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E-Procurement: From Dream to Delivery for Buyers and Suppliers


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Moving to fully paperless, compliant, green processes is easy in concept, but offers many challenges in execution. Once the internal barriers and blocks are removed, there still is the dependency on suppliers to make the entire transaction a reality. While many suppliers may conceptually support such initiatives, they often don’t understand the reality that they will face.

In this insightful session SSAB will explore the journey, initiatives and pitfalls they have faced, and how their supplier management and coordination has become a lynchpin to continued success.

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E-Procurement: From Dream to Delivery for Buyers and Suppliers

  1. 1. eProcurement: From Dream to Delivery for Buyers and Suppliers April 2014 Linda Folkesson Manager Business Development, EMEA Business Services
  2. 2. Agenda  Brief presentation of SSAB  SSAB’s reasons to implement Ariba suite and eSourcing & e-Procurement tool  SSAB choose Ariba (and vision for green flow)  P2I project and implementation during 2013  SSAB and our Suppliers – New supplier Registration and Enablement process – Advantages for SSAB and suppliers with new way of working – Challenges for SSAB and suppliers  Lessons learnt  Success factors and way forward for SSAB 2
  3. 3. SSAB  Formed in 1978 through a merger of the steelworks: – Domnarvets Järnverk in Borlänge, – Oxelösunds Järnverk, – Norrbottens Järnverk in Luleå.  A global leader in value added, high strength steel. – SSAB offers products developed in close cooperation with its customers to reach a stronger, lighter and more sustainable world.  In 2013, SSAB sales amounted to almost SEK 35 billion i.e. 4 billion €. – SSAB is listed on the NASDAQ OMX Nordic Exchange, Stockholm.  The Group’s steel operations consist of 3 business areas – EMEA, Americas, APAC and – 2 subsidiaries Plannja representing processing & Tibnor the group’s trading company. 3 “For a stronger, lighter & more sustainable world”
  4. 4. SSAB - Three Business Areas • Producer and supplier of high strength steel globally (Q&T, AHSS) • Standard steel products (strip and plate) • Commercial heavy plate in North America • High strength steel (Q&T) • Sales and distribution of high strength steel (Q&T, AHSS) • Kunshan finishing line Sales SEK 20 258m Sales SEK 16 173m Sales SEK 2 138m SSAB EMEA SSAB AMERICAS SSAB APAC Note: Sales refer to 2012 net sales . Employees per 30 Sept 2013 TIBNOR SEK 5 961m • Distributor of steel in the Nordic and Baltic region No. of employees: 8 720 4
  5. 5. 5SSAB Corporate presentation - About SSAB Towards global leadership in High Strength Steels Five major production facilities and sales offices in 50 countries
  6. 6. SSAB´s key segments Heavy transport Automotive Construction machinery Material handling Energy Building 6 Protection & Tooling
  7. 7. SSAB industry applications examples Increased strength and reduced weight 7 Docol 1400 MZE – the safest Ultra High Strength, electro galvanized steel for the automotive industry - Automotive structural parts - Automotive side impact protection - Automotive bumpers - Automotive seats Less crane weight, same strength
  8. 8. 8 SSAB ONE - Our common philosophy
  9. 9. SSAB EMEA Luleå Steel Works Borlänge Rolling Mill Oxelösund Integrated Mill  Common Purchasing Organisation formed in 2010 9
  10. 10. SSAB EMEA Purchasing organisation – development towards highly set goals 10 •Implementation of Ariba •Organizational development •Way of working •Identify purchasing synergies cross BAs •Wave program •Global Purchasing Academy •Improved cross-functional commodity teams •Advanced purchasing - including value creation by an extended value chain perspective and supplier relationship management Limited ability High abilityAbility to capture potentials Structure & Way of working Capture savings at a rapid pace Value creation
  11. 11. SSAB EMEA Purchasing-short background  Organizational change  Lack of IT tools – Different operational purchasing systems at our main three productions sites – No support for the strategic sourcing process 11 Business case for cost savings, development and knowledge management
  12. 12. SSAB’s reasons for an eSourcing & e-Procurement tool 12 SSAB EMEA SSAB Americas SSAB APAC No common purchasing system (3 not linked different ERPs) No e-Sourcing tool Current spend reporting tool only possible at very high Supplier (no visibility at line item nor supplier Supplier reporting) No Contract management system at SSAB Americas prior Ariba (sporadic vendor contract & price compliance) No supplier information & qualification management tool Very time consuming exercise to aggregate spend data from all 3 systems in EMEA
