april 20 briefing with team

4/20/01 1

Financial and Supply Chain Systems

Directions, Life Cycle Plans and Products

4/20/01 2

Overview, Directions, and Project Update

Supply Chain Strategies and Objectives

Financial and Supply Chain System Applications

Project Considerations and Implementation Strategy

Recommendations and Decisions Needed

Product Directions

4/20/01 3

11

Sourcing Transportation Delivery &Returns

Suppliers Planning Warehousing & Fulfillment

Customers

Future Vision

• Nation alfor ecastin g/inventor y plan ning

• Produ ct lif e-cyclemanagement(ob solescence andexcess in ventoryliquidation)

• Nation alpur chasingorg anization

• Revised vendormasteragreements

• Co nso lidated,sin gle nationalwarehouse

• New contract &ser vice levelagreements

• Stan dard partnum bering

• Co nso lidatedoutb oundtransportation

• Nation al return spolicy

• Overs to ck r etu rnshand ling

• Tools to suppo rtplanning

• Timely, accuratedata to pr oactivelyplan

• Expan dedintegration withsuppliers(electronicpro curement)

• Optimized valuechain planning

• Integr ated, fullyautomatedwarehousefun ction

• Kit-o n demand

• Leveraged pr icingbased o n planning

• Fully integratedinbo und &outb oundtransportationbased o n planning

• Forecasting/planning inclus iveof ‘neg ative’impact o fover stock return s

Optimiz ing the Supp ly Chain (vs . Optimiz ing Co mponents)

• Alig nment with overall AWS b usiness strategy• Elimin ation of red undan t sy stems and other

systems pr oblems• Integr ated, end-to- en d sup ply ch ain systems

Baseline

The current AWS Supply Chain needs to evolve into an automated,integrated end-to-end operation.

4/20/01 4

BP00 Financial and Supply Chain BP00 Financial and Supply Chain

BP01Planning

ResponsibilityNate White

BP02Item Master Management

ResponsibilityNate White

BP03Supply

Management

ResponsibilityGeorge Sloan

BP04Order

Management

ResponsibilityChris

Antoniou

BP06Warehouse

Management

ResponsibilityBob Robida

BP07Inventory Control


BP08Build

ResponsibilityAleta

Alexander

BP09Transportation Management


BP10Reverse Logistics

ResponsibilityCouncil

BP11Payables

Mgmt

ResponsibilityGeoge Sloan

BP12Receivables

Mgmt

ResponsibilityJana Mura

BP13GL

Management

ResponsibilityJana Mura

BP14Performance Measures

ResponsibilityClay Smith

BP05Retail

ResponsibilitySteve

Greenstein

4/20/01 5

BP00 Financial and Supply ChainBP00 Financial and Supply ChainSupply Chain ObjectivesSupply Chain Objectives

• Achieve the ‘perfect order’• Reduce product delivery time from supplier to end user• Focus on ‘zero held’ inventory• Provide flexible sourcing/delivery options• Improve data accessibility and analysis capabilities• Improve ease of data sharing• Provide real-time order tracking• Employ supplier managed inventory• Assist the maturity of suppliers to understand production capabilities• Improve planning/forecasting toolset to manage targeted inventory turns

4/20/01 6

We will be discussing the conceptual design for projects two through six today.

.1. Organization design2. Receiving process design3. Asset tracking process design4. Inventory control visibility/netting system5. Return, repair/use process design6. Return, repair/refurbish, retire and auction systems7. Design and implement spares inventory management system8. Number of warehouses, outsourcing RFP, select third party and implement

Asset Management Projects

4/20/01 7

Program Objectives Review

Asset Management Operational Objectives

Overall role to optimize asset and capital life cycle utilization (improve spare inventory management, equipment reuse and disposition sales value)

Simplify physical and financial asset tracking and tagging process Establish standard asset management processes, controls, compliance and

performance measures (receiving, tracking, tagging, returns, repair, reuse, redeployment/retirement)

