B2B P
Past, P
Present and F
d Future
EDIFICE 109th Plenary
Amsterdam, Netherlands
Amsterdam
Steve Keifer – Vice President, Industry Marketing

B2B Past, Present and Future
A Brief History of the Past 10 Years…
…A Look Ahead at the Next 10 Years
Electronics & Electronics B2B Integration
ICT Sectors Supply Chain Technologies
October 31, 2009 | Slide 2

Part Th Dot
P t 1 -The D t
Com Era
October 31, 2009 | Slide 3

Year 2000 Compliance
• UK - 10,000 HSBC credit card swipe machines failed
• Italy - Telecom Italia sent out bills with year of 1900
• Australia - Bus ticket validation machines failed
• US - 150 slot machines at racetrack stopped
pp
• South Korea - summoned 170 people to court on
date of 4 January, 1900
What Did Fail?
www.bbc.co.uk
Numerous web sites reported
inaccurate dates
October 31, 2009 | Slide 4

Other Outcomes of Y2K
€200 Bio was spent on
technology upgrades in
preparation for Y2K event
• Disaster preparedness of government
and financial sectors
• Catalyst for the offshore outsourcing
market in India & Asia
• Modernization of business applications
resulting in productivity gain
• Surge in sales of computer equipment
and software to businesses worldwide
October 31, 2009 | Slide 5

The Dot Com Era
Over $5 Trillion in Market
Value was lost in the
Tech Sector
• “Prefix” (e-) and “Suffix” (.com)
Investing
• Reliance on “Network Effects” to
build Market Share
• “Hockey Stick” Revenue Growth
Models
M d l
• Alan Greenspan called it a period
of “Irrational Exuberance”
October 31, 2009 | Slide 6

Post Dot Com – Tech Crunch
• Double and triple ordering
by distributors led to
forecast inaccuracies by
OEMs
• Y2K Compliance and One
One-
Time Dot-Com Purchases
created false demand
patterns
• Massive Telecom
Investments in Capacity
went unused (dark fiber)
• Bankruptcies of WorldCom,
Need for Demand Driven Global Crossing, XO
Supply Networks using Multi-
pp y g Communications
Tier Visibility & VMI
October 31, 2009 | Slide 7

Rise of the B2B E-Marketplaces
At the Peak of the Dot Com Era there were
over 2500 B2B e-Marketplaces
M k t l
October 31, 2009 | Slide 8

Fall of the B2B E-Marketplaces
• Independent
1600 Marketplaces created by
entrepreneurs and
t d
Numb of Online Marketplaces
1400 Venture
Capitalists froze
venture capitalists
1200 investments in
April 2000 • Consortia Marketplaces
1000 – Joint Ventures of
M
Peak in B2B
800 market was Leading OEMs and
February 2000 Suppliers
600
• Private Marketplaces -
ber
400
formed b indi id al
by individual
200 companies and their
supply chains
0
93 94 95 96 97 98 99 00 01 02 03 04 • Electronics Exchanges
- had high survival rate
Continues to Ceased Exit by Merger due to focus on hard-to-
Operate Operations & Acquisition
find items and liquidation
All 46% 23% 31% of excess inventories
Electronics 67% 8% 25%
Source: Shakeouts in Digital Markets: Lessons from B2B Exchanges - California Management Review Vol 45, No. 2 – Winter 2003
October 31, 2009 | Slide 9

Key Exchange Functions
Product
Catalog
C t l
Collaborative
Demand Planning g
Buy Side E-
Procurement Supplier
Portals
Sell Side Order
Management
Logistics
Excess Inventory Management
Liquidation
Reverse
Auctions
October 31, 2009 | Slide 10

Part
P t2–I
Innovation & Supply Chains
ti S l Ch i
October 31, 2009 | Slide 11

Mobile Internet Adoption
Forecast of Users 2008-2014
August 2009 “Western European Mobile Forecast, 2009 To 2014”
October 31, 2009 | Slide 12

Apple – Design & Innovation
Source: http://www.apple.com/pr/library/2009/10/19results.html
October 31, 2009 | Slide 13

