breaking down the barriers between engineering and … · 2006. 4. 30. · supplier management...

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Breaking Down the Barriers Between Engineering and Procurement- An approach to integrated PLM and Supplier Relationship Management

Ken SearsSrini Varanasi


Topics

Relevance of Supplier Relationship Management (SRM) to PLM

Use-cases for PLM and SRM integration

UGS Solution for integrating PLM and SRM


Topics

Relevance of SRM to PLM




Largest spend is on direct materials – direct relationship to PLM

• ERP• SCM• Niche Vendors

70-80%70-80%3-5%3-5%

10-15%10-15%5-10%5-10%Indirect Materials

MRO Items

TrueCommodities

Direct Materials

PLM


Supplier Relationship Management Initiatives Differ by Material Category

Systems & Engineered Parts

(bulk of suppliers)

Co-developed Parts & Systems(small numberof suppliers)

Indirect, MRO, &

Commodity

Current Practice

BestPractice

NextPractice

Future

PracticeMaturity

SupplierRelationship

“hands off”

“earlyinvolvement”

“mutual dependency”

“strategic”

DigitalCapability

Based Sourcing

eSourcing

Specifications Thrown Over

the Wall

IP Segmentation

Digital Integration

Co-designed Systems

Digital Interoperability

Global SourcingNetworks

Trading Exchanges

& BPO

DigitalB2B

Transactions

Volume Consolidation

&Best Price

Specification, Change, Cost &

RiskManagement


Key Differences in Solutions

ERP, eProcurement, Trading Exchanges

PLM

Material Category Coverage

Indirect Direct and Indirect

Core SRM Business Processes

Order to Re-order Build to Stock, Engineer to Order, Assemble to Order

Digital Information Item Master Only Part, System, Product Structure, Specs and Context

Sourcing DriverPrice, Volume Consolidation

Supplier Collaboration, Early Involvement, Spec Consolidation, Spec Improvement

Supplier Relationship

Arms length Collaborative

Key Sourcing Processes

Requisition to Pay Design to Source


Global Direct Materials Outsourcing

Sourcing Team On Critical Path

Globally Distributed Supply Chain

Complex Collaborative Processes

FORD

GM

TOYOTA

NISSAN

DCX

HONDA

OTHERS

BOM Change Request

Tier 1 Engineering

Design

Tier 1 Procurement

SourcingData

Tier 2 Supplier A

Tier 2 Supplier B

Tier 2 Supplier C

ManufacturingSite B

ManufacturingSite A

RFQ

UpdatedCosts

DesignReview

RecyclingReq.

TrackIssues

Design

TimeBid AccuracyProfit


Key challenges in Direct Material Purchasing

“Leverage the creative talents of our suppliers”

“Integrate and make our value chain more effective”

“Create value through effective innovation with key suppliers”

1 from A.T. Kearney's 2004 Assessment of Excellence in Procurement

Processing RFQs

What Purchasing is Doing

What Executives Want from Purchasing1

70%

15%

15%

Processing RFQsManaging RelationshipsOther


Automotive Supplier Case Study

01020304050607080

Time Spent Value Added

New Programs Changes

Buyers process 80 RFQs / day

75% of the RFQs are related to change

On average, there are three rejections by purchasing for every request from engineering

Average cycle time to process an RFQ is 35 days

Target is to reduce to 2 days

RFQ Processing


TimeLow

Cus

tom

er N

eeds

High

Supplier Search

Limited Scope Limited Scope Component SupplierComponent Supplier

Routine Changes in Requirements

Joint Engineering Design

Highly Engineered Parts Supplier

Breakthrough cycle Breakthrough cycle time improvementtime improvement

Supplier discovery and enablement


Topics





Basic PLM – Supplier Negotiation Process

Engineering

Procurement

Suppliers

Initiate Bid

package

AuthorNegotiation

Event(s)

Invite Suppliers

Respond toevent

Assessbids and

return quote


Initial Source Negotiation Process

EngineeringAuthor

Bidpackage

Author Negotiation

event(s)

Assessbids and

return quote

Reference #Part#(s), Description(s)Commodity CodeVolumeTarget Piece PriceMfg FacilityProgram

Procurement

Suppliers

Invite Suppliers

Respond toevent


Initial Source Negotiation Process

Engineering

Procurement

Suppliers

Author Bid

package

Assessbids and

return quote

Invite Suppliers

Respond toevent

Reference #Part #sSupplier Part #sSupplier IdsPiece PriceTooling, Trans, Pkg.

