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DB Supply Information Management
DB Supplier Management Solutions Monday,
December 08, 2014
Paolo Nobili Sales Representative, National
dept. ? nobilip_at_dnb.com ? 39 347 0655038
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DBs Background

• Premier Information Provider enabling business to
  business commerce for over 161 years
• Focus is helping customers Decide with
  Confidence
• Trusted Source of Information...90 of customers
  appear on Fortune 1000 list
• Web Focused

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Sourcing objectives
Supply Objectives

• Rebuild vendor file with robust, accurate data
• Identify and leverage aggregated family spend
• Optimise supply base
• Develop a strategy that will assess risk,
  dependency and diversity compliance

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Challenges

• Providing visibility of and access to customer
  name global spend
• Rationalisation of diversity segment within the
  supply base
• Implementation of an Information Strategy that
• Achieves significant cost savings, year over year
• Supports process changes to increase accuracy of
  spend classification
• Continues to optimise the size of the supply base
  through a robust analysis of consolidated spend
• Assures compliance with existing and future
  sourcing policy
• Meets diversity objectives in its supply base
• Identifies and minimizes risk to assurance of
  supply
• Utilises contract knowledge to develop sourcing
  strategies

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The Spend Analysis will
Demonstrate how company name can leverage
DBs Solutions by

• Identify, quantify, leverage and manage savings
  opportunities
• Aggregate and Consolidate Spend
• Optimize the supplier base on an on-going basis
• Proactively manage supplier relationships by
  limiting the level of risk in the supply base,
  thereby decreasing risks to the supply pipeline
  and its effects on production, service and RD.
• Monitor and increase compliance on contracts to
  capture additional savings
• Plan, manage and grow diversity initiatives
• Action in these critical areas can deliver
  significant savings
• and positively impact company name bottom line.

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DBs Spend AnalysisAgenda
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DBs Spend AnalysisAgenda
Supplier Information Supplier Information
Cleansing Supplier Information Enrichment
An analysis of Data overview SIC code
analysis Major industry groups Identification of
strategic opportunities Industry
segmentation Supplier risk Duplicate records
Family trees Supplier dependency
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Main Data SourcesEurope
Austria Example data sources Banks Bundesrechenzen
trum/BMFJ (Ministry of justice) CMD Ediktsdatei/BM
FJ (Ministry of Justice) Fimenbuch (Commercial
Register) Herold Business Data Intrum
Justitia/DB RMS Landesgericht Wirtschaftskammer T
otal yearly records 771,200
Belgium Example data sources Court of
Employment Euro DB Ministry of Finance Moniteur
Belge Belgisch Staatsblad Commercial
Courts National Bank of Belgium Total yearly
records 3,604,400
Czechs Republic Example data sources Albertina Ari
anda Bulletin Economia Commercial
Courts Government Statistical Office Thompson
File Total yearly records 105,000
Finland Example data sources Tax
Authorities Suomen Asiakastieto OY Finnish
Company Register Statistics Center of
Finland Thompson File Trade tape
participants Total yearly records 508,000
Netherlands Example data sources NV Databank
(Chambers of Commerce) NV databank Woerden County
Courts Verenining Kamers van Koophandel Total
yearly records 2.365,000
Italy Example data sources Protested Bills
Register (Infocamere) Italian Business Register
(Infocamere) Data House Thompson File Trade Tape
Participants Total yearly records 2,787,000
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Main Data SourcesEurope
France Example data sources BIL Bilans
service Facro France Heller Axciom Infogreffe Inpi
INSEE Total yearly records 5,320,000
Germany Example data sources ARGUS Government
Courts Handelregister New handelregister
Bulkload Thompson File Total yearly records
8,303,000
Hungary Example data sources Customers Ministry
of Justice Thompson File Inet Kft Total yearly
records 120,000
Northern Ireland Example data sources Companies
Registry office Regional District
Courts Thompson file Total yearly records
112,000
Norway Example data sources Register of
properties Skattedirektoratet Company
register Total yearly records 3.555.000
Ireland Accountants, liquidators,
receivers Companies Registry Office All
Courts Thompson File Trade Directories Example
data sources Total yearly records 207,000
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Main Data SourcesEurope
Portugal Example data sources Banco de
Portugal Courts Mercantile Registries Government
Offices Total yearly records 510.000
Spain Example data sources Borme Government
Registry Official Spanish Gazettes (BOE
BOC) Trade Partners Total yearly records
2,462.000
UK Example data sources Banks Companies
house Dept of trade Industry Electoral
Role London edinburg Gazettes Registry
Trust Royal Mail Total yearly records 4,190,500
Sweden Example data sources Chattel Mortgages
Registration office Post Och Inrikes
tidningar SPAR Central Bureau of
statistics Companies house The national Tax
Board National Tax Board County
Judgements Total yearly records 45,640.000
Switzerland Example data sources Banks Government
Registry National trade Registry Thompson
File TWIXTEL Total yearly records 268.000
Denmark Example data sources Copenhagen stock
Exchange Danish Companies House Danish Gazette
(Reistreringstidende) Danish statistical
Bureau Total yearly records 811.000
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Main Data Sources
  Data Sources in Italy     Data Sources in Italy     Data Sources in Italy     Data Sources in Italy  
Source of Data Type of Data Data Elements Vol per Annum
Protested Bill Register (Infocamere) Protested Bills Protested bills 2,000,000
Italian Business Register (Infocamere) Chamber of Commerce certificate (for newly created records) Legal data (name / address / capital ), head office and local units, subject of economic activity, representatives names and address, their power, etc. 60,000
Italian Business Register (Infocamere) Financial statements Balance sheets 650,000
Italian Business Register (Infocamere) Chamber of Commerce changes Legal data (name / address / capital ), head office and local units, subject of economic activity, representatives names and address, their power, etc. 500,000
Italian Business Register (Infocamere) Protested Billing for new names and new principals and other products not BIR. Protested bills 144,978
Data House Bankruptcy Loans (and other detrimental data) Bankruptcy, Loans, Mortgages, Foreclosures, etc. 83,335
Data House Failures Failures 10,040
DB Telephone Call (Full) Full Update All Data elements 307,300
Trade Tape Participants (DB customers partners) Trade Payment Experiences Payment performances maximum credit, current outstanding, amounts overdue, terms 1,010,927
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How Often is Data Updated?

