How Coca Cola streamlined procurement.

1. Transforming Indirect
Procurement
Patrick Hopkins
Coke Consolidated

2. Coca-Cola History
Atlanta Consolidated Begins  Sold to Investors
Pharmacist  First with Dasani and  Globalization
Dr. John Fridgepacks
Pemberton  One of 64
Independent Bottlers
1886 1888 1902 1916 1919
Secret Formula Famous Contour
Sold to Bottle
Asa Candler
Thought Coke in
bottles was “stupid”
and sold bottling
rights for $1.00

3. Procurement Opportunities
 No visibility to indirect spend detail
• Half of indirect on credit cards
 Six disparate order/payment processes
 Use of non-approved suppliers
• Verbal commitments with non-established suppliers,
late and duplicate payments, uninsured liabilities

4. Procurement Opportunities
 Use of non-standard, non-approved materials
 E-commerce solution not widely embraced
 Significant shopping prior to buying

5. Procurement’s Mission
Put the right materials and services
In the right hands
At the right place
At the right time
At the right cost
All the time

6. 87%
LIES HIDDEN
UNDERWATER

7. PRICE
Payment Terms & Methods Rebates/Discounts
Desktop Delivery
Bin Stocking
OPPORTUNITY
Training
Delivery Performance (Timeliness & Accuracy)
Receivables, Accounting Timeliness & Accuracy
Warranty Costs & Benefits
Stock Buy Back Agreements
Requisitioner’s Time
Cost Savings Programs
Operating Life Expectancy – Mean Time Between Failures
Data Transmission Costs (EDI vs. Paper)
RISKEnergy Consumption
Technology Enablers (Catalogs, Internet Capabilities) Regulatory Compliance
Shipping/Delivery Costs
COST
Purchasing Processing Time
Compatibility with Existing Equipment/Modification Costs
Dedicated Inventory Data Management Costs (Pricing, Catalogs)
TIME
Installation Costs
Error Correction/Customer Support Technical Support
Safety & Environmental Impact Ongoing Maintenance
Product Liability
Spare Parts Purchase & Inventory Holding Fees
Contract/SLA Administration Costs Consignment Inventory

8. Procurement Transformation Strategy
 Consolidate Supply Base
• Higher spend = lower mark up
• Rebates, incentives, MSAs, terms, insurance…
 Standardize Materials & Services
• Higher unit volume = lower unit price
• Lower inventory, higher quality,
longer life…
 Automate Processes
• Automation = employee & supplier productivity
• Simplify, eliminate, combine

9. Four E-Procurement Truths
1. The product must be in the catalog
2. Users must be able to find what they need
3. The data must be right
4. Users must want to use the system

10. So, Why Coupa?
Why Not SAP?

11. Achieving the 4 E-Procurement Truths
1. Items must be in the catalog
• Internally hosted
– Smaller suppliers, smaller scope
– Quicker system response
– Shared burden between supplier and customer
• Punch-out
– More burden on supplier
– Must be able to control scope, price
– Retrieval to cart process varies
An Unlimited Selection of Limited Options

12. Achieving the 4 E-Procurement Truths
2. Users must be able to find what they need
• Demands an intuitive, uncomplicated, simple process
• Demands master data excellence in accuracy,
consistency & clarity
• Demands ‘uniqueness’
• Demands fast response time
100% Confidence 100% of the Time

13. Achieving the 4 E-Procurement Truths
3. The data must be right
• Visibility to correct price
• Inventory availability
• Description & all MD accuracy
& consistency
• Delivery accuracy
• Billing accuracy
• Accounting accuracy – P&L
What Does it Cost if it’s Wrong?

14. Achieving the 4 E-Procurement Truths
4. Users must want to use the system
• Process must be:
– Easy
– Intuitive
– Fast
– Mobile
– Pleasant
– Successful
Easier than a P-Card

15. Results
 Capture & visibility of spend
• Integration to SAP
 Mobility that’s device agnostic
 Process discipline – 3-way match
• Requires receiving but eliminates
T&E process J A S O N D J F M
2012 2013
 Unlimited supplier expansion
• Critical to displace P-cards
 Cloud solution pleases ISS
 Positive user response & adoption
• Highest user rate vs. P-cards

16. Questions?