7th Annual Strategic Sourcing Summit 10th -11th, April, 2014, [ Radisson Blu Hotel Shanghai Hong Quan ], Shanghai, China Asia Strategic Sourcing Alliance

Organizer

Asia Strategic Sourcing Alliance

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7th Annual Strategic Sourcing Summit 10th -11th, April, 2014, [ Radisson Blu Hotel Shanghai Hong Quan ], Shanghai, China Asia Strategic Sourcing Alliance

LETTER OF THANKS FROM EVENT PRODUCER

Dear 7th Annual Strategic Sourcing Summit Participants,

As Conference Manager of 7th Annual Strategic Sourcing Summit hosted in Shanghai on April 10th – 11th, 2014, I would like to take this opportunity, on behalf of Asia Strategic Sourcing Alliance (ASSA), to express my heartfelt appreciation for your participation and help in making the event a great success. ASSA’s 7th Annual Strategic Sourcing Summit was aimed to provide a strategic opportunity for senio procurement professionals to address the major challenges as well as to share the best strategies to managing Asia Procurement Organizations in the uncertain times. As Asia’s most influential membership based learning & networking community for strategic sourcing professionals, Asia Strategic Sourcing Alliance (ASSA) is dedicated to improve the competencies and capabilities of strategic sourcing practitioners. Each of us will strive to uphold and advance our standards of excellence, and continue to earn the respect of our clients as a provider of in-depth insights and intelligence for procurement professionals to stay on top in the fast-growing, ever-changing industry. Again, thank you for your valuable participation in the 7th Annual Strategic Sourcing Summit. I have no doubt that your presence and involvement directly contributed to the overall success of this meaningful event. We will keep you abreast of ASSA’s upcoming events and I am earnestly looking forward to working with you again.

Very Sincerely,

Nora JI Conference Manager Asia Strategic Sourcing Alliance (ASSA)

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7th Annual Strategic Sourcing Summit 10th -11th, April, 2014, [ Radisson Blu Hotel Shanghai Hong Quan ], Shanghai, China Asia Strategic Sourcing Alliance

PRESS RELEASE 7th Annual Strategic Sourcing Summit Transcending From Procurement Leader to Business Strategy Partner April 10th - 11th, 2014 [Radisson Blu Hotel Shanghai Hong Quan] Shanghai, China In today’s age of scarcity and volatility, the gravy train has run out of track. Procurement has moved beyond simply delivering cost reductions and supplier rationalization to being a more integral part of how an organization delivers value to its customers and shareholders. Meanwhile, the role of Asia in global procurement landscape is evolving from a traditional operationally minded continent to a strategically minded continent. In the new normal environment, Asia procurement leaders are bound to meet executive challenges at both regional and global level. Asia sourcing is going through a new evolution currently and what’s next? Asia Strategic Sourcing Alliance (ASSA) hosted this 7th Annual Summit 2014 and brought forward some fresh insights from the multi-national companies in different industries. The summit started with the trending key topic “Transcending from Procurement Leader to Business Strategy Partner”, represented by Chairman, Kevin Harris, Executive Director, Russell Reynolds Associates. Procurement was always last to the table for many strategic exercises in traditional supply chain organizations. Kevin stressed the need for procurement to be an integral part of how an organization delivers value to its customers and shareholders. He also said that it is important for Procurement executives to stretch impact and look at the aspects which needs to be taken into consideration in order for procurement to be an influential business partner, including how best to ensure that Procurement engages strongly with the business strategy and become a key part of business success, develop the business acumen of the organization, and align the organization to shared growth targets of revenue, cost, cash flow, profitability and brand.

