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THE GLOBAL eMARKETPLACE
Quadrem: eOTD and releasing Supply Chain value
ECCMA Annual Conference
October, 2006
Agenda
A little about Quadrem
Buyer & Supplier Pain points
How have we approached this Standards
– Education, Development, Management
Systems Integration
Some “Requirements”
Benefits and Lessons learned
Launched in 2000 by global natural resources leaders to streamline procurement and reduce supply chain costs
Global Supply chain solutions leader with: Global MRO-Centric Supplier Network XML Messaging Hub Sourcing Solutions Financial Solutions Data Management Solutions
Company Overview
$12.5 billionannualized transaction
volume
$12.5 billionannualized transaction
volume
XMLTransaction
Hub
XMLTransaction
Hub
46,00046,000SuppliersSuppliers
35,00035,000P2P Supplier UsersP2P Supplier Users
356356Integrated Integrated
ConnectionsConnections
The Community as at September 2006
3434Active BuyersActive Buyers
635635Buyer Sites Buyer Sites
516516Integrated Integrated
ConnectionsConnections
2002 2003 2004 2005 2006Transaction and Throughput Record
Throughput Transactions
$0
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
$800,000,000
$900,000,000
$1,000,000,000
$1,100,000,000
$1,200,000,000
$1,300,000,000
Jan 02
Apr 02
Jul 0
2
Oct 02
Jan 03
Apr 03
Jul 0
3
Oct 03
Jan 04
Apr 04
Jul 0
4
Oct 04
Jan 05
Apr 05
Jul 0
5
Oct 05
Jan 06
Apr 06
Jul 0
6
Oct 06
0
25,000
50,000
75,000
100,000
125,000
150,000
175,000
200,000
225,000
250,000
275,000
300,000
325,000
350,000
375,000
400,000
425,000
450,000
475,000
500,000
525,000
2003-2006 Projected Order Value
Actual Order Value
Actual 'Procure-to-Pay' Transactions
Global footprint – Global customers
Worldwide Quadrem Offices and Partners
Santiago, Chile
Lima, Peru
Johannesburg, South Africa
Dubai, UAE
Riyadh, Saudi Arabia
Perth, Australia
Brisbane, Australia
Sydney, Australia
Rio de Janeiro, Brasil
Mexico City, Mexico
Dallas, USA
Toronto, CanadaMontréal, Canada
Houston, USA
Seoul, Korea
Jakarta, Indonesia
SingaporeParis, France Amsterdam, The Netherlands
250+250+ employees and associates worldwide employees and associates worldwide250+250+ employees and associates worldwide employees and associates worldwide
San Jose, Costa Rica
Key Strength - MRO Supply
Largest community of industrial MRO suppliers Assets stand idle without these mission critical suppliers Leveragability - MRO suppliers cover many industries
Standardized eOTD industry dictionary for more than 6,000 MRO categories Becoming the de facto standard for the mining, minerals and metals industries Platform for expansion to related industries where technical descriptions are
key
19 business process documents designed for MRO materials and services procurement Appreciates the criticality of timing and availability of supply Need for machine to machine integration
Pain Points
Buying Organizations – Pain Points
Landscape Results and Effects
Use different ERP applications (many times within the same company)
Each ERP requires content structured differently Segregated spend – requiring manual intervention
Use different catalogue schemas / standards
More than one schema within the same group Often inappropriate for business needs
Seldom have a well defined catalogue strategy
Find it difficult to pin down the business case and ROI for content projects
Decentralized buying and inventory functions have led to decentralized content creation and maintenance functions
Seldom pool content initiatives to take advantage of efficiencies of scale that content
Don’t view catalogue creation and maintenance as a core discipline
No quality training and change management plans No clear understanding of the value of good content Data not being maintained ~ creating a perpetual cycle of data
cleansing projects
Carry legacy content data
No structured approach to create and maintain content Does not unambiguously differentiate a material or service Duplicate content creates uncertainty ~ master to select Spend profiles and analytics are impossible or difficult
Landscape Results and Effects
Don’t understand complexities associated with creating content correctly
Poor quality content, Content never in a state of readiness Create content to differentiate not to standardize
Suppliers supply same materials to more than one buyer organization
Those that have created catalogues to a schema often unwilling to change or redevelop this content to a new schema
Vary in size and capability
Limited use of technology adding to the complexity of content creation
Limited resources or budget to pay for content to be created according to numerous standards laid down by different buying organizations
Supplying Organizations – Pain Points
How have we approached this?
