Shifting the dial: Moving from cost to value

Ben Briggs Group General Manager Procurement & Supply, Crown Resorts OVERVIEW o Introduction o The Crown Procurement Journey o Source to Pay diagnostic – where can technology be implemented o Setting Goals o Building the roadmap – 5 Year Vision o Outcome of Technology o Where are we today – what has technology enabled? o Where to next – define what value is o Develop a Value Map – Is this the role of a Chief Value Officer? o Where to from here? INTRODUCTION BEN BRIGGS GROUP GENERAL MANAGER PROCUREMENT & SUPPLY - CROWN RESORTS

o 18 Years + experience o Toyota Motor Corporation o GM Motors o US, China, Korea, o Ruffling feathers in businesses all over the world WHO ARE CROWN RESORTS

6 star luxury resort 2015 voted Australian Employer of the year 6 star luxury resort 6 star Green star design 5 Star NABERS energy rating 100% LED lighting thoughout

10,000 employees and contractors 17 Million Visitors per annum 1604 rooms combined 3 years in a row Voted Employer of Choice by ABA FUN FACTS ABOUT CROWN o Staff restaurant, largest 24 hour restaurant in the southern hemisphere (1million meals p.a.) o Crown are largest single site employer in both (6k) and Victoria (10k) o In total 3229 hotel rooms, suites, villas and luxury apartments once Sydney is completed o In FY18, Crown’s Australian Resorts attracted over 31 million visitors making them amongst Australia's most visited tourist attractions o In 2018 approx. 70% of waste was diverted from landfill o 900 solar panels installed on the roof of the Crown casino, generating over 400,000kWh of renewable energy annually WALKING INTO A MESS ALIGMENT – WHERE WERE WE AT

Where we were… Where we needed to be…

…. ALIGNED WHAT DID EVERYONE VALUE

Top 3 most important benefit types for Crown Innovation Procurement & Supply 1. Cost 2. Process Compliance Social Revenue 3. Contracts License Growth

Top 3 most important benefit types for suppliers

1. Margin enhancement Risk Service 2. Contract compliance Mitigation Enhancement 3. Innovation

Top 3 most important benefit types for BU’s 1. Quality COST 2. Service 3. Cost CROWN PROCUREMENT JOURNEY SOURCE TO PAY DIAGNOSTIC – WHERE CAN TECHNOLOGY BE IMPLEMENTED Crown S2P Process

Compliance Spend Analysis E-Sourcing Supplier Relationship (CLM/P2P/VMS)

- Hard to obtain - Using ARIBA - Supplier Visibility - Adhoc Supplier Poor - Inconsistent - Partial use of system meetings with no -Inability to get to level - Workflow approvals - Lack of policy scorecards 2/3/4 quickly prevention - Lack of business - No innovation Before - Maverick spend - Addressable spend planning - No reward non existent - Unclear - Supplier challenges - One-way - Multi-year view quoting on the procurement process - Not aligned to lacking system due to - Internal audit results Crown’s objectives limitations poor SETTING GOALS

➢ Increase catalogue spend ➢ Know our suppliers ➢ Catalogue Spend to 90% ➢ SRM for all key vendors ➢ Contract 70% of spend ➢ Increase compliance & controls ➢ SRM top 20 suppliers ➢ Compliance ➢ Drive Efficiency ➢ Impact Cost/Revenue ➢ Enable a group function ➢ Risk Management ➢ Time for risk management ➢ Time for social procurement BUILDING THE ROADMAP – 5 YEAR VISION Chief Value Officer/Chief Commercial Officer

Impact Brand

Enhance Value

Drive Compliance

Reset Baseline BREAKING DOWN THE LONGER TERM STRATEGY

RE-SET OUR BASELINE DRIVE COMPLIANCE ENHANCE OUR VALUE BRAND IMPACT

• Long term contracts • Policies & Procedures • SRM • Monetize Brand • Price benchmarking • Reduce Transactions • Strategic Partners • Generate Revenue • Supply & Payment Terms • Control Waste • Model “should costs” • Supplier Enabled Innovation • Fixed Price contracts • Contract KPI’s • Insource vs Outsource • Substitute Different Inputs/Services • Competitive Bidding • Reduce Demand • Introducing competition • Cost Discipline

CONTRACT CENTRIC SUPPLIER CENTRIC

IMPLEMENT TECHOLOGY EXPAND USE OF TECHNOLOGY WHERE ARE WE TODAY – WHAT HAS TECHNOLOGY ENABLED? o Procure approx. $1bn of goods and services across 6000 suppliers annually o Taken 10% out of the cost base o 95% transactions catalogued o 5 Year pipeline visibility o Multi- Year category plans o 75% suppliers – rich data (Risk rating, CSR data, Insurance etc) o 60% spend is contracted o 50 key suppliers on SRM’s . SRM performance warrants contract extensions o Contributing $4m+ in revenue o Lead in Social Procurement Initiatives such as CROWNability, Indigenous Procurement and research projects, Sustainability programs and modern slavery o Role created Head of Procurement Strategy & Operations – Innovation focus WHERE TO NEXT – DEFINE WHAT VALUE IS

o Improve Revenue

o Improve Operating Margins

o Improve the Balance Sheet/Technology

o Monetize Brand

o Relationships DEVELOP A VALUE MAP – IS THIS THE ROLE OF A CHIEF VALUE OFFICER?

Enterprise Value

Revenue Growth Operating Margins Balance Sheet/Cash Brand People/Relationships

New Markets Existing Markets Yielding COGS SG&A Taxes Working Capital P&E Technology Monetise Creatively Execution

Demand Retain Growth Acquire New Drivers Payment Labour Service Goods Rate/Cost Return on Investment Enhance Value Leverage Asset Terms

Price Product Service Innovation Optimisation Efficiency Optimisation/ Rates Rates Cost Risk Return Profit Terms Eliminate Duplication Understand Impact Encourage Monetise Marketing & Communications Innovation Assets Reconciliation/ Risk Efficiency Standards Quality Efficiency Monetise Collection

VIP/AL MGMNT/Hosts & Sales Labour Cost To Contribute to Remove Governance Reliability Efficiency Service Brand Friction Capability

Motivation/ Product Innovation Engagement Development Agility WHERE TO FROM HERE

o Broaden Leadership into new departments

o Re-map processes (do this every two years) and determine where technology can eliminate manual tasks, speed up process, integrate suppliers, create a VALUE market place for pre approved vendors to trade, improve the customer experience.

o Automate negotiations

o Crown buying group (Cost centre to a profit centre) THANK YOU