D&B Supply Information Management

1. D&B Supply Information Management D&B Supplier Management Solutions Thursday, November 13, 2014 Paolo Nobili Sales Representative, National dept.  nobilip@dnb.com  +39 347 0655038

2. D&B’s Background • Premier Information Provider enabling business to business commerce for over 161 years • Focus is helping customers “Decide with Confidence” • Trusted Source of Information...90% of customers appear on Fortune 1000 list • Web Focused

3. Supply Objectives Sourcing objectives • Rebuild vendor file with robust, accurate data • Identify and leverage aggregated family spend • Optimise supply base • Develop a strategy that will assess risk, dependency and diversity compliance

4. Challenges • Providing visibility of and access to {customer name} global spend • Rationalisation of diversity segment within the supply base • Implementation of an Information Strategy that: • Achieves significant cost savings, year over year • Supports process changes to increase accuracy of spend classification • Continues to optimise the size of the supply base through a robust analysis of consolidated spend • Assures compliance with existing and future sourcing policy • Meets diversity objectives in its supply base • Identifies and minimizes risk to assurance of supply • Utilises contract knowledge to develop sourcing strategies

5. The Spend Analysis will: • Identify, quantify, leverage and manage savings opportunities • Aggregate and Consolidate Spend • Optimize the supplier base on an on-going basis • Proactively manage supplier relationships by limiting the level of risk in the supply base, thereby decreasing risks to the supply pipeline and its effects on production, service and R&D. • Monitor and increase compliance on contracts to capture additional savings • Plan, manage and grow diversity initiatives Action in these critical areas can deliver significant savings and positively impact {company name} bottom line. Demonstrate how {company name} can leverage D&B’s Solutions by:

6. D&B’s Spend AnalysisAgenda Supplier Information Supplier Information Cleansing Supplier Information Enrichment Profiles A map of the spend through the enriched D&B data Detail Reports Drill down of high level information from the first sections Spend aggregation Identify spend aggregation opportunities Special Suppliers Identify key supplier categories (e.g. top spend)

7. D&B’s Spend AnalysisAgenda Supplier Information Supplier Information Cleansing Supplier Information Enrichment An analysis of: Data overview SIC code analysis Major industry groups Identification of strategic opportunities Industry segmentation Supplier risk Duplicate records & Family trees Supplier dependency

8. Main Data SourcesEurope Austria Example data sources Banks Bundesrechenzentrum/BMFJ (Ministry of justice) CMD Ediktsdatei/BMFJ (Ministry of Justice) Fimenbuch (Commercial Register) Herold Business Data Intrum Justitia/D&B RMS Landesgericht Wirtschaftskammer Total yearly records = 771,200 Belgium Example data sources Court of Employment Euro DB Ministry of Finance Moniteur Belge Belgisch Staatsblad Commercial Courts National Bank of Belgium Total yearly records = 3,604,400 Czechs Republic Example data sources Albertina Arianda Bulletin Economia Commercial Courts Government Statistical Office Thompson File Total yearly records = 105,000 Finland Example data sources Tax Authorities Suomen Asiakastieto OY Finnish Company Register Statistics Center of Finland Thompson File Trade tape participants Total yearly records = 508,000 Netherlands Example data sources NV Databank (Chambers of Commerce) NV databank Woerden County Courts Verenining Kamers van Koophandel Total yearly records = 2.365,000 Italy Example data sources Protested Bills Register (Infocamere) Italian Business Register (Infocamere) Data House Thompson File Trade Tape Participants Total yearly records = 2,787,000

9. Main Data SourcesEurope France Example data sources BIL Bilans service Facro France Heller Axciom Infogreffe Inpi INSEE Total yearly records = 5,320,000 Germany Example data sources ARGUS Government Courts Handelregister New handelregister Bulkload Thompson File Total yearly records = 8,303,000 Hungary Example data sources Customers Ministry of Justice Thompson File Inet Kft Total yearly records = 120,000 Northern Ireland Example data sources Companies Registry office Regional & District Courts Thompson file Total yearly records = 112,000 Norway Example data sources Register of properties Skattedirektoratet Company register Total yearly records = 3.555.000 Ireland Accountants, liquidators, receivers Companies Registry Office All Courts Thompson File Trade Directories Example data sources Total yearly records = 207,000

10. Main Data SourcesEurope Portugal Example data sources Banco de Portugal Courts Mercantile Registries Government Offices Total yearly records = 510.000 Spain Example data sources Borme Government Registry Official Spanish Gazettes (BOE & BOC) Trade Partners Total yearly records = 2,462.000 UK Example data sources Banks Companies house Dept of trade & Industry Electoral Role London & edinburg Gazettes Registry Trust Royal Mail Total yearly records = 4,190,500 Sweden Example data sources Chattel Mortgages Registration office Post Och Inrikes tidningar SPAR Central Bureau of statistics Companies house The national Tax Board National Tax Board & County Judgements Total yearly records = 45,640.000 Switzerland Example data sources Banks Government Registry National trade Registry Thompson File TWIXTEL Total yearly records = 268.000 Denmark Example data sources Copenhagen stock Exchange Danish Companies House Danish Gazette (Reistreringstidende) Danish statistical Bureau Total yearly records = 811.000

