1. Your Company’s Secret Weapon
ISM® 2006 Northeast Supply Chain Conference & Educational Exhibition October 2006
“Supply Chain”
Your Company’s Secret Weapon
Shelley Stewart, Jr.
Senior Vice President, Operational Excellence
& Chief Procurement Officer
Tyco International (US), Inc.

2. The Evolution of Supply Chain
From Tactical to Strategic
Creation of the CPO Level
Globalization of Supply Chains
Engagement in Non-Traditional Spend HR
Legal IT
“Bravely” Using Technology
Talent Skill Shift
November 29, 2018

3. Attacking all of the Opportunity
Total Cost Driven
Purchase Price
Administration
Payment-terms
Inventory
Set up
Scrap
Quality
Expediting
Planning
Maintenance
eNablers
Revenue Recognition
Mfg Efficiencies
Capacity
Warehousing
Lead-time
Specifications
Attacking all of the Opportunity
November 29, 2018

4. Signing the Contract is only the Start!
Strategic Sourcing
Time
Non-Compliance
Supplier Performance
Management
Supplier Collaboration
Six Sigma
Value Engineering
ESI
Value Creation
Contract
Signed
Supplier Value Scenarios
Up to 75 percent of
Sourcing Savings
can disappear
within 18 months
Different Types of Supplier
Value Management 1 2 3
Source: Geller & Company; PSC
November 29, 2018

5. Taking it Straight to the Bottom Line™ – Some of the Key Elements
November 29, 2018
Taking it Straight to the Bottom Line™ – Some of the Key Elements
Procurement Role
Objectives
Best Practices
Core Part of Corporate Strategy
Aggressive Stretch Objectives
Total Cost of Ownership
perspective
ROIC goals
Objectives Shared Across Entire
Organization
Incentives/Consequences
Supplier Performance Metrics
Strategic Sourcing
Negotiations Management
All Spend Categories in Scope
Risk Management
Partnerships with Suppliers
Supplier Recognition
Contract Management & Supplier
Centric Strategies
Cost Reduction Planning/Tracking
Budget Adjustments to Preserve
Cost Reductions
Low-Cost Country Sourcing
Consortium Buying
Asset Recovery
Selective Outsourcing $
Good Leadership
The Right Leader
Leadership Culture at all Levels
Bias to Action and Results
Innovation & Technology
Optimized Organization
Spend Analysis & Category Management
Demand Aggregation
Electronic RFIs, RFPs
Reverse Auctions
Optimization & Decision Support
Contract Mgmt & Compliance
Results Tracking & Reporting
Supplier Performance Evaluation
Project Mgmt & Executive Dashboard
Structure that works in your culture
Cross-functional involvement
Speaking with One Voice
Commitment to Continuous Learning
Professional Career Track
Excerpted from the book
“Straight to the Bottom Line”
November 29, 2018

6. Significant Worldwide Presence
November 29, 2018
A Global Business
$21.2
$5.8
$11
$2.2
Asia-Pacific 14%
Europe
27%
Other
Americas 5% US
54%
Broad geographic sales mix - $40.0 Billion
Facilities in over 60 countries
More than 40% of sales are outside the US
More than 50% of employees are outside the US
When we say Tyco is a global company, we aren’t kidding….
Over 50% of our employee base is located outside of the US,
And 43% of our sales are generated outside the US.
Our global reach and diversity are essential components to Tyco’s success. We better understand our global customer requirements by having employees located globally.
(based on FY2004 data)
Significant Worldwide Presence
November 29, 2018

7. Diverse Portfolio of Leading Brands
Electronics
Healthcare
Fire &
Security
Engineered
Products
Our Brands Are Well Known and Respected
November 29, 2018

8. People - Processes - Technology
Key Areas of Focus
Strategic Roadmap
Global Commodity Strategy/Teams
Leadership Engagement
Emerging Market Sourcing
eSourcing Strategies
Talent Development
People Processes Technology
November 29, 2018

9. Expanding Toolkit and Scope
November 29, 2018
Strategic Roadmap
2003
2004
2005
2006+
“Build the Foundation”
“Expand the Core”
“Accelerate the Impact”
“Sustain the Gains”
Segment C
Segment D
Segment E
Segment F
Segment A
Segment B
Segment
EMEA
China
India
Latin America
Geography
North America
Eastern Europe
Volume Leverage
eSourcing
Low Cost Country Sourcing
Supplier Development
Emerging Market
Expansion
Indirect Compliance
Working Capital (DPO)
Strategies
Traditional “Purchasing”
“Global Sourcing”
Continue Global
Expansion
55% Spend Addressed
“Segment Specific”
- 10 Teams
- Limited Spend
22 Teams/110+ Sub-Teams
Begin Global Expansion
Scope
Trade Compliance
IT Contract
Six Sigma Sourcing
Competency Training
New Product
Development
Training
7 Step Sourcing
Process
eSourcing
Leadership Training
Expanding Toolkit and Scope
November 29, 2018

