bill cox: italicized, bolded, increased to 18, centered. bill cox: italicized, bolded, increased to...
TRANSCRIPT
Bill Cox:
Italicized, bolded, increased to 18, centered.
Bill Cox:
Italicized, bolded, increased to 18, centered.
PeopleSoftSupplier Relationship
Management
The Key to High Performance
Supplier Relationships
Page 2
Agenda
•What is SRMWhat is SRM
•Why SRMWhy SRM
•PeopleSoft SRM Solution SetPeopleSoft SRM Solution Set
•SRM ResultsSRM Results
•Industry HonorsIndustry Honors
Page 3
As a result of the increasing importance As a result of the increasing importance of purchased value to the organization, of purchased value to the organization, Fortune 500 companies must move Fortune 500 companies must move strongly to SRM methodologies to avoid strongly to SRM methodologies to avoid profit reductions...profit reductions...
Source: Gartner Consulting
What is SRM?
A new set of methodologies and A new set of methodologies and solutions that optimize interactions solutions that optimize interactions with all suppliers of products and with all suppliers of products and services, directly impacting the services, directly impacting the profitabilityprofitability of the enterprise.” of the enterprise.”
Page 4
Real Results
• Global eProcurement• $35 million over 3 years• Exceed 277% ROI• Cost per Transaction - $250 down to $50• Electronic Catalog saved $20mm
• Services Procurement• 100% Increase in Services Spend Compliance• 30% Reduction in Services Spend
• Strategic Sourcing
• 10-25% cost savings on direct goods
• 35-70% sourcing cycle time reductions
Page 6
Why SRM Matters
•Metals 64.6%•Chemicals 61.3%•Beverages 51.7%•Computers, Office Equipment 50.8%•Automotive 47.2%•Electronics 45.6%•Communications 35.6%
•Pharma 34.0%•Food 33.8%•Utilities 18.5%
Purchase $ /SalesCost of goods in
relation to revenue
is increasing across
all industries. The
median will rise by
45% by 2005.
Gartner Group,
2001
Page 7
• Lack of visibility and control over all categories of spend
• “Silo” supply solutions and processes
• Inefficient communication with suppliers
• Manual, labor intensive processes
• Not leveraging complete supply base
• No single integrated insight into activity, performance, or spend
The need for SRM
Page 8
Optimize all supplier relationships to gainOptimize all supplier relationships to gain
competitive advantagecompetitive advantage
Manage All SpendManage All Spend
Connect All SuppliersConnect All Suppliers
Optimize Supplier PerformanceOptimize Supplier Performance
The SRM Imperative
Page 9
SRM Solution Set
Optimize supplier performance
Supply ChainWorkbench
Supply ChainWorkbench
Connect all suppliers
eSupplierConnection
eSupplierConnection
CatalogManagement
CatalogManagement
SCMPortal Pack
SCMPortal Pack
eProduct Management
eProduct Management
CollaborativeSupply
Management
CollaborativeSupply
Management
Manage all spend
StrategicSourcing
StrategicSourcing PurchasingPurchasing Services
Procurement
ServicesProcurementeProcurementeProcurement PayablesPayables eSettlementeSettlement
SupplierRating System
SupplierRating System
Page 10
Source to Settle
Page 11
Design
• Collaborative Design
• Full Lifecycle collaboration
Page 12
Source
• Find perfect supplier portfolio
• Negotiate High Impact Agreements
Page 13
Engage
Utilize PeopleSoft Technology for rapid supplier adoption
Page 14
Procure
• End to end solution for total spend management
• Automate information exchange
Page 15
Settle
• Self-Service invoicing and dispute resolution
Page 16
SOURCE
• Automated Sourcing Priority Vendor Split Sourcing Weighted Sourcing
• Strategic Sourcing Negotiate long term buying