• A company changes control every 15 minutes
• 1 million updates are made per day worldwide
• A new set of accounts are keyed every 36 seconds,
  company enters liquidation, receivership etc.
  every 3 minutes
• A new business is registered every 2.5 minutes
• A new non-corporate record is created every 22
  seconds
• A secured change is registered every 5 minutes
• A company name change is registered every 15
  minutes
• A directorship change happens every 32 seconds
• A share ownership change happens every 6 minutes
• A company changes control every 15 minutes
• A trade reference is received every second

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DBs DUNS Number Family Linkage
Fictional example
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(No Transcript)
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Data Universe Review
DB has matched over 90 of suppliers,
representing over 95 of spend.
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(No Transcript)
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DBs Spend AnalysisAgenda
An analysis of Data overview SIC code
analysis Major industry groups Identification of
strategic opportunities Industry
segmentation Supplier risk Duplicate records
Family trees Supplier dependency
Profiles A map of the spend through the appended
DB data
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Supply Information Spend AnalysisIdentify what
proportion of your suppliers account for most of
your spend
The top 5 of suppliers account for 90 of spend
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DBs Spend AnalysisAgenda
An analysis of Data overview SIC code
analysis Major industry groups Identification of
strategic opportunities Industry
segmentation Supplier risk Duplicate records
Family trees Supplier dependency
Profiles A map of the spend through the appended
DB data
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S.I.C Profiles

• Major Industry Group Segmentation
• of Total Spend
• Suppliers
• Purchases
• Drilldown to Three Key Industry Segments (Based
  on SIC)
• The spend Family Tree based on 2-digit SIC
  code
• of Total Spend
• Suppliers
• Purchases

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SIC Codes

• SIC stands for Standard Industrial Classification
  Code. The SIC is a code originally developed by
  the U.S government to describe business
  activities at an industry level.
• DB assigns SIC codes based on management
  interviews conducted by DB that define business
  operations and percentages of revenue derived
  from each activity. DB will assign up to 6 four
  digit SIC codes based on the revenue derived from
  specific business operations. The order of SIC
  codes are according to the percentage of total
  revenue that the activity comprises. The primary
  SIC code represents the activity with the largest
  percentage of total revenue.
• The SIC codes are extracted from DBs database
  on DUNS numbers assigned to a customers Master
  Vendor File.

