Contract savings


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Contract savings

  1. 1. Contract Savings A Sub System of GPS Siva Prasanth Rentala IBM Global Services
  2. 2. GPS Contracts Savings • Why GPS Contract Savings developed and used for? – Sourcing Decision Analysis – Cost management (CoMa) Reporting – Post-Knock Cost evaluation tracking – Buyer/purchasing performance etc.
  3. 3. How GPS Savings Calculated? • Initially savings are calculated using Action plans. • Following problems reported due to using Action plans to calculate Savings: – Multiple Actions plans were created because Standard blanket contract issued only for Approved action plans. – Creation of multiple Action Plans covering the same effective dates, which artificially inflates savings.
  4. 4. GPS Savings in GPS Antwerp Release • An enhancement was implemented in the GPS Antwerp Release to allow the creation and/or maintenance of Standard Blanket CLIs without an Action Plan. – This causes savings (positive or negative) to be underreported.
  5. 5. Contracts Savings • To overcome the mentioned problems World-Wide Purchasing Cost Management and the Global Business Process Owner proposed to use ‘Contracts’ instead of Action plan to calculate Savings.
  6. 6. Contracts Savings • Advantages of using Contracts – Savings are accurate. – Total Price is used to calculate Savings instead of ‘A’ price. Ref: Total price =Base Price + Total Base Material Cost + Price Add-Ons + Taxes ‘A’ Price = Base Price + Total Base Material Cost
  7. 7. Contracts Savings • Advantages of using Contracts – Savings for a contract can also be allocated to the plants using the contract, instead of all plants using the part (as is done on Action Plans).
  8. 8. Contracts Savings • Initially Contract Savings functionality was part of Global Purchasing Reporting System (GPRS). • Later moved to Supply Chain Metrics Reporting (SCMR). • Finally detached from SCMR and implemented as separate enhancement in GPS.
  9. 9. 700 GPS PLIPC1B CSIDS PLIPC1B MMDB PLIPC1B GPDS PLIPC1B WPCS PLIPC4B Supplier Name & Address, Supplier Contracts DSM = D WWP/PC&L DS/DRM 06/01/98 PRIMO PLIPC4B MPS PLIPC1B GQTS (SAMPLE/PPM) PLIPC1B Contract DSM = S GMTOPS PLIPC4B MGO-A MGO-C PLIPC4B TMS PLIPC1B SPA Contract Supplier Contracts eFX PLIPC1 B Shadow File DSM = D DSM = D Currency Conversion Rates Part Cost Organization Name, Buyer, Contract DSM = D DSM = D DSM = D Part Volumes Part Validity DSM = D Parts per Million Country, Supplier, CISCO Supplier, Quality Ratings Part Shared Purchasing Data GPS Datastore Multiple IPCs Steel Parts DSM = D Tooling POs Units Of Measure, INCO Codes EISIS Contract LEGACY DATA Parts, Volumes, Suppliers, Contracts Supplier Quality Ratings SPDI, MPCE Contract Savings Savings GPS-Contract Savings
  10. 10. Contract Savings Architecture Data File TROY SQL Server CS Adjustment GPS DB2 TROY SQL Server Stored Procedure For Merging MDB files MS IIS Server ASP Pages GPS APP Center MS ACCESS FTP PLIPC1B Mainframe at PLANO USTRSGSCM025 CS Web Adjustment CS Reporting CS Batch Process USTRSGSCM025
  11. 11. Contract Savings Batch Process CS-1 Extract and Prepare Timeline records (add Currency Conversion Rate, add GPS CLI info., break into months, match with Volumes, etc.) CS-2 Calculate Performance for each monthly record CS-3 Add Action Plan Information to each monthly record CS-4 Send Contract Savings file(s) to Reporting Server CONTRACT SAVINGS BATCH PROCESS
  12. 12. When Contract Savings batch process run? • The creation of Contract Savings information is expected to be a weekly batch process, which runs after the jobs to post GPS and Legacy contracts to Timeline. • The Contract Savings Batch Process must run immediately after Posting to Timeline because given the way the Contract Savings Part trigger(s) are created, this is the only time when the GPS Contract data, Timeline Contract Data, and Contract Savings Part trigger data is synchronized. • The Contract Savings Batch Process relies on the fact that this data will be synchronized to work properly and to report correct, consistent results.
