Panel Discussion: eBiz Metrics REVEAL Conference May 2014

Order Automation Panel Goals

In the next 45 minutes:

Order Automation • eBiz Metrics • Business Case • Best Practices

Panelists

• Ron Larson, Dow • Karen Williams, DuPont

Order Automation Leadership

What are the best practices for defining and managing supply chain metrics and performance management?

All companies measure supply chain performance, but many struggle to do so effectively. In particular, companies face challenges in identifying the right metrics, getting consistency and standardization across the organization to gain enterprise-wide visibility, and using the metrics effectively to make conscious and profitable trade-offs across the multiple end-to-end supply chains they operate…

"Who demonstrates supply chain leadership, and what do they do to achieve balance and optimize profitable trade-offs?" Learning from the best practices of industry leaders helps supply chain leaders improve performance.

Source: Agenda Overview for Supply Chain Strategy and Enablers, 2014. Gartner, Inc. 6 January 2014

QuickLinkTM Integration Connections Inter-Co

Master Data Elemica

Client ERP

Document Stream

Document Stream Client

Partner’s ERP

Mapping

Elemica Supply Chain Operating Network

Discovery

3rd Party Applications SmartLinkTM Applications

On-Boarding

Collaboration

Universal Data Model

Universal Business

Documents

ELEMICA CONFIDENTIAL

Business Process Dashboard

Messaging Dashboard

Unstructured Data

SmartLinkTM Analytics + = Universal Business

Concepts

Metrics

Define “Denominator” for Order Automation • All Orders, Order Lines, or Revenue • Automated Orders

o of 100% of x orders, y are automated o Some companies consider email or fax orders and invoices as

“automated”; we should dismiss this practice to ensure uniformity.

• Excluded Order Types / Business Scenarios o Changes, swaps, pulls o Inter-area moves o Internal Stock Transfer Orders

• Automatable Orders o By order type, what % are automatable?

Automation Metrics Defining

Gain agreement on what makes an “Automated” order, especially for special situations.

Automation Rates for Other Message Types

Order Automation Data

What others do you track?

Order Automation Data

Sources of Data and Their Benefits • ERP System

o How are orders classified to denote automation channel? • i.e., “Customer Purchasing Type” in SAP

• Elemica • Middleware Reporting Tool

o (i.e., Business Warehouse sitting next to ERP)

o Full exposure to e-Orders o Answers how many ship notices

• Combination

• APO Generated • System Interfaces • Stock Transfer Orders

Order Automation Focus

No-Touch / True Touchless / Zero Touch

What about system initiated orders?

When electronic orders fail to fully process

• Need to be regenerated • Considered Electronic or E with

Manual Intervention? What happens with orders created through help of efficiency tools?

• Internal Portal Utility • Scripts/Macros

Business Case

Order Automation Value Creation / Definition

Quantifying the Values

• Productivity Improvements

o Headcount – no need to increase FTE

o CSR Time Savings ü Redeploy saved time with value-added activities ü Realize increase in data validity

• Green Awards with paper trail reduction

• What else does your company capture?

Order Automation Value Creation / Definition

Quantifying the Values How to define savings across the entire supply chain?

• “The cost to NOT automate is $78 per order on average.” EDI: Workhorse of the Value Chain by Lora Cecere. 20 November 2013.

• “What once could be done in loosely connected departments and functions increasingly requires collaboration and synchronization across global supply chain organizations” Agenda Overview for Supply Chain Strategy and Enablers, 2014. Gartner, Inc. 6 January 2014

Order Automation Value Creation / Definition

Quantifying the Values

• Minimal Order Error Rates

• Latency - Order Entry - any manual steps • Manual effort to reach you = a cost for your

customer

o Do they pass this cost back in their pricing? o Do they avoid working with you?

“Orders not processed through EDI are more time consuming with more

frequent errors. On sales orders, the errors lead to fulfillment issues; and

in procurement, the errors lead to greater time in invoice reconciliation.”

EDI: Workhorse of the Value Chain by Lora Cecere. 20 November 2013.

Order Automation Value Creation / Definition

Quantifying the Values

• Value Calculators o Elemica’s o Industry o Your own

Engaging the Business Internal Challenges to Adoption

Best Practices

Organizational Change Behavior

Lessons Learned

• Allow orders to flow without an Automatic Block

• Risk is managed

• Barriers to reporting OTC Automation

Benchmarking Against Your Peers

• Sharing of message automation rates

Order Automation Best Practices

Discussion

Appendix

Order Automation Best Practices

IT leaders are often now thrust into the role of “Business Change Agents” • Meet a barrage of new

ambiguous, disruptive forces

• Measure impact, establish culture to rapidly adjust to change initiatives

• “Do IT better” with increased communication and transparency

Organizational Change Behavior

Source: Gartner: Agenda Overview for Business Process Management, 2014.

eBiz Metrics - Suggested Reading List

Source Published Author TitleGartner 16-Sep-13 Paul Lord 2013 Strategic Road Map for Managing and Fulfilling

Demand in Chemical Supply ChainsStanford Graduate School of Business

Mar-13 Barchi GillaiTao Yu

B2B Managed Services – Business Value and Adoption Trends

PIDX International, Houston Conference

4-Apr-13 Gary Neights PIDX Standards: History, Value, and Cross Industry Supply Chain Automation: Business Problems Fixed by Automation; Value of Automation

U.S. Census Bureau 10-May-12 U.S. Department of Commerce, U.S. Census Bureau

E-Stats

AMR Research Nov-09 Paul Lord Why Touch an Order? Bayer MaterialScience Knows Better

Aberdeen Group Jun-11 B2B Integration and Collaboration: Strategies for Building a ROI Business Case

Gartner 22-Aug-11 Jessica O’Brian Supply Chain Excellence: Improving Order Fulfillment for Customer Service and Working Capital Gains

Supply Chain Insights 20-Nov-13 Lora Cecere EDI: Workhorse of the Value Chain (A closer Look at B2B Connectivity Benchmarks in the Extended Supply Chain)