Implement asset management integration system to provide information from existing data systems Return, repair/refurbish, reuse and auction bolt-on Spares inventory visibility bolt-on Inventory control, visibility and netting bolt-on

Determine asset/logistics strategy including number of warehouses and outsource vendor for outbound, returns

Design and implement asset management organization to scale with a broadened asset management scope

4/20/01 8

Key Conceptual Design PointsStrategic Direction

• Improve asset visibility• Design processes that can be consistently applied• Enhance controls and closed loop monitoring• Design with sufficient flexibility to handle future asset generations (3G,

etc.)• Design asset management and tracking system to meet in-scope

requirements only• Track assets through relevant life cycle phases only• Track VPP, 3G, Bechtel, and all “Other” assets (antennas, rectifiers,

etc.)• Don’t equate asset tracking with asset tagging

4/20/01 9

To address forward and reverse asset management requirements, AWS may want to

build a closed loop system in stages.

Vendor• VPP

Operations• Cell Sites• Switch Sites

Drop Ship/Mail Box Etc. Technician Van

Vendor Outbound Equipment Movement and Installation

Web-based Visibility Alerts

Forecast

Spares Replacement

Technician Receipt via Status Change• Laptop/Visibility

System• Hand Held• Wait until at

terminal or Form/Fax

AWS Internal CustomersFinance and

AccountingEngineeringPurchasing Etc.Fixed Assets

Asset Management: Closed Loop Monitor and Control System

Site # Vendor Equipment Description Received Status 2 Etc.

Invoice and Equipment List Information•Web Based Connectivity•E-mail•Fax

Vendor Compliance Audit Results•Web-based Connectivity•Cycle counts•Vendor Score Card•Etc.

Carrier Proof of Delivery (POD)• Web Based

Connectivity• E-mail• Fax

Third Party Warehouse

Carrier Proof of Delivery (POD)• Web Based

Connectivity• E-mail• Fax

Out of Scope

RedeploymentOut of Scope

OracleData

4/20/01 10






Product Directions

4/20/01 11

Current State

Infoflo•BOM/WIP•NDC Inventory•Indirect A/R•Terminal Equip. Purchasing•Inventory G/L•Non-retail sales orders•Non-retail return authorizations

Titan•Retail Current Day Inventory•B2B A/R•Retail Sales Orders•Retail G/L•Bill-to-air interface•Tax calculation forretail revenue

Oracle 10.7•Retail Inventory•Retail Inventory replenishment•B2B A/R•Purchasing (non terminal equip.)•AWS A/P•Project Acctg.•Fixed Asset acct.•AWS G/L

Fail Over•Oracle 10.7•Data store•SCORE

Interfaces•Item Master•Store replenishment•Purchases for payment•Monthly G/L Summary

Interfaces•Start-of-day store inventory•End-of-day store sales orders•Monthly G/L Summary

Interfaces•Reporting data

From InfofloInterfaces•Reporting data

Interfaces•Fail over copy•Data store copy•Reporting data

EquipmentOrder &Return Systems

4/20/01 12






Product Directions

4/20/01 13

Example of Transaction Systems - Manufacturing

AR

ENG

BOMWIP

Shipments

Bills andRoutings

Shipments

ECOS

WorkOrders

GL

AP

Planning

PO

MaterialRequirements

EnterpriseDemand

Vendor PO

Interplant PO

Receipts

WorkOrders

DC Invoices

Customers

Journal Entries

Journal Entries

Journal Entries

Vendor Invoices

Vendor Payments

TransportationInformation

Bills

ItemsOE INV

Manufacturing Plant

InternalPayments

CorporateJournal Entries

DC Orders

ERP Modules are Highly Integrated and Dependent

4/20/01 14

Implementation Strategy Principles

• Execute implementation in stages and when capability is available to deliver results throughout the effort, reduce over all project risk, and maximize use of commonly-used resources.

