Pradheep Sampath On Scorecards, Measurements, Kp Is Ahma Hardlines Technology Forum 2009


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Pradheep Sampath spoke on the topic of Scorecards, Measurements and KPIs for B2B e-Commerce at the American Hardware Manufacturer Association annual Hardlines Technology Forum in April 2009.

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Pradheep Sampath On Scorecards, Measurements, Kp Is Ahma Hardlines Technology Forum 2009

  1. 1. Scorecards, Measurements, KPIs From Transactions to Supply Chain Transformation Pradheep Sampath Director, Global Product Management GXS WELCOME to the FORUM
  2. 2. Agenda 2009 Supply Chain Complexity – The Cause – The Effect The power of B2B Transactions – Assemble Transactions – Unlock Value Operational Supply Chain Intelligence – Define Metrics – Monitor, Collaborate, Improve. Repeat. 2 WELCOME to the FORUM
  3. 3. Supply Chains Transcend National Borders & Time Zones 2009 Manufacturers who master complexity Supply chains have evolved into of global value chains are 73% more complex ecosystems of outsourced profitable than those who do not. and in-house services 3 WELCOME to the FORUM Source: Deloitte: Managing Complexity
  4. 4. Global Sourcing Supply Chain Complexity 2009 Globalization of Supply, Localization of demand Mature manufacturing operations in China, South/Southeast Asia, Japan Emerging manufacturing hubs in Eastern Europe & Russia Global expansion impacts both buy- side and sell-side operations Demand Variability - Supply chains becoming less responsive Long lead-time multimodal shipments. Carriers, brokers, agents, consolidators……. 4 WELCOME to the FORUM
  5. 5. Formats, Protocols 2009 Enterprise Formats iDoc, cXML, XSLT, FLOW, Modern Communications xCBL, DTD, W3C, UBL… SOA Transports and Bridges JMS, ALE, MQ, BAPI, WSDL FTP, HTTP, HTTP/S, S/FTP, SOAP, RNIF, AS1, AS2, AS3 , SMTP… SMB Integration Legacy Communications Quickbooks, Dynamics, CRM, Async, Bisync, x.400, CICS, MIME… Line 50, Axapta, Sage… Industry Specific Standards Web Forms Multi-Lingual, PDF, TIFF, JPG, SPEC2000, RosettaNet, OAG, Digital Signatures, attachments… IDEA, PIDX, CIDX,VICS, HL7… InterIndustry Standards ANSI X12, EDIFACT, GS1 EANCOM SWIFT, HIPAA, ACH, EPC WELCOME to the FORUM 5
  6. 6. Global Logistics is Particularly Complex 2009 6 WELCOME to the FORUM
  7. 7. Results in Operational Supply Chain Challenges 2009 Forecasting Order Shipping & Invoice & & Planning Management Receiving Payment Lack of Common Buying Poor Visibility to Manual Comparison View of Data organization has Shipments before of Ordered, between buyers and to fax, e-mail, & they are received Received, Invoiced suppliers phone orders by Warehouse Quantity Bad data from trading 70% of supplier community Delayed receiving Payment inquiries from partners falls out from ERP cannot conduct e- processes due to manual suppliers consume system commerce inspection of contents Accounts Payable staff 7 WELCOME to the FORUM
  8. 8. Complex Supply Chains become Less Responsive 2009 Response times to demand by region for North American brand owners The pervasiveness of contract manufacturing and rush to low-cost countries are straining the ability to manage supply networks - 70 % of brand owners manage critical components either fully or jointly with contract manufacturers - Contract manufacturing activity will continue to increase - Global Supply networks remain unresponsive to daily demand signals - Need for greater visibility into supply chain processes Source: AMR Research Contract Manufacturing at a Crossroads: Brand Owner Need for Visibility 8 WELCOME to the FORUM
  9. 9. Strategic Actions to Regain Control 2009 Source: Aberdeen Group. Managing multi-enterprise supply chains. March 2009 9 WELCOME to the FORUM
  10. 10. Core B2B Transactions 2009 Purchase Order Purchase Order Advance Ship Purchase Order Change Acknowledgement Notice Shipment Status Proof of Delivery Invoice DSD Invoice Update Credit Note Debit Note Remittance Advise Between 2006 and 2011, Global 2000 companies will double their multi-enterprise traffic 10 (transactions, documents and process execution WELCOME to the FORUM events)…. Source Gartner Group. Predicts 2007
  11. 11. Exponential Growth in B2B Transactions 2009 Huge manual transactions persist 11 WELCOME to the FORUM
  12. 12. The SMB Automation challenge 2009 12 WELCOME to the FORUM
  13. 13. Automation A prerequisite to Visibility 2009 Size of Trading Partner Small Mid-Size Large SOHO Very Small Small Medium National Global SMB Enterprise Web Network Accounting Desktop Integration Resource Fax Package Planning Forms Translation Translator Broker Complexity of B2B Enabler 13 WELCOME to the FORUM
  14. 14. Take another look at your core.. B2B Transactions 2009 Purchase Order Purchase Order Advance Ship Purchase Order Change Acknowledgement Notice Shipment Status Proof of Delivery Invoice DSD Invoice Update Credit Note Debit Note Remittance Advise 14 WELCOME to the FORUM
