
Today
One Qtr
Trend
Metric
Score
KPI
Score
On time delivery percentage 50% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 90 80 85 90 h 9.0
Delivery conformance 50% 100% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 80 78 85 95 h 9.5 9.3
Additional available capacity 56% tbd 0 - 100 ≤ 80 80 - 89 ≥ 90 50 75 80 90 h 9.0
Financial stress 33% tbd 0 - 60 ≤ 48 49 - 53 ≥ 54 40 54 58 50 i 8.3
Credit score 11% 100% tbd 0 - 20 ≤ 16 17 ≥ 18 15 16 17 18 h 9.0 8.8
Rejection rate 26% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 70 75 80 90 h 9.0
Weighted non-comformance rate
/ CAR
26% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 80 83 85 91 h 9.1
Process chage 16% tbd 0 - 60 ≤ 48 49 - 53 ≥ 54 40 45 50 60 h 10.0
Audit rating 16% tbd 0 - 60 ≤ 48 49 - 53 ≥ 54 30 35 40 42 h 7.0
Auidt response time 16% 100% tbd 0 - 60 ≤ 48 49 - 53 ≥ 54 40 43 45 56 h 9.3 8.9
Response to standard request 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 60 70 80 91 h 9.1
Response to emergency request 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 90 80 70 60 i 6.0
Communication about potential
problems
9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 70 75 76 78 h 7.8
Flexibility to change 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 80 85 85 91 h 9.1
Customer services 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 70 75 80 85 h 8.5
Efficiency in providing information 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 90 80 70 60 i 6.0
Local support efficiency 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 85 91 h 9.1
Production lead-times 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 90 80 70 60 i 6.0
Competitiveness of Production
lead-times
9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 85 90 h 9.0
Stability of lead-times 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 80 80 g 8.0
Compliance with quoted lead-
times
9% 100% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 85 90 h 9.0 8.0
Performance Targets
Unaccept-
able Range
Target
KPIs Metrics
Assurance
ofSupply-
Delivery
Assuranceof
Supply-
Environment/
Business
15%
15%
Quality
25%
Services
15%
Comments
Performance Trend
Supplier Score
(Scale of 1-10)
Supplier Name
SRM Lead:
Account Manager:
Supplier Contact:

5. #AribaLIVE
Practical Success Factors of SRM
Adopters
Organization Process Metrics
• Strong governance structure with
champions for the program in each
area; engagement with internal audit
for program adherence and support.
• Understanding the SRM process,
having a framework; a culture of
collaboration in the organization.
• Active support from upper
management, internally and externally.
• Regular steering committee reviews.
• A mandatory external accreditation
program aimed at upskilling
capabilities.
• Vendor risk management profiles for
key supplier relationships.
• Consistency of SRM approach, with
strategic relationships effectively
managed via use of best- practice
tools.
• Supplier recognition program,
including supplier awards.
• Joint strategic supplier technology
roadmapping.
• Use of a scorecards as
measurement and feedback
mechanisms.
• Measuring cost-avoidance.
• One-page scorecards.
• Clear metrics that are actively
managed with the contracts.
• Supplier scorecards track
performance and progress of
initiatives.
Source: Hackett Research: 2012 SRM Study

6. #AribaLIVE
The Value Contribution from Supplier
Management Is Clear…
Source: Hackett Research: 2012 SRM Study

7. #AribaLIVE
Ultimately, Top Performers Are Better
Customers to Their Key Suppliers
4%
38%
46%
12%
0%
20%
30%
50%
1=We are definitely NOT a
customer of choice
2=We're a good customer in a few
areas
3=We're a good customer
overall, but still have a few
opportunities
4=We're a very good
customer, especially with critical
suppliers
Peer Group
Top Performer
Relative to your competitors, to what extent do you feel that you are a
"customer of choice" for suppliers in critical spend categories?
Source: Hackett Research: 2012 SRM Study

8. #AribaLIVE
Agenda
• Introduction
• Panel Discussion
• Key Takeaways
• Q & A
© 2013 Ariba, Inc. All rights reserved.8

9. #AribaLIVE
The Panel Team
Speakers: Neil Campbell, Aviva
Gilles Poirier , Solvay
© 2013 Ariba, Inc. All rights reserved.9
Moderator : Sundar Kamakshisundaram,
Sr. Director – Solutions Marketing, Ariba, Inc

10. Presentation title here 00.00.00 page 10
Smarter Supplier Management
Improving Supplier Performance through Better Collaboration and Monitoring
Neil Campbell
AVIVA Procurement

11. Aviva
• Largest insurer in the UK*.
• Strong businesses in selected international markets.
• Life, general and health insurance. Provider of asset management services.
• Circa 30,000 employees.
• 34 million customers globally.
• £23bn gross written premiums.
• £29bn paid out in claims and benefits due in 2012.
• £311bn total funds under management.
• 300 years of heritage
• * Based on aggregate 2011 UK life and pensions sales (PVNBP) and general insurance gross written premiums

12. Aviva Procurement
• Group Procurement
Indirect 3rd party expenditure
Main categories of spend include - I.T hw/sw, Marketing, Consultancy
Global annual expenditure £2.2bn. (60% UK).
• Supply Chain Procurement
Direct expenditure to service insurance claims
White goods, motor repair network, trade and legal services,
£1.1 bn annual expenditure
Diverse Supply Chains and market conditions.
Common Procurement processes employed across teams.

