Bridging The Technology Gap Between The Large Enterprise And Its Middle Market Suppliers

Patricia S. Meisner CEO [email_address] March 8, 2005 Managed Services for Electronic Trading for the Middle-Market Bridging the Technology Gap Between the Large Enterprise and Its Middle-Market Suppliers NY/NJ EDI Users’ Group

Bridging the Technology Gap Between the Large Enterprise and Its Middle-Market Suppliers

Components of Supply Chain Integration (SCI)

Span of Basic Technology Platforms

Case Study: Unlikely Trading Partners

Large Enterprise/Middle-market Priorities for SCI

Building the Bridge: Virtual Capabilities for the Middle-Market

Conclusions

Components of Supply Chain Integration

Connectivity

Data Transformation

Process Management

Barriers to Supply Chain Integration for the Middle-Market Supplier Lack of integration to accounting system No counterparts for data elements and business rules Complex requirements for data transformation, cross-referencing and data cleansing Inability to support multiple electronic trading protocols

Connectivity

Data Transformation

Process Management

MIDDLE-MARKET SUPPLIERS GreatPlains BEST MAS90/200 ACCPAC ProSeries Large Enterprise SAP, PeopleSoft, Oracle SMALL SUPPLIERS QuickBooks® PeachTree® # Suppliers (thousands) # Transactions/Month Lawson, Macola JD Edwards Span of Business System Platforms Basic Accounting Accounting Systems for Mfrs ERP

The Technology Gap… Accounting System Web Tools EDI/xml Enterprise Application Integrator ERP SYSTEM Supply Chain Management Apps Gateway/VPN/WebTools Large Enterprise Middle-Market Supplier MRP WMS CRM Connectivity Data Transformation Process Mgt

Unlikely Trading Partners… 15 Thousands Trading Partners Close Bronx WH Connect to CA 3PL with 940/945s Automated Receiving Technology Web-enabled supply chain tracking RFID Supply Chain Initiatives 10,000 sq.’ (NYC) Remote 3P Warehouse (CA) 1,225 US Stores 150 Million Sq.’ 19 regular DCs 3 Import WHs Facilities 50,000 Billions? Transactions (annual) ACCPAC ProSeries ERP Business System 12 300,000 Employees $10 M $48 B Revenues “ TT, inc.” Target Corp

Must Support Multiple Connectivity Protocols VAN FTP AS2 Bed,Bath Beyond Fred Meyer Kids R Us Zeller’s/ Hudson Bay Kohl’s Loblaw’s Mervyn’s Nordstrom Peyton Sak’s Shopko Toys R Us

Middle-market Constraints:

Minimal IT infrastructure, resources

Multiplication of procedures

TT, Inc.

No Counterparts for Business Rules and Data Elements TT, Inc.

Business Process Integration Requires Complex Data Transformation by Middle-Market Supplier Nordstrom850 SDQ Individual Orders by “Ship To” and “Mark For” Locations Process Orders Nordstrom 810 “C” Nordstrom Order/Invoice Requirements No capability to parse consolidated orders No capability to create consolidated invoices TT,Inc ACCPAC Accounting System

Optimization of Supply Chain for the Large Enterprise

Value-Chain Integration Drivers

Reduce Transaction Processing Costs

Improve Customer Satisfaction

Automate Transactions with SMB Partners

Comply with Customer’s Condition for Doing Business

Work effectively with suppliers

Improve Order Accuracy

Increase Business with Existing Customers

Improve Order Response Times

Reduce Inventory/Increase Turns

Improve Planning and Scheduling

Gain New Customers

e-Supply Chain Technology Drivers

Securely transmit transactions via internet

Manage Partner Profile Information

Support XML industry standards

Automate Transaction Workflow

Move from Batch to Real Time

Define, Invoke, Manage Human and System Events

Source: The Yankee Group 2003

Optimization of Supply Chain for Middle-Market Enterprise

Value-Chain Integration Drivers

3. Reduce Transaction Processing Costs

Improve Customer Satisfaction

Automate Transactions with SMB Partners

1. Comply with Customer’s Condition for Doing Business

Work effectively with suppliers

5. Improve Order Accuracy

4. Increase Business with Existing Customers

Improve Order Response Times

Reduce Inventory/Increase Turns

Improve Planning and Scheduling

2. Gain New Customers

e-Supply Chain Technology Drivers

Securely transmit transactions via internet

Manage Partner Profile Information

Support XML industry standards

1. Automate Transaction Workflow

2. Support multiple protocols with a single system/process

Move from Batch to Real Time

Define, Invoke, Manage Human and System Events

Service and Proprietary Systems Proprietary Software Red Tail Business Process Integrator™ Large Trading Partners Accounting System Red Tail Transaction Manager ™ REDTAIL Solutions Virtual Capabilities in an Outsourcing Model Mid-market Supplier WalMart Nordstom Kohl’s WalMart Internet

Business Process Integration Requires Complex Data Transformation by Middle-Market Supplier Nordstrom850 SDQ Order ∑ 850 “C” Review/Revise Trans.1 Individual Orders by “Ship To” and “Mark For” Locations Process Orders Trans.3 Trans.2 TT,Inc ACCPAC Accounting System Nordstrom 810 “C” Manual Edit/Trans.4 Nordstrom Order/Invoice Requirements No capability to parse consolidated orders or create a consolidated invoice

No Counterparts for Business Rules and Data Elements TT, Inc.