Review of the transformation journey of the CDK Global supply chain.

1. Transforming Fulfillment for
Better Customer Outcomes
October 31, 2018
Gartner Supply Chain Peer Forum
Mike Morsch, VP Global Procurement and Supply Chain

2. 2
About CDK Global, LLC
o CDK Global is the leading global provider of integrated information technology
and digital marketing solutions for the automotive retail and adjacent industries.
o With more than $2 billion in revenue, CDK Global solutions automate and
integrate all parts of the dealership and buying process from targeted digital
advertising and marketing campaigns to the sale, financing, insurance, parts
supply, repair and maintenance of vehicles.
o CDK Global serves over 28,000 auto, heavy truck, agriculture, construction,
powersports, marine and RV dealerships throughout North America, Europe, the
Middle East, Africa, Asia Pacific and South America.
o CDK Procurement has global responsibility for strategic sourcing, spend
management, vendor management, procurement operations and supply chain.

3. 3
Who Am I?
o Currently the Vice President of Global Procurement at CDK Global
o Before I came to CDK, I was Vice President IT for North America at Ipsos
o Prior to Ipsos, I enjoyed a long career with Motorola in a variety of senior
technology leadership roles

4. 4
Focus to Transform from Spinoff
o Joined CDK shortly before its
spinoff from ADP
o Six-month survival exercise
o Understand business, understand
services, understand staff
o Volunteered for Business
Transformation Leadership
o Took on leadership for Robotic
Process Automation and Global
Insource Centers leverage

5. 5
Procurement Operating Model
My Focus
o Transactional to
Strategic
o Drive to Digital
Vendor
Management
Sourcing
Procurement
Ops and
Fulfillment
Strategic
Manage
Operations

6. 6
CDK Supply Chain
Equipment delivery
to dealer needs
9,000
client sites
15,000
drop ship orders
New installs
and repair
Can’t be early,
Can’t be late
Supply chain
directly drives
our revenue
recognition
Supply chain linked
customer satisfaction
And loyalty

7. 7
Industry Issues
o Change of dealer ownership
o Short product life cycles
o Older technology
o Remote customer locations
o Lean margins
o Fragmented solutions
o Highly regulated

8. 8
Supplier Issues
o More to come on this
o Product defects
o Don’t drop ship directly to clients
o Do not provide reliable delivery
visibility – driving “blind”

9. 9
And Then There Was Our Issue
Supply
shortages
Business
transformati
Product
EOL
Customer impacts
Apparent, sudden increase in missed customer installs
• Missed installs • Lost trust • Lost revenue

10. 10
Initial Cause
What do we do now?
Poor EOL
Communication
Transparency
Bad Metrics

11. 11
Blocking and Tackling – Stop the Bleeding
Focused
Accountabil
ity
Lean
Root
Cause
Break
down Silos
Back to
Basics
Daily
business
reviews
Accurate
metrics
Manage
suppliers
Exception-
based
reporting
Bottom Line: Improve our supply chain management
communication

12. 12
Maturing the Supply Chain
Partner reviews
o People: redefine jobs/responsibilities
o Systems:
• Implemented supply chain visibility tool
• Tableau metrics reporting tool
• SC Systems enhancements
Process Drop Ship S&OP VAR
Supplier
Partnership
↑ Metrics Publish
OTIF by
supplier and
warehouse
Tracking
installs
Backlog and
forecast

13. 13
Path to Digital Transformation
o Go beyond the operating model
o Big three programs
o Metrics impact
o Dashboards

14. 14
Big Three Programs to Procurement Excellence
Procurement
Excellence
Margin
Transformation
Procurement
System (S2S)
Procurement
Operating
o Model and org review
o Key areas of focus
• Strategic sourcing
• Vendor Management
• Operations
• S&OP
• SC visibility
o Training and
development plans
o Executed plan
o Work streams support
o Savings $ Multi MM, FY16-
FY18
o Targeted help: third-party
advisors
Digital Transformation
o Take (SC visibility)
o Wand (third-party labor)
o Aspera (Assets)
o Oracle
o Zycus
• Strategic sourcing
• Vendor Management
• eProcurement
• Analytics
• P2P

15. 15
Source to Settle
Digital requests
Digital
contracting
e-Procurement
Vendor
Management
and
Analytics
Modern P2P
Big step to digital transformation

16. 16
Customer Outcomes
4
missed installs
in last year
Reduced
missed repairs
o Higher customer trust,
positive feedback
o OTIF > 95%
o Critical client support
(Hurricane)
o More seamless buy/sell events

17. 17
Leadership Believes in Supply Chain
Positive
influence
Improved revenue
recognition
Equipment
challenges
Increased profit
margin
Rants to raves
Delivery
assumed

18. 18
Continuous Transformation
The Infinite Loop of Transformation
Disruption
ModelingTransformati
End-to-end digitization Yellow Belt swarm AI and Machine Learning
may have a bigger impact on
procurement/supply chain
than any other function

19. 19
The Takeaway
o Start with the basics
o Must try to fix everybody
o Supply chain leaders are
technology leaders

20. Thank you!
Questions? Email Mike.Morsch@cdk.com.
© 2018 CDK Global, LLC / CDK Global is a registered trademark of CDK Global, LLC.