agreements Spend Analysis Purchasing Policies RFx Reverse Auctioning
SOURCE
PeopleSoft Product
PeopleSoft Strategic Sourcing
Page 17
NegotiateNegotiate EvaluateEvaluate AwardAwardPlanPlan AssessAssess DefineDefine
• Set Policies
• Determine Needs
• Set Policies
• Determine Needs
• Analyze Spend
• Identify Suppliers
• Rate Suppliers
• Analyze Spend
• Identify Suppliers
• Rate Suppliers
• Create Events
• Determine Factors and Weightings
• Use Standard Clauses
• Invite Suppliers
• Create Events
• Determine Factors and Weightings
• Use Standard Clauses
• Invite Suppliers
• Gather Responses
• Create Counter Offers
• Send Clarification
• Utilize Reverse Auctions
• Gather Responses
• Create Counter Offers
• Send Clarification
• Utilize Reverse Auctions
• Compare Scores
• Enter Qualitative scores
• Change Weightings
• Evaluate Options
• Compare Scores
• Enter Qualitative scores
• Change Weightings
• Evaluate Options
• Create Contracts, Purchase Orders, and Blanket Orders
• Split Award to Multiple Suppliers
• Create Contracts, Purchase Orders, and Blanket Orders
• Split Award to Multiple Suppliers
PeopleSoft Strategic Sourcing
Automate the Entire Sourcing Process
Page 18
Strategic Sourcing Innovative Features
•Spend AnalysisSpend Analysis
•Goods and Services SourcingGoods and Services Sourcing
•Private and Public EventsPrivate and Public Events
•Competitive, Blind, and Sealed BidsCompetitive, Blind, and Sealed Bids
•Bidder Self Service RegistrationBidder Self Service Registration
•Sourcing TemplatesSourcing Templates
Negotiation - Spend Analysis - Purchasing Policies - RFX - Reverse Auctions
Page 19
Solicit More Proposals
Source your ultimate supplier portfolioSource your ultimate supplier portfolio
Streamline the Sourcing CycleStreamline the Sourcing Cycle
Apply to Broader Commodity RangeApply to Broader Commodity Range
Standardize Sourcing PracticesStandardize Sourcing Practices
Strategic Sourcing
Page 20
SOURCE
• Manage Supplier Content Normalize and Classify Content
• Integrate Suppliers Transform B2B messages Allow Supplier Self Service
• Manage Supplier Connectivity Identify Supplier Capabilities Manage Trading Partner Interactions Self-Service XML Registration
Engage
PeopleSoft Products
SCM Portal Pack
eProduct Management
eSupplier Connection
Collaborative Supply Mgt.
Catalog Management
Page 21
Up to Date ContentContractually correct & understandableMust address full spectrum of suppliersAccess from a single desktop interfaceScalable
Empowered Purchasers and SuppliersEnable multi supplier searchingLeverage supplier eCommerce capabilitiesEnable suppliers to be self supporting
Choices for Supplier ConnectionsLeverage technological capabilitiesMultiple avenues of accessScale connection to business need--from simple to complex
Must embrace the full spectrum of supply relationships
Page 22
• Solutions that optimize your priority with supplier capability
• Multiple avenues of access---not one solution
• Multiple communication standards
• Multiple Interfaces for both the buyer and seller
• Content development and management
PeopleSoft Delivers
Full Spectrum Supplier Enablement
Page 23
SOURCE
Procure Direct, Indirect, Assets and Services
Complete Self Service Processes
Automate information sharing with suppliers Purchase Orders
Purchase Order Acknowledgements
Advanced Shipment Notices
Invoices
Procure
PeopleSoft Products
Purchasing
eProcurement
Services Procurement
Page 24
Resource Manager Focus
Skills-based ServicesWork Orders
Time & ExpenseConsolidated Invoicing
Services
Procurement
Casual User FocusCasual User FocusIndirect/ MROIndirect/ MRO