Part 1: Analyze Asia Sourcing Environment and Future Asia sourcing future is discussed in this summit by several speakers as a fundamental for people to understand well the challenges and environment that they will face and prepare themselves based on these analysis and forecasts. Bessy OU, Asia Sourcing GM in GE Energy Management, delivered a very interesting topic “How to adjust your sourcing strategy and keep your China sourcing competitive for next 5 years?”. With RMB appreciation, increasing labor costs and government policy changes, these pressures do seem like there are less opportunities of sourcing from China. But Bessy explained with the help of Chinese Economy Data, the future of China Sourcing. She thought that the labor cost increase does not mean the loss of competitiveness in China. It really depends on the situation. The first question which should be asked is how much product cost comes from direct labor. Rising management level costs, technology levels, basic infrastructures elements, target market and others should be taken into consideration. Away from the target market means more expensive transportation costs, longer lead time, more stocks. They all should be put into hidden costs eventually. Furthermore, will the tooling cost, capability and flexibility still there when moving out from China? How many component suppliers really could or want to move out from China? Bessy proposed these questions to help you identify and understand the future of Asia sourcing. China may not be a low-cost sourcing country anymore but we cannot confirm if it will become best costing country at present. A panel discussion was held to demonstrate the situation for Asia Sourcing and was joined by Martin LOCKSTROM, Partner, Asia Perspective; Harry ZHAO, Senior Director, Procurement Operations, Smith & Nephew; Philippe THEGNER, Purchasing, Engineering and Quality Director, Asia Pacific, Federal-Mogul Corporation, VCS; Gigi LAPLUME, Vise President of Procurement, Asia Pacific, Air Liquide. The focus was on “Keep Your IPO/APO for Asia Sourcing?”. We witnessed the significant changes of multinational’s procurement strategies in Asia, with a bunch of major multinational IPOs, APOs shut down and integrated to BUs in 2013. The panelists used different angles to show the Asia’s Sourcing competitiveness in the future and delivered some strategies.

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7th Annual Strategic Sourcing Summit 10th -11th, April, 2014, [ Radisson Blu Hotel Shanghai Hong Quan ], Shanghai, China Asia Strategic Sourcing Alliance

PRESS RELEASE Part 2: People’s Influence on Asia Sourcing People do play a critical role in keeping Asia sourcing competitive. Without human intelligence and development, the world will not work. Therefore, some of our eminent speakers stressed importance of people and how they function for procurement. An ongoing trend of MNCs moving CPOs to the east was indicated by Kenith POON, Director of Purchasing & Supply Chain Management, Building Efficiency, Johnson Controls, and was supported by a bunch of case studies of IBM, Nortel, and Philips. Kenith argued that the role of Asia in global supply chain landscape is transcending from an traditionally operational-minded continent to a strategic-minded continent, while Procurement functions at Asia still have low profile than elsewhere. He said that there are still many gaps to fill, and it is critical to shift the organizational & leadership gravity to Asia. It does not matter where CPOs sit - or how CPOs could influence the regional performance, it is the mindset that matters – how the corporate recognizes the cost structure and supply chain model are gradually shifting to Asia and to support the regional growth with more resources moving forward. A panel discussion on talent development joined by Kevin HARRIS, Executive Director, Russell Reynolds Associates; Vincent YANG, Purchasing Director, SKF China; May LEE, Purchasing Director Asia Pacific, TRW Automotives; Kenith POON, Director, Purchasing & Supply Chain Management, Building Efficiency, Johnson Controls. Although there are no universal effective methods for every organization, this discussion explored the innovative approaches to talent retention from various industry perspective and key takeaways including: • Competitive financial incentives alone are basic but are not effective enough to retain the top talent • Diversity (cultural, skill sets, etc) is important to keep the team strong and to attract the people you want • Devote your time on high potentials, and never take the risk of losing them • Publish clear career path is not enough, you need to spend time to coach employees to look at long term stay (3, 5, 10 years), and make them believe the company are really investing in them • Culture remain the most critical issue in talent retention, consistent efforts should go into upgrading management skills of your middle level managers – Many people join the company for the reputation, they leave the company simply because of the managers. • Training on hard skill is not enough, you need to spend enough time yourself or collaborate with other functional leaders in coaching and mentoring top talent, and you need to encourage the employees to take responsibility of their own develop ment, and generate a sense of loyalty and let them have the feeling that they are growing with the company. • Cross function rotation and international posting are effective in retaining top talents, but employee’s personal interest and the cost for the company need to be considered, and you need to prepare managing functional performance in the “good” turnover. Talented people do deserve a fair procurement performance measurement to evaluate their real performance and contributions. That’s why a panel on effective procurement performance measurement was also discussed and was joined by a mixed group including Oliver LIN, Senior Trainer, EIPM China; Jill BUCHANAN, Director, Purchasing, Asia Pacific, Dow Chemical Company; Charles JIANG, China Supply Chain Director, Goodyear China; Tony DONG, Strategic Sourcing Director, Valspar Asia; Luc BROUSSAUD, Vice President Procurement, Nokia Solutions and Networks, the panel tried to answer the critical question: How to reform Purchasing KPIs to work not only as a solo department, but also as a strategy business partner. What types of KPIs there should be and how they should be measured in order for Procurement to be more strategic, visible and impactful. Ethics abuse could destroy both the efforts of talents and the company image instantly. To focus on the damage extent and the importance of ethics problems, a panel joined by Vincent YANG, Purchasing Director, SKF China; Lucy YANG, Director, Asia Purchasing Office, Magna Seating; Sean WU, VP Supply Chain Asia Pacific, Eaton Corporation and Kenith POON, Director, Purchasing & Supply Chain Management, Building Efficiency. There is no consistency of approaches for ethics corruption. They spoke on ways of working with finance and compliance department to make the company’s process more