• Gates 9-5 (scope, business requirements, system requirements, architecture design, system design) must be closed together for all integrated business process groups, regardless of whether a business process group is included particular implementation stage.

• When at all possible, avoid creating project dependencies between two high-risk, complex projects.

• To retire Infoflo, both the Enterprise Resource Planning solution and the Warehouse Management solution must be addressed.

• It is best to get to one Enterprise Resource Planning solution before extending your information relationship to customers and suppliers.

• The time required to upgrade a full release of a packaged software product (e.g. Oracle) is directly proportional to the amount of data stored, the number of interfaces, the number of modules, and the number of extensions/customizations.

• Upgrades of a full release, we believe, are nearly as extensive and costly as a new implementation.

• There is never a good time to upgrade.

4/20/01 15

Our Current Oracle ERP Environment

• Oracle applications version 10.7, DBMS version 7.3.4– DBMS went out of support 12/31/00, Applications goes out of support 6/30/02.– Oracle’s most current version is 11i (11.5.3) for applications, 8i for DBMS.

• Modules implemented include– General Ledger– Accounts Payable– Purchasing– Fixed Assets– Project Accounting– Inventory (limited)– Order Entry (limited)– Accounts Receivable (limited)

• Only two modules are accessed by users via web browsers– Inventory, Project Accounting

4/20/01 16

General Ledger•Oracle v 10.7•Infoflo•Titan EIS

Project Accounting•Oracle v 10.7

Fixed Assets•Oracle v 10.7•MP5 ATS

Accts. Rec.•Oracle v 10.7•Infoflo•Titan

Accounts Payable•Oracle v 10.7

Purchasing•Oracle v 10.7•Infoflo

Inventory•Oracle v 10.7•Infoflo•Titan

Today

4/20/01 17

Pre-Stage (Oracle Retail Phase)

Objective• Convert AWS stores from Infoflo to Oracle

v. 10.7 (Phase I)

Result• Completed March 26, 2001• All AWS store inventory managed from Oracle on a min/max

replenishment model• Store replenished on a more effective schedule and quantity.• Inventory for 600 stores managed by approximately 10 people.• Item Master control moved from Infoflo to Oracle• Computing environment established for all phases.

4/20/01 18

General Ledger•Oracle v10.7•Infoflo•Titan

Project Accounting•Oracle v10.7

Fixed Assets•Oracle v10.7•ATS

Accts. Rec.•Oracle v10.7•Infoflo•Titan

Accounts Payable•Oracle v10.7

Purchasing•Oracle v10.7•Infoflo

Inventory•Oracle v10.7•Infoflo•Titan

Convert Retail Stores •Oracle v10.7

Today

PreStageItem Master Control in Oracle ERP

•Oracle v10.7

4/20/01 19

First Stage (Supply Chain Phase II)Objectives• March 2002 completion• Convert the bulk warehouse to Oracle 10.7 and McHugh WMS

applications(Warehouse’s 20,22,50,55,56,70,80)

• Convert APC(accessories) to Oracle 10.7 (Warehouse 50)• Implement indirect channel order entry• Align with CRM, SIM Management Tool, any determined interface

changes with Atlys, Vitria (provided associated scope and schedule align)• Convert all equipment accounts receivable to Oracle 10.7• Realign AWS retail inventory transactions (entire data flow through Oracle

10.7 and McHugh WMS applications.)• Implement Purchasing and Planning modules

4/20/01 20

First Stage (Supply Chain Phase II)Impacts• $7.299 million budget for Oracle phase II• $1.14 million budget for 3G• Budget eliminated in March for McHugh WMS• Combined Oracle phase II and 3G budget will cover cost of Oracle phase II.• To remove Titan in this phase, will need to integrate with NCR POS or a Siebal

POS integration partner.• Pro:

– Orders in this warehouse are less time-sensitive than direct fulfill warehouse.– Indirect channel order entry does not require other ordering systems.– Focus on retiring Titan EIS.

• Con:– Warehouse now segregated by two systems– Inventory and General Ledger continued separation between two systems.– Short-term interface between Siebel and Infoflo will be required.

