Description
The ppt describes on Enabling Supply Chain Collaboration.
ERP Case Presentation
World Wide Technology and ClearOrbit: Enabling Supply Chain Collaboration
Agenda
? Introduction ? WWT Background ? Supply Chain Collaboration ? Software Industry ? Automotive OEM Industry
? Challenges in Execution
? ClearOrbit Background ? POC Implementation ? Benefits of Collaboration ? Challenges Ahead ? Learnings
? July, 2004: WWT signed an outsourcing agreement to
manage
and
execute
indirect
materials
purchasing
operations on behalf of a large automotive OEM.
? December, 2004: WWT chose ClearOrbit- a rapidly
growing software based company- to be WWT?s technology
partner and software provider for the new program.
? February, 2006: A full 12 months had passed since the first
suppliers had been brought live into the automotive OEM program.
? 1200 indirect materials suppliers of all types and sizes handled
thousands of Pos from WWT on behalf of OEM.
? The newly-enabled PO and invoice management process between
WWT and the automaker?s supply base had a fundamental characteristic : it was collaborative.
? Mark felt that WWT had only scratched the surface of value that
the company could bring.
? In order to achieve that full utilization, he knew it was necessary
to extend the use of the software to additional areas of supply
chain collaboration.
WWT Background..
? Founded in 1990 by Jim Kavanaugh and David Steward in
St. Louis, Missouri, as a VAR of IT products.
? After 2 years it broadened its market reach to include the
federal government.
? 1997 : They decided to invest in a sophisticated ERP
system, despite the then relatively small size of the
company.
? After a successful ORACLE implementation, WWT set out to
drive efficiencies by offering different types of automations to its
customers, partners and suppliers.
? Early 2000: As a natural extension to its proven VAR
capabilities, WWT decided to diversify the business by offering
higher-end supply chain outsourcing solutions.
? WWT moved from focusing on the logistics and procurement
space to becoming an outsourced operations company.
? By 2005, 40 to 50 % of WWT?s sales came from the
execution to supply chain processes on behalf of Fortune
500 and public sector clients.
? The combination of cost-effective logistics and distribution
services, coupled with state-of-the-art facilities and the deployment of integrated technology solutions had given
WWT a unique market position.
Supply Chain Collaboration
? What is collaboration
? Can be implemented at different stages of the supply chain
? Current trends in collaboration ? Cost reduction ? Revenue creation ? Technology ? Data sharing
Software Industry
? SRM, SCE, SCM, procurement/sourcing
? In 2005, 75% had ERP in place
? Alternatives included: ? Staying ERP centric ? Enabling a best in class solution ? Developing an own solution ? SAP- a clear leader followed by Oracle
Automotive OEM Opportunity
? In 2004, partnership with a consultancy firm ? Proposed to reduce OEM?s MRO material ? OEM?s currently purchased on its own ? 1800 vendors ? 20 full time employees ? 50 Tool Store Managers ? Two main activities
? Strategic sourcing
? Technology intense purchasing process
Challenges in execution
? Vendors could not meet requirements
? Spot-buy transactions
? Smaller suppliers relied on paper documents
? Need for automation and scalability
Make or Buy decision
? Tight implementation-to-deployment time budget
? The 80/20 rule “myth”
? Internally developed solution ? Leveraging the skilled and experienced engineers ? Tighter control ? Complexity and size of OEM program ? Extensive maintenance work
iSupplier
? Oracle?s supplier collaboration tool
? Internet based portal
? Familiarity with Oracle needed ? Not all documents could be uploaded ? Support needed from Oracle to customize solution and
implementation
? Need for a company smaller than Oracle
ClearOrbit Background..
? ClearOrbit was founded in Austin, Texas in 1994 under the name
of BPA systems. Initially, the company positioned itself as a
sofware developer and service provider in the high-volume shop manufacturing space.
? Cisco Systems was its first customer.
? High technology its first targeted vertical. ? 1995 : ClearOrbit released its first product, an EHI platform.
? From its inception, ClearOrbit?s strategy within the ERP
landscape was to exclusively target users of the Oracle ERP
system.
