Caribbean JDE Strategy Meeting

WELCOME ! Thanks for Attending !

What’s your name? What do you do and who for? What is your JDE experience? What do you expect from this meeting? What don’t you like about meetings?

Brainstorming Session Needs vs. Wants Visions of the Future Identify Gaps Introduction / Agenda

Meeting Agenda Review of Implementation & Configuration efforts to date 1.1 – In the Beginning 1.2 – Anyone remember what the original plans were ? 1.3 – What to do with the Closed BP’s ? 1.4 – Comparison of Caribbean Locations Identify Functionality Gaps 2.1 – What is the Top Priority ? 2.2 – Caribbean configurations as of June 2007 2.3 – Costing Methods Overview 2.4 – Historical Costing – Advanced Stock Valuation 2.5 – BOM’s / WO/ SO / - Interactions 2.6 – Advanced Pricing ( ABC Methodology) 3. Needs vs. Wants 3.1 – You Want What and Need to do How? 3.2 – Sharepoint / Robohelp 3.3 – General Q&A – What is that ?? 4. Visions of the Future – Caribbean Goals 4.1 – What will the Caribbean look like in 6 months or a year from now? 4.2 – JDE Financial Goals 4.3 – JDE Procurement Goals Presented by: Steve Winnicki to JFM Executive Group June 2007

1.0 - Review of JDE Caribbean Configuration efforts to date. 1.1 – In The Beginning

1.1 – In The Beginning ADM MILLING – JAMAICA - 5/29/2003 JDE PROCUREMENT IMPLEMENTATION STRATEGY - MANAGEMENT TEAM MEETING Attendees: Joel Hanish, John Freeman, Fitzroy McLeod, Genève Lewis, Louis Phillips, Tom Sherman The following is a recap of the conference call to begin development of the JD Edwards Procurement model for implementation at ADM Milling, Jamaica . How Commodities will be handled The commodities (wheat, corn rice) will continue to be handled thru the Kansas City office, using CMS (Commodity Management System), including the scheduling of shipments to Jamaica. No purchase orders are created for these shipments. The majority of the corn is sold, but some is processed. The majority of the rice and wheat is processed, but some is sold. Also, upon arrival, the material is keyed into inventory in Platinum. Once JD Edwards is implemented the intent is to retire the Platinum system.

JD Edwards Procurement / Implementation Strategy Meeting Requisitions: Creation and Approval process is manual. Approvals: Purchase orders and receipts are entered into the Platinum system. Fitzroy indicated that they are interested in using the following JD Edwards procurement functionality: Re-Order Point Processing; Requisition creation and approval; purchase order creation; and receiving. Procurement: Approximately 8-10 users will be needed to run with the procurement processes. Forms/Reports: Purchase order form, receiving ticket, possibly the requisition. Reports are to be identified. A sample of the current purchase order form was previously supplied. Stock: Items include ingredients such as sugar, shortening, salt, packaging, etc. These are purchased from approximately 20 vendors. TVP and master cake mixes are purchased from other ADM locations. A list of the ingredients and IDT items has been requested, along with ADM locations currently providing product. Cost: Purchased items are valued at actual cost, based on invoice, freight, handling, import/tax, duty. The CIF price is paid to the supplier; duty to Customs; handling to a broker or shipping line; and, clearance to a contractor. Non-stock: Items such as supplies, services, equipment parts, etc are also purchased thru Platinum.

1.0 - Review of JDE Caribbean Configuration efforts to date. 1.2 – Anyone remember what the “Original Plans” were? 1.2.1 – What Actually Happened….

Modules we will be using INV – JDE Inventory MFG - Lots, Work Orders, BOM’s - (To be determined - ??? ) ADP – Advanced Pricing (To be determined - ??? ) FIN – Financial Systems of General Ledger, AP, and AR OTC - Sales Functionality (Order2Cash) PTP – Non-Grain process for IDT purchases JDE Modules we will NOT be using PTP – Custom applications – Grain Settlements FA – Fixed Assets will not be implemented at this time. MOW – Maximo will not be implemented at this time AGM – Blanket Sales Order will meet the need for Jamaica’s Contracts. TRN - Advanced Transportation TRAX – Transportation documentation – Bills of Lading, Etc… 1.2. – What the Original Plans were

1.2.1 – What Actually Happened…. Inventory Management (50%-60%) Procurement STATUS IS ?? Shipping & Warehousing Address Book Successfully Installed Names /Addresses Accounting G/L, A/P, A/R Successfully Installed $Sales$ Transactions Adv. Warehouse Management STATUS IS ?? Lots/ABC Job Cost / Forecasting Adv. Pricing STATUS IS ?? Costing Sales Orders Successfully Installed Shipments Transactions

1.0 - Review of JDE Caribbean Configuration efforts to date. 1.3 – What to do with the stock levels in the closed BP’s? 1.3.1 – And What about the closed BP’s ?