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7th Annual Strategic Sourcing Summit 10th -11th, April, 2014, [ Radisson Blu Hotel Shanghai Hong Quan ], Shanghai, China Asia Strategic Sourcing Alliance

PRESS RELEASE strict and thorough in order to prevent ethics abuse and establish the right culture and right governance to lead the right people to do the right thing. Besides, they gave two tips that is try not to be alone with suppliers or customers. It reduces the chances of corruptions. They also emphasized on reporting to the compliance department or management when there is uncertainty of where the red line is. Part 3: Set up a Best-in-class robust Supply Chain For most of the companies, Supply Chain costs occupy about 70% in the whole costs structure. Therefore, buying well is much more helpful than selling well. In this summit, two 500 Fortune companies with strong supply chain base, Eaton and Continental, introduced their best practices for supply chain. Sean WU, VP Supply Chain, Asia Pacific in Eaton Corporation, shared his company’s best practice for Supply Chain and how to maintain their supply chain as a source of competitiveness. He shared information about how Eaton’s Supply Chain Management helps to drive growth, deliver cost out, generate cash flow and mitigate risks. He also introduced how they use process to ensure right products in right place at the right time with right quantity and how they enhance innovation by leveraging investment and competency of the supply base, including technology roadmaps supporting innovation. They optimize their network of logistics and do the load management. Sean also talked about their inventory engineering, effective SIOP process and payables and consignment to generate cash flow in their company. He explained how they optimize terms and other elements of cash flow equation to achieve their goal. Risks, like cost, quality, deliver and regulatory, were also being mentioned by him and how they set up strategies to mitigate such damages to their supply base. Andreas SUBBE, Director Supply Chain Management Automotive Asia Pacific in Continental group brought us a notion of Bestin-class. He shared a topic on “Best in class Supply Chain in an Emerging Market”. What is supply chain in emerging markets? Best in Class may look different. Andreas introduced how they define the best-in-class supply chain and how they use Flexibility for short frozen horizon, Efficiency for technical implementation and Expect the unexpected for risk management to prepare the supply chain network to sustain growth in the future. He also represented their strategies and methods to apply in order to improve the collaboration with suppliers: their requirements to suppliers, their supply chain design, capacity planning and inventory planning, their phase out management and spare parts logistics, and their supplier management. Andreas expressed Best-in-class Supply Chain can only be achieved in active partnership with all involved stakeholders such as OEMs, Tier1, Suppliers and 3PL Forwarders.

Part 4: Some specific metrics or mechanisms to realize the Best-in-class Supply Chain In addition to the big layout plan of Asia sourcing and supply chain management, we also delivered some specific detailed metrics or mechanisms to realize the large goal of procurement transformation such as, Value Stream Mapping, Risks Mitigation, Legal, Tax, Custom updates and Sustainability sourcing. “Value Stream Analysis: China Supply Chain Logistic Integration” was spoken by Lucy YANG, Director of Asia Purchasing Office in Magna Seating. Her speech was all about an initiated program in order to gain more profits and cost savings. She explained the optimization process for one of the value streams that they picked in the supply chain. From the VSM system, we could find out that logistic route from NA to Mexico was firstly removed in order to achieve the goals for lead time reduction, cost savings and inventory reduction when compared with Current State Value Stream Mapping (CSM) with Future State Value Stream Mapping (FSM1) after one year. Then they continued to work on the same program and settled a target of 3 years. They started to localize from NA to China directly. The oversea loop then was simplified to a domestic procurement & logistic loop. In addition, quality issues could be responded faster and more packaging could be returnable. She mentioned that this Value Stream Mapping process model could also be applied in many different ways and places. It could be a very useful case for other companies to use for reference.