13. Supplier Management in Aviva
• Supplier Management programme initiated in UK, January 2011. (Other markets now following).
• Programme objectives
– Manage our most important suppliers with the appropriate level of rigour.
– Deliver a consistent and auditable approach to supplier and contract management.
– Establish clear accountability and ownership of suppliers.
– Improve Supplier Management capability.
– Utilise technology to drive adoption, collaboration and quality data metrics.
Programme supported at Executive Level.
Group Procurement Policy governs Business Unit responsibility.

14. Manage our most important suppliers
• Suppliers categorised based on risk
metrics and annual expenditure.
• Midpoint (£) set to ensure top 80% of
spend covered PLUS all high risk and
Business Critical arrangements.
• Minimum level of rigour based on
Supplier Classification (A, B, C).
• Classification dictates task frequency
and mandatory nature.
• Any supplier classified as A or B forms
part of our managed supply.
• Same exercise carried out at a contract
level. Interlinked activity.
Supplier segmentationContract

15. Consistent and Auditable approach (1)
SPM project structure
Managed Supplier
Contract
Management 1
Contract
Management 2
Contract
Management 3
Performance Management
ACW
SPMProjects

16. Consistent and auditable approach (2)
• Process framework embedded across all Supply and Contract Classifications.
• Rigour and frequency determined by A, B or C rating.
• Process driven through Ariba SPM to ensure compliance and collaboration.
• Consistent internal approach and Supplier experience on contract management tasks.

17. Clear accountability and ownership
Contract/Supplier Owners
Daily engagement
► Identify and own Supplier Risks. 250 Suppliers in scope.
► Day to day management of suppliers
► Ensure mandatory tasks are completed and compliance to standard
UK Business Areas
► Business Area Co-ordination of Policy Compliance
► Validation & QA (Evidence/challenge)
► Business Area Risk ownership
Business Units
BU Procurement Policy
Owner
► Chair of BU Supplier Management Forum (quarterly)
► Oversight and challenge of aggregated supplier risk across the Business Unit
► Provide assurance on the Policy implementation and compliance across the Business Unit
UK Region
UK Procurement
Policy Owner
► Chair of UK Supplier Management Forum (quarterly)
► Oversight and challenge of aggregated supplier risk across the UK
► Overview of capability across the UK
Group ► Group Procurement Policy Owner

18. Improve Supplier Management capability
Skills, awareness and development
• Process familiarisation and Ariba system training
• Formalisation of Supplier Management as a career family
• Shared capability framework for supply management disciplines
• Increased access to shared L&D resources
• Change Forum
Supporting Resources
• Ariba Knowledge Projects and local Intranet sites host supporting tools
• User and Process support - proactive guidance to contract and supplier managers
• Shared Learning groups
Upwards of 350 people involved in Supplier Management Activities.
Collaboration and access to common tools and resources is essential.

19. Utilise technology to drive adoption

20. Utilise technology to drive adoption (1)
Ariba SPM - Conditions, Ownership and Templates
Contract Classification
entered at set-up stage.
Additional conditions
based on other fields.
Individual templates for Supplier and
Contract management activity
Supplier Owners
clearly defined

21. Utilise technology to drive adoption (2)
Recurring phases, Tasks, owners, dates, surveys

22. Utilise technology to drive adoption (3)
Task reporting and compliance
• Compliance reports delivered directly to dashboards and inbox
• Hierarchical reporting employed so we can see task completeness at an
Organisational, functional, category and individual level
• Quarterly compliance activity in place

23. Utilisation of Ariba SPM (4)
SPM Surveys
• 4 surveys within the Supplier and Contract Management process
Supplier Vulnerability
Customer Perception of Supplier Service
Contract Vulnerability
Supplier 360
• Stakeholders and suppliers complete Surveys in line with classification frequency
• Action plans formulated based on results
• Aggregation is possible at Supplier, Business Unit, Commodity, Team level
• Performance over time can be tracked

24. Example Survey output 1:
Supplier Risk over time

25. Example Survey Output 2:
Supplier grading per risk activity

26. Summary / Lessons learned
• On-going programme. v3 of our framework and templates
o Increase in consistency, capability, documentation and approach.
o Steady increase in compliance to task and activities.
o General trend shows reduction in supplier / contract risk.
o Continue to refine and embed in UK and other markets.
• Lessons learned
o Senior sponsorship and mandate is vital.
o Supply arrangements must be classified correctly or resource challenges arise.
o Collaboration brings challenge around resource, accountability and capability.
o Ownership of tasks and projects needs to be clear.
o Learning curve on Ariba software, be prepared to support users.
o Process must be agile. Ensure appropriate change mechanisms in place.