4/20/01 21

Convert Accessory Packaging Center•Oracle v10.7/WMS•Bill of Materials, Work Orders

Convert Bulk Warehouse•Oracle v10.7/WMS•All Receipts•Indirect/Retail Fulfillment and returns

Convert Indirect Order Entry &Align with CRM•Oracle v10.7

Convert Indirect AccountsReceivable•Oracle v10.7

Today

FirstStage

Align Retail InventoryTransactions•All inventory movement now via Oracle.









PreStage

Implement Purchasing and Planning•Oracle v10.7

General Ledger•Oracle v10.7•Infoflo



Accts. Rec.•Oracle v10.7•Infoflo


Purchasing•Oracle v10.7

Inventory•Oracle v10.7•Infoflo

FirstStage

4/20/01 22

Second Implementation Stage

Objectives• 3rd quarter 2002 completion• Convert remaining warehouses to Oracle and WMS applications• Align with NBO ordering system (projected will not yet be retired in time

to meet our objectives)• Historical data in Infoflo moved or archived (Infoflo retired)

4/20/01 23

Second Implementation Stage

Impacts• Infoflo operating costs ($5.4 million annually) removed by 3rd quarter 2002.• IT Infoflo sustainment resources (approximately 5) freed up to focus on new

systems.• Dependency on Infoflo will be removed prior to ATC Logistics Services

contract negotiations (contract ends December 31, 2002).• Pro:

– Reduces conversion risk (allows for a back out plan)– Oracle Order Entry and Accounts Receivable implementation will be completed

with CRM integration in phase II.• Con:

– If 2G ordering systems are not converted to CRM, we will have to either wait or convert 2G ordering systems to Oracle.

– Maybe functionality gaps between Oracle 10.7 & 11i.

4/20/01 24

ConvertDirect Fulfill•v 10.7 Oracle/WMS•Replaces Infoflo inventory position for that line

Realign Order Entry toconverted direct fulfill•v10.7 Oracle•Convert as ordering systems ready.

Integrate Receivables withOrdering Systems•Post revenue, incentive, receivable and cash•Cash application for open receivables.

FirstStage

SecondStage



Convert Indirect Order Entry•Oracle v10.7

Convert AccountsReceivable from Infoflo andTitan•Oracle v10.7

Today










PreStage

Remaining historical dataremoved from Infoflo•Infoflo retired.

General Ledger•Oracle v10.7 Project Accounting

•Oracle v10.7


Accts. Rec.•Oracle v10.7



Inventory•Oracle v10.7








FirstStage

SecondStage

4/20/01 25

Third Implementation Stage

Objectives• Complete 3rd quarter 2002• Upgrade to Oracle Applications v11i and DBMS v8i

4/20/01 26

Upgrade Oracle•Oracle v11i/WMS

ThirdStage

ConvertDirect Fulfill•v 10.7 Oracle/WMS•Replaces Infoflo inventory position for that line

Realign Order Entry toconverted direct fulfill•v10.7 Oracle•Convert as ordering systems ready.

Integrate Receivables withOrdering Systems•Post revenue, incentive, receivable and cash•Cash application for open receivables.



Convert Indirect Order Entry•Oracle v10.7

Convert Indirect AccountsReceivable•Oracle v10.7

Today










PreStage

SecondStage

FirstStage

Remaining historical dataremoved from Infoflo.•Infoflo retired.








FirstStage

General Ledger•Oracle v10.7 Project Accounting

•Oracle v10.7





Inventory•Oracle v10.7 Second

Stage

4/20/01 27






Product Directions

4/20/01 28

Work Force RecommendationsActivity Current Work Force Work Force Needed

Keep Systems Running 18, 16 by June 18*

Support BusinessOperation

8, demand for 22 8*

3G June/July/Sept. (noInfoflo interface)

3.5 3.5

A/P Transition 1.75 1.75

Acquired Markets 10 (outsource) 10

WNS Asset Visibility 1.5 1.5

Fixed Assets Projects 3 3

Oracle Phase II 38 38

McHugh WMS 0 12 –project8 – on going

11I upgrade What ever is left What ever is left

* Will try to cover by changing operations, services levels, and reassignments.