Behind Every Great Product…
…Is a World Class Supply Chain
Is World-Class
See the Semiconductor Insights’ Apple iPhone Teardown -http://www.youtube.com/watch?v=mPhciMud0MM
October 31, 2009 | Slide 14

Growth of Outsourcing
Original Design
“Instead of company
Manufacturer
M f t to company
Design Contract
Manufacturer competition, we are
now in an era of
supply chain to
l h i t
Service Make supply chain
competition.”
OEM
Third Party
Logistics “The weakest link
of the supply
Freight
Forwarder
chain defines the
Sell Move supply chain.”
Distributors
& Resellers Third Party Dr. Hau Lee - Stanford University
Logistics
October 31, 2009 | Slide 15

Flextronics Services
Printed Circuit Camera Power
Enclosures Displays
Boards Modules Supplies
pp
Provide design and manufacture or more components.
Moving beyond just assembly.
Assembly Aftermarket
Design Procurement Logistics
& Testing Service
• Contract Design – • Forecasting & • Build-to-order • Supplier managed • Customer returns &
T&M engineering Demand Planning • Configure-to-order inventory repair
• Joint Development • Materials & • Just-in-time • Inbound freight • Refurbishment
Manufacturing Components Manufacturing management • Recycling
• Original Design & Purchasing • Defect analysis • Order fulfillment • Service parts
Manufacturing • Expediting • Environmental and distribution logistics
• Warehousing stress testing • Retail technical
services
i
Data gathered from Flextronics 10-K SEC Filing – May 2009
October 31, 2009 | Slide 16

Faster Response to Demand
Finished Goods assembled at Source
Finished Ocean Warehouse Retail
Manufacturing Product Transport Finished Product Store
Finished Product Inventory – Inflexible to Demand Changes
Late Stage Configuration & Postponement Model
Generic Ocean Late Stage Retail
Manufacturing Product + Kit Transport Configuration Store
Generic, Configurable Inventory – Flexible to Demand Changes
October 31, 2009 | Slide 17

Late Stage Configuration &
Postponement
p
Kits
Thousands of permutations of
mobile phones can be Late stage product
configuration on
configured from a few hundred various SKUs
standardized parts. based upon
consumer demand
Manufacturer Inventory Retailer
Generic version of
G i i f Generic version of
G i i f
product assemble product stored
centrally in low-cost closer to point of
manufacturing center consumption Local country
documentation and
retailer specific
t il ifi
Documentation & packaging
Packaging
October 31, 2009 | Slide 18

Broadband Growth
Household Penetration and Adoption by Country
December 2007 “Western European Residential Broadband Forecast: 2008 To 2013”
October 31, 2009 | Slide 19

Finland’s Right to Broadband
"Good telecommunications
access have evolved from a
luxury into a necessity."
Ministry of Communications
http://www.lvm.fi/web/en/news/view/920307
October 31, 2009 | Slide 20

South Africa’s Challenge
80km Route
Unlimited IT proved it was faster to transmit
data via carrier pigeon (Winston) than
through the local Internet Service Provider
g
http://www.reuters.com/article/newsOne/idUSTRE5885PM20090909
http://blogs.gxs.com/keifers/2009/10/new-carrier-pigeon-service-for-b2b-large-file-transfers.html
October 31, 2009 | Slide 21

B2B E-Commerce
Technologies
B2B Technologies
October 31, 2009 | Slide 22

Large File Transfer Challenge
Telecommunications – Call Detail Records
Health Care – Radiology Images
Manufacturing – CAD/CAM Diagrams
Retail – Point of Sale Transactions
Logistics – S lli I
i i Satellite Imagery
Banking – International Trade Documents
a g te at o a ade ocu e ts
October 31, 2009 | Slide 23

DilbertFiles.com
• Large files up to 2GB from
any web browser
• True cloud service without
any software installed
• Plug-in for mail clients such
Plug in
as Outlook
• Desktop application with
checkpoint/restart
• E-mail address to receive
the link for the download
• Secured through 128 bit
SSL encryption
• Replicated to at least two
servers to prevent data loss
http://www.dilbertfiles.com
October 31, 2009 | Slide 24