  13. 13. Requester PO confirmation & Delivery confirmation Chooses/Searche s the good or service PO approval PO is sent Supplier A Supplier B Supplier C Supplier D Supplier E Catalogue based purchase E-invoice Goods receipt A R I B A N E T W O R K Automatic 3 way match Payment OK to pay file sent to ERP 13 SSAB EMEA goal for the operational purchasing flow- ”green flow”
  14. 14. SSAB’s chosen Ariba suite 14 Supplier Management Visibility Procurement Invoice Pay Sourcing Contracts Best Practice Services Professional Services Helpdesk Ariba Supplier Network Implemented Implemented Implemented SIM Implemented SPM: Not implemented yet SIM: ImplementedImplemented
  15. 15. Ariba implementation at SSAB EMEA 3 years after the implementation started Q1 2011 15 SSAB EMEA SSAB Americas Common purchasing system – integration towards 1 ERP Common global e-Sourcing tool available Spend reporting tool now possible at ERP Supplier & line item level. Dashboards available. Common global contract management system at SSAB Common global supplier information & qualification management tool & instituted approval processes Easy aggregated EMEA spend visibility Greatly reduced spend data collection time Visibility on EMEA spend
  16. 16. From Sourcing to P2I flow in Ariba 16  Sourcing Choosing supplierEvaluation Sourcing project Contract Contract Management RFP Contract Compliance PO  Collaboration  € PO/Approve  Pricing termsPR  Catalogues Invoice P2I Recieving Invoice
  17. 17. © 2012 Ariba, Inc. All rights reserved. 17 What is the Ariba Network? Connects buyers and suppliers for successful business collaboration Network
  18. 18. Ariba Network  Ariba Commerce Cloud is a network for suppliers and customers get in touch and enable: – Answer request (RFP: Request for Proposal) – Send purchase orders and invoice via Ariba Network – Discover new business opportunities  Each registered supplier on Commerce Cloud / Network have their own profile containing basic information about the company.  Specific information for SSAB in Ariba. Not available for other customers or companies.  Ariba Commerce Cloud is a public network: 18
  19. 19. Last year….. 19 Supplier Management Visibility Procurement Invoice Pay Sourcing Contracts Best Practice Services Professional Services Helpdesk Ariba Supplier Network Implemented Implemented Implemented SIM Implemented SPM: Not implemented yet SIM: ImplementedNot implementedImplemented
  20. 20. Implementation of P2I for EMEA  Implement a unified “Procure to Invoice” solution for SSAB EMEA – Achieve a common way of working within SSAB globally and with SSAB EMEA, – Unify the 3 production units currently disconnected ERPs in Sweden, – Achieve an electronic ”green” touchless flow  Users in scope – Approx. 5 000 requesters in EMEA – 80 suppliers at start (with catalogues & contracts) – ~20,000 invoices in 2012: 12% total nb invoices for EMEA in 2012 • Remaining suppliers to be on-boarded in the following phases 20 P2I – Procure to invoice
  21. 21. Deployment Timeline Supplier & Catalog Enablement Change Management Project Management Kickoff Testing Training & Communication Go-Live/ Wrap-up Configuration & Solution Confirmation Solution Planning (Pre-Kickoff) Aug-Oct Project kick-off Oct 2012 Nov-Feb Mar-May Jul-Sep Go-Live Pilot June (2013) Okt 2012 2013 Technical integration team Functionality and business development team
  22. 22. 22 Dashboard and User Profile Catalog Views and Searchability Requisitioning (PR) Ordering (PO) Contracts Approval Rules Default User Preferences Default Notification PreferencesUsers & Groups Accounting Receiving (RC) Invoicing (INV/IR) Reporting 1 2 3 4 5 6 Configuring Supportiv Functionality Deliverable – Functional team
  23. 23. Deliverable - Technical integration 23 IFS (Stina) Ariba SAP PI Visma Attestförordning Användare SSO Streamserve Active Directory ReadSoft Users Authorisation rules
  24. 24. Phase 3: Network Growth Program Phase 2: Pilot Program Phase 1: Preparation 24 Strategy Design & Build Suppliers Onboarding Suppliers Onboarding Suppliers Onboarding Etc. Customer Education Supplier Enablement Lead Network Growth Manager Supplier Enablement Program Health Check Buyer Stakeholders Session Customer SE Maintenance Readiness Strategy Refreshments Supplier Enablement Process © 2012 Ariba, Inc. All rights reserved.