1.3 – What to do with the stock levels in the closed BP’s? Recommendations…. (YES!)- Copy Cocoa Process (NO) - Manual SQL/UBE Extract and Adjust (NO) - Manual IA/IT

End Result is a nice version of Item Ledger Detail Report (R41540) Can include Signature Line area for Controller’s / Mgr. approvals.

Why not use the other methods? An inventory transfer or adjustment creates TWO Journal Entries (JE) in the General Ledger (G/L). The first journal entry decreases inventory at the original location. The second entry increases inventory at the destination location. The Inventory in the Closed BP’s has already been credited and debited to the G/L in a previous year (2006). Only the Item Data truly remains and not the actual physical stock. Since the transfers program increases inventory at the destination location, this method will not work. More critically important, is that the Transfers program in the Inventory Management system does not create any sales or purchase order documents therefore, it does not provide an adequate audit trail (for Sarbanes or internal audit compliances). On Hand + Adjustments (IA) & (IT) Transfers on P.O.’s Also, Credit orders Physical inventory variances + - Issues (I7) & Transfers Sales orders Ship confirms Physical inventory variances -

1.3.1 – What to do with the Closed BP’s – (TBD ?) Streamlining Solution - Copy Cocoa Inventory Processes throughout the Caribbean Next Best Streamlining Recommendation – Copy Barbados Methods The Best Case scenario for the old and used BP’s is to fully reconcile them to zero balances. From there they can be renamed and reused or made ‘Obsolete for use’ from Top Level Branch Plant Constants. There are several opportunities at JFM to improve the inventory processes. One way would be to add a BP 3001003 that would service the Mix / Packing Plants. This would eliminate tricky inventory counting methods. Additionally, Location configurations could also accomplish this task.

2.0 – Identify Functionality Gaps or A.K.A. - What’s the Best Way to Set this up ?

2.0 - Identify Functionality Gaps. 2.1 – Configurations as of June 2007 2.2 – Last Known Costing Decisions 2.3 – Costing Detail Overview 2.4 – Historical Costing 2.5 – BOM’s / WO/ SO / - Interactions 2.6 – Advanced Pricing ( ABC Method)

INV. / SALES ORDER PROCESSES 2.1 - Configurations As Of June 2007 Function Jamaica Grenada Belize Barbados POS for Cash Sales Yes No No No Sales Entry 520 Yes Yes Yes Yes Ship Confirm 560 No No No Yes Invoicing 580 Yes Yes Yes Yes Sales Update 620 Yes Yes Yes Yes Post Yes Yes Yes Yes

Caribbean - Order Related Features (June 2007) Feature Status Jamaica Grenada Barbados Belize Order Entry 520/580 Yes Yes Yes Yes Order Maintenance 520/580 Yes Yes Yes Yes Pricing Module 520/580 Yes Yes Yes Yes Blanket Orders 520/580 Yes Yes Yes Yes Invoicing 580/620 Yes Yes Yes Yes Sales Update 620/999 Yes Yes Yes Yes

Caribbean – Features to be (?) (June 2008) Feature Priority 1- 5 Jamaica Grenada Barbados Belize Advanced Warehousing Manufacturing Fixed Assets Procurement Advanced Pricing

P554102 – Location Category Codes How could the Caribbean use this Feature…?

These Jamaica Companies and Branch Plants use JDE: Company 03001 – Jamaica Flour Mill Limited BP 3001001 – Jamaica Flour Packaging BP 3001002 – Jamaica Mill Silo BP 3001004 – JA 3 Mile Warehouse - JFM Company 03005 – Jamaica Rice Milling Limited BP 3005001 – Jamaica Rice Mills Silo BP 3005002 – JA Rice Finished Goods WRHS Companies NO LONGER IN USE ** Need to decide on clean-up plan** BP 3007004 – Kelly’s BP 3002002 / 3002004 – Allied Jamaica changes customers $26 per pallet. It allows returns for a refund Jamaica uses Microsoft Point-of-Sale software for their cash sales Cash Sales are manually entered into JDE from the previous day Jamaica uses “SB” Blanket Orders for some customers Use Weigh Bridge for Bulk transactions Domestic Customer LOB Category Codes 15=SL, 16=CQ, 17=CQ, 18=S8 Export Customer LOB Category Codes 15=SA, 16=C1 Jamaica Operations Overview – (As Of June 2007)