11. Main Data Sources

12. How Often is Data Updated? • A company changes control every 15 minutes • 1 million updates are madeper day “worldwide” • A new set of accounts are keyed every 36 seconds, company enters liquidation, receivership etc. every 3 minutes • A new business is registered every 2.5 minutes • A new non-corporate record is created every 22 seconds • A secured change is registered every 5 minutes • A company name change is registered every 15 minutes • A directorship change happens every 32 seconds • A share ownership change happens every 6 minutes • A company changes control every 15 minutes • A trade reference is received every second

13. D&B’s DUNS Number & Family Linkage Fictional example

15. Data Universe Review D&B has matched over 90% of suppliers, representing over 95% of spend.

17. D&B’s Spend AnalysisAgenda An analysis of: Data overview SIC code analysis Major industry groups Identification of strategic opportunities Industry segmentation Supplier risk Duplicate records & Family trees Supplier dependency Profiles A map of the spend through the appended D&B data

18. Supply Information Spend AnalysisIdentify what proportion of your suppliers account for most of your spend The top 5% of suppliers account for 90% of spend

19. D&B’s Spend AnalysisAgenda An analysis of: Data overview SIC code analysis Major industry groups Identification of strategic opportunities Industry segmentation Supplier risk Duplicate records & Family trees Supplier dependency Profiles A map of the spend through the appended D&B data

20. S.I.C Profiles • Major Industry Group Segmentation • % of Total Spend • Suppliers • Purchases • Drilldown to Three Key Industry Segments (Based on SIC) • The spend “Family Tree” based on 2-digit SIC code • % of Total Spend • Suppliers • Purchases

21. SIC Codes • SIC stands for Standard Industrial Classification Code. The SIC is a code originally developed by the U.S government to describe business activities at an industry level. • D&B assigns SIC codes based on management interviews conducted by D&B that define business operations and percentages of revenue derived from each activity. D&B will assign up to 6 four digit SIC codes based on the revenue derived from specific business operations. The order of SIC codes are according to the percentage of total revenue that the activity comprises. The primary SIC code represents the activity with the largest percentage of total revenue. • The SIC codes are extracted from D&B’s database on DUNS numbers assigned to a customer’s Master Vendor File.

22. SIC Code vs. Commodity Code • SIC codes, are assigned based on a business’s operations. Therefore, these codes are industry specific. SIC codes can identify the industry in which a business operates, but does not define the products that the business sells. • Commodity codes (UNSPSC, eCl@ss or custom codes), are applied to products and services purchased by a company. These codes are assigned based on descriptions of items found in a company’s Item Master File. These are product specific codes that are used to determine what is purchased.

23. Coding Examples Coding Examples

24. D&B’s Spend AnalysisAgenda Profiles A map of the spend through the appended D&B data An analysis of: Data overview SIC code analysis Major industry groups Identification of strategic opportunities Industry segmentation Supplier risk Duplicate records & Family trees Supplier dependency

25. Industry Profiling • D&B has catagorised spend into 24 high level industry/spend sectors, by grouping S.I.C codes together. These can be used to identify significant opportunities and to “drill down” and identify more specific opportunities. Direct sectors description Mining, forestry and construction Manufacturing, general Mining, primary industries Food, tobacco and kindred products (inc. non durable goods) Heavy construction, general contractors Printing, paper and packaging Petrochemicals, chemicals, pharmaceuticals and plastics Raw materials – metals Sub-contract manufacturing Electronics (components and assembly) Wholesale durable goods Indirect sectors description Bulk transport and logistics Utilities Information technology Banking, finance, insurance and investment Professional services (consulting, legal, outsourcing) Other services Maintenance, repair, operations – MRO Travel and accommodation (inc automotive dealers, gas stations and event management) Retail Printed material (inc print shops, photo copying, brochure design and print) Communications and telecommunications Government Non classifiable

26. Major industry GroupsRanked by PurchasesDirect Material Sectors

27. Major industry GroupsRanked by PurchasesIndirect Material Sectors

28. D&B’s Spend AnalysisAgenda Profiles A map of the spend through the enriched D&B data An analysis of: Data overview SIC code analysis Major industry groups Identification of strategic opportunities Industry segmentation Supplier risk Duplicate records & Family trees Supplier dependency

29. Strategic Opportunitiesfor improved Supply Management High spend and relatively STRATEGIC High High number of suppliers low number of suppliers: And high spend: Spend already optimised to a considerable extent. It may be advisable to examine This is the key area presenting risk of over - dependency on opportunities to leverage spend suppliers of key products & by negotiating strategic deals. services. Amount of Spend TACTICAL LOWER PRIORITY Low spend spread among a Total spend and number of high number of suppliers: suppliers both relatively low. Savings still possible, especially This presents tactical opportunities for those in the “bottom - right” to consolidate spend amongst of this quadrant. fewer suppliers. 0 Number of Suppliers High