  25. 25. Communication and education © 2012 Ariba, Inc. All rights reserved. 25 Supplier Ariba Invitation Letter Ariba Network Supplier Reminders Non Compliance Escalation (as needed) Supplier Data Validation / Follow Up Calls / Webinar Recordings SSAB SE Team Supplier Project Notification Letter Ariba Supplier Managers Ariba SE Lead Ariba Electronic Supplier Integration Manager (ESIM) Integration Webinar and Q&A SupplierSSAB SE Team Go Live Letter (as needed) Supplier SSAB SE Team
  26. 26. Product goals for the P2I implementation 26 Product Delivered A new system (Ariba P2I) for operational purchasing across 3 sites Integration with ERP (one only!) 600 users trained in the new P2I application 50 enabled suppliers with contracts/ACC/free text New governance organisation (System Development and Administration) Instructions of new way of working, process maps for purchasing process in Ariba P2I – Procure to invoice
  27. 27. SSAB and our suppliers -processes 27 Suppliers yet to be discovered Potential suppliers Suppliers in sourcing process Supplier contract Suppliers SSAB do business with
  28. 28. Tools supporting Supplier process -THEN 28 Suppliers Potential suppliers SSAB EMEA supplier list ERP (3 different)
  29. 29. New way of working: internally and for suppliers 29 Supplier Possible suppliers Suppliers in sourcing Supplier Contract Suppliers in Purchasing Supplier Registration Supplier Enablement SIM- Supplier Information Management Contract Management Sourcing P2I – Procure to invoice
  30. 30. Supplier process and tools with Ariba 30 Suppliers yet to be discovered Potential suppliers Suppliers in sourcing process Supplier contract Suppliers SSAB purchase from Supplier registration Supplier enablement Ariba Network ”Anywhere else” Approve suppliers Register new contracts Create ACC, Catalogue SIM- Supplier Information Management ContractsSourcing P2I – Procure to invoice
  31. 31. 1. Supplier creates his cloud profile 2. Supplier answers SSAB’s profile questionnaire Supplier Self-registration invite via email Supplier Registration 31 Buyer SourcingContract Management Strategic buyer APPROVES the supplier SIM- Supplier Information Management Supplier registration SIM Supplier responsible for own profile, updates and changes
  32. 32. 1. Supplier accept trading request via existing Ariba Network account 2. Configuration of account (Ready To Transact status) Supplier Trading Relationship Request E-mail contaning URL to landing page Supplier Enablement 32 Supplier Onboarding Team creates Vendor Upload File SSAB decision to transact Purchase Orders and Invocies with supplier on Ariba network P2I – Procure to invoice Supplier Enablement P2I – Procure to invoice Expectations on Supplier - Recieve and confirm orders on AN - Invoice on AN - Update supplier profile - Create and update Catalogs via AN Ariba Supplier Enablement team recieve Vendor Upload file and send Trading Relationsship Request on behalf of SSAB
  33. 33. Supplier Enablement -Then and Now  Then – Manual work for SSAB to approve and register supplier – With correct information this took about 10-15 min – Many new suppliers each week, little or no control over preferred supplier list  Now – Supplier self-registration – Supplier invitation to transact with SSAB on Ariba Network – Several weeks or more in calender time 33
  34. 34. Philosophy for new Purchasing process (applies to all activities of all modules)  Prepare – Purchasing organisation – Supplier enablement team  Right from the start – 3-way matching – Catalogues with pre-decided content to  Supplier participation 34
  35. 35. New way of working has many advantages for SSAB  Control of suppliers – More active in our choice of suppliers – Approval process of suppliers in place – Structured information on aspects such as CSR, quality and environmental issues  Support and tool for strategic sourcing – Realize cost potential – Common structure, transparency and knowledge management  Reduced administration – Green flow –e-transactions – Less time answering questions regarding payment, trace invoices etc  Contract Compliance – Catalogue content – Easy to use tool for requesters 35
  36. 36. Advantages for suppliers  Find new and maintain existing customers on Ariba Network  Shorten sailcycles and increase customer satisfaction – Faster handling of orders and order quality  Increased sails – Visibility of content trough catalogues Advantages of E-invoice  Lower cost with E-invoices  Get paid on time and less invoice errors – Increase cash flow  Invoice status updated on Ariba Network 36
  37. 37.  Supplier enablement process was insufficient – Suppliers had not understood – SSAB had not understood – Ariba had not understood  We had to restart with many of the suppliers that we thought were “ready to transact” – Find the correct people to talk to • Not only the KAM – Support on technical issues – Integration projects  We had to restart with Buyers and internal stakeholders – Catalogue content – Change Management 37 P2I Go Live in october 2013 –How did it go?