4/20/01 29

Project Cancellation Recommendations

• Travel and Entertainment – $ 700,000 capital, $200,000 expense– Incorporate into 11i upgrade effort in 2002– Continue project until product selection complete (one month)

• i2 implementation – no budget, no people, no hardware– $2.4 million expenditure not covered by a budget

• National Warranty & Exchange Phase II – $2.5 million capital, 6 people– Approximately $500,000 committed– Prepare recommendation, Ray Bingham will address with Jim Bennett and

Alan Loffert

4/20/01 30

2001 Project Recommendations

Small Projects• 3G June/July/September launch (Ordering interface with Infoflo)

– part of $1.14 million 3G budget (we also have expense budget)– Siebal project effort will need to provide resources (via John Feiler)

• A/P Transition & Unclaimed Property – $200,000 budget– Will likely get approval to use contracted staff if necessary

• WNS Asset Visibility – Contract via Arthur Anderson, funded by WNS

• Fixed Assets Projects– $500,000 budget

4/20/01 31

2001 Project Recommendations

Large Projects• Acquired Markets

– $ 3 million– Outsource arrangement with EDS

• Oracle Phase II – $ 7.299 million remaining after reduction from $13.1 million– Part of $1.14 million 3G budget to cover remaining cost– Additional staff and cost with change in scope will need to be identified

• McHugh WMS – $ 1.6 million capital from NWES project– Will require approximately 8 IT staff– Requires Governance Board approval

• Oracle 11i upgrade – $ 700,000 from T&E project– Requires Governance Board approval (?)

4/20/01 32






Product Directions

4/20/01 33

AWS Supply Chain Business

Direct FulfillDirect Fulfill

Customer Customer Facing &Facing &

Order Mgmt.Order Mgmt.Warranty ExchangeWarranty Exchange

iProcurementiProcurementExchangeExchange

RetailRetailOperationsOperations Central Central

WarehouseWarehouse

Mfg. Assembly Mfg. Assembly Financials, Assets, ProjectsInventory, Purchasing

Supply Chain Plan , Mfg.

Business

Bulk DistributionBulk Distribution

Intelligence

Shipping- UPS, FedEx, Airborne,USPS, Clipper Ship, LTL

4/20/01 34

Oracle Offering OM / Pricing / Inventory

• Order Management / Pricing / Inventory

– Ability to Order Inventory items + Services and Contracts

– Full Serial & Lot Traceability - back to Mfg. Warranty as well as sold Service / Insurance Contracts

– Pricing Promotions by Market, Coupons, Volume Incentives, Rebates– Single Pricing system established for all Ordering systems, Direct

Fulfill, Retail, Web, etc.

Key business issues

4/20/01 35

Oracle Sales for Communications 11i Product Features and Functions

• Product & Services Catalog– Available products & services– Restrictions on products, such as:

• Proximity• Install Base - Existing Configuration• pre-requisite products, etc.

– Required provisioning steps– Pricing & bundling options

Key business issues

4/20/01 36

Oracle Offering iStore & iSupport

• iStore & iSupport - Self Service

– Full out of the Box integration to Supply Chain Applications– ATP From the Web For Distributors and Direct Customers by Market

allocations– Distributors - Each will see their Prices based on Volumes earned– Ability to Cross Sell and Up Sell - Tailored to Markets and to specific

Distributors– iSupport - Provides order Status - and full knowledge based

application to provide self service Support– Fully Integrated process for self service returns

Key business issues

4/20/01 37

iPayment

• iPayment is fully integrated with Oracle– iStore, Order Management, AR & Collections– Out of The Box Support for Credit Card, Procurement

