In this presentation Garry has shared some of the challenges the procurement team at AMD faced owing to the changing business environment & the procurement initiatives undertaken by AMD to wade through the turbulent waters. Garry has also provided insights into how an effective implementation of procurement technology can result in greater value realization for the procurement function.

2. Wading Through Turbulent Waters
– AMD’s Procurement Journey
Presented by
Garry Christie
Director, Global Business Services
Advanced Semiconductor Devices (AMD)

3. AGENDA
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AMD Profile
Business Environment
Challenges and Initiatives
Zycus – Fast Track Implementation
Change Management
Value Realization
Closing Message

4. AMD PROFILE
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Headquarters: Sunnyvale, California
Established: 1969
Employees: Approximately 10,000 worldwide
Facilities: more than 50 locations worldwide
NYSE Listing: AMD
Fortune 500 firm
2012 revenues of $5.42 billion
At AMD we live our core values through our actions

5. BUSINESS ENVIRONMENT
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In 2011 we anticipated a decline in our
core markets from 2012 forward
Cloud is the killer app that changes
everything
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Commercial and consumer spending
moving from PC’s and Notebooks to
Tablets and Phablets
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3 phase turnaround put in place
 Reset and restructure
 Accelerate & Execute
 Transform to Win

6. AMD TRANSFORMATION
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Protect our Core Business
 Desktop PC
 Notebooks
 Graphics
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Attack New Markets
 Tablets
 Gaming
 Embedded
 Dense Servers

7. PROCUREMENT CHALLENGES
 Our headcount needed to reduce
 We were already below
benchmark
 We had to aggressively drive cost
reduction in all areas
 Gross Margin
 Factory Operating Cost
 R&D plus SG&A
 Need to increase leverage with
suppliers
 Spend decreasing
 Business model changing

8. PROCUREMENT INITIATIVES
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Provide our global team with
tools to improve efficiency
 To meet the challenge of
increasing goals with decreasing
headcount
Specific need for Analytics with
our Indirect Spend
 Significantly larger number of
categories and suppliers than
Direct
Implement with minimal
budget and no procurement
systems team
 We cannot allow this to impact a
successful deployment

9. ZYCUS - Fast Track
Implementation
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Zycus was selected as SaaS provider
for 3 modules:
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Contractual agreement at end of
June 2011
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Spend Analysis – new capability
eSourcing – replaced Ariba
Supplier Management – replaced
home grown solution
Go-live with all modules at start of
2012
Each module was led by one of our
sourcing managers
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Global team of super users created
for each stream
Zycus training augmented by AMD
computer based

10. CHANGE MANAGEMENT
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Strong support from Senior
Management was essential
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Build on a strong foundation of
business processes
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Discuss, decide, embrace & execute
Continuous Improvement as we
learn from enhanced capability
Develop an unwavering
partnership with IT
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Program Management is critical
Building a trusted data set is key

11. ZYCUS ENABLEMENT
Category
Research &
Analysis
Business
Requirements
Development
iAnalyze
Sourcing
Strategy
Development
Supplier
Selection &
Evaluation
Business
Execution
iAnalyze
 One comprehensive view of
global spend
 Clear user interface to run
reports
 Standard work process
deployed globally
Performance
Management

12. ZYCUS ENABLEMENT
Category
Research &
Analysis
Business
Requirements
Development
Sourcing
Strategy
Development
Supplier
Selection &
Evaluation
iSource
 Used for all RFx activity
across the global team
 System is able to support
all types of events
 Easy interface supports
complex pricing scenarios
Business
Execution
iSource
Performance
Management

14. VALUE REALIZATION
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All Supplier Management scorecards
completed in iPerform
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All eSourcing completed in iSource
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100% of top tier suppliers
Terrific usability and collaboration
Supported selection of award
winners for annual Supplier Day
Average savings percentage greater
than benchmark
Regional teams leading the way
iAnalyze used for Spend Analysis
across global procurement
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Enabled improvement in pay terms
to support increased DPO
Significant efficiency gains in
gathering Indirect spend data
One consolidated view of global
spend

15. Key Procurement
Performance Indicators
Procurement Labor
Reduced 23%
Procurement Labor
Savings Increased
per FTE 26%
Savings per FTE
Source: AMD Data
Supply Base
Reduced 30%
Active Supply Base

16. CLOSING MESSAGE
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Do not underestimate the
need for business process
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Stay the course
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Foundation of everything we do
All issues can be overcome with
conviction and fortitude
Pick a good partner
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Success would not have been
achieved without the support
and flexibility of Zycus

17. Disclaimer & Attribution
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