  38. 38. Challenges internally  Way of working – Great change for ALL involved (SSAB and suppliers)  Method of enabling suppliers and creating catalogues – Constant learning process, evaluation and development  Organisation and governance – Roles, decisions, escalation and coordination need to be improved within SSAB  Functionality in Ariba P2I – Technical issues with for example punch-out catalogues 38
  39. 39. Response from suppliers  Different challenges depending on size and branch of supplier – Large suppliers –integration – Middle sized suppliers – Small suppliers – Very small suppliers – positive if “IT-mature” Wish to receive POs by e-mail, can easily change own process with moderate effort 39 This is where we have most challenges
  40. 40. Challenges for Suppliers  Double work – Due to requirement of two invoice (suppliers ERP and on Ariba Network)  Integration process requires resources and time  Outsourcing of invoicing in Nordic countries is wide spread and increasing  Competence at supplier  Catalogue content unclear–common issue for SSAB and supplier 40
  41. 41. Our lessons learned implementing P2I  Do not underestimate implementaion internally – Change management on way of working for Buyers and requesters needed again and again AND  Do not underestimate the role of suppliers  Do not focus on the system, changes in way of working and on all parts of the purchasing process has a greater impact 41
  42. 42. Advice to get supplier onboarded  Start with fewer suppliers – Choose suppliers thourogly  Decide criterias (strategy) for wich suppliers to start with – IT-matureness – Already Ariba users – ”Way of purchasing”  Start enablement as early as possible – Written letter is not enough! – Physical meeting; explain and listen to suppliers – A close cooperation with fewer suppliers from the start • Get all the way • Good examples and refernces  Clear strategy towards suppliers 42
  43. 43. Which Suppliers to Enable? 43 Ease of enablement HARDER EASIER BenefitsReceivedLOWHIGH Lowest Priority Low volume, low importance suppliers • Enable gradually over time • Use image conversion • Leave on paper (easily entered into AN by buyer) Medium Priority High Volume or Strategic Suppliers with low technical capability • High Volume – support cXML or EDI enablement • Moderate Volume or non-PO - Use file upload (.csv) • Low Volume – Use PO Flip Medium Priority Low volume or low importance suppliers who are already on the Ariba Network • Second Wave enablement, bring into network rapidly as resources permit, using preferred creation method High Priority High Volume or Strategic Suppliers who are already on the Ariba Network • First Wave enablement, bring on as soon as possible using their preferred creation method
  44. 44. Success factors  CHANGE MANAGEMENT – Strong management mandate needed – New ways of working effect everyone within Purchasing • Get Purchasing organisation involved  New system drives changes in way of working – Keep a holistic view of purchasing process – Operational purchasing is the outcome of strategic work! 44
  45. 45. The way ahead  Continue implementation and increase scope  Common maintanence system on all three production sites in Sweden – Expansion of Integration  Continue learning and develop way of working 45
  46. 46. The way ahead with suppliers -a lynchpin to master  SSAB are close to mastering Supplier registration and enablement through  Developed supplier enablement process and  Enhance communication (both internal and external) on the long term benefits – E-commerce and green flow – Compliance – More active choice of suppliers – Suppliers records and SRM (+ CSR process)  Patience in overcoming short term obstacles – Understanding, Technique, Willingness, Resources, Matureness 46
  47. 47. Reflecting on the future of cloud solutions what do you think?  When and how will organisations like SSAB be more ready?  When and how will Suppliers be more ready? 47
  48. 48. Thank you for listening! 48
  49. 49. Appendix 49
  50. 50. Title Slide for Content  This is a content bullet – This is a content sub-bullet number one – This is a content sub-bullet number two – This is a content sub-bullet number three  This is a content bullet – This is a content sub-bullet number one © 2014 Ariba – an SAP company. All rights reserved. 50