When it comes to good supplier management, it’s an opportunity you wouldn’t want to miss and a risk you cannot afford to take. Meticulous supplier information gathering, measuring performance, and assessing risks is a two-way collaborative process between buyers and suppliers. Without the right tools and processes, efforts to manage your supplier portfolio could take a lot of time with little results. This session presents the groundwork for laying a successful supplier management strategy and the best practices in maintaining buyer and supplier adaption.

1. #AribaLIVE
@ariba
Effective Supplier Management: Because
Knowing Is Better than Wondering
© 2015 Ariba – an SAP company. All rights reserved.
Speakers
• Dolf Mesland – Air France-KLM
• Natasja Wierts – DSM
Moderator
• Keertan Rai – Ariba, an SAP Company

2. #AribaLIVE @ariba
Agenda
© 2015 Ariba – an SAP company. All rights reserved.2
• Overview and Introductions
• Panel Presentations
• Dolf Mesland, Manager – Procurement Processes and Systems, Air France - KLM
• Natasja Wierts, Business Process Expert, DSM
• Q&A

3. #AribaLIVE @ariba
Effective Supplier Management: Because
Knowing Is Better than Wondering
© 2015 Ariba – an SAP company. All rights reserved.3

4. #AribaLIVE @ariba
Panelists
© 2015 Ariba – an SAP company. All rights reserved.4
Dolf Mesland
Manager – Procurement
Processes and Systems
Air France - KLM
Natasja Wierts
Business Process Expert
DSM

5. #AribaLIVE @ariba
Air France KLM
“ proud of our history, committed to our future ”
Air France & KLM: A Rich History
© 2015 Ariba – an SAP company. All rights reserved.5

6. #AribaLIVE @ariba
Air France KLM
“ proud of our history, committed to our future ”
Today: Customer-centric, Innovative & Efficient
Lost & found : https://www.youtube.com/watch?v=NK-T_t166TY
© 2015 Ariba – an SAP company. All rights reserved.6

7. #AribaLIVE @ariba
Air France KLM – Some Figures over 2014
€ 25.000 Million revenues
231 destinations in 103 countries
77.5 Million passengers carried
370 aircraft operated
30.000 cabin & cockpit crew employed
© 2015 Ariba – an SAP company. All rights reserved.7

8. #AribaLIVE @ariba
Air France KLM Procurement Figures
© 2015 Ariba – an SAP company. All rights reserved.8
 200 Professional Buyers
 € 15.800 mio Spend
 3.400 Contracted Suppliers
 7.500 Managed Contracts
 300+ launched eRFIs/eRFPs
..... Some “spend” examples
- Crew Hotels  1.500.000 rooms
- JetA  11.000.000.000 liters
- Beer  5.000.000 cans

9. #AribaLIVE @ariba
Air France KLM Procurement Organisation
Airport & Navigation
• Airport
• Navigation Fees
IT
• Distributed Services, IT products
• IT Communication, IT applications
Corporate & Marketing
Facilities, General Services
• Marketing & Communication. Professional & Financial Services
Inflight Services
• Inflight Hardware, Catering Handling, Groceries & beverages
• Crew Accommodation
Fuel
• Fuel
• Logistics
Engineering & Maintenance
• Engines, Aircraft, Components, Cabin, Tools & Services
Airport Services
• Ground Operations Hubs, Handling Outstations
• General Services Equipment, Cargo Trucking, Cargo Handling
9

10. #AribaLIVE @ariba
Procurement Journey
• Aligned & Structured the Procurement Organisation
© 2015 Ariba – an SAP company. All rights reserved.10
• Set a clear Procurement Process & Tool Strategy
• Focused Tool-developments on “Strategic Buying”

11. #AribaLIVE @ariba
Supplier Management
© 2015 Ariba – an SAP company. All rights reserved.11
“ ………..
When it comes to good supplier management, it’s an opportunity you wouldn’t want to
miss and a risk you cannot afford to take. Meticulous supplier information gathering,
measuring performance, and assessing risks is a two-way collaborative process
between buyers and suppliers. Without the right tools and processes, efforts to
manage your supplier portfolio could take a lot of time with little results. This session
presents the groundwork for laying a successful supplier management strategy and
the best practices in maintaining buyer and supplier adaption
…………”

