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© UGS Corp. 2005. All rights reserved.
An Integrated Approach Supplier ManagementFocus on Technology Supplier Collaboration for Innovation in 21st Century ManufacturingRaj Khoshoo
© UGS Corp. 2005. All rights reserved.
Topics Digital transformationDigital transformation
Digital maturity for supplier relationshipDigital maturity for supplier relationship
Collaboration technology used in PLMCollaboration technology used in PLM
Integrated SRMIntegrated SRM
Contrasting SRM systems approachesContrasting SRM systems approaches
Integration of collaboration with SRMIntegration of collaboration with SRM
© UGS Corp. 2005. All rights reserved.
Topics Digital transformationDigital transformation
Digital maturity for supplier relationshipDigital maturity for supplier relationship
Collaboration technology used in PLMCollaboration technology used in PLM
Integrated SRMIntegrated SRM
Contrasting SRM systems approachesContrasting SRM systems approaches
Integration of collaboration with SRMIntegration of collaboration with SRM
© UGS Corp. 2005. All rights reserved.
Digital Transformation
Digital transformation is the ability to understand what business trends and technologies are at hand that can be of great value to a corporation, and then to have a systemic and rapid way of adopting those trends, building them into a sustainable business model and making competitive use of them.
Three principles used to determine whether a capability is a good choice for digital transformation
The capability must be more attractive in digital form.Potential must exist to leverage the capability beyond existing company boundaries.The target business model must be strategically attractive.
(“The Digital Springboard” by Gillis Jonk and Bruce Klassen)
© UGS Corp. 2005. All rights reserved.
A sound indicator of the digital potential is to look at the entire spectrum of customer’ supplier management initiatives generalized over broad categories of sourced systems/parts
System & parts suppliers(bulk of
suppliers)
co-development partners
(small numberof suppliers)
Catalog &
indirect
Current practice
Bestpractice
Nextpractice
future
DigitalMaturity
SupplierRelationship
“hands off”
“earlyinvolvement”
“mutual dependency”
“strategic”
© UGS Corp. 2005. All rights reserved.
We see a mix of digital, services, consulting and custom software development initiatives in the industry
System & parts suppliers(bulk of
suppliers)
co-development partners
(small numberof suppliers)
Catalog &
indirect
SupplierRelationship
“hands off”
“earlyinvolvement”
“mutual dependency”
“strategic”
DigitalCapability
Based Sourcing
Digital Rfx And Auctions
Specifications Thrown Over The
Wall
IP segmentation
digital integration
Co-designed systems
Digital Interoperability
Global SourcingNetworks
Trading Exchanges
& BPO
B2B Digitization
For Transaction Processing
Volume Consolidation
&Best Price
Specification, Change, Cost &
RiskManagement
Current practice
Bestpractice
Nextpractice
future
DigitalMaturity
© UGS Corp. 2005. All rights reserved.
Topics Digital transformationDigital transformation
Digital maturity for supplier relationshipDigital maturity for supplier relationship
Collaboration technology used in PLMCollaboration technology used in PLM
Integrated SRMIntegrated SRM
Contrasting SRM systems approachesContrasting SRM systems approaches
Integration of collaboration with SRMIntegration of collaboration with SRM
© UGS Corp. 2005. All rights reserved.
PLM provides heavy lifting digital product and process development capability
co-development partners
(small numberof suppliers)
IP segmentation
Digital integration
Co-designed systems
Digital Interoperability
Suppliers collaborate with their customers to provide information early in the design cycle to integrate the digital product definition
Suppliers collaborate with their customers to concurrently develop systems
Suppliers collaborate with their customers to concurrently develop specifications and IP
© UGS Corp. 2005. All rights reserved.
Digital Integration ILLUSTRATIVE
© UGS Corp. 2005. All rights reserved.
Digital Integration ILLUSTRATIVE
Service
Costing
GLOBAL INNOVATION NETWORK
Sourcing
Mfg
4 million PLM seats use JT around the world everyday
© UGS Corp. 2005. All rights reserved.
Co designed systems ILLUSTRATIVE
© UGS Corp. 2005. All rights reserved.
IP development ILLUSTRATIVE
© UGS Corp. 2005. All rights reserved.