B2B Technology Evolution
XML Internet Data
Messaging
M i Communications
C i ti Synchronisation
S h i ti
Radio SWIFT Corporate Services Oriented
Frequency ID Access Architecture
October 31, 2009 | Slide 25

EDI’s Darwinian Survival Instincts
EDI is Dead…
Long Live EDI.
Source: Forrester Research - July 2007 “B2B
Integration Trends: Message Formats”
Charles Darwin (1809-1882)
http://blogs.gxs.com/keifers/2008/05/edi-and-darwin-how-edi-survived-the-internet-
bubble-and-the-rise-of-the-brics.html
October 31, 2009 | Slide 26

The Long Tail of B2B Standards
http://blogs.gxs.com/keifers/2008/05/the-long-tail-of-b2b-standards.html
October 31, 2009 | Slide 27

Fiscal Dematerialisation
Gartner predicts that
by 2012, 20% of
invoices in EU will be
i i i ill b
electronic
Country Specific Up to 80% savings
Regulations
Reg lations through conversion
th h i
to e-invoicing from
Digital Signatures paper
Content – Mandatory Fields Paper invoice costs
P i i t
Archival Period €30 to process
Human Readable Format Opens up new
Audit Trail market opportunities
such as Supply
Chain Finance
Source: Gartner - Cost Savings Finally make
European E-Invoicing Steamroller Pick Up
Speed
October 31, 2009 | Slide 28

European Union Expansion
Citizens and businesses can
conduct business and perform
financial transactions anywhere in
the European Union as easily, safely
and efficiently as they can within
y y
their own countries
– Currency - Adopt a common currency
(Euro) and monetary system
– Accounting - Common financial
reporting standards for all corporations
– Invoicing - Harmonize electronic
invoicing standards across EU
– Capital Markets – Harmonize securities
settlement systems across EU
– Payments – Harmonize payment
technologies and systems across EU
October 31, 2009 | Slide 29

Single European Payments Area
Low Volume,
High Value Payments
High Volume,
Low Value Payments
October 31, 2009 | Slide 30

ISO 20022 XML (UNIFI)
About ISO 20022 XML
– Universal Financial Industry Messaging
Scheme
– Joint initiative between
OAGi, TWIST, RosettaNet and IFX
– Designed for Payments Foreign
Payments,
Exchange, Trade, Securities and Invoicing
Adoption of ISO 20022
– Foundation for SEPA messaging
(TARGET2)
– SWIFT MX message class
– Oracle and SAP banking interface
packages
– Corporates – Sun
Microsystems, Merck, IKEA, Alcatel, Shell
More information at http://blogs.gxs.com/keifers/2007/12/02/iso-
20022-in-search-of%e2%80%a6payments-harmony/
October 31, 2009 | Slide 31

End of the
World Decade
W ld D d
October 31, 2009 | Slide 32

Collapse of the Financial Markets
October 31, 2009 | Slide 33

M&A, Divestitures, Bankruptcies
Bankruptcies Joint Ventures Reorganizations
& Spinoffs & Bankruptcies
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Merger Merger Vertical
Wave Wave Integration
October 31, 2009 | Slide 34

The Rise of Google
50% of all Search
Engine Activity
5% of Worldwide
Advertising Spend
1 P t b t of user-
Petabyte f
generated data per hour
Leader in Cloud
Computing & SaaS
October 31, 2009 | Slide 35

Cloud Computing
– Infrastructure delivered
as a Service
– Commoditized and
standardized hardware
and software platform
– Ability to quickly
move, change, add and
delete applications
– Massive scalability both
upwards and d
d d downwards d
with same economics
– Pay by consumption
units (e.g.
gigabytes, CPU cycles)
– No upfront
implementation fees or
long term contracts
October 31, 2009 | Slide 36

Cloud Platform
• Easy to Use
• Fast
• Elastic
• Highly Available
• Pay by the Drink
October 31, 2009 | Slide 37

Amazon.com e-Book Reader
Inside of Amazon’s Kindle Reader
October 31, 2009 | Slide 38