12. #AribaLIVE @ariba
Supplier Management
From  To (Day)
 Suppliers “everywhere”
 Supplier data “scattered”
 Supplier knowledge “not sustainable”
© 2015 Ariba – an SAP company. All rights reserved.12

13. #AribaLIVE @ariba
Supplier Management
From  To (day)
 Underlined that Suppliers are “key-asset” for Procurement
 Standardised the Supplier-base definition
 Set a clear supplier Update- and Approval- process
© 2015 Ariba – an SAP company. All rights reserved.13
Pre-req: … get the basis right
 Adaptation: do not underestimate the “administrative” effort
 Attention-points: Where to start and cleaning never stops
 Collaboration: makes life a lot easier

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“SIM” in Practice (Knowing vs Wondering)
© 2015 Ariba – an SAP company. All rights reserved.14
Supplier Management and “Compliance”

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“SIM” in Practice
© 2015 Ariba – an SAP company. All rights reserved.15
Collaboration leads to Knowledge

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“SIM” in Practice
© 2015 Ariba – an SAP company. All rights reserved.16
“Compliance Management”
 Approach
 Challenges
 Adaptation
 Results

17. #AribaLIVE @ariba
Constraint & Roadmap
• Air France KLM Processes & Systems
 Keep Supplier Base info accurate
 From operational- to strategic-Supplier Relationship Management
© 2015 Ariba – an SAP company. All rights reserved.17
• Ariba “SIPM”
 Supplier Contact (and User) Management
 Supplier Performance Management

18. #AribaLIVE @ariba
You can always visit us: www.af-klm.com/procurement
Thank you for your attention
© 2015 Ariba – an SAP company. All rights reserved.18

19. #AribaLIVE @ariba
Agenda
© 2015 Ariba – an SAP company. All rights reserved.19
• Overview and Introductions
• Panel Presentations
• Dolf Mesland, Manager – Procurement Processes and Systems, Air France - KLM
• Natasja Wierts, Business Process Expert, DSM
• Q&A

20. Page
FOR INTERNAL USE ONLY
20
DSM Mission
Our purpose is to create brighter
lives for people today and
generations to come.
We connect our unique
competences in
Life Sciences and Materials Sciences
to create solutions that nourish,
protect and improve performance.
Page 20

21. Page
FOR INTERNAL USE ONLY
Strong & Increasing Global Presence
World total ~24,500 employees*
Page 21
Latin America
~2,000
employees
North America
~5,000
employees
Europe
~12,500
employees
* 2013 numbers including employees Pharma cluster
China:
~3,500
employees
Rest of Asia:
~1,500
employees

22. Page
FOR INTERNAL USE ONLY
Goal
• Explain the deployment journey of DSM of Processes
and system to support DSM Sourcing in all strategic
sourcing activities.
• The deployment journey was an enabler to achieve DS
Indirect vision 2015 to de-complex CLM & SLM processes
- crucial to embed those processes in technology
Page 22

23. Page
FOR INTERNAL USE ONLY
7+% average
annual savings€ 2billion spend
4 Cluster
strategiesapproved by PLT
20 suppliers in
KSM (Key Supplier
Management)
Perf Mngt SystPeople – Processes - Systems
125.000+ suppliers in
systems
45.000+ active
suppliers last year
Contract compliance
from 18% to 60%
Active support to
60+ sites
SRMsingle largest DSM
IT-platform
Indirect Snapshot
Global Online
Procurement Platform
Page 23

24. Problem Description
Reduce costsCultivate value-
driven supplier
relationship
Define &
Minimize Risk -
compliance
Problem
descriptions:
Basic
requirements:
How can we
improve
/measure the
performance of
my supplier?
It takes a long
time before my
supplier data
is entered
Is my supplier
involved in child
labor?
Page 24

25. Apollo 2.0 – Shape 2010 - PSD
SRMq-MDM
BW
Page 25

26. Page
FOR INTERNAL USE ONLY
Introduction
• Processes and system to support DSM Sourcing in all
strategic sourcing activities.
• Modules implemented:
– E-Sourcing
– Supplier Lifecycle management
– Contract Lifecycle management
– Ariba Procurement Content (Catalogs)
• One central change manager appointed
• Implemented Globally between October 2013 and
November 2014 for 4 regions
• Technicalities : Cloud solution, Standalone system and
Access is arranged via Single Sign On.
Page 26

