Quality
Global Sourcing Strategies in a
Volatile Environment
Service
ELC
Procurement
Best Practices
Cost
Leonardo DeCandia, P.E.
October 12, 2010
Global
Procurement
Global Indirect
Procurement
1
Presentation Agenda
•
•
About the Estee Lauder Companies
About the Presenter
•
Sourcing Practices at ELC
•
Current & Evolving Challenges
•
Tactics & Strategies
•
Q&A
Global
Procurement
Global Indirect
Procurement
Quality
Service
ELC
Procurement
Best Practices
Cost
2
The Estee Lauder Companies Inc
•
Founded in 1946
•
$8 Billion in Sales
•
Over 25 Brands/Over 40 Global Affiliates
•
Prestige Beauty Segment
•
A Culture of “High Touch” – Unique Connection to
the Consumer
•
Building & Investing on a Tradition of Excellence
Global
Procurement
Global Indirect
Procurement
Quality
Service
ELC
Procurement
Best Practices
Cost
3
Leonardo DeCandia
•
15 Years @ J&J; Last Role – Head of Supply
Management Consumer Companies
•
8 Years @ Roche; Last Role – Chief Supply Officer
Pharma NA
•
4 Years @ AmerisourceBergen; Last Role –
SVP/CPO Supply Chain Management
•
Part Time Lecturer – Rutgers University Graduate
School of Business
•
Chair Emeritus – Rutgers University Supply Chain
Center
Global
Procurement
Global Indirect
Procurement
Quality
Service
ELC
Procurement
Best Practices
Cost
4
ELC Procurement Balanced Approach to Supply Base Management
• Adherence to ELC Standards & Expectations
• Robust & Reliable Quality Systems
• Consistent & Repeatable Global Execution
• Adherence to Promise Date
• Responsive & Flexible to Change
• Clear Understanding of Priorities
Quality
Service
ELC Procurement
Best
Practices
Cost
• Global Systems & Tools
• Organizational Training & Development
• Investment in Innovative Practices & Technologies
Global
Procurement
Global Indirect
Procurement
•Wednesday February 10th, 2010
• Marketplace Leadership
• Continuous Improvement Mindset
• Optimal Asset Utilization
Current & Evolving Challenges
•
•
A Cautious Supplier Base – Is this recovery
sustainable?
A Dynamic Geopolitical Environment – The
changing of the guard in Asia & the reindustrialization of the US & Europe?
•
An Overleveraged Consumer in the Major Markets
– Can the growth of emerging markets off-set the
revenue loss?
•
The Constant Need to be Quicker & More Efficient
– Procurement’s role in facilitating access to
innovation and expansion of profit margins?
Global
Procurement
Global Indirect
Procurement
Quality
Service
ELC
Procurement
Best Practices
Cost
6
ELC Procurement Priorities & Focus
1.
2.
Direct Material Sourcing
• Global Brand Leads (Experienced & Integrated Resources)
• Global Category Leads (Leadership @ Source Supplier)
• Global Innovation Lead (Integrated w/R&D Colleagues)
Third Party Manufacturing
• Global Strategy & Supply Management
• Consolidate Suppliers Based Upon Core Competencies
• Formal Innovation Management Practices
3.
Indirect Procurement
• Global Buyer’s Network w/Regional Hubs
• Global/Regional/Local Category Management Processes
• Global Roll Out of SAP with Common Data & Policy
4.
Organizational Development & Investment
• Common Category Practices for All Procurement
• Rotation Programs – Cross Brands, Regions & Procurement
• Training in Performance Management
Global
Procurement
Global Indirect
Procurement
Quality
Service
ELC
Procurement
Best Practices
Cost
7
Tactics & Strategies for the Current Environment
Service
Quality
• Full Understanding of Global
Regulatory Environment
• Dynamic Measures & Supplier
Reward Systems
• Early Supplier Engagement in
Design for Execution
• Metrics: Quality @ receipt; %
suppliers @ highest level; etc
Quality
Service
• Global Center-Led Policy & Processes
with Regional Execution
• Lead Time Reduction Programs &
Capacity Planning
• Innovation in Common Platforms
with Brand Customization
• Metrics: On time delivery; flexibility
to change; lead time average; etc
ELC Procurement
Best Practices
• Organizational Design Aligned with
ELC Strategy
• Core Competency Focus Integrated
& Complementary to Business
Partner Needs
• Procurement Professional
Development @ Global Level
• Metrics: Training hours; retention
levels; high potentials %; etc
Global
Procurement
Global Indirect
Procurement
Cost
Best Practices
Cost
• Brand Driven COGS Targets with
Procurement Programs
• Category Life Cycle Management & 5
Year Pipeline Plans
• Global Market Expertise & Dynamic
Supplier Management
• Metrics: COGS; year to year savings;
supply base consolidation; etc
8
Q&A
Quality
Service
ELC
Procurement
Best Practices
Cost
Thank you
Global
Procurement
Global Indirect
Procurement
9