Strategic Value Beyond Savings

Strategic Value Beyond Savings Procurement & Supply Chains role in Delivering Sustainable Business Success Paula Gildert BSc FRSA FCIPS MIEE CEng VP...
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Strategic Value Beyond Savings

Procurement & Supply Chains role in Delivering Sustainable Business Success

Paula Gildert BSc FRSA FCIPS MIEE CEng VP Development Strategic Sourcing Novartis CIPS President

Leading global excellence in procurement and supply

Complexity is everywhere

Leading global excellence in procurement and supply

“A more complex form of capitalism is emerging that has the potential to enhance corporate performance AND advance the quality of life for billions of people on the planet.”

..complexity of connected economies needs a new brand of leadership based on collaboration & innovation through partnership Leading global excellence in procurement and supply

CIPS President – an opportunity to start a new dialogue? • Build responsibility for • Raise Awareness & Leadership & Legacy in our Profile of Procurement Community of Practice & Supply Chain as a Profession

Leading global excellence in procurement and supply

CIPS President – an opportunity to start a new dialogue? • To Promote & Develop our Value proposition – a new winning strategy that goes beyond cost savings

Leading global excellence in procurement and supply

Our focus is on patients

Our purpose is to care and cure. We provide medicines to treat and prevent diseases, ease suffering and improve quality of life.

An Example Novartis Pharma - Development Gen Meds Cost Reduction Performance Savings $m

7%

144

10%

96

2010

2011

120

2012

9%

127

Target 9%

2013

Leading global excellence in procurement and supply

A new strategy for a new game Productivity

Innovation

Growth

Deliver financial measurements (savings, cash flow) & supporting business bottom line

Drive innovation by creating collaborative culture with suppliers & business partners

Speed to market. Contribute to lunch excellence and support the blockbusters.

Protecting the business Ensure quality compliance & integrity, supply risk & ethical behaviors.

Organization Excellence

Organization & Governance

Providing efficient and effective processes and systems, timely, accurate data and easy to use.

Global category strategy, cross divisional structure, value creation

Business Partner

People

Understand business needs, bring insights to partners

Create a diverse culture & attract, develop & retain

& deliver joint goals & aspirations

best of class talents

Value Delivery

Value Enabler

Leading global excellence in procurement and supply

What does Value Beyond Savings look like?

Corporate responsibility Assurance of supply & risk mitigation

Quality & Service Innovation & Insight

Cost

Leading global excellence in procurement and supply

Measuring Delivery of Our New Game • % time on Core activities • Key Process Continuous improvement (contract cycle time) • Quality and compliance (Zero Audit

• • • • •

Cost savings Cost avoidance Total product cost E-sourcing / auctions Cashflow

findings)

• Customer survey

• People Engagement Survey • Training feedback

• Supplier survey • Strategic Supplier Relationship performance

Leading global excellence in procurement and supply

…. to transform the way we work we need a new approach Traditional Approach starts here: ‘above the water-line’ intervention delivers marginal improvements and low sustainability

Achieve Breakthrough approach starts here: Intensive ‘below the waterline’ intervention combined with unique innovation delivers genuine transformation. “The real voyage of discovery consists not in seeking new landscapes but in having new eyes” Marcel Proust Source: Achieve Breakthrough

Leading global excellence in procurement and supply

Commitment to be a Trusted Partner • Who understands the business needs to drive growth, innovation, productivity & to protect the business • Who brings valuable insights to partner with the Business & improves the strategy to develop and deliver joint goals & ambitions • Who fosters an affiliated & collaborative culture to greenhouse & implement innovative solutions & ideas from our third party partners & suppliers

Leading global excellence in procurement and supply

We need to deliver breakthroughs in several areas Permission and Confidence

• Stand as equals – belief and confidence • Seeing and committing what it takes to be a Trusted Business partner • Show up as expert through entire cycle of identification of opportunity, contracting through to delivery

Change Agency

• Supporting the business in a new way of working - ‘blow’ up the conventional wisdom, assumptions and habits that limit • Experts at shifting the perception of the business

Skills to lead the agenda’s

Executing the agenda

• Strategic Thinking, based upon business insight and organisational savvy • Able to gain ownership of the agenda through listening to customers and weaving in sourcing agenda in a seamless way • Able to jump between modes – expert, facilitator, coach, trainer • Overcoming and navigating the dynamics of implementing change • Creating an environment for innovation • Turning resistance into a positive force going forward - enrolment

Leading global excellence in procurement and supply

The goal is to develop a number of skills In how we work & engage with both Customers & Suppliers

Change Management – transferring change management skills to help others drive through outcomes that need behavioural change

Facilitating – working with groups and teams to design and manage interventions that are future-focussed and action-driven

Coaching – uncovering people’s concerns and fears and reframing action based on a future commitment

14

Business expertise – understanding strategic drivers and issues for organisation, so as to get buy in at right level and align on visions and priorities

Consulting skills – understanding how to use the right mix of tools – listening, questioning, communicating, influencing – to create a trusted advisor presence Active listening – ensure effective communication technique that requires the listener to feed back what they hear from the speaker

Leading global excellence in procurement and supply

Thank you

Leading global excellence in procurement and supply

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