The Walt Disney Company Strategic Sourcing and Procurement ...

The Walt Disney Company
Strategic Sourcing and Procurement
Process Overview
October 10, 2006

The Walt Disney Company Sourcing Process
and 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 Company’s Approach to Supplier Diversity

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.
Sourcing Phases
Section 3.1 Section 3.2 Section 3.23 Section 3.24 Section 3.25
Project
Project
Plan
Plan
Analysis
Analysis
&
&
Strategy
Strategy
Supplier
Supplier
Evaluation
Evaluation
&
&
Selection
Selection
Negotiate
Negotiate
Agreements
Agreements
Implementation
Implementation
Sourcing
Activities
Opportunity
Assessment
Team
Established
Spend Analysis
Market
Analysis
BU
Requirements
Develop Bid
Documents
Receive Bid
Response
Perform Pilot
Analysis &
Negotiation
Strategy
Implementation
Plan
Supplier
Development
Plan &
Performance
Scorecard

Supplier Evaluation and Selection Selecting Potential Vendors TCO
After thoroughly examining potential supplier sources and gathering pertinent supplier information,
S&P should select suppliers for a competitive bidding opportunity based on the likelihood that the
supplier can meet TWDC’s requirements on a best-value/total-cost-of-ownership basis.
Total cost-of-ownership (TCO) represents a collection of cost elements including:
Purchasing Cost Factors
Total Cost Factors
1. Initial purchase price 1. Maintenance costs
2. FOB point 2. Training costs
3. Cash terms 3. Installation costs
4. Discounts 4. Defects costs/rate
5. Transportation costs 5. Allocated overhead costs
6. Lead time 6. Disposal costs
7. Inventory cost
8. Quality control
9. Packaging and handling costs
10. Financial costs

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
→ Supplier’s geographic scope
→ Ability to meet TWDC’s 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
→ Understanding of and track record in cost reduction initiatives
→ Community relations factors
→ Training, maintenance, and product support

Supplier Evaluation and Selection Competitive Bidding Controls
Inclusion of Diverse Suppliers
1 S&P is committed to supplier diversity and requires that every competitive bidding
opportunity include at least one qualified woman or minority owned supplier.
2 S&P 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.
3 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.
4 Documentation may be periodically reviewed by the Supplier Diversity and Development
department for compliance.

Supplier Evaluation and Selection Competitive Bidding Vendor Selection
S&P Compliance
Supplier Diversity Certification
1. Diverse suppliers may only be considered diverse if they meet the Company’s definition of a
minority or woman owned business and present a current certification of minority or women owned
business enterprise status issued by:
a) An independent non-profit supplier organization qualified to issue certification and/or
b) A local or national governmental agency that specifically certifies minority or woman owned
status.
c) Please refer to the Supplier Diversity link in the Sourcing and Procurement module for further
information on certifying agencies.
2. The certification becomes part of the vendor record and must be submitted with the vendor set-up
request provided by casual buyer.

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