The Walt Disney Company Strategic Sourcing and Procurement Process Overview

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The Walt Disney CompanyStrategic Sourcing and
ProcurementProcess Overview

• October 10, 2006

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The Walt Disney Company Sourcing Processand our
Approach to Supplier Diversity

• Procurement Operations Manual
• The Users Guide for Strategic Sourcing
• Integration of Supplier Diversity
• Supplier Diversity Development Objectives
  within The Walt Disney Co.
• The Walt Disney Companys Approach to Supplier
  Diversity

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Sourcing Phases ? Overview
The sourcing process has five key phases
Project Plan, Analysis Strategy, Supplier
Evaluation Selection, Negotiate Agreements, and
Implementation. For each phase, there are
specific activities, deliverables, and milestones
that must be completed before the next phase can
begin. Below is an overview of each phase and
the associated activities.
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Supplier Evaluation and Selection ? Selecting
Potential Vendors ? TCO

• After thoroughly examining potential supplier
  sources and gathering pertinent supplier
  information, SP should select suppliers for a
  competitive bidding opportunity based on the
  likelihood that the supplier can meet TWDCs
  requirements on a best-value/total-cost-of-ownersh
  ip basis.
• Total cost-of-ownership (TCO) represents a
  collection of cost elements including
• Purchasing Cost Factors Total Cost Factors
• Initial purchase price 1. Maintenance costs
• FOB point 2. Training costs
• Cash terms 3. Installation costs
• Discounts 4. Defects costs/rate
• Transportation costs 5. Allocated overhead costs
• Lead time 6. Disposal costs
• Inventory cost
• Quality control
• Packaging and handling costs
• Financial costs

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Supplier Evaluation and Selection ? Selecting
Potential Vendors ? Other Factors

• In addition to the hard costs, other
  considerations could be taken into account when
  selecting potential vendors.
• Excellent service or product quality
• RFI responses
• Diversity status
• TWDC experience
• Overall business reputation
• Delivery performance
• General litigation record and any unsettled
  claims or outstanding litigation
• Financial condition of supplier, parent, and
  affiliated companies
• Client mix and dependency on clients
• Ability to meet required specifications or scope
  of work
• Ability of the supplier and/or their
  subcontractors to obtain required insurance
• Suppliers geographic scope
• Ability to meet TWDCs requirements on a
  best-value/total cost of ownership (TCO) basis
• Familiarity with existing design, structure or
  product use within TWDC
• Transportation logistics capability
• Commitment to technological advancement
• Ability to conduct electronic commerce

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Supplier Evaluation and Selection ? Competitive
Bidding ? Controls

• Inclusion of Diverse Suppliers
• SP is committed to supplier diversity and
  requires that every competitive bidding
  opportunity include at least one qualified woman
  or minority owned supplier.
• SP is encouraged to work with their Segment
  Supplier and Diversity Development Manager to
  identify potential suppliers and/or gain access
  to the Diverse Supplier Database.
• If a minority or woman owned supplier has not
  been identified as a potential supplier,
  documentation must be included in the vendor
  record to show the steps taken to identify a
  diverse supplier and the reason no diverse
  supplier was included.
• Documentation may be periodically reviewed by the
  Supplier Diversity and Development department for
  compliance.

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Supplier Evaluation and Selection ? Competitive
Bidding ? Vendor Selection ? SP Compliance

• Supplier Diversity Certification
• Diverse suppliers may only be considered diverse
  if they meet the Companys definition of a
  minority or woman owned business and present a
  current certification of minority or women owned
  business enterprise status issued by
• An independent non-profit supplier organization
  qualified to issue certification and/or
• A local or national governmental agency that
  specifically certifies minority or woman owned
  status.
• Please refer to the Supplier Diversity link in
  the Sourcing and Procurement module for further
  information on certifying agencies.
• The certification becomes part of the vendor
  record and must be submitted with the vendor
  set-up request provided by casual buyer.

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Supplier Diversity Development Objectives

• Supplier Diversity Development at The Walt
  Disney Company has three clear, concise
  objectives that are designed to focus our
  collective energies around the initiative.

• Articulate the value of a robust process
• Enable diverse suppliers to compete for
  opportunities
• Facilitate a fact-based dialogue within TWDC and
  with external interest groups

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