CatalogsCatalogsExpress FormsExpress Forms
ePro
cure
men
t
Prof Buyer FocusRaw Materials
Linked to Mfg/ PlanningContracts
Purchasing
Technology
Data Model
Analytics
Settlement
Integration
PeopleSoft Total Spend Management
Page 25
SOURCE
• Automate information sharing with suppliers Online Approvals Invoice Generation Supplier Self-Service Invoicing Electronic Bill Presentment and Payment Electronic Funds Transfer
• Returns
• Dispute Resolution
Settle
PeopleSoft Products
Payables
eSettlements
Page 26
SOURCE
• Engineer Share Designs Manufacture
Support and Change Support Change collaboration,
notifications, and approvals
• Retirement• End of Life
• Full Product Life Cycle Management
Design
PeopleSoft Products
Engineering
Field Service
Product Lifecycle(through Agile)
Page 27
SOURCE
250+ Metrics Procurement Analysis
Contract Analysis Payment Summary Purchase Price Variance Quantity & Amount Transaction Totals
Supplier Performance Quality Detail Shipment Amount Shipment Quantity Shipment Summary Supplier Pricing Analysis
Analyze
PeopleSoft Products
Supply Chain Warehouse
Supplier Rating System
Page 28
• Improve Revenue - reduced customer delivery cycle times, improved quality, increased margins/ competitiveness
• Reduce Cost - Eliminate non-value added layers and processes across all suppliers, leverage contracts and discounts, and streamline payment process
• Improve Efficiency - Reduce administrative time, standardize processes, and compress procurement and hiring cycles
• Increase Visibility - Track and utilize quality resources, monitor supplier effectiveness, and leverage historical information
SRM Results: Profitability
Page 29
Industry Honors
Page 30
Market Acceptance
• 300+ PeopleSoft SRM Customer Wins
• Sales Across Industries• Sears Canada• Waste Management• Duke Energy• North Shore LIJ Health Systems• National Security Agency• El Paso Corporation• State Of Connecticut
Page 31
“PeopleSoft’s SRM vision is a
comprehensive, extended view of how
collaboration has to be done.”
"The whole thrust of the PeopleSoft product is to take supplier relationships, make them more efficient and more effective, and take that to the bottom line."
What the Analysts are saying
Joshua Greenbaum
Principal
Enterprise Applications
Consulting
Page 32
Only PeopleSoft SRM delivers
• CompletenessCompleteness• Provides the most comprehensive solution for managing all
levels of supply relationships
• FlexibilityFlexibility• Provides a powerful solution with flexible deployment options
• Ease of UseEase of Use• Uses a standard web browser as the interface for employees
and suppliers, allowing access anytime and anywhere
• Fully IntegratedFully Integrated• Integrates easily with other enterprise applications
• Embedded AnalyticsEmbedded Analytics• Delivers maximum return on business intelligence
information.
Page 33
SRM for Industry
Page 34
SRM for Industry
•Healthcare
•Energy
•Financial Services
•Government
•Consumer Products
•High Technology
Supplier Relationship Management
FForor
HealthcareHealthcare
Page 36
•Integrated Delivery Networks
•Hospitals
•Teaching hospitals
•Surgery centers
•Long term care
•Clinics
•Focused factories
•Managed care
•Government providers
PProviders ofroviders ofHealthcare ServicesHealthcare Services
Page 37
Healthcare in Crisis
•Two-thirds of US Hospitals lose money or break even
•Over 40% have negative operating margins
•Almost one-third have negative net margins*Other profitability comes from interest income
Source: American Hospital Association Survey
Trustee, January 2002
Sally Nelson Chief Financial OfficerTexas Children’s Hospital
“No margin, no mission.”
