Various figures in recent market research has highlighted the Procurement Reformation that is taking place in South East Asia, moving from tactical functions to a strategic role. This is an insightful presentation shared by Supakit Kitsaran - Strategic Sourcing Manager at Siam City Cement, in our previous Procurement Quarterly Meetup. Supakit has spent more than 17 years experience in the field of Procurement. He have worked with many communities and industries such as latex, steel, copper, third party services, and logistics. His vast experience has equipped him with the know-how and insights to improve procurement from demand management all the way to value analysis and value engineering. In his current role, he leads cross functional team for new project initiatives in domain of outsourcing services. The following is his 30-minutes presentation, where he looked into the challenges that procurement professionals face across South East Asia and Asia, and how these challenges are being currently addressed. He also examined the tools and technology that are instrumental in the Procurement Reformation of this region, as well as other motivation factors that drive South East Asian Procurement professionals in this reformation – such as low-cost operations, rapid market growth and China's growing influence on South East Asia.

1. Procurement Transformation
Procurement Quarterly Meetup
Procurement Reformation in South East Asia
Supakit Kitsaran
26th April 2018

2. 2Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
SCCC Group Company Profile (“INSEE” Brand)
• Found 1969, Listed in Thailand stock exchange
• Netsales Over 1 Billion USD (TH operation) and more after regional expansion
• 12 companies + 1 JV under the group
• Total 6,300 staffs in all countries
• Export to 13 countries in Asia and South Africa
IT services
Business Portfolio
Cement & Mortar
(Core)
Concrete and Aggregate Power and Coal (Share Holding)
Lightweight block
Wood replacement material
(Fiber Cement)
Waste Mgt & Industrial
Cleaning Servies
Indonesia
Total Capacity 26.5 M ton per year
Cement footprint & Capacity
INDONESIA

3. 3Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
One of the Largest Cement Facility in the World
World class operational and technical excellence
SCCC want to achieve the best value and a
sustainable future for all our stakeholders.

4. 4Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
The Multifaceted Nature of Transformation
30/04/2018

5. 5Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
What are current environment surrounding us nowaday?
Need competitive advantage (Organization excellence, Best Cost
competitiveness, etc) Need own expertise
Need technology, speed and efficiency
Need Professional procurement to support business competitiveness
Need to prepare for international
opportunity

6. 6Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
What is required procurement organization nowadays?
30/04/2018
Professional with Business Acumen

7. 7Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
Users are clear about what they expect from us
“I need someone with to be able to respond to my
needs quickly”
Customer centric…
“My ideal partner would need to have the expertise to
bring solutions to the table and be proactive to
suggest improvements”
…Solution provider
“Yes, my partner needs to help me buy faster and
better, but focus must be on value and not just on
lowest cost”
… adding value
“I need my partner to help me buy faster, better and
cheaper – it doesn’t matter how they are structured
internally”
Efficient…
“What I need is a good partner and collaborator”
“We need to be one team, with joint KPIs”

8. 8Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
Procurement maturity curve
SCCC (2018)
2014

9. 9Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
SCCC Procurement Strategy
To be World Class procurement organization in digital era
EfficiencyStrategic partnership Reliable supply Capability & Transparency
Strategic
Objectives
Goal and
target
Commercial success
Optimize total cost
of ownership with %
Benefit saving
Create additional
value with cash
improvement,
revenue generation
Create value for our
internal/external
business partners
with joined project
KPI, business
insight, co-creation
Develop a stable and
competitive supply
base
• Supplier
consolidation
• On time delivery
• Inventory
improvement
Ensure efficient and
effective procurement
cycles
• Increase contract
and automated
spend
• Reduce PR/PO
lead-time
Enhance capabilities &
ensure transparency
• % people qualified
• Satisfactory Audit
result
Key Enablers
for Operating
Model
Collaboration model
and governance
Role & Structure
enhancement
with RAPID
model
People
Development and
Performance Mgt
Leadership &
innovation culture
with Business
Acumen
Process & Information
With Procurement System & Tools

10. 10Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
Procurement Academy Framework
30/04/2018

11. 11Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
Need (PR)
Source
and
Qualify
RFQ and
Selection
Contract/
Catalog
PO &
Confirm
order
Receive Payment
Procurement System Development
for Procurement transformation and excellence
30/04/2018
ARIBA Sourcing
(e-RFQ/ e-auction)
ARIBA Content
Mgt
(e-catalog)
ARIBA Contract
Mgt
(e-contract mgt)
ARIBA Supplier
Information Mgt
(e-qualification)
ERP
(CORE)
Cloud
based
solution
Doc Mgt
& Report
Mobile
Device
(e-invoicing)
Business Report (2015) Business Analytic & Procurement Dashboard (2015/2016) Content & Document Management (2016)
P2P Process (2015)
(2016)
(2015)
PR/ PO Approval via mobile (2015)
ARIBA Network
(e-transaction)