Conventional Takeoff and Landing Variant (CTOL)
Short Takeoff Vertical Landing Variant (STOVL)
Carrier Variant (CV)
JSF: One Program - - Three VariantsMeeting Service Needs
© UGS Corp. 2005. All rights reserved.
Integrated Digital Environment
Integrated, Inactive, Associative, Web-based, Synchronized & Secure
Prod Str = Product Structure
© UGS Corp. 2005. All rights reserved.
Topics Digital transformationDigital transformation
Digital maturity for supplier relationshipDigital maturity for supplier relationship
Collaboration technology used in PLMCollaboration technology used in PLM
Integrated SRMIntegrated SRM
Contrasting SRM systems approachesContrasting SRM systems approaches
Integration of collaboration with SRMIntegration of collaboration with SRM
© UGS Corp. 2005. All rights reserved.
Instant World-Wide Collaboration
Major Partners…
© UGS Corp. 2005. All rights reserved.
Instant World-Wide Collaboration
Major Partners…
© UGS Corp. 2005. All rights reserved.
Instant World-Wide Collaboration
Major Partners…
© UGS Corp. 2005. All rights reserved.
Instant World-Wide Collaboration
© UGS Corp. 2005. All rights reserved.
Instant World-Wide Collaboration
© UGS Corp. 2005. All rights reserved.
United StatesCanada United Kingdom Denmark
Australia
Netherlands
Norway
Martin Baker
Rolls-Royce
BAE SYSTEMS
Smith Industires
CytecFiberite
Honeywell/Normalair
Garrett LTD
Aermacchi
Alenia Aerea
Mecaer
Datamat
Maersk Data
Piaggio Aero
Italy
GKN Aerospace
Turkey
Fokker-Elmo
Fokker-Aerostructure
NGHoneywell
Rockwell Collins
General Electric
LM Aero – Ft Worth
Harris Corp
LM Aero
-
Litton Amecom
Moog
LM AeroPalmdale
-
Kaiser
NG ESSS
L3Communications
TRW Avionics
Parker Aerospace
Cytec
Fiberite
United Technologies
LMNTS
EDO
TRW Aeronautic
System
Wright
VSIMoog Hexcel
Hamilton SundstrandRolls Royce Allison
BAE SYSTEMS Controls
Eaton
Goodrich
Marion Composites
Smiths Industries
Smith Industries, M&T, Visioneering
Goodrich
Weber
LogiconInfo Sys
Logicon Adv Tech
McCook Metals
Wyman Gordon
LMNE & SS
NASA
Ames
Applied Research
NASA LangleyRMI
Research
Veridian
Boeing Company
Progressive
H.M. Dunn
HI /CAT
Alliant Tech
AdvanceTool & Die
LMALC
Info Sys
Litton
J.C. Carter
Goodrich Aerospace Hq
LMSI
United TechnologiesNASA Glenn
Alcoa
Pilkington
Sandia Labs
General Electric
Harris Corp
LMInformation Systems
LM Aero
-
Marietta
Litton
Amecom
BAE SYSTEMS
LM Missiles &Fire Control
NG ESSS
L3Communications
Cytec
Fiberite United Technologies
EDO
TRW Aeronautical System
Curtiss
BAE SYSTEMS Controls
Eaton
Marion Composites
Smiths IndustriesGoodrich
Wyman Gordon
AEDC
Applied Research
NASA Langley
RMI
Bihrle Applied
Research
Veridian
LMMannedSpaceSystem
Advance Tool & Die
LogiconInfo Sy
LMSI
United Technologies
NASA Glenn
Global Network of Suppliers…
Lockheed Martin Aeronautics Company
LockheedLockheed--led Global Military Coalitionled Global Military Coalition
UGS Teamcenter provides a capability that does these things:UGS Teamcenter provides a capability that does these things:•• The Master Digital ThreadThe Master Digital Thread…… from Concept through Sustainmentfrom Concept through Sustainment•• Collaboration & workflows worldCollaboration & workflows world--wide, enabling a Virtual Programwide, enabling a Virtual Program•• ITAR Capability to control exports/data securityITAR Capability to control exports/data security•• MultiMulti--CAD Product data & structure managed in a single systemCAD Product data & structure managed in a single system•• Config Mgmt performed throughout the Product Life CycleConfig Mgmt performed throughout the Product Life Cycle•• SignificantSignificant savings over traditional programssavings over traditional programs
© UGS Corp. 2005. All rights reserved.