Grenada Company Name: Caribbean Agro Industries Ltd . Grenada Branch Plants that are on JDE: BP 3012002 – Grenada Carib-Agro Ind Grenada no longer does manufacturing Similar operations to Jamaica No Pallet tracking or separate Pallet charge to customers Understood to be using Microsoft Point-of-Sale for cash sales ?? Controller – Theresa Calliste Additional Accounting Contact - Phillip George Customer LOB Category Code 15 =“0S”, Cat. Code 16 =“VA” Grenada Operations – (As Of June 2007)

Company 03010 - Barbados Mills Limited has Branch Plant: BP 3010002 –Barbados Mills Limited Barbados keeps good track of inventory on-hand on a daily basis Orders are usually made prior to Truck arriving Barbados uses a cash register for transactions Cash Register receipt will contain the Product and quantity purchased The truck bulk transactions are weighed via the weigh bridge Some larger customers are billed for Sales transactions Controller – Trevor Lewis Additional Accounting Contact - Julie Beckles Customer LOB Category Code 15 =“0S”, Cat. Code 16 =“VA” Barbados Operations – (As Of June 2007)

Company 03009 - Belize Mills Limited has Branch Plant: BP 3009002 –Belize Mills Limited Belize is the only grain company in Belize Charles keeps track of inventory No Scales are used. Counts the number of truck loads Sales Update for Belize is not currently on the scheduler Customer LOB Category Code 15 =“0S”, Cat. Code 16 =“VA” Controller – Felix Reyes Additional accounting contact - Sarita Casanova Sales Process is as follows : - Invoice for Item - Cash purchase of the item - Produce Invoice for this purchased Item - Invoice used as a pick list to pick up the item at the warehouse - - Every morning the quantity on-hand is determined Belize Operations – (As Of June 2007)

2.0 - Identify Functionality Gaps. 2.2 – Last Known Costing Decisions

Last Known JFM JDE Costing Decisions

Was R5541016 meant to be the Costing Report Solution ?

2.0 - Identify Functionality Gaps. 2.3 – Costing Detail Overview

Enter Item Cost Information – F4105 Level 1 - Item Cost the same no matter what BP / Location Level 2 - Item Cost determined by Branch / Plants Level 3 - Item Costs are by BP & by Locations

Item Master - F4101 Item Branch - F4102 Item Cost - F4105 Item Price - F4106 Item Location - F41021 Qty Available - F41021 Item Ledger - F4111 Item Cost / Price Information Item Price Features - F4106 Base Price Discount Structures – P40070 Item Price Groups - Detailed Billing Instructions Customer Price Groups – Detailed Billing Instructions Simple Groups - UDC driven Complex Groups – Category Code driven – P4092 Trading Discounts – applied to base price Primary JDE Cost Tables

2.0 - Identify Functionality Gaps. 2.4 – Advanced Stock Valuation

Advanced Stock Valuation This application functionality not being actively used when it has been identified as priority need is a perfect example of the Caribbean not being properly implemented, configured, or supported.

2.0 - Identify Functionality Gaps. 2.5 – Work Orders, BOMS, Sales Orders, PO’s

WO/BOM/PO Processing Production Cost (F3102) Cost Components (F30026) UPDATES THE F4111 CARDEX / ITEM LEDGER BOMS / WO ‘s (F30006/F30008) WO / PO / INV Process Interactions Master Files – Item / Branch Location Cost QTY (F4101) (F4102) Item Cost / Base Price (F4105) (F4106) Work Order Parts List (F3111) Cycle Counting (F41240) Financials / Inventory Purchase Orders Sales Orders

Shipment Confirmation – P4205 Ship Confirm Change quantity Use advanced status codes Backorder or cancel lines Change commitment Assign serial number Add miscellaneous charges Reduce on-hand quantity Change location in warehouse

Shipment Confirmation When Inventory is physically shipped out of a warehouse BP the following JDE Tables are updated: F4111 – Item Ledger – SO # F4211 – Sales Order Detail – statuses updated F41021 – Item quantities updated – quantity on hand reduced, commitments updated

