© Nano Time Limited – October 2008 Source Planning What –Analytical process that for creating procurement and supply strategies for key categories Wh y –A key driver in procurement savings across the business –Creates engagement across the business and locates the decisions closer to the operators –Pulls in extra resources to the procurement programme –Improves the quality and depth of procurement delivery –Establishes supplier management How –Coordinated, managed and supported by Procurement –Utilises cross functional teams and data and supplier management supported by Supplier Accreditation programme –Commitment to the process and ensuring quality (of data, of thoroughness of options evaluation and business case building).

© Nano Time Limited – October Implement plan 1. Create a written supply plan in collaboration with Key people 3. Monitor ongoing performance and development Create clear, well grounded category supply plans aimed at introducing appropriate change and ‘Trading Agreements’ for key supply categories. Include other departments and people in the process to make sure that the changes made and agreements created are well adopted. Make agreed changes, carry out tendering needed, select suppliers, negotiate deals, introduce and implement new agreements. Ensure that suppliers and sub-contractors deliver the things that they said they would – including longer term ‘development plans’ Source Planning Process Overview

© Nano Time Limited – October Implement1. Plan3. Manage Source Planning Process Overview

© Nano Time Limited – October Implement plan 1. Create a written supply plan in collaboration with Key people 2.1 Re-form team for implementation 2.4 Review and completion 2.2 Supplier / Market selection 2.3 Change management / implementation 1.3 Get key people involved and define project 1.2 Gain sponsorship 1.4 Pull together data needed 1.5 Establish proposed approach, plan and business case 3.2 Set up relationship management with Supplier 3.3 Certify achievement levels 3.4 Establish ongoing development plan 1.1 Check Opportunity 3.1 Handover to relationship Manager Executive sign off points 3. Monitor and manage ongoing performance and development Source Planning Process Overview

© Nano Time Limited – October Form team and define project 1.2 Gain sponsorship 1.4 Pull together data needed 1.5 Establish proposed approach, plan and business case 1.1 Check opportunity Fit with programme objectives Ease of implementation Effort required Potential savings Potential for other benefits Business implications Agree opportunity with executive Sponsor agree and sign off outline plan Kick off meeting Terms of reference Overall plan Cross functional representation Team commit time Use of team tools, project management, process templates etc Issue requests for information (RFI’s) Interview key people Analyse purchase ledger/s Issue questionnaires Carry out market reviews Create supplier profiles Purchase profile and history (volumes, pricing). Forecasts Etc Options meeting Data analysis Brainstorming Business requirements analysis Process mapping Alternative scenarios mapped out Strategy and business case meeting Direction and approach described in detail Cost and benefit analysis Rate of return for overall business case Cash flow analysis Category plan document Sponsor sign off Source Planning Process Overview 1. Create a written supply plan in collaboration with Key people

© Nano Time Limited – October Form team and define project 1.2 Gain sponsorship 1.4 Pull together data needed 1.5 Establish proposed approach, plan and business case 1.1 Check opportunity Source Planning Process Overview 1. Create a written supply plan in collaboration with Key people Team gathers required data Team checks options Kick off Set up the team and the project. Agree list of required facts and data. Share out the data gathering workload Kick off Options Review and analyse the facts and data to confirm assumptions and generate ideas Brainstorm and then prioritise options Options Strategy Agree best option and plan implementation. Create business case Get Sponsor sign off Strategy

© Nano Time Limited – October Re-form team for implementation 2.4 Review and completion 2.2 Supplier / Market selection 2.3 Change management / implementation New team brief and updated sponsorship Time commitments re-assessed Any new people required added Supplier joint implementation teams Process re- configuration Briefing workshops and events Handover meetings and certification Measurement and milestones reviews Learning review User survey Team feedback Completion reports Handover to operational management Programme director and sponsor approve completion report and disband implementation team Positioning analysis RFP’s RFQ’s Tender management Selection panels Agreement and contracting Legal review Finance approval Sponsor sign off SLA’s linked to business requirements Programme director and sponsor agree individual agreements where appropriate Source Planning Process Overview 2. Implement plan

© Nano Time Limited – October Set up relationship management with Supplier 3.3 Certify achievement levels 3.4 Establish ongoing development plan 3.1 Handover to relationship Manager High level supplier contact Executive sponsorship from both sides Clear approach – written down and explicitly agreed Sponsor sign off to ensure organisational commitment Appoint key contacts and clarify accountability Establish supplier development plan objectives as objectives of ‘account manager’ in both client and supply side Formal kick off Testing period Publishing of results Formal review Publish certificate of acceptance of performance levels Report variances with action plans to develop Sponsor sign off for certificate and action plane Bi annual reviews of sector by category manager Review and carry out situation analysis using breakthrough planning Agree step change targets Benchmark results Source Planning Process Overview 3. Monitor and manage ongoing performance and development

© Nano Time Limited – October 2008 Q1Q2Q3Q4 Source Planning Process Overview - Category Roll Out Example -

© Nano Time Limited – October 2008 CategoryExpected stage Oct Expected stage Nov Expected stage Dec Expected stage Jan Expected stage Feb Expected stage Mar Expected stage Apr Expected stage May X XX XX XX etc Source Planning Process Overview - Category Roll Out Example -

© Nano Time Limited – October 2008 Team gathers required data Team checks options Kick offOptionsStrategy Planning Process Action Standard approach to ensure: –Consistency and a common language –Ease of programme control and progress –Quality control –Able to repeat Principles –Creates meaningful and appropriate change –Not just a way of cutting deals with suppliers –Sponsor and core team to get support, involvement, commitment and extra resource. –Importance of not jumping steps in the process: ‘ready fire aim’ –Data = information = insight > lack of data; lack of insight

© Nano Time Limited – October 2008 Team gathers required data Team checks options Kick offOptionsStrategy Kick off Purpose –Bring team together, effectively kick off the project, agree list of required facts and data and Share out the data gathering workload Outputs –Team understands the background, rationale and approach for the project, is keen to take part and is willing to commit time. –An agreed set of project documents, project management plan, analysis tools and data requirements list. A ‘Quick wins’ plan (if appropriate) and a Schedule of actions Agenda –Go over the background to make sure everyone understands what’s gone before –Get agreement to the project documents and situation analysis –Brainstorm data requirements –Action plan who will do what to get the data

© Nano Time Limited – October 2008 Kick offOptionsStrategy Options Purpose –Review and analyse the facts and data to confirm assumptions and generate ideas Outputs –Everyone understands the facts and data that have been gathered –All data has been analysed and insights gained Agenda –Review actions from last meeting –Analyse facts and data – log observations and insights –Brainstorm and then prioritise options –Task the team with actions to test and validate assumptions and to check options ideas Team gathers required data Team checks options

© Nano Time Limited – October 2008 Strategy Purpose –Create strategy & business case Outputs –An agreed strategy and business case –Sponsor sign off Agenda –Get team feedback from options reviews –Agree and write down the strategy –Plan the implementation –Cost up the implementation –Define the benefits –Draft up the business case –Present to sponsor for sign off Team checks options Kick off Team gathers required data Options

© Nano Time Limited – October 2008 Outcome A well defined plan:- –With validated assumptions and agreed targets –Agreed by a team of supportive colleagues from across the business –With executive sign off –Ready to go straight into implementation Team checks options Kick off Team gathers required data OptionsStrategy