28. “Smarter Supplier Management” –
Improving Supplier Performance
through Better Collaboration and
Monitoring
Gilles Poirier
e-Sourcing Manager
Procurement & Supply Chain Excellence Function
© 2013 Ariba, Inc. All rights reserved.

29. #AribaLIVE
Topics
• Introduction
• Supplier Management at Solvay
Solvay Purchasing Process
Managing Supplier Performance
SRM core values
SRM, what is coming next?
• Where are the best in class?
© 2013 Ariba, Inc. All rights reserved.29

30. #AribaLIVE
Solvay Company Overview
A 150-year old company
Consumer chemicals
Advanced materials
Performance chemicals
Functional polymers
Corporate & business
services
2012 Net sales
• 12.4 billions EUR
• 111 sites in 55 countries
• 29100 collaborators

31. #AribaLIVE
Solvay Purchasing Process
1. Define Customer needs & Analyse market
2. Define purchasing strategy & source
3. Negotiate & Contract
4. Manage supplier performance
5. Manage System Performance

32. #AribaLIVE
Manage Supplier Performance (SRM)
Continuously improve the supplier performance to create value for the
Solvay Group
1. Manage supplier non
conformance
Buyer:
Drive & follow-up supplier non
conformance & assessments
If relevant manage the non
conformance corrective action
Internal customer:
Identify & communicate non
conformance
Performance & Quality:
Provide guidance on the non
conformance management
process
Consolidate reports (templates
and process)
2. Manage the improvement of supplier
performance (KPIs)
Buyer:
Lead supplier evaluation, construct &
monitor supplier action plans
Internal customer:
Provide feed back on supplier
performance
Performance & quality:
Provide guidance on the supplier
performance management process
Consolidate report

33. #AribaLIVE
Supplier Performance
• Provide innovative products and services
• Contribute to reduce time to market
• Use IT tools (Ariba modules…)
• Purchasing contributes to innovation, growth of
business and margin

34. #AribaLIVE
Solvay Ariba Key Figures
after 4 years - - - -
Ariba sourcing
• 270 full projects
m850 EUR, savings about 6%
• RFP
• RFI
• Auctions - 71 (in Bulgaria)
• 50 buyers currently using the tool
(15%)
• Last 12 months (311 events)
RFI - 31
RFP - 226
Auctions - 54
Contract management
• More than 1000 contracts
• Purchasing families
Energy
Raw Materials
TG / TS
Facility Management
General Expenses
Intellectual services
Logistics, packaging
• Future 2013/2014
140/200/300 licences
Adoption growth (WW) expected full
deployment within 2-year
Use of SIPM module
ISO 9000 certification (end 2013)

35. #AribaLIVE
SRM
• Cost reduction, Risk management, Value creation
• Promote binomial buyer/prescriber
• Develop the suppliers’ capacity
• Sharing risks and profits with suppliers

36. #AribaLIVE
Innovation and Collaboration in
Purchasing
• Purchasing function is open on the outside
• The collaboration is a main change in purchasing
• Purchases electronisation
• The purchasing function is a complex set of
business, relationships and tools
• Earn more by spending more (purchasing performance)
• The majority of professional buyers do not see the
potential of new information systems

37. #AribaLIVE
Buyers’ Skills
• Functions buyer project, transverse buyer
or purchase coordinator will greatly expand
when product buyers or buyers per country
will decrease
• New Buyers skills: creativity, relational
quality, capacity to collaborate
• Buyers should consider collaboration internally
and externally as a major strategic issue

38. #AribaLIVE
SRM Core Values
• Core values
Trust
Competitiveness
Growth
• Supplier categories
Standard, Preferred (strategic)
• Innovation and collaboration are seen as key
levers for long-term growth

39. #AribaLIVE
Open Innovation Champions
Thank you for your attention

40. 40
Summary and Key Takeaways
40
• Solidify sponsorship of internal champions and executives
• Design a collaborative relationship methodology to improve supplier
management
• Determine Supplier Segmentation Model (i.e.
strategic, key, transactional)
• Pilot specific categories and/or supplier tiers
• Use technology as an enabler to understand supplier performance
and risk
Manage all aspects of supplier information and performance on a single
integrated technology platform
Gain complete visibility into supplier information, performance, and risk
Provide suppliers a single web-based portal to share information to many
buying organizations
• Measure the success of the SRM methodology and plan for
continuous improvement
© 2013 Ariba, Inc. All rights reserved.

41. Questions?
Contact info:
Sundar Kamakshisundaram: sundar@ariba.com
© 2013 Ariba, Inc. All rights reserved.
41

42. #AribaLIVE
© 2013 Ariba, Inc. All rights reserved.42
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