  15. 15. Beyond Buyers & Suppliers Eliminating Supply Chain Blind Spots 2009 Export Ocean Import & Ground Warehouse Accounts Processing In-Transit Customs Transit Receiving Payable Automated In-gate at Arrival at Arrival at De- Received at Invoice- Order manifest filing Port of Destination Consolidator Warehouse Reconciled Departure Port Arrival at Loaded onto Arrival Payment consolidator Loaded onto Customs Ground Inspection Approved Marine Vessel Clearance Transport Completed WELCOME to the FORUM
  16. 16. Did I say.. Global? 2009 WELCOME to the FORUM
  17. 17. Assemble Transactions into.. A Procure-to-Pay Lifecycle 2009 Order Orders Orders Acceptance Ship Event Signal Proof of Notice Delivery Repository Remittance Invoice Advice Visibility, Collaboration, Automation into the Suppliers procure-to-pay process Buyers 17 WELCOME to the FORUM
  18. 18. Collaborative Exception Management 2009 Order Quantity Order Quantity Change? Change? Unacknowledged Unacknowledged Orders? Event Signal Orders? Pending Shipment Repository Pending Shipment Late Shipment? Late Shipment? Jointly Obtain Real-Time Answers to Critical Suppliers Supply Chain Questions Buyers18 WELCOME to the FORUM
  19. 19. Transactions Visibility Insights 2009 19 WELCOME to the FORUM
  20. 20. Beyond Visibility Battle of Supply Chains 2009 “Instead of company to company competition, we are now in an era of supply chain to supply chain competition.” .. Dr. Hau Lee, Stanford 20 WELCOME to the FORUM
  21. 21. Supply Chain Performance Management 2009 The supplier performance strategy and program is important for improving end-to-end supply chain performance in the context of company goals. The supply management organization must be aligned with the business strategy. June 2008 With improved operational efficiency in mind, companies need to focus on how to use supply chain visibility data to drive responsiveness in their supply chains. September 2008 21 WELCOME to the FORUM
  22. 22. Supply Chain Execution Strategic Convergence 2009 “…the role and perceived importance of SCE is strategically changing as leading organizations recognize the need to better orchestrate, synchronize and control their end-to-end SCM processes.” 22 WELCOME to the FORUM
  23. 23. What dashboard do you need? 2009 Source © Forrester Research 2007 Dashboards – Turning Information Into Decisions 23 WELCOME to the FORUM
  24. 24. Operational Intelligence Supply Chain Central 2009 Number of active Trading Partners Number of ship-to-locations Business document distribution Discrete line Item count SKU (part number) count across orders Order-value & order-count by status 24 WELCOME to the FORUM
  25. 25. Partner Performance Management 2009 Fill Rates Line Fill Rate Order Fill Rate Value Fill Rate Unit Fill Rate Key Performance Indicators (KPIs) Delivery ASN Order Invoice Punctuality Timeliness Acceptance Accuracy Supply Chain Exceptions Overdue Invoice without Fill Rate KPI Shipments Shipments Exceptions Exceptions 25 WELCOME to the FORUM
  26. 26. Collaborative Fill Rate Analysis 2009 Line Fill Rate Order Fill Rate Value Fill Rate Unit Fill Rate 26 WELCOME to the FORUM
  27. 27. Key Performance Indicators 2009 Delivery Punctuality ASN Timeliness Order Acceptance Invoice Accuracy 27 WELCOME to the FORUM
  28. 28. Operational & Financial Metrics 2009 Perfect Orders Delivered to Customers – Complete, On-Time Perfect Orders Received from Suppliers – Complete, On-Time Cash Conversion Cycle – Absolute and relative improvement Accuracy of Total Landed Cost Forecasting Source: Aberdeen Group. Managing multi-enterprise supply chains. March 2009 28 WELCOME to the FORUM
  29. 29. AMR Research Hierarchy of Supply Chain Metrics 2009 WELCOME to the FORUM
  30. 30. The Perfect Order Index Concept 2009 Accurate Defect Complete On Time Documents Free 95% X 95% X 95% X 95% POI = 81.4% If the each component measured above is 90% instead of 95%, the perfect order index 30 will be 65.6%. Benchmarking the Perfect Order: 2005 Retailers Report WELCOME to the FORUM Retail Compliance Council
  31. 31. Goal Alignment Strategic & Tactical 2009 Shorten Lead Times Improve Internal Monitor 100% of Partners; Productivity acknowledge orders; on- Remove manual supply time shipments chain interactions and overhead Reduce Stock Outs Decrease Data Errors Early warning for delays; Speed reconciliation; make alternate sourcing process specific data quality arrangements rules Lower Transportation Improve Supplier Cost Connectivity Advance Shipment Across heterogeneous Notice; reduce reliance on systems and capabilities expedites Reduce Safety Stock Achieve IT Cost Controls Reduced risk of trading Eliminate multi-million dollar partner non-compliance / connectivity & visibility maverick action projects 31 WELCOME to the FORUM
  32. 32. In Summary 2009 Recognize your supply chain’s complexity – Recognize its effects Cross-functional business / strategic goals – Alignment with supply chain execution tactics – Aligned with your trading partner’s B2B Transactions, Visibility, Insights – Pick appropriate KPIs and Scorecards – Monitor, Manage: Collaboratively and Continuously 32 WELCOME to the FORUM
  33. 33. Scorecards, Measurements, KPIs From Transactions to Supply Chain Transformation Pradheep Sampath Director, Product Management 100 Edison Park Drive Gaithersburg MD 20878 WELCOME to the FORUM