Procurement Processes Axar consulting Procurement Processes

Procurement’s Vision Trusted business advisor and partner for our stakeholders Involved early in key business discussions Co-develop market strategies to drive maximum value Review historical spend & upcoming spend commitments Proven expertise in delivering total value by: developing valuable supplier relationships, driving cost reductions and leading process improvement

Procure to pay processes Business Unit identifies need for Goods/Services Business Unit engages Procurement >$50k We collaborate to create Sourcing Strategy or Contracting Approach Business Unit creates Purchase Requisition in Oracle Procurement reviews & approves Purchase Requisitions Purchase Order is issued (systemically) Invoice are paid against Purchase Order based on Contractual Payment Terms

Purchasing levers Direct Negotiations Competitive Bidding Demand Management Right-Sizing

What is Indirect Spend? Revenues - COS (Direct) Gross Margin - SG&A (Indirect) Net Income Purchases of Goods and/or Services that are: “Controllable” Expenses / Budget within the departments/BUs Not directly incorporated to Products, outside of “Bill of Material” Could be recurring or non-recurring and/or “P-Card” spend In-scope spend: Travel: Air, Car, Hotel, Legal Services, Business Services, HR, Marketing, MRO, IT/Telecom, Auto, MRO, Facilities, Temp. Labor, Lab Supplies, IT Hardware, IT Software, Consumables, Reagents, Controls, Tradeshows, Energy, Bio-specimens, etc. Out of scope spend: intercompany transfers, intercompany charges, intercompany pricing, payroll, gov’t, taxes, etc.