PLM software provides flexibility in implementing global development business rules
Centralized, distributed, federated,…Secure supplier access to data segmented by “need to know”basisSupplier hubs can be placed in the DMZ depending on customers requirementDistributed architecture can be implemented to reflect design partitions of the productStandards can be local or global or both
© UGS Corp. 2005. All rights reserved.
Topics Digital transformationDigital transformation
Digital maturity for supplier relationshipDigital maturity for supplier relationship
Collaboration technology used in PLMCollaboration technology used in PLM
Integrated SRMIntegrated SRM
Contrasting SRM systems approachesContrasting SRM systems approaches
Integration of collaboration with SRMIntegration of collaboration with SRM
© UGS Corp. 2005. All rights reserved.
Before Global Outsourcing
Design In House
Simple Supply Chain
Engineering
Design
BOM Change Request
ManufacturingSite B
ManufacturingSite A
Design
© UGS Corp. 2005. All rights reserved.
Global Outsourcing
Sourcing Team On Critical Path
Globally Distributed Supply Chain
Complex Collaborative Processes
BOM Change Request
Product Development
Design
Purchasing
SourcingData
Supplier A
Supplier B
ManufacturingSite B
ManufacturingSite A
RFQ
UpdatedCosts
DesignReview
RecyclingReq.
TrackIssues
Design
TimeCost ManagementProfit
Tier 2 Supplier CSupplier C
© UGS Corp. 2005. All rights reserved.
Keys To Effective Sourcing
Complete SRM Solution
Integrated with Product Development
Supplier Collaboration
BOM Change Request
Product Development
Design
Purchasing
SourcingData
Supplier A
Supplier B
Supplier C
ManufacturingSite B
ManufacturingSite A
RFxSpecs
UpdatedCosts
DesignReview
RecyclingReq.
TrackIssues
© UGS Corp. 2005. All rights reserved.
Typical Collaborative Global Supply Chain
1,200 buyers in 12+ countries
40,000 to 60,000 suppliers worldwide
BuyerBuyer
BuyerBuyer
BuyerBuyer
BuyerBuyer
© UGS Corp. 2005. All rights reserved.
Integrated SourcingThe Need
• Which parts on this CR have been sourced?
• How much will this change impact my program cost?
Product Development
Procurement
• Why does this part need to be re-sourced?
• Where is the design spec?• Please don’t ask me to re-key this info into an RFQ!
© UGS Corp. 2005. All rights reserved.
Integrated SourcingBringing Purchasing into Product Development Processes
Sup
plie
rsP
urch
asin
gP
rodu
ctD
evel
opm
ent
QuoteTask
Review /ModifyRFQ
MonitorEvent
PostEvent
ReceiveRFQ’s Evaluate
CreateCR
Create/ GenerateBid Pkg
Review &Respond to
RFQ
Review &Respond to
RFQ
Review &Respond to
RFQ
Quote TaskComplete
AcceptQuoteTask
Task Assignment with Bid Package
Award Recommendation
© UGS Corp. 2005. All rights reserved.
Integrated SourcingValue of Process Improvement
0 20 40 60 80 100
Integrated
CurrentInitiate Change Request
Change Impact Analysis
Develop Sourcing Strategy
RFQ Prep
Initiate RFQ
RFQ Collaboration
RFQ Response
Analyze Responses
Negotiate
Award Contract
Change ImpactAnalysis
+ RFQ Prep
+ RFQCollaboration = >50% of Cycle Time
•Reduced Time to Process Change Requests•Improved Cost Management
© UGS Corp. 2005. All rights reserved.
Integrated SourcingValue of OEM and Partner Collaboration
As the OEM drives higher content from the suppliers, the cost ofcollaboration and coordination rises while improving affordability as long as both are collaborating and iterating to an optimum specification complexity
• UGS has integrated the proven and scalable Teamcenter collaboration and Program management technology with the eSourcing Tools
© UGS Corp. 2005. All rights reserved.
Integrated SourcingValue of Improved Purchasing Productivity
Less time on repetitive manual tasks
More time for strategic supplier management
30%
Tactical Transactions
Strategic Supplier Mgt.