? 1997 : ClearOrbit identified the need to extend industry-specific
ERP functionality.
? December, 2000 : ClearOrbit decided to re-brand itself in order
to boost growth in an increasingly competitive marketplace.
? ClearOrbit
began transitioning from a services focused
organization to a products focused organization.
? The company organized the new products into 2 major suites: 1.
Gemini Series: focused on what ClearOrbit knew best; supply chain execution within the four walls of an enterprise.
2.
Endeavour Series: It aimed at tight collaboration with business partners beyond the four walls of an enterprise.
WWT engages ClearOrbit..
? ClearOrbit?s main contribution to the negotiating table at WWT
was a software product (POC).
? POC differentiated itself by its simplicity and intuitive inner
workings.
? One of POC?s most valuable advantages was that, despite being
an independent best-of-breed solution, it integrated directly and seamlessly to any ERP system, without the need for additional layers of data.
? In order to avoid this redundant creation of data, ClearOrbit?s
approach was to build different versions of the POC product
specifically built to leverage the data layers and data objects terminology native to a particular ERP.
? One of POC?s key strengths was its highly customizable software
platform.
? Another factor was its intuitive interface. ? The last key capability of POC was control.
POC Implementation
? One month Long implementation.
? Structured in three phases :
Phase I : (Early Jan „05) Define from a business perspective, specific needs and expectations to be covered from order till payment of invoice. Phase II : (Mid Jan „05) Install POC at WWT headquarters. Phase III : (End Jan „05) Adapt POC to WWT?s IT environment.
Phase 1: Order to Delivery Process Design
OEM Activities
OEM generates order at assembly plant
WWT Activities
Once Incoming order is validated, Oracle creates sales order
Order sent via EDI to WWT’s Oracle ERP
Receives promised date via EDI
Receives dropshipped items at assembly plant
Oracle creates purchase order; POC picks up PO
Corrects rejected PO and sends back to vendor as received
Receives invoice and processes payment
Supplier Activities
Supplier searches for PO in POC and reviews it If PO incorrect, rejects PO and sends back to WWT Accepts Order, provides promised delivery date Ships order and sends invoice to WWT
Phase 1 continued
? Initially the built in Invoice capability was not implemented due to
strict timelines. However it was implemented in march „06.
? Generally WWT involved actual handling of the moving product
through its state of the art distribution centers.
? But for automaker program products were drop-shipped to an one of
the OEM?s assembly plants.
? Once done , 2 ways of distribution:
1.Large materials and tools through tool cribs. 2.Smaller materials through vending machine like stations.
Phase II: Product Installation
? Customizing the tool as per the needs of WWT
? Installation in 2-3 weeks due to technical expertise of WWT?s
software development team.
? High level of collaboration with daily conversations and
discussions and working together.
? Customization was done through tool?s “rules Engine” rather
than code alterations.
? E.g: Price Tolerance tool
Phase II continued
? Though WWT had clear understanding in terms of technical
aspect, functional level understanding was less as product was
mainly for OEMs.
? Continuous change of WWT?s requirements form originally
1800 suppliers to 200 to finally 900 total suppliers. Also from
full-temporary –back to full implementation status.
? However Strong collaboration and team work helped them in
implementing the software.
Phase III: Adapting to a new environment
? Connection of tool to WWT?s server, ERP, and DB
systems.
? Server centric application utilizing J2EE platform. ? WWT had WebLogic application server and CLearOrbit
Team had obtained WebLogic certificate to install drivers and connect to DB.
? A stable connection to WWT?s central database was made.
Convincing the supply base
? It took 30 days to customize, install and test the tool. ? It was ready on Feb 1st, Demo on Feb 8th and first suppliers
online by Feb 14th. ? Self service feature within POC known as Supplier Administrator(SA) to expedite the task of signup. ? POC enabled small suppliers to receive more information in less time with higher accuracy and at lower cost. ? However Large suppliers who had direct EDI connectivity with OEM suppliers were unhappy and resisted the change. ? WWT offered a single portal, an easy to use tool to upload promised date info. And a way to send invoices and track their status in real time. ? Convincing the large suppliers on the argument that system wise they would be able to transmit and complete orders faster with lower cost and ease of use.