27. Page
FOR INTERNAL USE ONLY
Critical Success Factors
• Project set up (global design team with DSM sourcing
professionals / organization
• Close cooperation between Ariba – Internal consultancy
department - Sourcing professionals
• Stakeholder management
• Change management
• Training approach
• Commitment of management / project sponsor
cooperation with Management team – which enabled
fast decision making
Page 27

28. Page
FOR INTERNAL USE ONLY
Global Training and Deployment
• All users in their own region trained via 3-day class
room training by the project team.
• Day 1: functional training
Day 2: system training – demo & exercises
Day 3: cases in the system, wrap up and closure
• Documentation: training slides and working instructions
for exercises.
‘red line’ were true / false questions throughout the
full training.
• Online training approach available for new employees
28
Page 28

29. Page
FOR INTERNAL USE ONLY
Scoping of Supplier Lifecycle Management
• Supplier Qualification & Approval
• Supplier segmentation process
• Supplier Performance measurement and evaluation
• Supplier non-performance management
Supplier workspace Supplier Performance
Management project
SW
Page 29

30. Page
FOR INTERNAL USE ONLY
Supplier Qualification and Segmentation
Suppliersegmentation
Ariba
Discovery
Operational
Suppliers
Tactical
Suppliers
Strategic
Suppliers
Potential
Suppliers
DSM
Ariba
SQ
A
All new qualified suppliers will have the initial status
of operational
Supplier approval will consist of one, and ultimately
two steps:
1. Formal approval based on qualification documents.
2. Formal approval of the segmentation:
a) In case of operational:
Suppliers do not require an approval
b) In case of strategic or tactical formal approval.
 Only e-Sourcing events can be conducted with approved
and potential suppliers
 Contracting can only be conducted with approved suppliers
 Supplier approval and segmentation are executed and
visible in Ariba (Single Source of Truth)
Page 30

31. Page
FOR INTERNAL USE ONLY
Supplier Qualification
& Approval
Check
Approval by Regional Director & Category Director
2. Credit Risk Assessment of
the supplier
1. Trade Control violations
3. Compliance to DSM’s
sustainability requirements
4. (Where applicable)
pre-qualification on
Safety performance
TradeControl
Compliance
CreditRisk
Assessment
Sustainability
questionnaire
SafetycheckPage 31

32. Page
FOR INTERNAL USE ONLY
Supplier Segmentation
•Competitive position
•Strategic alignment
•Supplier regards
DSM as a strategic
customer
Strategic fit
•Impact on bottom
line
•Potential value
•Growth
opportunities
Business
value
•Uniqueness of offer
and supplier
dependency
•Potential business
risks
Business
criticality
•Joint development
and innovation
opportunities
Innovation
potential
•Comply with code
of conduct
•Contribute to
sustainable solutions
for the value chain
Sustainability
potential
Page 32

33. Page
FOR INTERNAL USE ONLY
Supplier Performance
Measurement and
Evaluation
Principles SPM&E
Only in case a supplier is:
 Tactical
 Strategic
In case a supplier is:
 Operational:
no performance measurement,
useless requested / required based
on (performance) issuesPage 33

34. Page
FOR INTERNAL USE ONLY
Benefits
• Supplier reduction and consolidation
• Integrated approach
• Supplier risk management
• Manage suppliers across over all sites
• Transparency of supplier complaints
Page 34

35. Page
FOR INTERNAL USE ONLY
Lessons Learned
• An enabling procurement tool need to be part of an integral
strategic approach
• First learn to walk before you can run!
• Keep it simple – De Complex!
• Fast decision making only possible through high
Commitment of management and empowerment of
Deployment team
35
Page 35

36. #AribaLIVE @ariba
Agenda
© 2015 Ariba – an SAP company. All rights reserved.36
• Overview and Introductions
• Panel Presentations
• Dolf Mesland, Manager – Procurement Processes and Systems, Air France - KLM
• Natasja Wierts, Business Process Expert, DSM
• Q&A

37. #AribaLIVE @ariba
© 2015 Ariba – an SAP company. All rights reserved.37
“Even a correct decision is wrong
when it’s taken too late.”
- Lee Iacocca

38. #AribaLIVE @ariba
© 2015 Ariba – an SAP company. All rights reserved.38
Contact Us
Contact Information: (Panelists)
Dolf Mesland
Dolf.mesland@klm.com
Natasja Wierts
Natasja.wierts@dsm.com
Contact Information: (Moderator)
Keertan Rai
Keertan.rai@sap.com