30%
0% 20% 40% 60% 80% 100%
Electronic
Manual
% Sourcing Pro's Time on Strategic Activities
Tactical TransactionsStrategic Supplier Mgt.
© UGS Corp. 2005. All rights reserved.
Contract Mgmt.
Req. to pay Finance
The UGS Integrated SRM suite
RFX and Surveys SpendNegotiate Supplier
Mgmt.SupplierQuality
Reports &Analytics
Program Management
Product & ProcessData
CAD
Program Mgmt.RequirementsChange Mgmt.
Process planningDesign Mgmt.
Release mgmt.Doc mgmt.
Commodity, Category and Industry best practices
(Doc mgmt., Routing, visualization, Office collaboration, conferencing, Alerts, Issue tracking, , reports and dashboards)
Alliances and
Category Solutions
CAE CAM
Sourcing Databasee.g. PLM item references, Tooling, Changes, events, spend, suppliers, awards,
customer extensions
© UGS Corp. 2005. All rights reserved.
Topics Digital transformationDigital transformation
Digital maturity for supplier relationshipDigital maturity for supplier relationship
Collaboration technology used in PLMCollaboration technology used in PLM
Integrated SRMIntegrated SRM
Contrasting SRM systems approachesContrasting SRM systems approaches
Integration of collaboration with SRMIntegration of collaboration with SRM
© UGS Corp. 2005. All rights reserved.
Systems covering supplier management….extending PLM systems
PLMERP eProcurement
&Trading
exchanges
PLM systems successfully manage the co-design relationship today
Extending this capability by integrating strategic sourcing tools provides significant value:
Avoiding errors which are discovered later in the lifecycle by managing the entire lifecycle including day to day changes
Taking full advantage of the supplier innovation
Bringing the supplier selection, on-boarding early on the product development process by linking the specifications to the category/supplier structure
Enabling supplier quality / performance to be linked to supplier capability
© UGS Corp. 2005. All rights reserved.
Systems covering supplier management….extending ERP systems
Extending ERP and other indirect Sourcing systems to handle engineered systems/parts has the advantage of:
Integration with business data warehouse, R2P and contract management
In some cases of engineered goods, particularly in the domain of“order to re-order” business process, this approach may be suitable
PLMERP eProcurement
&Trading
exchanges
© UGS Corp. 2005. All rights reserved.
Systems covering supplier management…. Should SRM be an independent system in the middle?
Having another backbone system for Sourcing is not a long term viable proposition
The coverage of such systems today is limited, with little or no interfaces with PLM and ERP systems and will end up maintaining costly integrations
Specialty “open” applications will evolve in this space
which will need to be integrated into the backbone systems.
Specific capability based category solutions (e.g. Vykor) are a great example of this trend
© UGS Corp. 2005. All rights reserved.
Two distinct directions for digital sourcing
Transaction based systems Model based systems
Centralized monoliths Distributed architecture
Transaction based systems Model based systems
Centralized monoliths Distributed architecture
Evolved from Finance, HR Evolved from product development
Flat BOM based Product structure based
Transaction based systems Model based systems
Centralized monoliths Distributed architecture
Evolved from Finance, HR Evolved from product development
Flat BOM based Product structure based
The technical basis of collaboration is EDI
Collaboration and change management is integral
Transaction based systems Model based systems
Centralized monoliths Distributed architecture
Evolved from Finance, HR Evolved from product development
Flat BOM based Product structure based
The technical basis of collaboration is EDI
Collaboration and change management is integral
Understanding of People, BOM, payables and
receivables
Understanding of parts, systems and assemblies at a model level
Transaction based systems Model based systems
Centralized monoliths Distributed architecture
Evolved from Finance, HR Evolved from product development
Flat BOM based Product structure based
The technical basis of collaboration is EDI
Collaboration and change management is integral
Understanding of People, BOM, payables and
receivables
Understanding of parts, systems and assemblies at a model level
Integration of contract management and R2P Integration of ME/EE/SW
Transaction based systems Model based systems
Centralized monoliths Distributed architecture
Evolved from Finance, HR Evolved from product development
Flat BOM based Product structure based
The technical basis of collaboration is EDI
Collaboration and change management is integral
Understanding of People, BOM, payables and
receivables
Understanding of parts, systems and assemblies at a model level
Integration of contract management and R2P Integration of ME/EE/SW
Link supplier to its delivery? Link supplier capability and quality to specification
Transaction based systems Model based systems
Centralized monoliths Distributed architecture
Evolved from Finance, HR Evolved from product development
Flat BOM based Product structure based
The technical basis of collaboration is EDI
Collaboration and change management is integral
Understanding of People, BOM, payables and
receivables
Understanding of parts, systems and assemblies at a model level
Integration of contract management and R2P Integration of ME/EE/SW
Link supplier to its delivery? Link supplier capability and quality to specification
Expensive to customize, maintain and extend
Model based approach lends itself to easy on-site extensions
Transaction based systems Model based systems
Centralized monoliths Distributed architecture
Evolved from Finance, HR Evolved from product development
Flat BOM based Product structure based
The technical basis of collaboration is EDI
Collaboration and change management is integral
Understanding of People, BOM, payables and
receivables
Understanding of parts, systems and assemblies at a model level
Integration of contract management and R2P Integration of ME/EE/SW
Link supplier to its delivery? Link supplier capability and quality to specification
Expensive to customize, maintain and extend
Model based approach lends itself to easy on-site extensions
© UGS Corp. 2005. All rights reserved.