Page 38
Healthcare Business Imperatives
• Streamline administrative operations to increase efficiency• Reduce supply costs• Increase compliance with standards• Increase productivity to increase care delivery• Connect all suppliers
• Gain real-time insight on state of the organization• Total spend• Contingent labor• Goods & services usage• GPO contract purchase compliance and
savings
Page 39
Evolution of Materials Management Approaches
Departmental Materials Management
Integrated ERP Suites of Financial and Materials Management
SRM for Enterprise-wide Total Spend Management
Medical & surgical supply procurement
Med/Surgical and capital procurement
Total Product and Services Procurement
Connect primary distributor via fax or EDI for orders
Connect all major trading partners via EDI for all transactions
Connect and collaborate with ALL trading partners for transactions and catalogs
Purchasing and materials users
Connect other departmental knowledge workers
Connect all staff
Page 40
SRM for Healthcare – Key Functionality
SourceSource• Manage & measure GPOs
• Move to Corporate contracts & strategic sourcing
EngageEngage• Compile & approve catalogs
and pricing from multiple sources
• Connect quickly to all Suppliers for efficient communications
• Integrate with departmental systems & monitor total procurement centrally
• Manage supply, capital, services & contingent labor procurement
• Integrate with point of care supply cabinets (Omnicell, Pyxis)
ProcureProcure• Enable dispersed
requisitioning via browser
• Replenish par inventories using handhelds
• Use UPNs for efficient supply chain communication
• Integrate patient supply usage with HIS and Billing systems
AnalyzeAnalyze• Track implantables and other
medical devices
• Track Surgical supplies usage
• Measure supplier performance
• Analyze item usage & support compliance initiatives
Page 41
++140140World Class Healthcare Customers with SRM
Supplier Relationship
Management
FForor
EnergyEnergy
Page 43
Energy Industry
Commercially-owned entities that provide energy to business and
consumer customers.
• Electric• Generation• Transmission• Distribution• Wholesale• Retail• Trading
• Water and Wastewater
• Waste management
• Petroleum
• Gas industry• Natural gas• Liquids• Pipeline • Refining
• Multi-product utility
• Public Sector• Flood control• Fire protection• Municipal services
Page 44
Energy Industry – The World Has Changed
• Deregulation has scrambled the landscape
• The industry is under heavy public scrutiny
• Business growth and service expansion
• Multiple delivery channels
• Competition and encroachment
……
Page 45
Competition and
Encroachment
Dramatically increase efficiency and reduce operational costs
Deregulation has
scrambled the landscapeAgile business structures
and business systems
Growth and expansion
Multiple channels
Improve customer acquisition,
retention & profitability
Change Imperative
What Does This Mean For The Energy Industry
The industry is under
heavy public scrutinyVisibility and accountability
across decentralized structures
Page 46
SRM for Energy
• Solution Requirements• Real-time Procurement
• Establish best practices for procurement• Common or centralized procurement• Leverage enterprise-wide demand• Negotiate lower costs
• Intelligent Asset and Project Management• Manage supplier performance around the clock• Track all spend and inventory
• Integrated Spend Management• Balance MRO inventories across suppliers and
locations• Manage contract service procurement• Develop improved sourcing practices
• Support FERC and other regulatory standards
Page 47
Support for FERC &
Regulatory RequirementsFully supported
Real-time Procurement eProcurement, Purchasing,
Services Procurement
Integrated Spend
Management
Strategic Sourcing, Supplier
Rating System and Supply
Chain Warehouse
SRM Need PeopleSoft Solution
What Does This Mean For The Energy Industry
Intelligent Asset and
Project ManagementFull integration to PS Assets &
Projects
Page 49
77 1of theof the largest Energy/Utilitieslargest Energy/Utilities02424 50
Largest Energy companiesLargest Energy companiesof
World Class Energy Customers
Supplier Relationship Management
forforFinancial ServicesFinancial Services
Page 51
Banks
•Brokerages
•Insurance Companies•Property & Casualty
•Life
•Heath
•Reinsurance
Real Estate Companies
Exchanges/Commissions
Securities Firms
Non-depositary Credit
PProviders ofroviders ofFinancial ServicesFinancial Services
Page 52
Alan Greenspan – April 22, 2002
“Because of increased access to real-time information and, more arguably, extensive deregulation and innovation in financial and product markets, economic imbalances are more likely to be readily contained”.