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SIC Code vs. Commodity Code

• SIC codes, are assigned based on a businesss
  operations. Therefore, these codes are industry
  specific. SIC codes can identify the industry in
  which a business operates, but does not define
  the products that the business sells.
• Commodity codes (UNSPSC, eCl_at_ss or custom codes),
  are applied to products and services purchased by
  a company. These codes are assigned based on
  descriptions of items found in a companys Item
  Master File. These are product specific codes
  that are used to determine what is purchased.

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Coding Examples
Coding Examples
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DBs Spend AnalysisAgenda
Profiles A map of the spend through the appended
DB data
An analysis of Data overview SIC code
analysis Major industry groups Identification of
strategic opportunities Industry
segmentation Supplier risk Duplicate records
Family trees Supplier dependency
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Industry Profiling

• DB has catagorised spend into 24 high level
  industry/spend sectors, by grouping S.I.C codes
  together. These can be used to identify
  significant opportunities and to drill down and
  identify more specific opportunities.

Direct sectors description Mining, forestry and
construction Manufacturing, general Mining,
primary industries Food, tobacco and kindred
products (inc. non durable goods) Heavy
construction, general contractors Printing, paper
and packaging Petrochemicals, chemicals,
pharmaceuticals and plastics Raw materials
metals Sub-contract manufacturing Electronics
(components and assembly) Wholesale durable goods
Indirect sectors description Bulk transport and
logistics Utilities Information
technology Banking, finance, insurance and
investment Professional services (consulting,
legal, outsourcing) Other services Maintenance,
repair, operations MRO Travel and accommodation
(inc automotive dealers, gas stations and event
management) Retail Printed material (inc print
shops, photo copying, brochure design and
print) Communications and telecommunications Gover
nment Non classifiable
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Major industry GroupsRanked by PurchasesDirect
Material Sectors
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Major industry GroupsRanked by
PurchasesIndirect Material Sectors
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DBs Spend AnalysisAgenda
Profiles A map of the spend through the enriched
DB data
An analysis of Data overview SIC code
analysis Major industry groups Identification of
strategic opportunities Industry
segmentation Supplier risk Duplicate records
Family trees Supplier dependency
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Strategic Opportunitiesfor improved Supply
Management
High spend and relatively
STRATEGIC
High
High number of suppliers
low number of suppliers
And high spend
Spend already optimised
to a considerable extent.
This is the key area presenting
It may be advisable to examine
opportunities to leverage spend
risk of over
-
dependency on
by negotiating strategic deals.
suppliers of key products
services.
Amount of Spend
TACTICAL
LOWER PRIORITY
Low spend spread among a
Total spend and number of
high number of suppliers
suppliers both relatively low.
This presents tactical opportunities
Savings still possible, especially
to consolidate spend amongst
for those in the bottom
-
right
fewer suppliers.
of this quadrant.
0
Number of Suppliers
High
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Data Universe ReviewDirect Materials
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Data Universe ReviewIndirect Materials
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Three key Opportunity Areas

• 3 major sectors stand out as worthy of attention
• Wholesale Goods
• This sector has the highest number of suppliers
  of any sector (over 400) and also the highest
  spend (nearly 30 of the total). It is also a
  sector where their is likely to be significant
  competition between suppliers.
• Raw Materials (Metals)
• Accounting for nearly 10 of total spend, and
  15 of suppliers, this is clearly a key area in
  which savings are likely to be made.
• Professional Services
• Accounts for nearly 6 of suppliers, but less
  than 3 of total spend.This is a classic area
  of discretionary spend, with many potential
  alternative suppliers.
• We shall examine each of these three sectors in
  turn.

