Profit From The Source
Convención CPOnet
NOVEMBER 16, 2022
0
Books and videos by Christian
Christian Schuh
BCG Senior Partner and MD
1
1
Globalization
1990
2020
Source: BCG
2
2
De-globalization
Source: BCG
Natural disasters
New regulation
Climate change
Trade & tariffs
Source: AFP
Shortages
Inflation
Pandemics
Wars & sanctions
3
3
Many companies don't understand Procurement
CEOs spend just 1% of their time with suppliers …
7 min
… and will say that Procurement's only task is savings generation
"[…] They are right that better management of supply-chain risk is urgent. But will the CPO have time to do that while also cultivating suppliers; achieving breakthrough innovations; improving product quality; helping meet environmental, social and governance goals; and doing several other things as well?"
Source: WSJ ‘Profit From the Source’ Review (July 2022)
Source: Michael E. Porter and Nitin Nohria, “How CEOs Manage Their Time”, Harvard Business Review, July-August 2018, BCG analysis
4
4
"I had never had an automotive executive call me – until the shortage was desperate. In the past two years they call me and behave like my best friend. […] One auto maker called to urgently request 25 wafers! No wonder you cannot get the support"
TSMC CEO C.C. Wei to a �crowd in Silicon Valley 2022
Source: Bloomberg; BCG Analysis
5
5
Having a CPO in the leadership team pays off
Source: BCG analysis of 150 companies out of “S&P 500” on stock price developments between 2000 and 2020
Share price increase in %, indexed at 100% (2000)
6
6
How to Profit from the Source
5
Demand upfront�double savings
6
Achieve breakthrough�innovations
7
Deliver unbeatable�quality
9
Go twice�as fast
8
Become truly�sustainable
10
Halve
your risks
How the Company’s Ecosystem needs to change
How the Company needs to change
How the CEO
needs to change
7
7
7
Apple – the supply chain company
8
8
Companies now start to realize that change is needed: Example Volkswagen
Source: LinkedIn
9
9
Profit from the Source
Launched June 21, 2022, in collaboration with Harvard Business Review Press.
The book draws on proprietary research and our first-hand experience in working
with some of the world’s leading companies. The focus of the book is how procurement and supply chain as a function needs to take center stage, for companies to increase profitability.
The book is divided into three sections:
A What The CEO must do to change?
B What The Company must do to change?
C What The Company’s Ecosystem (supplier network) must do to change?
Lessons from the book applied.
10
10
The services and materials provided by Boston Consulting Group (BCG) are subject to BCG's Standard Terms (a copy of which is available upon request) or such other agreement as may have been previously executed by BCG. BCG does not provide legal, accounting, or tax advice. The Client is responsible for obtaining independent advice concerning these matters. This advice may affect the guidance given by BCG. Further, BCG has made no undertaking to update these materials after the date hereof, notwithstanding that such information may become outdated or inaccurate.
The materials contained in this presentation are designed for the sole use by the board of directors or senior management of the Client and solely for the limited purposes described in the presentation. The materials shall not be copied or given to any person or entity other than the Client (“Third Party”) without the prior written consent of BCG. These materials serve only as the focus for discussion; they are incomplete without the accompanying oral commentary and may not be relied on as a stand-alone document. Further, Third Parties may not, and it is unreasonable for any Third Party to, rely on these materials for any purpose whatsoever. To the fullest extent permitted by law (and except to the extent otherwise agreed in a signed writing by BCG), BCG shall have no liability whatsoever to any Third Party, and any Third Party hereby waives any rights and claims it may have at any time against BCG with regard to the services, this presentation, or other materials, including the accuracy or completeness thereof. Receipt and review of this document shall be deemed agreement with and consideration for the foregoing.
BCG does not provide fairness opinions or valuations of market transactions, and these materials should not be relied on or construed as such. Further, the financial evaluations, projected market and financial information, and conclusions contained in these materials are based upon standard valuation methodologies, are not definitive forecasts, and are not guaranteed by BCG. BCG has used public and/or confidential data and assumptions provided to BCG by the Client. BCG has not independently verified the data and assumptions used in these analyses. Changes in the underlying data or operating assumptions will clearly impact the analyses and conclusions.
Disclaimer
11
11
bcg.com
12