12. 12Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
System integration benefits
for Procurement Transformation
• Strategic Sourcing Process standardization and implementation
• Category Intelligence in the system
• More advance technology experience & Promote innovative culture
• BI report for better analytic and decision
Efficiency
• Punch-out catalog for low value items: “ZERO” PO lead-time. Reduce MDM, Users Self-
Services with online shopping experience
• Supplier Collaboration via auto PO Sending and confirmation
• Approval flow to ensure collaboration and alignment
• SAP Fiori on mobile for faster approval
Reduce workload in transaction and paper work for buyers.
Customer services was improved by 30% faster PO lead-time ,
+10% Contract, and -15% HC optimization
RAPID capability building in strategic sourcing across the group with
same STANDARD, and support faster integration
Capability

13. 13Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
Commercial
success
• Category management Implementation
• E-auction to drive competition
• Sourcing standard (e-RFP, e-auction) was enforced with transparency
Achieved double cost saving with more professional sourcing approach,
more time to explore new ideas & supplier co-creation
Transparency
• Increase Procurement Process compliance & Control
• Avoid price manipulation and error via seamless flow of P2P Process
• Avoid maverick spend
Enhanced transparency with records, seamless data flow,
and proactive sourcing with enforcement resulting in good audit result
Reliable supply
• 24/7 Delivery confirmation to reach +10% on time delivery
• Consolidate low value items suppliers by catalog (Reduce >300 suppliers or -15%)
Faster, up-to-date, Available communication channel with suppliers
Enable new sourcing model to consolidate suppliers
System integration benefits
for Procurement Transformation

14. 14
Siam City Cement Public Company Limited
Business Performance Success
Overall Procurement Transformation
4.7
1.5
2.5
2.0
4.6
5.4
APAC Same
Industry
Cross
Industry
SCCC
2014
SCCC
2015
SCCC
2016
% Benefit Saving
Benchmark by global consulting firm in 2014
636
1095
2015
Target
2015
actual
2016
Target
2016
actual
Actual Benefit Saving vs target 2015-
2016
+72%
+28%
1285
Procurement Saving 2015-2016 Procurement contribution in 2017
• Procurement is one of main workstreams in Butterfly project for SCCC
Business Recovery Plan > 95 Initiatives
• We committed to 2017 EBITDA Impact of 250 MTHB and delivered 350
MTHB (140%)
• We collaborated and supported other workstreams/functions on commercial
parts

15. 15
Siam City Cement Public Company Limited
Q2 2016
Q2 2017
Business Performance Success
Overall Procurement Transformation
Procurement Maturity Curve – Organization Improvement
“Significant progress made towards building a world-class
procurement organization” – Global Consulting Firm
“Procurement has earned a seat at the table; proactive contributor
and responsive to our requests, creating value for their partners” –
SVP Manufacturing
Since Procurement transformation journey in 2015, The team
has demonstrated major improvement on organization
excellence and delivered higher performance with double
cost saving benefits, significantly contributing to company
performance in 2015-2017 and support regional expansion –
SCCC Group CFO

16. 16Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
Procurement was certified by external parties on
performance with many recognitions
ProcureCon Asia, Singapore, 11-13 July 2017
# Overall Winner Procurement and Supply Chain Team of the
Year
# Most innovative use of Technology
# Best People Development Initiative
SCCC Procurement won
3 CIPS Supply Management Awards 2017 ASIA

17. 17Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
Procurement Trend By 2020
30/04/2018
Chief procurement officers (CPOs) should use high internal business support to build
capabilities in value and collaboration, talent, and digital procurement.
Migrate from Price/Cost
focus to Value and ROI
Increase vendor
Collaboration & Value added
partnership
Linked to Business Agenda
and seen as enabler
Data analytics for transparent
decision making and Agility to
response dynamic with digital
Key Capabilities Requirement: Business Acumen, Operational Excellence, Risk management, Supplier Development, SRM,
Strategic Planning, Supply Strategy, Technology Enablement
proactively made fundamental changes to the way they operate including how they harness
digital technology, the ways they manage and use data, and how they interact across the
end-to-end value chain and with suppliers.

18. 18Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
CAPS RESEARCH: 2018 Roundtable Top Issues for CPO’s
Technology
• Blockchain
• Artificial
Intelligence
Risk
Management • Cybersecurity
Talent
Management
• Skills for
Strategic
Focus
Alignment
to Business
Strategies
• Seat at the
table
30/04/2018

19. 19Siam City Cement Public Company Limited ©SCCC | All Rights Reserved.
Key Takeaways form our journey
• Focus on People Capability building
• Automate/integrate - Improve efficiency and apply
strategic approaches
• Built Momentum whilst remaining flexible
• Change the mind-set of both procurement team
and those on business functions dealing with
procurement
• Collaboration Model
30/04/2018

20. 20Siam City Cement Public Company Limited ©SCCC | All Rights Reserved. 30/04/2018
Q&A