Page 53
Industry Challenges
Regulatory ChangeRegulatory Change
Competition from New SourcesCompetition from New Sources
Commoditization of ProductsCommoditization of Products
Increased Customer FocusIncreased Customer Focus
Growing Proportion of Services SpendGrowing Proportion of Services Spend
Reducing CostReducing Cost
Page 54
SRM for FSI - Needs
Control and visibility into all areas of spend Unify and standardize spending process Manage contingent labor spend Streamline all procurement and payment
processes Manage both product and service
contracts Integrate general ledger, asset
management and projects with procurement
Financial Services have a need to increase profitability,
at the same time as managing risk, through improved
operating efficiencies and reduced costs.
Page 55
SRM for FSI - Functionality
• Full integration with PeopleSoft General Ledger, Assets and Projects
• Total Spend Management
• eProcurement
• Services Procurement
• Sourcing for Goods & Services
• Supplier Portal for Simple Supplier Adoption
• Scalability for Centralized Procurement
• Support for Private Trading Exchanges
Page 56
Worldclass FSI Customers
Supplier Relationship Management
FFororGovernmentGovernment
Page 58
Government agencies include…
• Federal government agencies• State government agencies• County government agencies• Local government agencies• Education Institutions/Systems
Page 59
E-Government Can Save Money1. Reduced Workforce Costs
2. Higher Employee Productivity
3. Reduced Paper Costs
4. Reduced Processing Costs
5. Better Supply-chain Management
6. Better Prices on Goods & Services
7. More Efficient Markets
8. Reduced Travel & Training Costs
9. Reduced Fraud & Abuse
10. Lower Building & Property Costs
Page 60
• Process visibility for control
• Deliver more services with less tax/fee revenue
• Ensure legal compliance and access to contract opportunities
• Support broad interaction requirements
• Streamline processes and encourage self-service
• Management of both goods & services
SRM issues facing agencies today
Page 61
SRM for Government Functionality
•Full integration with financials
•Budget check and commitment control
•Full support for encumbrance and fund accounting
•Seamless extension of projects, contracts and grants
•Streamlined procurement processes
•Support for multiple commodity formats including NIGP
•Collaborate with suppliers on-line
•Inventory management across multiple sites and agencies
•On-line Sourcing
•Allows open supplier access to request for bids
•Provides tools for blind and sealed bidding
•Provides on-line supplier registration with self categorization using NIGP codes
•Enables decision disclosure by posting bid tabulation results using the internet
Page 62
SRM Government Customers
Supplier Relationship Management
FFororConsumer ProductsConsumer Products
Page 64
Consumer Products – Durable Goods and Non-durable Goods
Food: Perishables•Dairy•Meat•Produce•Deli•Frozen•Bakery
Health/Beauty Care•Shampoo•Oral care•Shaving•Cosmetics•OTC remedies
Food: Dry Grocery•Canned foods•Cereal•Coffee•Soda•Juice•Beer/wine
Non-Food•Paper items•Diapers•Home cleaning•Bar soap
Housewares•Small appliances•Stationery•Pet supplies•Kitchen gadgets
Other Retail•Office supplies•Print cartridges•Automotive acc.•Garden/seasonal
Page 65
Today’s consumer products issues
• Replenish on demand
• Component rationalization
• Compressed cycle times
• Shift to real time collaboration
• Slow overall growth
• Retailer power & supplier consolidation
• Global competition
• Regulation & liability
Page 66
SRM for Consumer Products
•What is needed………• Flexible Real-time collaboration for
immediate reaction to changes in demand and source
• Manage all costs (goods & services) to support margins
• Efficient resource allocation across multiple products, brands, and channels
• Visibility across processes and relationships for effective management and control
• Promotion Management visibility & integration
• Product packaging supply management
Page 67
SRM for Consumer Products Functionality
SRM Process Integration w/Sales & Demand Management Trade Promotion Management Demand planning & management
Real-time collaboration with all suppliers PS Supplier Portal, eSupplier Connection, Enterprise
Process Broker Event Management
Seamless Access to Trading Exchanges Integrate to public and private trading exchanges for
fast, accurate purchase transactions that tie directly to supplier order management.