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7th Annual Strategic Sourcing Summit 10th -11th, April, 2014, [ Radisson Blu Hotel Shanghai Hong Quan ], Shanghai, China Asia Strategic Sourcing Alliance

PRESS RELEASE Vincent YANG, Purchasing Director in SKF China gave a speech about responsible sourcing in China. He presented how to make sourcing sustainable, both from company’s responsibility side and supplier base integration side. He introduced SKF BeyondZero program about how they reduce the negative environmental impact deriving from their operations and increase the positive environmental impact by innovating and offering new technologies, products and services with enhanced environmental performance characteristics to their customers. Also, SKF set their requirements to select and evaluate their suppliers which they called QCDIM: Zero Defect/NCC, Total Cost Optimization, On Time Delivery, Innovation Product and Process and Management Ability & Sustainability so as to achieve an integrating sustainability in supplier development. In order to better operate in the procurement field, it is necessary to get a brief understanding of regulations. Baker & McKenzie, associate, Frank PAN, delivered a speech. The purpose of his presentation was to give a high-level overview of recent developments in China Customs, Legal and Tax and how these regulations affect outsourcing operations. He covered mainly four topics: Trade Facilitation Measures Updates which was put in place recently; Export Control Updates; Other Updates on Customs and Trade Policies and a very hot topic in the public eye presently: VAT Pilot Reform Updates. He explained the details about the new updates and analysis and how these regulations could apply into business. Risk management has always being a common, indispensable, unavoidable topic that we face in the supply chain. Labor and material costs skyrocketed, risks from unforeseen natural disasters and political upheavals soared, and intellectual property protection posed greater challenges than first thought. A panel on “How to develop specific responses to mitigate identified supply chain risks for the coming years?” was chaired by Kevin HARRIS, Executive Director in Russell Reynolds Associates and co-discussed by Jill BUCHANAN, Director, Purchasing, Asia Pacific, Dow Chemical; Fei LIU, Senior Director, Head of Asia Procurement, Harman International; David SHAO, Council Director of Procurement and Design-to-Cost (PDC), Alcatel-Lucent. In this session, the panelists, who come from the different industries, revealed their Top3 supply chain risks that they are facing now. The common risk for them was the fast evolving technology challenges, for automotive, chemical and high-tech industries. More cost saving requirements, time-to-market pressure, ever changing customer needs, competitors, all the elements construct innovation as a new and key supply chain risk. They introduced their different measures to handle the technology risk by cooperating with customers and suppliers. They also mentioned the Intelligence Protection could be another risk that derived from the innovation ideas. Besides, partnership with suppliers is also a major concern that they are dealing with. How to maintain a sustainable relationship by cooperating with your key suppliers? How to make sure your supplier’s financial health? When to monitor your suppliers and when to back off? All these issues were discussed in-depth. Risks are numerous and changing all the time. That’s why the processes or mechanisms to identify and prevent potential supply chain risks become so necessary and go beyond the problem solving after the risks occurred.

assa.noppen.com.cn

7th Annual Strategic Sourcing Summit 10th -11th, April, 2014, [ Radisson Blu Hotel Shanghai Hong Quan ], Shanghai, China Asia Strategic Sourcing Alliance

EMINENT SPEAKERS

Kevin HARRIS Executive Director Russell Reynolds Associates

Tony DONG

Kenith POON Director, Purchasing & Supply Chain Management, Asia Building Efficiency Johnson Controls