Benefits of Collaboration
• • • •
Connecting larger number of suppliers (1200) by using POC Transaction management: number of full-time employees reduced to mere 8 Fewer employees + right technology: value added services and in depth information Greatly reduced the order processing time
– Orders come into the WWT system
– POs cut to all vendors
– Vendors invoice WWT and its partners – OEM, thus, receives orders from one company, WWT?s partner
•
Increased visibility on timing and shipments making performance evaluations easy due to order acknowledgement and data capabilities
•
Increased number of suppliers but reduced HR and HR efforts due to fewer customer support tasks and supplier inquiries
•
Supplier sign up costs reduced: One to many virtual hub helped in avoiding high integration costs, reduced implementation period and cost of online training program
•
Cost reduction on accounts payable front: due to one to many hub, manual entries were reduced and hence the errors. Thus, less inquiries from suppliers which
reduced labor effort
•
Non conformances reduced by 10-20 %: WWT and its suppliers checked before the product arrived at the receiving dock
Benefits to Suppliers and ClearOrbit
• Smaller suppliers also got access to real time information
via internet (due to POC)
• Increased visibility of the entire information flow about
cash and goods transfer
• Representatives of larger suppliers removed from assembly
plants
• Feedback from WWT enabled ClearOrbit to enhance POC
product: introduced standard functionalities
Challenges Ahead
? Enable tightened control of supplier?s date compliance, on-
time delivery and invoice accuracy
? Electronic material reception process: ePOD (electronic
proof of delievery), RFID
? Developing technological components to extend visibility
and control multiple tiers into supply chain (to reduce
dependency links)
LEARNING ….
? Early Identification of requirement of collaboration. ? Better understanding of supply chain collaboration.
? Role of technology in supply chain management.
? Supplier need to have adequate flexibility. ? Importance of maintenance, repair and operations in OEM. ? Importance of indirect material sourcing and purchasing as a
source of savings.
Thank You !!!!
doc_854567388.ppt
The ppt describes on Enabling Supply Chain Collaboration.
ERP Case Presentation
World Wide Technology and ClearOrbit: Enabling Supply Chain Collaboration
Agenda
? Introduction ? WWT Background ? Supply Chain Collaboration ? Software Industry ? Automotive OEM Industry
? Challenges in Execution
? ClearOrbit Background ? POC Implementation ? Benefits of Collaboration ? Challenges Ahead ? Learnings
? July, 2004: WWT signed an outsourcing agreement to
manage
and
execute
indirect
materials
purchasing
operations on behalf of a large automotive OEM.
? December, 2004: WWT chose ClearOrbit- a rapidly
growing software based company- to be WWT?s technology
partner and software provider for the new program.
? February, 2006: A full 12 months had passed since the first
suppliers had been brought live into the automotive OEM program.
? 1200 indirect materials suppliers of all types and sizes handled
thousands of Pos from WWT on behalf of OEM.
? The newly-enabled PO and invoice management process between
WWT and the automaker?s supply base had a fundamental characteristic : it was collaborative.
? Mark felt that WWT had only scratched the surface of value that
the company could bring.
? In order to achieve that full utilization, he knew it was necessary
to extend the use of the software to additional areas of supply
chain collaboration.
WWT Background..
? Founded in 1990 by Jim Kavanaugh and David Steward in
St. Louis, Missouri, as a VAR of IT products.
? After 2 years it broadened its market reach to include the
federal government.
? 1997 : They decided to invest in a sophisticated ERP
system, despite the then relatively small size of the
company.
? After a successful ORACLE implementation, WWT set out to
drive efficiencies by offering different types of automations to its
customers, partners and suppliers.
? Early 2000: As a natural extension to its proven VAR
capabilities, WWT decided to diversify the business by offering
higher-end supply chain outsourcing solutions.
? WWT moved from focusing on the logistics and procurement
space to becoming an outsourced operations company.
? By 2005, 40 to 50 % of WWT?s sales came from the
execution to supply chain processes on behalf of Fortune
500 and public sector clients.