10. Strategic Sourcing Teams
November 29, 2018
Strategic Sourcing Teams
North America
Capital Equipment
Chemicals
Commercial Print
Corp Commodities
Electronics
Energy
Facilities
Fleet IT
Metal Forming
Molded Plastics
MRO
Office Equipment
Office Supplies
Packaging
Resins
Telecom
Temporary Labor
Tooling
Transportation
Travel
EMEA
Capital Equipment
Castings (New)
Electronics
Energy
Fleet
Inj. Molding (New) IT
Metal Forming
MRO
Office Consumables
Office Supplies
Packaging
Steel Tubes (New)
Telecom
Temporary Labor
Transportation
Travel
Latin America
Energy
Fleet
MRO
Packaging
Telecom
Temporary Labor
Transportation
Travel
Asia
Electronics
Fleet
Packaging
Telecom
Temporary Labor
Tooling
Transportation
Travel
30 Category Teams, 229 Initiatives
November 29, 2018

11. Electronics Category Team
Electronics Steering Committee
Team Leader TE
TFS
THC
TEPS
IPO
(Reps)
Analyst
Category
Initiatives
PCBs
PCBAs
Caps
Cables
Conn.
Etc..
Electronics Category Team
Initiative Leaders
Resource #1
Resource #3
Resource #2
IPO
Offices TE
TFS
THC
TEPS
Segment
Council
Business
Stakeholders
November 29, 2018

12. IT Sourcing Team Structure
IT Sourcing Steering Committee
CIO
Council
Infrastructure
Apps/ Enabling
Security
Hardware
Telecom
Software
Resellers
Sourcing Sub-Teams
Tyco
Sourcing
Leadership
Team
(TSLT)
November 29, 2018

13. Leadership Engagement
Category Executive Sponsor
CAPEX SVP, Operational Excellence
Chemicals Segment President
Commercial Print SVP Communications
Electronics Segment President
Fleet Segment President
IT SVP, Chief Information Officer
Legal EVP, Chief Counsel
MRO SVP, Investor Relations
Packaging Segment President
Resins Segment President
Telecom Chairman & Chief Executive Officer
Temp Labor SVP, Operational Excellence
Travel EVP, Chief Financial Officer
Transportation SVP, Corporate Governance
Senior Leaders Actively Involved
November 29, 2018

14. Selecting Regions Based on Total Cost, Quality & Delivery
November 29, 2018
Global Sourcing Regions & Commodities
Asia
Electronic components
Cables / Harnesses
Auto parts / stamping
Molded parts / Tooling
PCB / PCBA
Textile
Contract mfg. - Hi Volume
Castings
Eastern
Europe
Raw material
Metal parts fabrication
Castings
Tooling
China
India
Mexico / Latin
America
Molds & Dies, Molded Parts
Metal parts / Machining
Chemicals / Resins
Pharma & Bio-tech
IT & ITES
Textiles
Castings & Forgings
Metal parts
Cable Harnesses
Assemblies
Selecting Regions Based on Total Cost, Quality & Delivery
November 29, 2018

15. Strategic Sourcing – Global Sourcing
Spend
Focus on Asia … IPOs established in China and India:
Tooling
Electronics
Metal forming
Chemicals
Expanding to Eastern Europe, Latin America & Southeast Asia in ’05 through ‘07
Developing local talent via ongoing training … Sourcing, Integrity, Trade Compliance
Raising awareness & overcoming internal resistance in high cost countries
2003
2004
2005
2006
Big Opportunity Ahead
November 29, 2018

16. Spend Management Roadmap
eSourcing
Datawarehouse
eProcurement
Contract Mgmt
Supplier Portal
eSourcing
Datawarehouse
eProcurement
Contract Mgmt
COMPLETE
eSourcing
COMPLETE
eSourcing
Datawarehouse
Sourcing Applications Building Blocks
November 29, 2018

17. What’s Next ?? Supplier Network Tyco ERP & AP Systems
Contract Compliance
Spend Visibility
eSourcing
Contract Management
eInvoicing
ePayment
eProcurement
Category Procurement
Catalog
Tyco ERP & AP Systems
Suppliers
Invoices / PO’s
GL / Cost Center
Item, etc
System 1
System 2
System 3
System N
November 29, 2018

18. Competency - Based Training Commitment to Continuous Learning
November 29, 2018
Competency - Based Training Commitment to Continuous Learning
Fact - Based Decision Making
Supplier Performance Management
Total Cost Management
Strategic Sourcing
Team Management
Supply Chain Competencies:
1. Leadership / Behavior
Results-Oriented Leadership X
Communications and Relationships
Data Management & Analysis
Disciplined Problem Solving
2. Sourcing
Supplier Management
Purchasing
Strategic Sourcing
Advanced Procurement
3. Supply Chain
Logistics and Distribution
Inventory Management
Demand Management
Optimized Organization
November 29, 2018

19. The Future of Supply Chain
More Strategic Roles in Supply Chain
Extended Collaboration with Supply Base
More Aggressive use of Technology
Continued Globalization of the Supply Chain
Larger Talent Pool from Universities with Supply Chain Specialization
November 29, 2018

20. My job is saving you money. I love my job! Saving Money ©GEICO
November 29, 2018