Webinar Notes: Realizing Hard-Won Savings at H.J. Heinz
This week’s featured webinar was hosted by Supply & Demand Chain Executive and sponsored by SAP: Realizing Hard-Won Savings at H.J. Heinz.You can access the event on demand here.
The event focused on the technology and tracking effort Heinz has had to make in order to drive higher negotiated savings and also see those savings affect the bottom line. Internally, this is referred to as their ‘keystone’ program. In a CPO Rising blog post from earlier this year, Andrew Bartolini described the keystone program – which was really a global IT transformation effort – and the opportunity that procurement seized to increase efficiency and better leverage their global scale. Procurement did an in-depth self-evaluation as part of this process, and what they learned allowed them to maximize the impact of the platform rollout on their own capabilities and results.
After a global supply chain task force was established in 2006, Heinz implemented SAP’s SRM and Sourcing solutions. The solutions were implemented like a global business transformation, focusing on visibility (to provide leverage for sourcing) and compliance tracking.
The value proposition was based on their ability to provide a user-friendly online shopping experience for their internal customers. The global solution and process were deployed at 40+ sites in 9 countries with 2,500 users and approximately $1B in annual spend. 60% of the transactions are managed through online catalogs.
The benefits of emphasizing the use of web-enabled catalogs includes increasing transaction efficiency and streamlining the overall user experience. They guarantee negotiated prices and drive spend with contracted suppliers. All non-catalog spend has to be approved. Heinz was also able to achieve a reduction in accounts payable headcount by migrating all high volume supplier communication (such as office supplies) to electronic methods.
One of the keys to Heinz’ success was getting their suppliers involved in the Sourcing rollout. They began by sending frequent email updates through the implementation process. A group of pilot suppliers that were selected based on existing relationships and volume were involved in testing before the system was taken live. Their engagement early in the process both improved the speed of the rollout and increased adoption and support from internal stakeholders later in the process.
If you are interested in more about H.J. Heinz procurement programs, listen to the October 8th Buyers Meeting Point weekly procurement update on Blog Talk Radio with host Jon Hansen. In the guest sound bite, we hear from Mauricio Sirgo, Associate Director of Continuous Improvement & Strategic Initiatives at Heinz. In this clip, he describes the opportunities Heinz has seized for transforming their indirect spend.