Jill BUCHANAN

Vincent YANG

Luc BROUSSAUD

Purchasing Director

Vice President Procurement

SKF China

Nokia Solutions and Networks

May LEE Purchasing Director Asia Pacific TRW Automotive

Charles JIANG

Sean WU

Harry ZHAO

Vice President, APAC Supply Chain Eaton Corporation

Senior Director, Procurement Operations Smith & Nephew

Lucy YANG

Gigi Laplume

Director, Asia Purchasing Office Magna Seating

Vise President of Procurement, Asia Pacific

Bessy Ou Asia Sourcing General Manager

Philippe THEGNER

GE Energy Management

Strategic Sourcing Director Valspar Asia

Director, Purchasing, Asia Pacific Dow Chemical Company

China Supply Chain Director Goodyear China

Air Liquide

Purchasing, Engineering and Quality Director, Asia Pacific Federal-Mogul Corporation, VCS

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7th Annual Strategic Sourcing Summit 10th -11th, April, 2014, [ Radisson Blu Hotel Shanghai Hong Quan ], Shanghai, China Asia Strategic Sourcing Alliance

EMINENT SPEAKERS

Oliver LIN Senior Trainer EIPM China

Frank PAN Associate Baker & Mckenzie

Andreas SUBBE Director Supply Chain Management Automotive Asia Pacific Continental

Fei LIU Senior Director, Head of Asia Procurement Harman International

David SHAO Council Director of Procurement and Design-to-Cost (PDC) Alcatel-Lucent

Dr. Martin Lockström Partner Asia Perspective

assa.noppen.com.cn

7th Annual Strategic Sourcing Summit 10th -11th, April, 2014, [ Radisson Blu Hotel Shanghai Hong Quan ], Shanghai, China Asia Strategic Sourcing Alliance

TESTIMONIALS “ Very well organized, great topics, relevant to event market procurement situations ” - Pentair Water “ Well organized/connected/managed - well done! ” - Clariant Chemicals “ Informative! ” - ASSA ABLOY “ Great Speeches providing the inspiration and common voice ” - Alfmeier Automotive Systems

UPCOMING EVENT

3rd Procurement Leaders Roundtable Optimizing Your Core Supply Base to Ensure Reliable Supply Continuity in an Age of Uncertainty May 29, 2014, Shanghai, China Procurement risk management is a subject that is long on words, full of different interpretations, and often short on actual help. 82% of companies are concerned about the risk in their supply chain... but only 11% actively manage them. 50% of the executives expect risks associated with raw-material supplies or parts to increase over the next three years and 36% anticipate increased risk of service failures due to longer supply chains and lead time. 94% said the disruption impacted profitability whereas nearly one-quarter of executives say their company doesn’t spend enough time or resources on mitigating risk and does no formal risk assessment. Asia Strategic Sourcing Alliance would like to welcome you to join our half-day executive roundtable to network and share best practice with other practitioners on key strategic skills, and tools to develop robust risk planning and mitigation strategies.

assa.noppen.com.cn

7th Annual Strategic Sourcing Summit 10th -11th, April, 2014, [ Radisson Blu Hotel Shanghai Hong Quan ], Shanghai, China Asia Strategic Sourcing Alliance

ABOUT THE ORGANIZER

About Asia Strategic Sourcing Alliance( ASSA)

Asia Strategic Sourcing Alliance

Asia Strategic Sourcing Alliance (ASSA) is a membership network serving major corporations and procurement, sourcing and supply chain executives in Asia, established within Noppen Group. We provide independent procurement intelligence, professional development and peer to peer networking and associations via our exclusive executive events, dynamic educational solutions and award winning online information resource.

Our Vision We are dedicated to becoming premier resources for leading procurement professionals in China to achieve organizational goals and boost personal growth. Each of us will strive to uphold and advance our firm’s standards of excellence, and continue to earn the respect of our clients as a provider of in-depth insights and intelligence to stay on top in the fast-growing, ever-changing industry.

Products and Services Branded Annual Conferences Working Groups Executive Roundtables Teleconferences & Webinars Workshops Public & In-house Trainings MICE

Contact Us ASSA (Asia Strategic Sourcing Alliance) – A Noppen Company C7-111, No. 570 West Huaihai Road Shanghai 200052 China Tel: +86 21 6085 1007 Fax: +86 21 6192 1908 assa.noppen.com.cn