Continued e-Commerce Growth
Western Europe Forecasted 2008-2014
p
March 2009 “Western European Online Retail And Travel Forecast, 2008 To 2014”
October 31, 2009 | Slide 39

Online Shopping for Electronics
Only 6% of
shoppers
purchase
Computers or
Electronics
El t i
Online
70% of
shoppers
research
online before
buying in
store
October 31, 2009 | Slide 40

Demand Forecasting with Web 2.0
Traditional Demand Signals
Downstream Recent Inventory New Product Competitor
Forecasts Sales (POS) Positions Launches Activity
Production
Demand
Signal Forecast
Repository
Search Engine Pre-Order Personal Gift Ratings &
Activity Requests Wish List Registry Reviews
Localize Time Based Time Based
Demand Demand Demand
Web-Based Demand Signals
October 31, 2009 | Slide 41

Google Flu Trends
Intense
High Predict & Prevent – “Digital
detection: supporting technology
Moderate
and efforts to detect early online
Low 'signals' of emerging threats”
Minimal
http://www.google.org/flutrends/
October 31, 2009 | Slide 42

Web 2.0 and Social Media
October 31, 2009 | Slide 43

What is a Mashup?
Web applications or Web widgets that users create
without coding to combine multiple data sources.
Source http://marinetraffic.com/ais/
October 31, 2009 | Slide 44

Inventory Visibility Mashup
Brazil Inventory Forecast – November 2009
October 31, 2009 | Slide 45

Supplier Performance Mashup
Fast Semiconductor
Supplier Fill Rate
On Time Delivery
Data Accuracy
Environmental
Defects
October 31, 2009 | Slide 46

Crowd Sourcing
“Crowdsourcing” is a distributed problem-solving and
production model. Problems broadcast to unknown
group of solvers in form of an open call.
October 31, 2009 | Slide 47

Guardian leverages Crowds
Engaged 20,000 readers to
analyze 700,000 documents
for expense discrepancies
from UK Parliament members
Source: http://platform.idiomag.com/2009/06/crowdsourcing-news-the-guardian-and-mp-expenses
October 31, 2009 | Slide 48

Real Examples in High Tech
Cisco’s I-Prize Dell’s IdeaStorm
$250K prize awarded to team Consumers vote on ideas for
with best emerging technology
g g gy enhancements to Dell’s PC and
concept using Cisco’s products peripherals product line
http://www.ideastorm.com/
http://newsroom.cisco.com/dlls/2008/prod_101408b.html
October 31, 2009 | Slide 49

B2B & Social Networking
Social Networks for Businesses
in the Supply Chain
October 31, 2009 | Slide 50

Linked In for the Supply Chain
Master Data for Suppliers
Corporate level data – products
supplied, contact d il
li d details
Individual person data -
contact, photo, skills, roles &
responsibilities
Change Management
Routing Guides
New Stores & Distribution Centers
Pallet Labeling
Floor Ready Merchandising
B2B e-Commerce Program
On-Boarding
On Boarding for B2B e-Commerce
e Commerce
Readiness Survey
On-Line Training
Connectivity Option Selected
Testing with Sample Data
Live Transactions
October 31, 2009 | Slide 51

US Vendor Compliance Federation
Retailers have as many
as 150 b i
business rules
l
Supplier compliance
guides are updated 10-
10
12 times per year
Updates posted to
supplier portals or
distributed via e-mail
Deductions assessed
and scorecards used to
measure performance
October 31, 2009 | Slide 52

GCI’s Future Value Chain 2016
www.gci-net.org/gci/.../2016_Future_Value_Chain_GCI_Report-06-11-01-ohne.pdf
October 31, 2009 | Slide 53

Let’s Discuss
What is the Vision for the Electronics
Future Value Chain 2020?
October 31, 2009 | Slide 54

Questions
Steve Keifer
VP Industry Marketing
Work +1.301.340.4000
E-Mail: steve.keifer@gxs.com
North America | gxs.com EMEA | gxs.eu ASPAC | gxs.asia.com
October 31, 2009 | Slide 55