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CPS Workshop 2006

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					CPS Workshop 2006


Existing Market

      Hotel Groups
      Independent hotels
      Restaurant Groups

Potential Groups

      Healthcare
      Government Tenders
           o Prisons
           o Hospitals
           o Schools
           o Universities
           o Food Parcels
      Old Age Homes
      Mines
      School Groups
      Contract Food Groups
      Restaurant Buying Group
      Clubs
      B & B Buying Group
      Large companies with in sourced catering
      Airline Caterers
      Suppliers


Categories

Current

Food
Beverage
Cleaning materials


Potential

      Liquor
      Laundry
      Soft Furnishings
      Linen
      Kitchen Smalls
      Kitchen Equipment
      Amenities
      Stationery
      IT Hardware
      Printed Stationery
      Computer Consumables
      TV Sets
      Uniforms
      Business cards
      Travel

Services
    Security
    Cleaning
    Laundry
    Landscaping
    Office Plants
    Courier

Repairs and Maintenance


Current Offering

      Price Stability
           o Managed, monitored
           o Inflation guarantee
      Buying Manual
           o Listed suppliers
           o Product and price details
           o Contact details
           o Customised to Buyer
      Account Facility
           o Manage accounts
           o Reconciliation and payment of all creditors
           o Single invoice to client
           o 30 day accounts
      Manage Quality and Service
           o Products
           o Suppliers
      Suppliers
           o Minimal Risk
           o On time payment
           o Volumes / potential business
          o Query Resolution
          o Sell products on behalf of suppler
          o Customer lock in / partial

      Procurement Service
          o Organisation and structure around the procurement process
          o Fraud / bribe control
          o Reporting
          o Line item price control
          o Price benchmarking and monitoring

      Cost
         o Rebate
         o Administration saving
         o Time and resource – productivity gains


VALUE PROPOSITION

Clients
    Professional procurement services
    Lowest sustainable prices
    Single monthly invoice
        o Enhanced cash flow
    Enhanced category of products offered
    Electronic procurement system
        o Self service admin tools to reduce fixed monthly costs
        o Integration services
    Detailed real time reporting systems
    Tendering service for large clients

Suppliers
   Enhanced sales force
   Centralised guaranteed payment
   Enhanced average order size (no cherry picking)
   Single drop vs multiple deliveries – disciplined ordering
   Electronic order receipt – correct product, price
   RFC and POD management
   Centralised negotiation

Proposed Increased Offering

      Best Nett Price
      Product Range / categories
          o Liquor?
         o Other service suppliers
     Easy to use system MMC
         o E mail order
         o On line reporting
         o Budget checks
         o Approval of orders
     BEE Suppliers and Tracking
     Payment Terms
     Lowest Cost provider




Weaknesses

     Name / Brand
     Easy to target and undercut
          o Nett price / invoice price / perception of being expensive
     Manual costly processes
          o Unprocessed Pod’s
     Over reliance on key accounts
     Client churn – no contracts
          o Regular client visits to maintain volumes
     Offering a partial service – not 100% of spend
          o Duplicate processes for client
          o No control of compliancy
     Sales strat and pipeline
          o Value proposition not clear
          o Flexible deals
     Administration
          o Staffing incomplete
          o Decentralised
     Supplier Adoption
          o Take on and listing slow
     No Point of purchase systems
          o Undisciplined client ordering
     High client staff turnover
          o Training and selling
     Supplier support try to deal directly
     Staff and focus


Strengths
       Buying Dept
       Buying Power / Volumes
       Price controls
            o Administration price checks
       Compass System
       Flexibility pricing policy with rebates
       Relationship managers
       National infrastructure and presence
       Experience in Industry
            o Procurement
            o Hospitality
            o Client Relationships
       Suppliers
            o Support (categorizing suppliers)
       Buying Manual
       Single invoice value proposition
       Part of Bidvest Group
       Empowerdex rating


Opportunities

       Nett Pricing model
       Growth incentives with suppliers
       Liquor
       mymarket,com
       mymarket.com clients
       Increased Range
       Increased Markets
       Bidvest Procurement
       Exports


Risks

       Cash flow management
       Bad Debt
       Buying Manuals
       Arabella
       Three Cities
           o Tender out for procurement
       Staff
       Suppliers
           o Losing Compass perception
       System migration
      Client loss due to change
      Buying Power
      Client contracts
      External procurement consultants



Proposed Cost Model
    Different rate chart per market segment
         o Different base rates
         o Sliding scale on the admin fee
    5% fixed admin fee per client
    Minimum fixed fee of RXXX – base on 70% of current purchases
    2,5% settlement discount from suppliers
    Growth incentives negotiated with suppliers
    Supplier Adoption Fee
         o Penalty for not using approved Vendors
    mymarket.com transaction fee
    mymarket.com set up rates



 Arabella Offering (Wednesday)

 Currently –
 Earning 12.5% returning 3% - Therefore earning 9.5% of Average R400K

 Offer –
 Best Nett Prices
 Charge Fee of Either
                5% If CPS to do all administration as current OR
                3% If Arabella utilize mymarket to order and receive
                Minimum base price of R 15 000 ex VAT
 Ebrahim to negotiate a 2.5% Settlement Discount, where possible.
ACTION PLAN


Action                                                   Who            When
Sales
    Define target market                                PE
    Value Proposition
          o ROI model to be implemented (blue sheet)     CR
    Identify list of customers per target market per    PE
       region
                                                         PE
   Goals in place per target market                      PK/CR
   Commission structure to be finalized                  TP
   Sales material (brochures and leave behinds)          CR
   Rate Chart per target market
   Identify Sales team per region                        CR/PE
   Client Contract (2 page)                              CR/PK
Marketing
   Rebranding                                            TP
   Sales Brochure                                        TP/PE
   Supplier Brochure                                     TP/EH
   Corporate ID                                          TP
   Uniforms                                              TP
   Website                                               TP
   Communication to clients                              TP/EH
                                                          TP/PK
   Communication to suppliers
                                                          TP
   Re brand mymarket.com system
                                                          ALL
   Road show to clients and suppliers

Financial
    Budget 2007                                          CR         Done
    Staff salaries / increases                           CR/PK
    Staff and structure                                  PK/CR
    Possible restructure – location                      PK/CR
          o Iook within Bidvest                           PK
    Company registration                                 PK
    Directors                                            PK
    Reporting structures                                 CR
    Capex
Operations
    Internal Conference / workshop                       PE
    Location of offices                                  PK/CR
    Procurement                                          PK/EH
          o Identify additional categories
          o Negotiate 2,5% settlement discount
    Migrate customers to mymarket.com system             PE/TP
    Purchasing of equipment and office space layout      TP
    Investigate integrated payment solution with IT IS   PK
    Centralised creditors

System
    Migration and Development of back office             PK/BP/EH
    Front end Client Purchasing                          BP/PK/PE
    Supplier management                                  PK/BP/EH
Suppliers
      Supplier value proposition               EH
          o Cant undercut us                    EH
      Trading agreements                       EH
      Settlement discount                      EH/PK
      Identify additional categories           EH/MM
      Migration from Compass to mymarket.com   EH/TP
      Communication
      Supplier Matrix definition               EH/CR
   

Training
    mymarket.com system training


TIMING

19th May Feedback

Conference 24, 24, 26 May ???

				
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Description: CPS Workshop 2006