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Strategic SectorsThe Top 3 Sectors of Interest
Sector Description Suppliers Spend
1 Wholesale Goods 486 340,351,648
2 Raw Materials - Metals 282 195,093,336
3 Professional Services - (Consulting, Legal, Outsourcing) 121 26,610,156
These three sectors account, between them, for
almost 50 of xxxs entire spend. We shall
investigate each of them in turn, identifying
some of the most promising areas to make savings.
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Strategic Sector1 Wholesale Goods
Clearly the vast majority of Wholesale
expenditure is concentrated in the durable
goods sector. We shall therefore examine this.
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Strategic Sector1 Wholesale Durable Goods
SIC 5084 Industrial Equipment Wholesalers,
stands out here, in that it is serviced by over
100 suppliers more than 5 of the total, while
accounting for only 1 of spend.
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Strategic SectorIndustrial Equipment Wholesalers
It is striking here, firstly, that the suppliers
alone account for over 80 of the spend in this
sector. Secondly, there are a very large number
of Industrial Equipment wholesalers in Italy
representing a very low spend. There may be scope
for rationalisation.
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Strategic Sector2 Raw Materials - Metals
The second strategic sector that we have
identified is that of Metal industries. This in
turn subdivides into two segments, both of which
are significant. However, Fabricated metal
products has a particular high number of
suppliers (9 of the total) in relation to the
spend (6.5). We shall therefore investigate this
sector further.
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SIC 33 Fabricated metalproducts except
machinery
Two SIC codes stand out here 3499 Misc.
Fabricated metal products manufacturers, and
3443 Fabricated Plate work manufactures. We
shall examine 3499.
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SIC 3499Misc. Fabricated Metal Products
It is noticeable that the top four suppliers of
Fabricated Metal Products account for over 80 of
the spend in this sector. In contrast, there are
four suppliers with a spend of less than 1,100,
offering scope for rationalisation.
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Strategic Sector3 Professional Services
The third strategic sector that we have chosen is
Professional Services. While this accounts for
only 2.5 of spend, it is a classic example of
indirect spend in which there is often
significant overlap between the services offered
by various suppliers. By far the biggest
proliferation of suppliers is to be found in SIC
87 Engineering, accounting, Research, management
etc. We shall examine this spend in greater
detail.
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Engineering, accounting,research, management etc.
While Engineering Services shows, at first
glance, the greates scope for savings through
Supplier Reduction, it is Management Consulting
Services which probably offers the biggest
discretionary spend. It would be interesting to
examine who the fifteen suppliers in this segment
are
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SIC 8742Management Consulting Services
It immediately becomes clear that, of the 15
suppliers, only four are major players,
accounting for over 95 of spend. Would it be
practicable to consolidate this market to, at
most, two or three preferred partners?
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DBs Spend AnalysisAgenda
Profiles A map of the spend through the enriched
DB data
An analysis of Data overview SIC code
analysis Major industry groups Identification of
strategic opportunities Industry
segmentation Supplier risk Duplicate records
Family trees Supplier dependency
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Industry Segmentation4 digit SICs ranked by
purchases
Significantly, these 20 specialised sectors
account for over 79 of xxxs total spend.
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Top industry4 digit SICs ranked by purchases
Of the four top industries, three of them are
connected with metals or scrap, and as such are
critical to xxxs production. As one would
expect, the supply base has already been pared
down.
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Industry Segmentation4 digit SICs ranked by
suppliers
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Top industry4 digit SICs ranked by purchases
When we examine the industries in which Thyssen
has the highest number of suppliers, it is
noticeable that, with the exception of Metals
Service Centres, the number of suppliers is
disproportion-ately high. There is probably scope
for rationalisation.
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DBs Spend AnalysisAgenda
Profiles A map of the spend through the enriched
DB data
An analysis of Data overview SIC code
analysis Major industry groups Identification of
strategic opportunities Industry
segmentation Supplier risk Duplicate records
Family trees Supplier dependency
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Geographic AnalysisContent

Major Country Segmentation

of Total Spend

Suppliers

Purchases

Drilldown to a number of key countries (Based on
SIC)