Standards System Integration
Plan
Design
Build
Test
Deploy
1 + 1 = 3
Quadrem and Standards
Wherever possible Quadrem bases its services and products on open, international standards
The philosophy being that it lowers the change management effort and rework over time
Quadrem facilitates two standards groups for its customers Integration Standards Council
– XML, document choreography coordination Content Standards Council
– Classification, Codification and industry templates
eOTD Management Methodology
Close liaison with customer (and their data) to develop and extend the eOTD to meet industry context
Focus on “minimal” requirements to find, describe and buy in a commercial perspective
Put in place robust standards maintenance processes to ensure adoption, consistency and reuse
Once stabilized move relevant structure to public domain Lowers cost over time, increases adoption
System Integration Methodology
Plan Design Build Test Deploy
SummarySummaryTasksTasks
StagesStages
Prioritize integration project based on business needs, benefits, & targets
Define Scope & Implementation Phases
Define Business Process & Workflow
Define Connection Architecture
Gather Data Mapping Requirements
Decide Catalogue strategy & requirements
Establish Team & Timeline
Set Up Integrated DDID
Conduct Connection/ Document Training for Trading Partner Tech
Exchange Connection Info – IDs, Passwords, e-mails, URLs
Provide Document Standards & Samples, Connection User Guides & Test Script
Specify Data Mappings -transformation rules & values
Collect Catalogue Data
Create detailed Project Plan
Populate catalogue for Quadrem catalogue and/or Buyer ERP catalogue
Supplier or Quadrem builds Document Mappings in Dev environment
Migrate Mappings to UAT environment
Install & Configure UAT environment (routing rules, certs)
Test Connectivity to Quadrem in Test environment
Conduct end-to-end integration and catalogue test with Buyer & Supplier
Migrate Mappings to Production environment
Install & Configure Prod environment (routing rules, certs)
Test Connectivity to Quadrem in Production environment
Assist as needed with End-User Training & Communications
Quadrem monitors initial production transmissions through marketplace
Gather feedback & resolve issues
Some “Requirements” Classification - UNSPSC / Material Groups / Other Codification – eOTD / Other
Use as is? Customize internally? Leverage existing process and customized templates? (QTAG)
Business Rules required Special Characters Units of Measure (Imperial and / or metric) Valid Values (or free text) Cleansing and standardization rules
– OEM Items– Generic Items– Mnemonics and Part Numbers
QA guidelines and rules
Descriptions Patterns leverage existing or develop / customize internally Short Text (40 Characters) Long Text PO Text
KPI Potential Typical
Duplicates ID 5 - 20% 12%
Inventory Reduction 5 - 20% 8%
Deleted / Obsolete Materials 5 - 15% 11%
BOM Duplication / Rationalization 10 - 35% 15%
Poor Mnemonic Part Numbers 5 - 20% 3%
Some real benefits delivered
Lessons
Get the strategy right, set expectations early and clearly
Pick a standard and stick to it “All models are wrong some are useful” eOTD is useful !!!
Interlocking “systems integration” and “catalogue” standards saves time and plants seeds for long term success
Maintenance is just as important as creation
In Conclusion
Recommend taking “baby steps” and understand catalog in relation to larger Procurement strategy Need to decide on some standards!!
There is no simple solution for some sourcing groups i.e. OEM catalogs
Some Phases to consider: Phase 1
– Focus on small key group of Suppliers– Use common tool to maintain catalogue and pricing– Define simple load format / process for ERP Material Master– Put in place process to have items distributed from Supplier Buyer
Phase 2– Catalogue management services for other spend groups or integrate as part of
Strategic Sourcing initiatives Phase 3
– Re-analysis of Content strategy in light of value released
THE GLOBAL eMARKETPLACE
Quadrem: eOTD and releasing Supply Chain value
ECCMA Annual Conference
October, 2006
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