? The combination of cost-effective logistics and distribution
services, coupled with state-of-the-art facilities and the deployment of integrated technology solutions had given
WWT a unique market position.
Supply Chain Collaboration
? What is collaboration
? Can be implemented at different stages of the supply chain
? Current trends in collaboration ? Cost reduction ? Revenue creation ? Technology ? Data sharing
Software Industry
? SRM, SCE, SCM, procurement/sourcing
? In 2005, 75% had ERP in place
? Alternatives included: ? Staying ERP centric ? Enabling a best in class solution ? Developing an own solution ? SAP- a clear leader followed by Oracle
Automotive OEM Opportunity
? In 2004, partnership with a consultancy firm ? Proposed to reduce OEM?s MRO material ? OEM?s currently purchased on its own ? 1800 vendors ? 20 full time employees ? 50 Tool Store Managers ? Two main activities
? Strategic sourcing
? Technology intense purchasing process
Challenges in execution
? Vendors could not meet requirements
? Spot-buy transactions
? Smaller suppliers relied on paper documents
? Need for automation and scalability
Make or Buy decision
? Tight implementation-to-deployment time budget
? The 80/20 rule “myth”
? Internally developed solution ? Leveraging the skilled and experienced engineers ? Tighter control ? Complexity and size of OEM program ? Extensive maintenance work
iSupplier
? Oracle?s supplier collaboration tool
? Internet based portal
? Familiarity with Oracle needed ? Not all documents could be uploaded ? Support needed from Oracle to customize solution and
implementation
? Need for a company smaller than Oracle
ClearOrbit Background..
? ClearOrbit was founded in Austin, Texas in 1994 under the name
of BPA systems. Initially, the company positioned itself as a
sofware developer and service provider in the high-volume shop manufacturing space.
? Cisco Systems was its first customer.
? High technology its first targeted vertical. ? 1995 : ClearOrbit released its first product, an EHI platform.
? From its inception, ClearOrbit?s strategy within the ERP
landscape was to exclusively target users of the Oracle ERP
system.
? 1997 : ClearOrbit identified the need to extend industry-specific
ERP functionality.
? December, 2000 : ClearOrbit decided to re-brand itself in order
to boost growth in an increasingly competitive marketplace.
? ClearOrbit
began transitioning from a services focused
organization to a products focused organization.
? The company organized the new products into 2 major suites: 1.
Gemini Series: focused on what ClearOrbit knew best; supply chain execution within the four walls of an enterprise.
2.
Endeavour Series: It aimed at tight collaboration with business partners beyond the four walls of an enterprise.
WWT engages ClearOrbit..
? ClearOrbit?s main contribution to the negotiating table at WWT
was a software product (POC).
? POC differentiated itself by its simplicity and intuitive inner
workings.
? One of POC?s most valuable advantages was that, despite being
an independent best-of-breed solution, it integrated directly and seamlessly to any ERP system, without the need for additional layers of data.
? In order to avoid this redundant creation of data, ClearOrbit?s
approach was to build different versions of the POC product
specifically built to leverage the data layers and data objects terminology native to a particular ERP.
? One of POC?s key strengths was its highly customizable software
platform.
? Another factor was its intuitive interface. ? The last key capability of POC was control.
POC Implementation
? One month Long implementation.
? Structured in three phases :
Phase I : (Early Jan „05) Define from a business perspective, specific needs and expectations to be covered from order till payment of invoice. Phase II : (Mid Jan „05) Install POC at WWT headquarters. Phase III : (End Jan „05) Adapt POC to WWT?s IT environment.
Phase 1: Order to Delivery Process Design
OEM Activities
OEM generates order at assembly plant
WWT Activities
Once Incoming order is validated, Oracle creates sales order
Order sent via EDI to WWT’s Oracle ERP
Receives promised date via EDI
Receives dropshipped items at assembly plant
Oracle creates purchase order; POC picks up PO
Corrects rejected PO and sends back to vendor as received
Receives invoice and processes payment
Supplier Activities
Supplier searches for PO in POC and reviews it If PO incorrect, rejects PO and sends back to WWT Accepts Order, provides promised delivery date Ships order and sends invoice to WWT
Phase 1 continued
? Initially the built in Invoice capability was not implemented due to
strict timelines. However it was implemented in march „06.
