bill cox: italicized, bolded, increased to 18, centered. bill cox: italicized, bolded, increased to...

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

Agenda

•What is SRMWhat is SRM

•Why SRMWhy SRM

•PeopleSoft SRM Solution SetPeopleSoft SRM Solution Set

•SRM ResultsSRM Results

•Industry HonorsIndustry Honors

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.”

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

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

• 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

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

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

Source to Settle

Design

• Collaborative Design

• Full Lifecycle collaboration

Source

• Find perfect supplier portfolio

• Negotiate High Impact Agreements

Engage

Utilize PeopleSoft Technology for rapid supplier adoption

Procure

• End to end solution for total spend management

• Automate information exchange

Settle

• Self-Service invoicing and dispute resolution

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

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

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

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

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

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

• 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

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

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

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

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)

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

• 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

Industry Honors

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

“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

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.

SRM for Industry

SRM for Industry

•Healthcare

•Energy

•Financial Services

•Government

•Consumer Products

•High Technology

Supplier Relationship Management

FForor

HealthcareHealthcare

•Integrated Delivery Networks

•Hospitals

•Teaching hospitals

•Surgery centers

•Long term care

•Clinics

•Focused factories

•Managed care

•Government providers

PProviders ofroviders ofHealthcare ServicesHealthcare Services

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.”

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

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

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

++140140World Class Healthcare Customers with SRM

Supplier Relationship

Management

FForor

EnergyEnergy

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

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

……

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

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

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

77 1of theof the largest Energy/Utilitieslargest Energy/Utilities02424 50

Largest Energy companiesLargest Energy companiesof

World Class Energy Customers


forforFinancial ServicesFinancial Services

Banks

•Brokerages

•Insurance Companies•Property & Casualty

•Life

•Heath

•Reinsurance

Real Estate Companies

Exchanges/Commissions

Securities Firms

Non-depositary Credit

PProviders ofroviders ofFinancial ServicesFinancial Services

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”.

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

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.

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

Worldclass FSI Customers


FFororGovernmentGovernment

Government agencies include…

• Federal government agencies• State government agencies• County government agencies• Local government agencies• Education Institutions/Systems

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

• 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

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

SRM Government Customers


FFororConsumer ProductsConsumer Products

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

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

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

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

Consumer Products Customers


FFororHigh TechnologyHigh Technology

High Tech Industry

Manufacturers of high technology products

• Computers

• Disk drives• Routers

• Telecom equipment

• Semiconductors

• Other

• 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

• 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?

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

SRM High Tech Customers

Customer Examples

•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

•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?

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

bill cox: italicized, bolded, increased to 18, centered. bill cox: italicized, bolded, increased to...

Documents

srm methodologies

srm mattersmetals64

rapid supplier adoptionpage

gartner consultingwhat

gartner group

new set of methodologies

labor intensive processesnot

dispute resolutionpage