Summarizing the two approaches
© UGS Corp. 2005. All rights reserved.
Topics Digital transformationDigital transformation
Digital maturity for supplier relationshipDigital maturity for supplier relationship
Collaboration technology used in PLMCollaboration technology used in PLM
Integrated SRMIntegrated SRM
Contrasting SRM systems approachesContrasting SRM systems approaches
Integration of collaboration with SRMIntegration of collaboration with SRM
© UGS Corp. 2005. All rights reserved.
Next generation Sourcing is based on 6 key technologies
Quality driven improvements
Analytics and lifecycle cost
PLM integration and change
management
ProgramManagement & collaboration
Supplier capability & risk
model
eSourcing Tools integration
+ OPEN ARCHITECTURE
© UGS Corp. 2005. All rights reserved.
Program Management & Collaboration
One window avi
© UGS Corp. 2005. All rights reserved.
Next generation Sourcing is based on 6 key technologies
Quality driven improvements
Analytics and lifecycle cost
PLM integration and change
management
ProgramManagement & collaboration
Supplier capability & risk
model
eSourcing Tools integration
+ OPEN ARCHITECTURE
© UGS Corp. 2005. All rights reserved.
© UGS Corp. 2005. All rights reserved.
© UGS Corp. 2005. All rights reserved.
Summary
Digital transformationUnderstanding what business trends and technologies are at hand that can be of great value to a corporation and then to have systemic and rapid way of accepting those trends, building then into a sustainable business model and making competitive use of them.
Digital maturity for supplier relationshipKey to understanding your business environment…and your understanding next step
Collaboration technology used in PLM – Instant World-wide CollaborationPLM software provides flexibility in implementing global collaboration...which is required!
Integrated SRMIntegrated SRM, with PLM, for maximum data re-use, process automation, sharing, and collaboration with your suppliers.
Contrasting SRM systems approachesThe integration from PLM offers critical advantages…takes full advantage of the supplier innovation, capability, and performance…integrated with the supplier database
Integration of collaboration with SRMThe full suit of integrated tools are required to receive maximum value.
To be continued….
© UGS Corp. 2005. All rights reserved.
Next generation Sourcing is based on 6 key technologies
Quality driven improvements
Analytics and lifecycle cost
PLM integration and change
management
ProgramManagement & collaboration
Supplier capability & risk
model
eSourcing Tools integration
+ OPEN ARCHITECTURE
Next Presentation
© UGS Corp. 2005. All rights reserved.
Analytics in Supplier Relationship ManagementFocus on Technology Analytics in Supplier Relationship Management Raj Khoshoo
© UGS Corp. 2005. All rights reserved.
Next generation Sourcing is based on 6 key technologies with analytics occupying a key role
Quality driven improvements
Analytics and lifecycle cost
PLM integration and change
management
ProgramManagement & collaboration
Supplier capability & risk
model
eSourcing Tools integration
+ OPEN ARCHITECTURE
© UGS Corp. 2005. All rights reserved.
© UGS Corp. 2005. All rights reserved.
© UGS Corp. 2005. All rights reserved.