30. Data Universe ReviewDirect Materials

31. Data Universe ReviewIndirect Materials

32. Three key Opportunity Areas 3 major sectors stand out as worthy of attention: • Wholesale Goods This sector has the highest number of suppliers of any sector (over 400) and also the highest spend (nearly 30% of the total). It is also a sector where their is likely to be significant competition between suppliers. • Raw Materials (Metals) Accounting for nearly 10% of total spend, and 15% of suppliers, this is clearly a key area in which savings are likely to be made. • Professional Services Accounts for nearly 6% of suppliers, but less than 3% of total spend.This is a “classic” area of discretionary spend, with many potential alternative suppliers. We shall examine each of these three sectors in turn.

33. Strategic SectorsThe Top 3 Sectors of Interest These three sectors account, between them, for almost 50% of xxx’s entire spend. We shall investigate each of them in turn, identifying some of the most promising areas to make savings.

34. Strategic Sector1 Wholesale Goods Clearly the vast majority of Wholesale expenditure is concentrated in the “durable goods” sector. We shall therefore examine this.

35. Strategic Sector1 Wholesale Durable Goods SIC 5084 – Industrial Equipment Wholesalers, stands out here, in that it is serviced by over 100 suppliers – more than 5% of the total, while accounting for only 1% of spend.

36. Strategic SectorIndustrial Equipment Wholesalers It is striking here, firstly, that the suppliers alone account for over 80% of the spend in this sector. Secondly, there are a very large number of Industrial Equipment wholesalers in Italy representing a very low spend. There may be scope for rationalisation.

37. Strategic Sector2 Raw Materials - Metals The second strategic sector that we have identified is that of Metal industries. This in turn subdivides into two segments, both of which are significant. However, Fabricated metal products has a particular high number of suppliers (9% of the total) in relation to the spend (6.5%). We shall therefore investigate this sector further.

38. SIC 33: Fabricated metalproducts; except machinery Two SIC codes stand out here: 3499: Misc. Fabricated metal products manufacturers, and 3443: Fabricated Plate work manufactures. We shall examine 3499.

39. SIC 3499:Misc. Fabricated Metal Products It is noticeable that the top four suppliers of Fabricated Metal Products account for over 80% of the spend in this sector. In contrast, there are four suppliers with a spend of less than €1,100, offering scope for rationalisation.

40. Strategic Sector3 : Professional Services The third strategic sector that we have chosen is Professional Services. While this accounts for only 2.5% of spend, it is a classic example of indirect spend in which there is often significant overlap between the services offered by various suppliers. By far the biggest proliferation of suppliers is to be found in SIC 87: Engineering, accounting, Research, management etc. We shall examine this spend in greater detail.

41. Engineering, accounting,research, management etc. While Engineering Services shows, at first glance, the greates scope for savings through Supplier Reduction, it is Management Consulting Services which probably offers the biggest discretionary spend. It would be interesting to examine who the fifteen suppliers in this segment are…

42. SIC 8742:Management Consulting Services It immediately becomes clear that, of the 15 suppliers, only four are major players, accounting for over 95% of spend. Would it be practicable to consolidate this market to, at most, two or three preferred partners?

43. D&B’s Spend AnalysisAgenda Profiles A map of the spend through the enriched D&B data An analysis of: Data overview SIC code analysis Major industry groups Identification of strategic opportunities Industry segmentation Supplier risk Duplicate records & Family trees Supplier dependency

44. Industry Segmentation4 digit SICs ranked by purchases Significantly, these 20 specialised sectors account for over 79% of xxx’s total spend.

45. Top industry4 digit SICs ranked by purchases Of the four top industries, three of them are connected with metals or scrap, and as such are critical to xxx’s production. As one would expect, the supply base has already been pared down.

46. Industry Segmentation4 digit SICs ranked by suppliers

47. Top industry4 digit SICs ranked by purchases When we examine the industries in which Thyssen has the highest number of suppliers, it is noticeable that, with the exception of Metals Service Centres, the number of suppliers is disproportion-ately high. There is probably scope for rationalisation.

48. D&B’s Spend AnalysisAgenda Profiles A map of the spend through the enriched D&B data An analysis of: Data overview SIC code analysis Major industry groups Identification of strategic opportunities Industry segmentation Supplier risk Duplicate records & Family trees Supplier dependency

49. Geographic AnalysisContent • Major Country Segmentation – % of Total Spend – Suppliers – Purchases • Drilldown to a number of key countries (Based on SIC) • The supplier risk analysis – % of Total Spend – Suppliers

50. Country SegmentationRanked by suppliers Two salient factors stand out here: Firstly, while Italian suppliers account for less than 60% of spend, they make up nearly 90% of the supply base. This indicates scope for savings.