Most companies, even if they are not in manufacturing, have a supply chain. Ineffective Supply Chain Management (SCM) often fails to get its due in the damage it can cause to financial performance. Costly mistakes are often made by companies in many areas including contract negotiation, cost leakage, and in selecting the right supply chain partners.

1. Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Supply Chain Management:
Costly Mistakes & Success
Metrics for CFOs

2. • Identify specific opportunities to improve your company’s
negotiating power and mitigate contract leakage
exposures
• Improve your supply chain network from choosing better
partners to managing supplier relationships more
effectively
• Evaluate the metrics your company uses to measure
supply chain efficiency
After attending this event you will be able to:
Learning Objectives

3. Proformative is the leading professional development resource for
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Welcome to Proformative

4. Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Supply Chain Management: Costly
Mistakes & Success Metrics for CFOs
Deborah Stanton, Executive Managing
Director, CAPS Research

5. • ASU ranked among the top 100 world
universities
• Supply Chain Management
department ranked #3 in the U.S.
• The world’s first supply
management association
• Publishes the monthly ISM
Report On Business®
• Established in 1986 as a research
center in the W. P. Carey School of
Business and in partnership with the
Institute for Supply Management
• A non-profit organization advancing the profession of
supply management through outstanding research,
benchmarking, and peer-to-peer networks
• Companies/corporations join CAPS Research as Member
Companies to receive benefits
Introduction

6.  Supply Chain Management Trends and
Benchmarks
 Five Costly Mistakes in the Area of Supply Chain
Management
 Five Steps for Getting the Most Value from your
Supply Chain Partners
 Q&A
Agenda

7. Supply
Management
organizations are
positioned more
strategically
within the
Corporation
• 82.1% report
directly or one
level down from
CEO
• 20% report to the
CFO
11.6%
70.5%
Number of Levels in between
CPO and CEO
0 1 2 3LEVELS:
2014 Benchmarking
Supply Chain Management Trends

8. Average 85.5%
of a company’s
external spend
is managed by
Supply Chain
Management
Source: CAPS Research
2014 Cross-Industry
Report of Standard
Benchmarks
Supply Chain Management Trends

9. 1. Tactical vs. strategic focus
Tactical Strategic
Consumed doing purchase orders
– “the paper-pushers”
Never touch a purchase order; focus on development and
execution of sourcing and category/commodity strategies
Reactive to the business – “waiting
for the phone to ring”
“3 bids and a buy”
Proactively engaged with the business on major projects and
initiatives; strategic business alignment; bringing solutions to
the business
Only involved with non-critical
spend areas
Driving sourcing/category strategies for all critical spend areas,
i.e. Marketing, I.T., Legal
Only focused on cost reduction,
deal by deal
Managing total cost, driving maximum value from suppliers,
enabling competitive advantage
Desperate systems and technology
solutions – “the supplier tells me
what I spend with them”
Great spend visibility across entire enterprise; e-sourcing tools;
automated tools for supplier performance management,
contract management, risk management
Five Costly Mistakes

10. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Aerospace Financial
Services
Manufacturing Petroleum Utilities
% of Supply Management Employees that are Strategic vs.
Operational (2014)
% of SMEs that are Operational % of SMEs that are Strategic
Tactical vs. Strategic

11. 2. Expect to look at the data differently
• Visibility of your external spend across the entire
enterprise
• Spend grouped by category codes (not GL)
• Metrics you should be asking about:
 How many suppliers do we have? Are they
segmented? How are they managed?
 How many suppliers make up our top 80-90% of
spend? How do we identify critical suppliers?
 What is your supply management ROI?
 Cost savings…what is the budget impact?
 How are we managing supplier risk?
Five Costly Mistakes

12. Thank you for your interest in this presentation.
View the on-demand webinar or download the full
presentation at:
www.Proformative.com
Supply Chain Management: Costly Mistakes &
Success Metrics for CFOs