Presentation from Elemica's inSIGHT 2013 Conference

1. Automation & Process
Improvement Strategies
Onno Maliepaard
The Goodyear Tire & Rubber Company

2. Agenda
• Intro Goodyear Tire & Rubber Company
• Organisational design principles behind Purchasing
set up
• Automation as lever to increase effectiveness &
efficiency of purchasing
• Business Intelligence as outcome of automation
• New measures of efficiency and effectiveness

3. Our Early Years
• Founded:
– In 1898 in Akron, Ohio by
industrialists Frank and Charles
Seiberling.
• Named:
– In honor of Charles Goodyear,
discoverer of the vulcanization
process for natural rubber.
• Products:
– Bicycle and carriage tires and
rubber goods. Developed the
“Straight-Side” tire and first tire
building machines.
– Developed pneumatic airplane tires
in 1909 and began work on airships
(“blimps”) in 1910.
Frank
Seiberling

4. Early Milestones
• Became the world’s
largest tire company on
the basis of sales in 1916.
• Opened its first plant
outside the U.S. in 1910
in Bowmanville, Canada.
• Sales reached the $100
million mark in 1917
• $1 billion in 1951
• $5 billion in 1974
• $16 billion in 2009

5. In 2011…
72,000
180 million
$343 million
$22.7 billion
Tires Sold
Worldwide Associates
Net Income
Net Sales

6. Global Facilities…
World Headquarters: Akron, OH
Global Technical Centers: Akron, Luxembourg, Hanau
Global Manufacturing Facilities: 57
Manufacturing Footprint: 23 countries, 5 Continents

7. Global Consumer & Commercial
Sales with Leading Brands

8. Overview
Leading Market Positions and Brands
Brands
European Union
Latin
America
Asia
Pacific
North America
Market Position
#1 #2 #1 #2

9. Goodyear Purchasing Org
Strategy and Compliance
§ Supply Management Strategy & Leadership
§ Compliance
Expertise-based Activities
§ Sourcing: Category Management and Spend
Analysis
§ Sourcing: Supplier Evaluation and Negotiation
§ Supplier Performance Management
§ Contract Management
§ Supplier Collaboration
Transactional Activities
§ Requisitioning
§ Order Processing
§ Material Receipt
§ Financial Settlement
§ Supplier Data Management
§ Supplier Enablement
Drive
Efficiency
Drive
Effectiveness &
Efficiency
Drive
Effectiveness
Leadership
STRATEGY
Expertise
Based Activities
Transactional
Activities
Operational support
3 Pillar Organization established

10. Goodyear Internal Business users
Suppliers
2) Regional Operational
Procurement*
LUXEMBOURG SSC +
COUNTRIES, WHEN
-no language leverage
- continuous local supplier
engagement
1) Expert Sourcing &
Category Management*
REGIONAL OFFICES
LUXEMBOURG
2) Local Operational Procurement
3) Transactional
Procurement*
Near Shore
Intramural

11. Source-to-Pay Process Automation
Request Source Contract Order Receive Pay
Strategic Transactional
Operational
eProcurementeSourcing
Supplier Portal
eInvoicingeProc / MRP
VMI / VMOI
Procurement Requester A/PRequester
SIS
A/P Workflow
CLM / eCat
eProcurement tightly links Requester with Procurement

12. Business Intelligence
to drive Process Performance Optimization
Request Source Contract Order Receive Pay
Monitor Shopping Carts (SCs)
Monitor Requisitions
Define Strategy Plan
Provide Sourcing Support
Provide eSourcing Services
Define SRM Strategy
Optimize Contracts
Perform Contract Admin
Define P2P Strategy
Manage Cost Center
Optimize Supplier Performance
Receive Goods and Services
Optimize User Compliance
Perform Invoice Processing
ü Overview of approved SCs
ü SCs by requester
ü SC approval steps and approval time
ü Overview of overdue MRP requisitions
ü Key Performance Indicators (commercial +
process)
ü Spend classification based on standardized
product hierarchy at line item level
ü Vendor performance evaluation
(commercial)
ü Vendors per product category, per POrg
ü RFx and Auction documents per product
category, per Porg
ü Elemica Optimizer tool for raw materials
ü ABC vendors via VMD spend analysis
ü Contract Lifecycle Management
ü Elemica Optimizer tool for raw
materials
ü Performance cycle KPIs
ü Workload per POrg
ü SCs/POs per cost center
ü PO document details
ü Elemica VMI/VMOI reporting for raw
materials
ü Vendor performance evaluation (process)
ü OTIF “on time in full” tracking (late PO
deliveries)
ü Tracking of quantity mismatches
ü Goods Receipt document details
ü Invoice-PO compliance
reporting
ü Tracking of price
mismatches
ü Invoice document details
Circle back input for Sourcing: avg payment days, avg cycle time, avg pricing, etc

13. Process KPIs
to drive Continuous Process Improvement
KPI Target Actual
Spend concentration
(Indirects)
>60% spend covered by 300
suppliers
65% spend covered by <300
suppliers
Portal usage
(Indirects)
Note: RMs via VMI Portal
80% actively managed suppliers
defined on portal
75% of PO transactions via
portal
25% actively managed suppliers
defined on portal
65% of PO transactions via
portal
Handsfree procurement Indirects: >70%
Raw Materials: 100%
Indirects: 72%
Raw Materials: 100%
eSourcing usage
Note: RMs via offline process
50% hands-on shopping carts 20% hands-on shopping carts
eInvoicing usage 28% Jul 2013
49% Jan 2014
30% Jul 2013
Compliance Indirects: 97%
Raw Materials: 100%
Indirects: 97%
Raw Materials: 100%

14. Transactional Center Balanced Scorecard
to industrialize shopping cart handling
Focus Area KPI Target Actual
Efficiency Transaction cycle
time
<3 work days per PO
avg <1.5 work days
98% processed <3 days
<1 day avg cycle time
FTE loading >25/FTE/day 18/FTE/day
Effectiveness Handsfree >70% 72%
Price errors <5% <0.3%
Sustainability Turnover rate <30% <10%