CPS Sourcing Strategy

 

Summary

There are several definitions crucial for the understanding of the Nefab Sourcing.

 

The Sourcing Database is a tool for organising and gathering information (prices, presentations etc) regarding suppliers. The suppliers in the sourcing database supply Nefab with products of the Global CPS-concept.

 

The Global CPS-concept includes products and services decided by the Product Council. The products and services are divided into Strategic and Complementary products.

 

Strategic products bring added value to the customer while the complementary products is a complement to give the customer a complete packaging solution. The division is decided by the Product Council.

 

For all the suppliers, there is further a distinction into Global, Continental, Regional and Local suppliers. The distinction is depending on where the supplier can deliver products. For every supplier in the sourcing database, Nefab has one person that is supplier responsible.

 

The supplier responsible person for Global and Continental suppliers is a product manager. The supplier responsible person for Regional and Continental suppliers is a local sourcing responsible. The local sourcing responsible can in some cases also be the product manager.

 

Introduction

 

Objective

The objective of this document is to promote a structured process for sourcing and managing Global CPS products.

 

Why does Nefab need a sourcing strategy?

During 2007, sales of traded products amounted to almost 50 % of Nefab’s total sales.

 

During the coming years, this figure will increase due to an increase of CPS-sales in existing sister companies, and due to acquisitions of trading companies.

 

Today, many sister companies are buying from the same suppliers, negotiating its own prices and conditions and spending valuable time on these issues. Nefab’s purchasing power is increasing with the volumes and we need to organise ourselves to manage suppliers in a centralised way. We need to gather the volumes at some suppliers to be able to negotiate better prices and we need to show the suppliers that Nefab is one customer.

 

Purchasing power is achieved through knowledge of the product and market and information about purchasing volumes. Therefore, we need to know what we buy and from where, to be able to negotiate benefits for the Group. We must also study the markets better and be experts on the different products. We must use our competence to try to get agreements that benefit all Nefab companies independent of where we have the volume.

 

The aim is to have a clear Sourcing organisation, one negotiation point and one clear speech to the suppliers. This will bring benefits to the Group.

 

What is the Global CPS concept?

 

The Global CPS concept includes outer and inner transport packaging, consulting and services. The products and services within the Global CPS concept are divided into Strategic and Complementary products and services.

 

The local CPS Concept can include also other packaging material than transport packaging, ie Consumer packaging. Non-packaging products are outside the scope of the CPS concept.

 

· The Strategic products and services are the most important for the global Nefab CPS concept. The strategic products bring added value to the customer. For example, Nefab can be competitive in cost and/or quality, the end solution can be customised and/or the products have good gross margins. Nefab should be pro-active in selling the strategic products and services.

 

· The Complementary products and services strengthen the CPS concept further. The complementary products are sometimes traded with low margins due to many competitors but they can also have high margins. The products are necessary in order to be able to offer the complete solution. They are most often sold together with one or more strategic products. Less time and resources are to be put on suppliers of complementary products.

Complementary products and services are to be promoted re-actively.