How You can Recover Hidden Cash Flow from Your Supplier Base (Modify your title as appropriate for your audience) First Name Last Name Bold Month XX, 2015

Expense Reduction Analysts A Global Company Finding extra cash flow within your supplier base and putting it back to work in your business.

Agenda What’s the Real Opportunity for You? What are the Obstacles? What Can You Do about it? Q & A

Is this Relevant to You? You’re probably doing a good job of managing expenses Thinking it’s still possible that you’re leaving significant money on the table? Curious if you are, how much it might be, where it is, and how to get it? Some important initiatives may be under- funded? You could put Additional Cash Flow to good use

ERA’s Experience with over 17,000 client projects tells us: Most companies are still leaving 10%-30% on the table across large expense categories The Opportunity 10%15% 20% 30% What could Your Company do with an additional 20% added back into your budgets?

How is this Possible? Most companies don’t realize that the greatest leverage comes from understanding their Suppliers’ industries as well as their own. 2 It can be impractical to dedicate equal resources to less strategic cost categories. 3 Most companies lack real time market pricing data that creates the benchmark to know what pricing is really possible. 4 There are many Misconceptions about Procurement Best Practices. 5 The Goal of any Supplier is to win as much business as they can, at the highest margin that they can. 1

ONE Suppliers give similar pricing to similar clients and customers 01 Top 10 Common Misconceptions TWO Your strategy and expertise in purchasing in one cost category will produce similar results in another 02 THREE National pricing agreements are always better than local or regional agreements with the same Supplier 03 FOUR Supplier loyalty translates to best pricing and service 04

FIVE More volume always gets you a better deal 05 Top 10 Most Common Misconceptions SIX Getting three bids will get you to the best price 06 SEVEN You’re asking the right questions in your RFPs 07 EIGHT Group purchasing will always get you the lowest costs 08

NINE Lower price means lower quality and service 09 Top 10 Common Misconceptions TEN Lowest price is the same as lowest cost 10 IS YOUR ORGANIZATION LIMITED BY SOME OF THESE BELIEFS?

You Can Find Additional Cash Flow GOOD BETTER GREAT EXCEPTIONAL Top 10 Best Practices in the Path to Exceptional

01 COMMIT Develop a strategy and a plan The Path to Exceptional: Getting Started 02 ANALYZE Analyze your actual purchasing history---It’s NOT what you think

03 DEFINE QUALITATIVE NEEDS Understand the qualitative requirements for each cost category – It’s NOT all about price 04 UNDERSTAND YOUR BUYING ASSUMPTIONS Many of the Assumptions & processes that drive supplier requirements are no longer valid, appropriate, or necessary. The Path to Exceptional : Understand Yourself

05 SUPPLIERS & THEIR INDUSTRIES Understand each of your suppliers’ businesses and their industries like you understand your own The Path to Exceptional: Understand Suppliers Market Trends, Pressures, Cycles New Developments & Alternatives Terminology & Jargon Business Practices & Unique ways to Contract Cost/Price Drivers Pricing & Terms Behavior for Similar Companies, with Similar Spends, in Other Geographies Their True Differentiation Among Their Competitors

06 RE-EVALUATE Re-evaluate your current supplier relationships with these new insights The Path to Exceptional: Re-evaluate 07 GO TO MARKET Go to market with written bids, proper frequency and ask the right questions

08 NEGOTIATE Negotiate More Effectively Leverage all your new insights Separate negotiator & relationship owner Use pricing behavior benchmarks Help the supplier save money Know all the contracting options 09 DECIDE, IMPLEMENT, MONITOR Implement quickly This is equivalent to a cash leak! Fight Price Creep Many mistakes—many line items and human error on both sides Processes---e.g., Off-contract purchasing Publish pricing & SKU changes Rebates, incentives, credits, etc. Suppliers have many methods to recover margin Continue to Optimize over time The Path to Exceptional: Execute

10 CHANGE THE CULTURE Embed a real expense control mindset into the company culture Mindset first – techniques, policies and procedures second. No cost is sacred Do they spend money like it’s their own? Do they understand the real Impact on the company, e.g., $1,000 Saved = $5-10,000 in Sales? Are cost-saving suggestions encouraged and pursued? Integrated into your reward systems? The Path to Exceptional: Sustain it

Decide, implement and monitor Analyze and validate your actual purchasing history How You Can Recover More Cash Flow Develop a strategy and a plan Understand your qualitative requirements for each cost category 4 Understand Your Assumptions & Processes 5 Understand your suppliers and their industries like your own 6 Re-evaluate supplier relationships 7 Go to market better 8 Negotiate Better Embed the expense control mindset into the company culture 1 0

Question & Answers

As Promised: Next Steps High-Level Analysis No Fee for Attendees Could You be Leaving Money on the Table? If so, Want to Know How Much? Where it might Be? How You Can Get It?

Expense Reduction Analysts Topic: How to Recover Significant Cash Flow from Your Supplier Base Date:Monday, Month XX, 2015 Location: ABC Association Annual Meeting, Dallas, TX Speaker: Will Finemore, Director, Expense Reduction Analysts Attendee Name ____________________________ Company _________________________ Address _____________________________ Phone ___________________________ Check if You are Interested in:  Following up on ERA’s Special Offer  Learning more about ERA Services  Invitations to other ERA presentations  ERA Blog & Case Studies TIO NY

Question & Answers