Training for the Annual Negotiation Calendar

In this quick training, we will summarize the Annual Negotiation Calendar that provides a guidance to CPS & SIS execute the key processes related to Negotiation and Publishing the price and terms.

  1. Annual Purchasing Volume process – End of Jul
  2. SIS Negotiation and Price memo publishing – End of November
  3. SAP data update into SAP – Beginning of Jan (Next year)

 

1. Annual Purchasing Volume process – End of Jul

Pre-Check

CPS Shared Service has to apply the pre check on June, and verify a list of critical tasks to be executed by the CPS Demand, Material Management and Planning to ensure SAP data accuracy related to Purchasing Volume that will be pull and send for the Negotiation process with the Suppliers.

Which month CPS Shared Service team needs to apply the Pre-Check?

  • Any time, because those checks are critical to have an accurate Forecast in SAP
  • June in the Current year

Segmentation of Ingredients based on Volume and Strategy

CPS Procurement will pull the data from SAP and use the segmentation of ingredients to determine the analysis and narratives that must to be provide by the CPS Material managers based on the criteria identified below in the Table 1.


What are the groups of ingredients segmented for the Annual Purchasing Volume process?

  • Critical Ingredients, Key Ingredients, No Volume Sensitive, Strategic Ingredient, CEPG and Volume Sensitive
  • Key Ingredients, No Volume Sensitive, Strategic Ingredient and Volume Sensitive

Variance criteria

CPS Material Management will not make analysis on the ingredients that are not volume sensitive, only for the ingredient with the following variance and for those categories: Key, Strategic and Volume sensitive

What are the Segmentation groups of ingredients that CPS has to explain the variances of +/- 10%?

  • Key Ingredients & Strategic Ingredients
  • No Volume Sensitive & Key Ingredients

2. SIS Negotiation process - End of November

Database to capture the Local CPS Requirements

Database to capture the Local or Unique CPS Requirements

All local or special operational and procurement requirements must to be captured in a database that will be managed by SIS.

CPS Procurement will send the database to the QA, Operational and Material Management areas to capture the information for the key categories of ingredients as follow:


How SIS will capture the Local or Unique requirements for each Plant

  • There is no Local or Unique requirements
  • CPS Procurement will send the database to the QA, Operational and Material Management areas to capture the information for the key categories of ingredients as follow:

Price Memo

SIS Price memo

The price memo is the book of record of negotiated prices for the SIS ingredients. SIS organization will publish this document in the End of November for the most of ingredients and quarterly for the ingredients that has the negotiation done in this frequency.

During the year if there is any change due special requirements or critical issues, SIS price memo will notify the CPS Procurement, Material Management and Finance team about the new prices or changes published, informing the ingredient and CPS plant that will be applied.

If you do not have access to the price memo, you can request it here.

https://teams.coca-cola.com/sites/FIS/FIS%20Sharepoint%20Library/PriceMemoPage.aspx

The SIS price memo is an excel file, with the columns and contents below.

The SIS price memo is an excel file, with the columns and contents below and will be available in the SIS SharePoint.

https://teams.coca-cola.com/sites/FISInformationLibrary/SitePages/Home.aspx

What is the Price Memo document?

  • Guidance that brings the Commercial Instructions to our Suppliers
  • The price memo is the book of record of negotiated prices for the SIS ingredients.

Meeting with SIS Category managers

Meeting with SIS Category managers to communicate the Sourcing strategy

During the Annual Negotiation the SIS managers will coordinate meetings with CPS Procurement to align and communicate the key changes, impacts, on boarding or any information that could drive significant savings.

The meeting has to provide the following information:

What are the information that will be shared by SIS during the Strategy Meeting?

  • 1. Pricing Overview (Previous and Current year in CPS) 2. Supply point options (Scenarios if applicable) 3. SIS Strategy and potential savings 4. Distribution of Allocation (Multi Source if applicable)
  • 1. Final Price 2. Suppliers 3. Allocation 4. Terms

3. SAP data update into SAP– Beginning of Jan (Next year)

4. SAP Data update

SAP standard Requirements

There are standard requirements to setup SAP and the CPS Plants have to following the key requirements to keep updating in annual basis or quarterly the price & terms.

When must we use Purchase Info Records-PIR?

  • Never-This is not a Purchasing record
  • Always-Info records are required for all ingredients/Packaging/Juice

Can we use in the Contract condition the year 9999?

  • Yes, to allow us to never review the date again
  • No, the date has to reflect the period that the price was negotiated

Why the Source List is needed as a standard requirement?

  • Key that determines how the source of supply defined in the source list record is used in material requirements planning (MRP). The source list will link the material and vendor with a contract number. If contracts are used for purchasing, then the source list are mandatory.
  • Source list does not determine how the source of supply defined in the source list record is used in material requirements planning (MRP). If there is a Contract you don't need to create the Source List.

4. Detailed Annual Negotiation Calendar

Annual Negotiation Calendar

The Calendar will detailed the critical activities to be completed during the periods from June to December.

When CPS has to complete the analysis for the Annual Purchasing Volume?

  • End of July
  • End of August

When SIS publish the SIS price memo?

  • End of July
  • End of November

When CPS will be able to Pre-check the PIR, Source List, Contract and Quota?

  • Beginning of December
  • End of December