  13. 13. Contract Savings Release 1.0, December, 2000 • This release implemented when the GPS Contract Savings Batch Process to calculate Contract Savings finalized.
  14. 14. Contract Savings Release 2.0, Currency Conversion Release, December, 2001 • Released when the Currency Conversion method for Contract Savings was modified to: – Report contracts for European receiving plants in EUR instead of USD. Approximately 95% of European contracts now have a currency of EUR. Reporting these contracts in EUR instead of USD will lessen inaccuracies due to currency conversion from European performance data. USD and EUR are the only valid destination currencies etc.
  15. 15. Contract Savings Release 3.0, Part Relationship Release July, 2002 The original design of Contract Savings only looked back one generation of replaced parts and then only at confirmed replaced part relationships. This led to many parts having no performance calculated or performance being calculated against Costbook because an Old Price could not be determined. A great deal of manual effort was then spent to track down what the performance for a part should have been and add the resulting information into the Contract Savings Adjustments application.
  16. 16. Contract Savings Release 3.0, Part Relationship Release July, 2002 • This led to many parts having no performance calculated or performance being calculated against Costbook because an Old Price could not be determined.
  17. 17. Contract Savings 3.1, Net Material Performance Release, March 2003 • An issue was discovered with the Option Adjusted Forward (OAF) rates maintained by NYTO and the algorithm defined for currency conversion. Because of this issue the currency conversion algorithm for future months is being modified to use the rate most recently provided by NYTO for that month.
  18. 18. Contract Savings 4.0 • Client: GM WWP IS&S • Customer: GM WWP Cost Management • Other Stakeholders: GM WWP GMASB GM Supply Base GM Platform Management Team GM SMTs
  19. 19. Contract Savings 4.0 1.Commercial Savings: Part relationships are not confirmed in GPS in many cases. These relationships are crucial to calculating savings as part numbers change due to EWO’s. Contract Savings compares today’s price to the price on year ago to measure part performance, then tracks how engineering changes have affected that price in order to derive purchasing performance. 2.Contract Savings will be used as the GMNA common system to track material cost. This means that Engineering Performance (Technical Savings) will be tracked from the system as carefully as Purchasing Performance (Commercial Savings). This will require enhancements to the system to allow adjustments to Engineering Performance, and perhaps other changes (Web Adjustment tool).
  20. 20. Contract Savings 4.0 3. Need to be able to track savings (Commercial and Technical) by product line. Currently, volume records do not have required product line information. 4. In order to globalize the system, enhancements will be required due to Brazil’s savings calculation against an index of inflation and devaluation. Similar issues may exist in Asia Pacific.
  21. 21. Contract Savings 4.0 Goals of Contracts Savings The two primary goals of the project are: • Reduce the amount of manual reconciliation required to provide accurate Material Performance Tracking Information • Utilize a common Contract Savings reporting process for GM
  22. 22. Contract Savings Adjustment (CSA) The Contract Savings Adjustment (CSA) module enables users to enter, maintain, and view adjustments for Contract Savings in the Contract Savings process in GPS. The users of the CSA module will interact with it through multiple pages and through graphical data selections. The Contract Savings Reporting Database merges the contract savings adjustments
  23. 23. Contract Savings Adjustment Maintenance
  24. 24. Contract Savings Adjustment
  25. 25. Contract Savings Adjustment
  26. 26. Contract Savings Adjustment Selection
  27. 27. Contract Savings Adjustment List
  28. 28. Contract Savings Adjustment (CSA) The CSA module is comprised of the following page types: 1.Adjustment related – Enables adjustment inquiries, modifications and additions. This first page enables entry and viewing of key adjustment information. 2.Security related – Login, User Maintenance, Change Password Etc. 3.Feedback – The Feedback module provides all General Motors users the ability to send written feedback to the System Owner via E-Mail regarding the CSA
  29. 29. Contract Savings Reports The Contract Savings Reporting Database merges the contract savings adjustments with the contract savings from GPS. Using Contract Savings Reporting Database following reports are created – Detail Report – Summary Reports – Variance Reports – Left Side Report – Exception Report Analysts use the Reports to identify which records has changes in their performance (savings) from one reporting cycle to the next.
  30. 30. Contract Savings AppCenter Exception Report
  31. 31. Contract Savings AppCenter Exception Report