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ELC Procurement

ELC Procurement. Service. Quality. Global Sourcing Strategies in a Volatile Environment Leonardo DeCandia, P.E. Cost. Best Practices. October 12, 2010. Global Procurement. Presentation Agenda. ELC Procurement. Service. Quality. About the Estee Lauder Companies

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ELC Procurement

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  1. ELC Procurement Service Quality Global Sourcing Strategies in a Volatile Environment Leonardo DeCandia, P.E. Cost Best Practices October 12, 2010 Global Procurement

  2. Presentation Agenda ELC Procurement Service Quality • About the Estee Lauder Companies • About the Presenter • Sourcing Practices at ELC • Current & Evolving Challenges • Tactics & Strategies • Q & A Cost Best Practices Global Procurement 2

  3. The Estee Lauder Companies Inc ELC Procurement • Founded in 1946 • $8 Billion in Sales • Over 25 Brands/Over 40 Global Affiliates • Prestige Beauty Segment • A Culture of “High Touch” – Unique Connection to the Consumer • Building & Investing on a Tradition of Excellence Service Quality Cost Best Practices Global Procurement 3

  4. Leonardo DeCandia ELC Procurement Service Quality • 15 Years @ J&J; Last Role – Head of Supply Management Consumer Companies • 8 Years @ Roche; Last Role – Chief Supply Officer Pharma NA • 4 Years @ AmerisourceBergen; Last Role – SVP/CPO Supply Chain Management • Part Time Lecturer – Rutgers University Graduate School of Business • Chair Emeritus – Rutgers University Supply Chain Center Cost Best Practices Global Procurement 4

  5. ELC Procurement Balanced Approach to Supply Base Management • Adherence to ELC Standards & Expectations • Robust & Reliable Quality Systems • Consistent & Repeatable Global Execution • Adherence to Promise Date • Responsive & Flexible to Change • Clear Understanding of Priorities ELC Procurement Quality Service Cost Best Practices • Global Systems & Tools • Organizational Training & Development • Investment in Innovative Practices & Technologies • Marketplace Leadership • Continuous Improvement Mindset • Optimal Asset Utilization Global Procurement • Wednesday February 10th, 2010

  6. Current & Evolving Challenges • A Cautious Supplier Base – Is this recovery sustainable? • A Dynamic Geopolitical Environment – The changing of the guard in Asia & the re-industrialization of the US & Europe? • An Overleveraged Consumer in the Major Markets – Can the growth of emerging markets off-set the revenue loss? • The Constant Need to be Quicker & More Efficient – Procurement’s role in facilitating access to innovation and expansion of profit margins? ELC Procurement Service Quality Cost Best Practices Global Procurement 6

  7. ELC Procurement Priorities & Focus ELC Procurement • Direct Material Sourcing • Global Brand Leads (Experienced & Integrated Resources) • Global Category Leads (Leadership @ Source Supplier) • Global Innovation Lead (Integrated w/R&D Colleagues) • Third Party Manufacturing • Global Strategy & Supply Management • Consolidate Suppliers Based Upon Core Competencies • Formal Innovation Management Practices • Indirect Procurement • Global Buyer’s Network w/Regional Hubs • Global/Regional/Local Category Management Processes • Global Roll Out of SAP with Common Data & Policy • Organizational Development & Investment • Common Category Practices for All Procurement • Rotation Programs – Cross Brands, Regions & Procurement • Training in Performance Management Service Quality Cost Best Practices Global Procurement 7

  8. Service • Global Center-Led Policy & Processes with Regional Execution • Lead Time Reduction Programs & Capacity Planning • Innovation in Common Platforms with Brand Customization • Metrics: On time delivery; flexibility to change; lead time average; etc Tactics & Strategies for the Current Environment Quality • Full Understanding of Global Regulatory Environment • Dynamic Measures & Supplier Reward Systems • Early Supplier Engagement in Design for Execution • Metrics: Quality @ receipt; % suppliers @ highest level; etc Service Quality ELC Procurement Best Practices Cost Cost Best Practices • Brand Driven COGS Targets with Procurement Programs • Category Life Cycle Management & 5 Year Pipeline Plans • Global Market Expertise & Dynamic Supplier Management • Metrics: COGS; year to year savings; supply base consolidation; etc • Organizational Design Aligned with ELC Strategy • Core Competency Focus Integrated & Complementary to Business Partner Needs • Procurement Professional Development @ Global Level • Metrics: Training hours; retention levels; high potentials %; etc Global Procurement 8

  9. Q & A ELC Procurement Service Quality Cost Best Practices Thank you Global Procurement 9

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