Support Full Range of Buying Patterns Hedge buying, Seasonal Buying, Consigned Inventory,
Promotional Campaigns
Page 68
Consumer Products Customers
Supplier Relationship Management
FFororHigh TechnologyHigh Technology
Page 70
High Tech Industry
Manufacturers of high technology products
• Computers
• Disk drives• Routers
• Telecom equipment
• Semiconductors
• Other
Page 71
• Shrinking time to market
• Rapid product development
• Shrinking Product Life Cycles• Average 6 mo in semi-conductor• Improve time to market 1 mo -
improve profit by 11.9%
• Cost of Distribution• Customer / Supplier
collaboration • Supplier Management
• Mergers & acquisitions
Industry Industry IssuesIssues
Page 72
• Standards for collaborative and flexible SCM
• Real-Time Collaboration among customer, mfg and supplier
• Product Life Cycle Management• Batch/Lot/Serial/Yield material control
needs
• Support for direct, indirect and services procurement
• Integration to planning systems
• Access to internal and external inventory
• Event Management
What does High Tech Need?
Page 73
SRM for High Tech Functionality
• Collaborative demand planning
• Streamlined Sourcing & Procurement
• Support for RosettaNet
• Cross-Supply Chain Inventory Management
• PLM Support - Agile
• Real time supplier collaboration over the internet
• Vendor Managed Inventory
• Quality System Integration
• Event Management
Page 74
SRM High Tech Customers
Page 75
Customer Examples
Page 76
•HQ in Pittsburg, PA
•Owns stakes in 10 global eServices companies
•5500 employees
•Purchases account for over $15M annually
80% of iGate’s spend isnow processed throughPeopleSoft eProcurement
Solutions Implemented
•PeopleSoft 8 SRM
•PeopleSoft 8 Financials
•PeopleSoft 8 Human Resources Management
Implementation Partner
• PeopleSoft Consulting
Radically decentralized spend across 10 companies
Manual and paper-intensive procurement processes
Maverick spend rampant throughout the enterprise
Unified procurement process saving as much as 25% in product cost
Streamlined, intuitive, paperless purchasing solution
Effective controls placed on employee spending
The PeopleSoft Solution
iGate Capital’s Challenges
Page 77
•HQ in Boise, Idaho
•International Distributor of-Paper Products-Packaging-Building Materials
•24,000 employees
•Ranks 241 in the Fortune 500
•Corporate Purchases account for over $60M annually
Solutions Implemented
•PeopleSoft 8 SRM
•PeopleSoft 8 Financials
Implementation Partner
• PeopleSoft Consulting
Boise’s Challenges
The PeopleSoft Solution
• Establish commerce system to improve utilization of preferred suppliers
• Enable buyers to focus on developing strategies for more leveraged purchasing
• Allow on-line employee access to inventory items
• Fully automated purchasing solution connected directly to preferred supplier websites
• Tactical purchases handled through a more automated process – freeing up buyer time
• Full employee access to inventory items through integration to Maximo®
Questions?
Page 79
Corning has moved its entire manufacturing, sourcing and order fulfillment – including core business processes like source to settle, order to profit, and plan to produce – to the Internet.
Benefits
Common processes in 10 of 12 plants, globally
PeopleSoft Products• Supply Chain
Planning• Manufacturing• Supplier Relationship
Management• Customer Fulfillment
Management
CUSTOMER EXAMPLE
“Corning Inc. needed a supply chain solution flexible enough to span unique processes across our five divisions.”
-Rick Beers – Supply Chain Process Leader