GATS Supply Chain Management ”Adding Value and Creating New Profit Streams

1. GATS Supply Chain Management ”Adding Value and Creating New Profit Streams through Strategic Alignment and Accelerated Performance Improvement” 14 September 2007

2. GATS Supply Chain Management ”Adding Value and Creating New Profit Streams through Strategic Alignment and Accelerated Performance Improvement” • What we intend to do • Where we intend to do it • How we intend to approach it • What’s the opportunity we should focus on

3. GATS SCM - Mission Statement “To deliver tangible improvements to the business performance of our clients and targeted assets through the accelerated implementation of innovative and effective supply chain management concepts & processes and by operational execution”

4. We understand procurement & supply chain management… We understand procurement & SCM in key vertical business sectors… We understand key global supply markets… We understand how procurement operates further down key supply chains.. We understand in general terms how and why their customers buy from them… We work synergistically to form strategic partnerships with key players in critical supply markets… With PMMS, we are big enough to have global impact and understanding… Yet we are small enough to deliver a senior and personal touch. The GATS Senior Management Team Understands SCM across five continents…

5. GATS SCM Services • Organizational Assessment & Opportunity Assessment • Structured assessment of SCM capability, benchmark against 100+ blue-chips • Defines potential for incremental value generation • Strategic Sourcing • Expenditure segmentation, Spend Analysis & Opportunity analysis • Embedding structured and differentiated methodologies • Category and Supply Market Knowledge • Establishing and managing Strategic partnerships • Implementation support and benefits acceleration • Tactical Sourcing • Identifying quick-win opportunities • Target definition and sign-off • Resource planning • Procurement Change • Organisation, people, process, strategy • Leading to self-sustainability at enhanced levels

6. GATS SCM Services • Resourcing • Capability Development • Project support and implementation • Market assessments and research • Purchasing • Procurement transformation & change management • Process expertise & organizational benchmarking • Classroom training, e-learning and blended solutions • Category management – strategic sourcing • Outsourcing and low cost economy sourcing • E-procurement consulting and solutions • Negotiation • Planning • Delivery • Resource management – • Recruitment • interim management • Sales Proposals • Capability upgrade • Live deal support

7. Key Elements of GATSStrategic SCM Process • Expenditure Segmentation • By supply chain • Spend and opportunity analysis • Structured and prioritized plan • Project Initiation • Robust PM disciplines • Differentiated Process • Level of analysis, approach and resourcing determined by the supply chain/supply market type, complexity and business risk • Strategic ‘SASP’ process - strategic categories, difficult markets • Accelerated ‘Quick Win’ process – tactical categories, straightforward markets • Implementation & benefits realization • Continued PM discipline: risk and change management

8. Strategic • Driven by business needs • Solving a business need • Influencing and developing the market to meet the needs • A cross-functional business process • Acquisition built around strategy to shape the market, supply chain analysis, supply base optimization • Application of a market-led differentiated approach using appropriate tools/methodology • Part of strategic planning • Market & Relationship managers Tactical • Driven by specifications/requisitions • Often buying a solution • Buying what the market offers and sells • A function • Acquisition built around consolidation of spend, supplier rationalization and often leverage • Adoption of a structured sourcing methodology usually leading to RFPs or pre-determined approaches • Not part of strategic planning • Contract Managers Tactical vs Strategic P&SCM- What’s the difference?

9. Over 60% of multi country sourcing strategies fail to deliver the value determined in the business case The number one cause is the lack of a robust but flexible P&SCM Operating Framework that drives rigour at all stages of the process The Global P&SCM Challenge

10. Enabling Foundation Strategic Capability External Relationship Management Contribution & Influence Organisation & Internal Relationships Quality of Analysis Quality of Process, Sustainability of Delivery & Permanence of Change Staff Calibre & Capability Development Strategic Procurement Action Quality & Application of Systems & Information Purchasing & Process Control Framework Delivery Of Results Assessing a Target Organisation’s P&SCM Operating Framework

11. Business Supply Chain Focus Business Supply Chain Optimization Business Value Optimization Basic Proc Ops Differentiated Purchasing Transactional Low Management Attention No Professional Purchasing No Supply Chain Management Operational Focus Low Skills ‘Shopping’ Behaviours Cost/Spend/ Opportunity Analysis Purchasing Effectiveness Analysis Coordination Control Early Wins Non-traditional Spends Make vs Buy Outsourcing Category Mgt Focus Contracting Strategies Cost analyses 2nd Phase ‘SASP’ wins ‘Foundations’ Development Process Improvement Supplier Management Risk Management Key Alliances Driven Competency Development ‘Business Needs’ drivers Enhanced Customer Proposition Proactive Sourcing Cross-function Teams End-to-end Supply Chain Alignment Value Drivers Value Based Sourcing Value Based Selling Cross- Enterprise Decisions 6 sigma Approach Value Integration Level 0 Level 1 Level 2 Level 3 Level 4 Level 5 P&SCM – Opportunity Analysis within Target Organisations

12. P&SCM – Opportunity Analysis within Target Organisations • So, of the 106 MB assets: • Where are they positioned in these terms? • Can we develop a simple graphic representing a first best guess of the 106 versus “Levels 0 – 5” ? • Can we then further prioritise within this, perhaps focusing on Levels 0-2 initially ? • And what would all this tell us about the scale and achievability of the performance improvement opportunity within your current asset base ?