Card, EFT, & Check– Risk Analysis - Amount, Terms - Pay History, Frequency,

Ship To/Bill To Address – Routing Rules

• Integrates with any merchant EC Application

Key business issues

4/20/01 38

Warranty Exchange

• Contracts/ Depot Repair/ Service/Tele Service– Full out of the Box integration to Supply Chain and Web based

Applications– Able to relate all Purchases from Suppliers to Product Warranties

offered & Sold Customers– Full Customer Life Cycle Site Register of equipment and Services

Sold.– Knowledge based Application - to assist Warranty Exchange

personnel in determining problem resolutions

Key business issues

4/20/01 39

Global Order Promising - Client Responsiveness Access from any place any device -and any market - real time

AWSPlanning Over 100000 ATP

Inquiries Per day fromAll Business Lines

4/20/01 40

Customers

4/20/01 41

4/20/01 42

Two Products: Complete, Therefore Simple

• Scalable, Reliable, Secure

4/20/01 43

Oracle9i Database

• Manages All Your Data

Multimedia

Object Relational Data

Messages

Documents

XML

4/20/01 44

Oracle9i Application Server

• Runs All Your Applications

Business Intelligence

Transactional Apps

Portals

APACHE

Integration

4/20/01 45

Oracle9i Developer Suite

• One Platform, One Toolset

Java

Portal

XML

Forms

BI Reports

4/20/01 46

Oracle9i Advanced Features

• Real Application Clusters– Limitless scalability and reliability for real-world

applications

• Oracle9i Application Server Cache– Fastest Web sites in the world

• Real-Time Personalization– The only real-time recommendation engine

• Wireless Services– Most advanced and most widely adopted

4/20/01 47

Performance, Oracle9i Web Cache

• Accelerates Delivery Of:– Search Results– Catalogs– Personalized Pages– Images– Text– Audio / Video

4/20/01 48

Performance, Oracle Web Cache

500

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

Req

uest

s Pe

r Sec

ond

Average Store Performance Per Web Server

With Web Cache

7500

150x Improvement In Store Performance

4/20/01 49

Performance Proofs

• TPC Benchmark Results– Winter Corp DB Scalability Awards– Oracle won virtually all OLTP awards, & TCO– HP, Compaq, IBM used Oracle in their HW tests to

achieve their winning results

• Sun/Oracle 4/17 announced 3 terabyte TPC-H result

• At BT, IBM built 82 terabyte DW using EMC and Oracle 8i

4/20/01 50

#1 on Unix in 2000

Others6%

NCR3%Sybase

6%

Informix12%

IBM10%

Oracle 63%

Source: Dataquest, May 2000

4/20/01 51

Intelligence, Personalize By Device• Any Kind of Wireless Device• Support Spatial Applications• Secure For ECommerce

WMLWAP Gateway

SMS Gateway

CDPD Gateway

Voice Gateway

TTML

tiny HTML

4/20/01 52

65% of Fortune 100 e-businesses10 of the World’s Top 10 B-to-C e-businesses9 of the World’s Top 10 B-to-B e-businesses

93% of all Internet IPOs80%+ of all European e-businesses

ASPs’ Most Supported Platform

4/20/01 53

Oracle8i: Database of Choice for Packaged Applications

Market Share by Installation

Source: Gartner Group April 2000, Oracle Alliances

Oracle 74%

Oracle75%

Siebel SAP

4/20/01 54

Partnering with AT&T Wireless for their Supply Chain Management

4/20/01 55

AWS Supply Chain Business

Direct FulfillDirect Fulfill

Customer Customer Facing &Facing &

Order Mgmt.Order Mgmt.Warranty ExchangeWarranty Exchange

iProcurementiProcurementExchangeExchange

RetailRetailOperationsOperations Central Central

WarehouseWarehouse

Mfg. Assembly Mfg. Assembly Financials, Assets, ProjectsInventory, Purchasing

Supply Chain Plan , Mfg.

Business

Bulk DistributionBulk Distribution

Intelligence