© UGS Corp. 2005. All rights reserved.
© UGS Corp. 2005. All rights reserved.
Market AssessmentConcept Development
Product DesignRFX
Analytics, Negotiation, awardDesign Collaboration
Release to Mfg.
OEM xProgram y
Market AssessmentConcept Development
Product DesignRFX
Analytics, Negotiation, awardDesign Collaboration
Release to Mfg.
OEM xProgram 1
Market AssessmentConcept Development
Product DesignRFX
Analytics, Negotiation, awardDesign Collaboration
Release to Mfg.
OEM 1Program n
Market AssessmentConcept Development
Product DesignRFX
Analytics, Negotiation, awardDesign Collaboration
Release to Mfg.
OEM 1Program 1
Supplier structure with capability is the basis of next generation sourcing
© UGS Corp. 2005. All rights reserved.
Market AssessmentConcept Development
Product DesignRFX
Analytics, Negotiation, awardDesign Collaboration
Release to Mfg.
OEM xProgram y
Market AssessmentConcept Development
Product DesignRFX
Analytics, Negotiation, awardDesign Collaboration
Release to Mfg.
OEM xProgram 1
Market AssessmentConcept Development
Product DesignRFX
Analytics, Negotiation, awardDesign Collaboration
Release to Mfg.
OEM 1Program n
Market AssessmentConcept Development
Product DesignRFX
Analytics, Negotiation, awardDesign Collaboration
Release to Mfg.
OEM 1Program 1
Supplier structure with capability is the basis of next generation sourcing
© UGS Corp. 2005. All rights reserved.
Next generation Sourcing is based on 6 key technologies with analytics occupying a key role
Quality driven improvements
Analytics and lifecycle cost
PLM integration and change
management
ProgramManagement & collaboration
Supplier capability & risk
model
eSourcing Tools integration
+ OPEN ARCHITECTURE
© UGS Corp. 2005. All rights reserved.
Enabling the next generation of savings….good data basis is needed for decision making……. data needs to be aggregated from multiple sources
A B C D E F G H I
Supplier Files
WebSitesData
Bases WebSites
PriorActivities
Employee Paper Files
A B C D E F G H IA B C D E F G H I
ManualData
Collection
Traditional Approach Technology-Based Approach
A B C D E F G H I
A B C D E F G H IA B C D E F G H I
Data Warehouse
Quality, SCARS, Warranty,..
ANALYTICS
Performance
Supplier structure, capability, capacity, spend, specifications,
events,..
SRM
BOM, Change History, forward and backward references, EBOM/MBOM comparison, associated models and drawing, requirement specs, sourced
parts
PDM
Inventory by revision level, lot size, target cost, target volumes,
production usage, MRO consumptions
ERP
© UGS Corp. 2005. All rights reserved.
The Case for Advanced Analytics - Optimization
© UGS Corp. 2005. All rights reserved.
Next generation Sourcing is based on 6 key technologies with analytics occupying a key role
Quality driven improvements
Analytics and lifecycle cost
PLM integration and change
management
ProgramManagement & collaboration
Supplier capability & risk
model
eSourcing Tools integration
+ OPEN ARCHITECTURE
© UGS Corp. 2005. All rights reserved.
Visual Analytics – Supplier Quality
Short avi of GF
© UGS Corp. 2005. All rights reserved.
Visual Analytics – Supplier Scorecard
© UGS Corp. 2005. All rights reserved.
Visual Analytics – Sourcing Dashboard
© UGS Corp. 2005. All rights reserved.
SummaryDigital transformationDigital transformation
Digital maturity for supplier relationshipDigital maturity for supplier relationship
Collaboration technology used in PLMCollaboration technology used in PLM
Contrasting SRM systems approachesContrasting SRM systems approaches
Integration of collaboration with SRMIntegration of collaboration with SRM
© UGS Corp. 2005. All rights reserved.
Summary
“ the sourcing diamond” (AT Kearney)
© UGS Corp. 2005. All rights reserved.
Next generation Sourcing is based on 6 key technologies with analytics occupying a key role
Quality driven improvements
Analytics and lifecycle cost
PLM integration and change
management
ProgramManagement & collaboration
Supplier capability & risk
model
eSourcing Tools integration
+ OPEN ARCHITECTURE