? Generally WWT involved actual handling of the moving product
through its state of the art distribution centers.
? But for automaker program products were drop-shipped to an one of
the OEM?s assembly plants.
? Once done , 2 ways of distribution:
1.Large materials and tools through tool cribs. 2.Smaller materials through vending machine like stations.
Phase II: Product Installation
? Customizing the tool as per the needs of WWT
? Installation in 2-3 weeks due to technical expertise of WWT?s
software development team.
? High level of collaboration with daily conversations and
discussions and working together.
? Customization was done through tool?s “rules Engine” rather
than code alterations.
? E.g: Price Tolerance tool
Phase II continued
? Though WWT had clear understanding in terms of technical
aspect, functional level understanding was less as product was
mainly for OEMs.
? Continuous change of WWT?s requirements form originally
1800 suppliers to 200 to finally 900 total suppliers. Also from
full-temporary –back to full implementation status.
? However Strong collaboration and team work helped them in
implementing the software.
Phase III: Adapting to a new environment
? Connection of tool to WWT?s server, ERP, and DB
systems.
? Server centric application utilizing J2EE platform. ? WWT had WebLogic application server and CLearOrbit
Team had obtained WebLogic certificate to install drivers and connect to DB.
? A stable connection to WWT?s central database was made.
Convincing the supply base
? It took 30 days to customize, install and test the tool. ? It was ready on Feb 1st, Demo on Feb 8th and first suppliers
online by Feb 14th. ? Self service feature within POC known as Supplier Administrator(SA) to expedite the task of signup. ? POC enabled small suppliers to receive more information in less time with higher accuracy and at lower cost. ? However Large suppliers who had direct EDI connectivity with OEM suppliers were unhappy and resisted the change. ? WWT offered a single portal, an easy to use tool to upload promised date info. And a way to send invoices and track their status in real time. ? Convincing the large suppliers on the argument that system wise they would be able to transmit and complete orders faster with lower cost and ease of use.
Benefits of Collaboration
• • • •
Connecting larger number of suppliers (1200) by using POC Transaction management: number of full-time employees reduced to mere 8 Fewer employees + right technology: value added services and in depth information Greatly reduced the order processing time
– Orders come into the WWT system
– POs cut to all vendors
– Vendors invoice WWT and its partners – OEM, thus, receives orders from one company, WWT?s partner
•
Increased visibility on timing and shipments making performance evaluations easy due to order acknowledgement and data capabilities
•
Increased number of suppliers but reduced HR and HR efforts due to fewer customer support tasks and supplier inquiries
•
Supplier sign up costs reduced: One to many virtual hub helped in avoiding high integration costs, reduced implementation period and cost of online training program
•
Cost reduction on accounts payable front: due to one to many hub, manual entries were reduced and hence the errors. Thus, less inquiries from suppliers which
reduced labor effort
•
Non conformances reduced by 10-20 %: WWT and its suppliers checked before the product arrived at the receiving dock
Benefits to Suppliers and ClearOrbit
• Smaller suppliers also got access to real time information
via internet (due to POC)
• Increased visibility of the entire information flow about
cash and goods transfer
• Representatives of larger suppliers removed from assembly
plants
• Feedback from WWT enabled ClearOrbit to enhance POC
product: introduced standard functionalities
Challenges Ahead
? Enable tightened control of supplier?s date compliance, on-
time delivery and invoice accuracy
? Electronic material reception process: ePOD (electronic
proof of delievery), RFID
? Developing technological components to extend visibility
and control multiple tiers into supply chain (to reduce
dependency links)
LEARNING ….
? Early Identification of requirement of collaboration. ? Better understanding of supply chain collaboration.
? Role of technology in supply chain management.
? Supplier need to have adequate flexibility. ? Importance of maintenance, repair and operations in OEM. ? Importance of indirect material sourcing and purchasing as a
source of savings.
Thank You !!!!
doc_854567388.ppt