For each selected supplier

Author Negotiation

event(s)


Engineering Change to Quote update Process

Engineering

Procurement

Suppliers

Generate Bid

package

Author Negotiation

event(s)

Assessbids and

return quote

Reference #Change Request #Part#(s), Description(s)Commodity CodeVolumeIncumbent SuppliersCurrent bidsMfg FacilityProgram

InitiateChangeRequest

Automated

Invite Suppliers

Respond toevent

For each new & existing supplier


Engineering Change to Quote Update Process

Engineering

Procurement

Suppliers

Assessbids and

return quote

Generate Bid

package

InitiateChangeRequest

Reference #Change Request#Part #sSupplier Part #sSupplier IdsPiece PriceTooling, Trans, Pkg.

For each new & existing supplier

Author Negotiation

event(s)

Invite Suppliers

Respond toevent


Evaluate cost-rollups and supplier dependencies in PLM

Bid Pkg

Part

Part

Assy

PartPart

Bid Pkg

Supplier1 Supplier

2

Supplier3

Quote

St. Louis

Toluca

Mfg1

Mfg2

CR

Prog2

Prog1

OEM 1

OEM 2


Design for Supply Chain

Engineering

Define Supplier

Model

Procurement

SuppliersComplete supplier

information

Verify & Manage supplier

data

Available suppliers

CapacityCapability

Collaboration between

engineering, procurement and suppliers

Specifications

Product Design

CommodityLocationProgram


Topics





Teamcenter for SRM

Sourcing Community

RFx

Neg

otia

te

Spen

d M

anag

emen

t

Supp

lier M

anag

emen

t

PDM

Ana

lytic

s


Sourcing Community

Built on top of Teamcenter Community

“One Window” access to all SRM applications and Teamcenter

Role-based dashboard views into SRM applications

Leverages existing integrations between Teamcenter Community & Teamcenter Engineering and Enterprise

Sourcing Community

RFx

Neg

otia

te

Spen

d M

anag

emen

t

Supp

lier M

anag

emen

t

PDM

Ana

lytic

s


PDM

Configuration management of all product information including supplier and quote information

Cross-functional workflow that automatically generates a bid package from product change information and routes it to the right buyer

Commercial Part Management

Sourcing Community

RFx

Neg

otia

te

Spen

d M

anag

emen

t

Supp

lier M

anag

emen

t

PDM

Ana

lytic

s


Part Management

Commercial parts managementStandard part request mgtEOL and last buy date managementEnhanced PFM display

VendorVendor

ManufacturerManufacturer SupplierSupplierDistributorDistributor

Sourcing Community

RFx

Neg

otia

te

Spen

d M

anag

emen

t

Supp

lier M

anag

emen

t

PDM

Ana

lytic

s


Support for integrated PLM and SRM workflows

Teamcenter

RFx (Buyers)

RFx (Suppliers)

Initiate Bid

package

AuthorNegotiation

Event(s)

Invite Suppliers

Respond toevent

Assessbids and

return quote


BOM Grading Reports Help Manage Risk

Sourcing Community

RFx

Neg

otia

te

Spen

d M

anag

emen

t

Supp

lier M

anag

emen

t

PDM

Ana

lytic

s


RFx

Web-based RFI/RFP/RFQ authoring and publishing application

All question formats from simple text to Excel-like grids

Automatically generated from PDM

Analysis

On-line canned analytics and reports

Award scenario modelling and optimization

Ability to easily extract data for analysis

Approved supplier quotes published to PDM

Automatically transfer data to Negotiate application

Sourcing Community

RFx

Neg

otia

te

Spen

d M

anag

emen

t

Supp

lier M

anag

emen

t

PDM

Ana

lytic

s


Negotiate

Time-bound reverse or forward auctionsSmooth data transfer from PDM to RFx to NegotiateReal time graphs and reportsAnalytic tools to monitor and measure results

Sourcing Community

RFx

Neg

otia

te

Spen

d M

anag

emen

t

Supp

lier M

anag

emen

t

PDM

Ana

lytic

s


Analytics

Interactive analysis on data from multiple systems inside and outside the Teamcenter application suite

Complex formulas supported

Custom reports configurable by user

Ad hoc reporting

Sourcing Community

RFx

Neg

otia

te

Spen

d M

anag

emen

t

Supp

lier M

anag

emen

t

PDM

Ana

lytic

s


Supplier ManagementSourcing Community

RFx

Neg

otia

te

Spen

d M

anag

emen

t

Supp

lier M

anag

emen

t

PDM

Ana

lytic

s

Web-based application allows suppliers to self-register and manage their own contact information

Capacity and capability information is captured

Dynamic reports of supplier history and performance

Integrated with RFx and Negotiate applications

Information available for Teamcenter Integration


Spend Management

Track spending across your enterprise by business unit, location, supplier, commodity and itemEasily identify all suppliers Aggregate spend from multiple systems Extensive standard reports and custom reporting Price compliance tracking

Sourcing Community

RFx

Neg

otia

te

Spen

d M

anag

emen

t

Supp

lier M

anag

emen

t

PDM

Ana

lytic

s


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breaking down the barriers between engineering and … · 2006. 4. 30. · supplier management...

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