The supplier risk analysis

of Total Spend

Suppliers
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Country SegmentationRanked by suppliers
Two salient factors stand out here Firstly,
while Italian suppliers account for less than 60
of spend, they make up nearly 90 of the supply
base. This indicates scope for savings.
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Sourcing By Continent
Fully 96 of xxxs spend is allocated to Western
Europe, while barely 1 is allocated to suppliers
outside of Europe and North America. Is there
scope for more global sourcing?
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Country SegmentationDirect Spend
Italy dominates most sectors of direct
spend. The main exception is Mining and Primary
Industries, where others predominate. (The two
largest suppliers here are in Canada and
Venezuela respectively).
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Country SegmentationIndirect Spend
Two sectors stand out as being sourced mainly
from outside Italy Banking etc. where the
picture is dominated by holding companies in
Netherlands, Switzerland and France. While
Government, dominated by Germany, is clearly a
special case.
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DBs Suppliers Risk Score

• Suppliers are grouped together based on SER
  scores.
• The Supplier Risk Score (SER) predicts the
  likelihood of a firm ceasing business without
  paying all creditors in full, or reorganizing or
  obtaining relief from creditors under state law
  over the next 12 months.
• Scores are awarded to each supplier. The scores
  range from 0-9 and a lower SER score indicates a
  lower risk and a higher score a higher risk.

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of Suppliers per SER Score
DB was able to provide a Supplier Evaluation
Risk Score for 92 of Suppliers matched,
representing 90 of spend. Of these the
overwhelming majority are low risk (1, 2 or
3). It is still worth investigating the higher
risk suppliers.
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SuppliersRanked by Risk Rating
Two suppliers in particular, Mefer SRL and IOSA
Carlo SRL, appear to present a high risk exposure
with a spend of over 3million apiece, and an SER
Score of 8.
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DBs Spend AnalysisAgenda
An analysis of Data overview SIC code
analysis Major industry groups Identification of
strategic opportunities Industry
segmentation Supplier risk Duplicate records
Family trees Supplier dependency
Spend aggregation Identify spend aggregation
opportunities
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Spend AggregationContent

• Top Duplicate Suppliers
• Suppliers
• Purchases
• Top Interrelated Firms
• Suppliers
• Purchases

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Duplicate RecordsRanked by Suppliers and
Purchases
While the xxx supplier-base contains a much lower
level of duplication than that sometimes
encountered, the aggregation of these duplicates
presents a fuller and more accurate view of spend.
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DBs Family Linkage Tree

• DB provides ownership detail utilising the DUNS
  Number at three Levels
• Immediate upward linkage Parent /Headquarters
• Highest ranking member of a family tree in the
  same country as the subject business Domestic
  Ultimate
• Highest ranking member of a family tree worldwide
  Global Ultimate
• DB utilises the tree to establish family
  relationships within a vendor master file. This
  allows analysis of inter-company relationships
  to
• Leverage buying power within a corporate family
  rather than with individual suppliers only
• Provide an overview of the overlap of suppliers
  across multiple purchase sites

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DBs Family Linkage Tree
This slide takes the top 20 supplier families,
which account for 63 of spend, measured against
the top 10 spend categories (which are 85 of
spend. This shows that, in an idealised
scenario, there is scope to source 85 of spend
from just 20 suppliers.
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DBs Spend AnalysisAgenda
An analysis of Data overview SIC code
analysis Major industry groups Identification of
strategic opportunities Industry
segmentation Supplier risk Supplier dependency
Special Suppliers Identify key supplier
categories (e.g. top spend)
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Top Individual SuppliersRanked by Purchases
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High Dependency SuppliersSegmentation by
Supplier Ratio
The dependency ratio is based on a parity of 1
1. It shows that some of the largest suppliers
have a degree of dependency which is perhaps
excessive. It would be worth verfifying whether
any of these suppliers are critical
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DBs Detailed Reports

• The set of comprehensive reports delivered
  includes
• Top 100 unmatched suppliers, ranked by purchases
  (1 report)
• Top 100 out of business suppliers, ranked by
  Purchases (1 report)
• Top 100 SIC ranked by purchase and suppliers,
  (2 reports)
• Top 100 highest Interrelated Firms, ranked by
  purchases suppliers.
  
  (2 reports)
• Top 100 Duplicate Suppliers, ranked by Duplicates
  (1 report)

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DBs Spend Analysis

• Questions?