Select Items Print Sheets Count Enter Count Approve Count Update Count Use data selection to select those items that need to be counted Print out the sheets that will be filled out during the physical counting Distribute the sheets to the persons who will execute the counting process When the count has been completed, enter the results using this interactive application Having viewed the Cycle Count Variance report, amend entries where necessary and then approve the count The update carries out inventory adjustments where necessary and generates all the background financial and other transactions 10 20 30 40 50 STAGE OF PROCESS DESCRIPTION STATUS

Receipts Issues Adjustments Reclassifications Purchase Orders Work Orders Sales Orders BOM’s JDE ITEM LEDGER F4111 Branch Plant Location Lot G/L Class Code Fiscal Year Etc… JDE AS-OF TABLE F41112 As-Of Report is a Summary of Data from F41112 TRANSACTIONS STORED IN THE F4111 CARDEX / ITEM LEDGER Sales Update / Ship Confirm Tables Updated F4111 – Item Ledger – SO # F4211 – Sales Order Detail – statuses updated F41021 – On-Hand QTY - Updated reduced (+ Commitments Updated) Inventory Management Reports (QTY/On-Hand)

2.0 - Identify Functionality Gaps. 2.6 –Base & Advanced Pricing Concepts 2.6.1 – ABC Methods

2.6 –Base & Advanced Pricing Concepts >>> Base Pricing is being used but what are we REALLY using it ? >>> Advanced Pricing / Advanced Stock Valuation are not being used

What is the ABC Method? ABC is a technique to quantitatively measure the cost and performance of activities, resources and cost objects, including when appropriate, overhead. ABC captures organizational costs for the factors of production and administrative expenses, and applies them to the defined activity structure. The application can be as rigorous as a definite mathematical distribution or as creative as a selective assignment using a surrogate indicator. Regardless of the method, ABC is a process of simplifying and clarifying decisions required by the process evaluators and senior management using activity costs rather than gross allocations. Why should we be using it? ABC is an essential part of the functional process improvement and reengineering effort. It captures quantified cost and time data and translates this into decision information. ABC measures current process and activity performance, provides simulated data for determining the cost of business process outputs across various scenarios and identifies opportunities to improve process efficiency and effectiveness. Evaluation of previous effort and production output levels are a poor determination alone and totally inadequate for measuring improvement. Though quality might determine "better", it does not contribute to other meaningful decisions such as what is more “Cost-Effective" and “Improves Production Flow”. It is the integration of these two dimensions that is the critical decision support element of the total process. ABC is the mechanism to integrate these two views. Basically, it can be summed up as follows : “ Cost-Effective” + “Improved Production Flow” = Lower Costs and Higher Profits !

What is the advantage of ABC? ABC is a consistent, disciplined process that is necessary to the functional process improvement effort in both an analytical and evaluation role. It is also a process that requires professional judgment and creativity when applied to a transitional business process model. This creativity does not invalidate the basic integrity of the idea, but is rather a necessity to bridge the gap from the traditional accounting data to the new process methodology. This idea will become more evident when ABC is compared to the traditional methods of costing. When applied with sound accounting principles to translate cost data and to provide a reliable information source upon which to base managerial decisions ABC is an invaluable tool that you will thank yourself for having the wisdom to use.

3.0 - Needs vs. Wants 3 .1 – You Want What and Need to do How? 3.2 – SharePoint / Robohelp / Documentation 3.3 – General Q&A – What is ??

3.0 - Needs vs. Wants 3 .1 – You Want What and Need to do How?

http://intranet.admworld.com/helpdesk/infrarequests.asp InfraEnterprise 3.1 – You Want What and Need to do How?

3.0 - Needs vs. Wants 3 .2 – Caribbean Sharepoint Site

Knowledge is a Powerful Tool when used properly…Lets use ours! 3.2 – Caribbean SharePoint Site (?)

Caribbean – Documentation – (As Of June 2007) User Manual Jamaica Grenada Barbados Belize Last Updated SO Entry Yes Yes Yes Yes October 2003 SO Export Entry Yes Yes - - October 2003 Pricing Yes Yes Yes Yes October 2003 Blanket Orders Yes Yes Yes Yes October 2003 Approval Release Yes Yes - - October 2003 Revise Order Yes Yes Yes Yes October 2003 ST/OT Yes - - - October 2003 Credit Orders Yes Yes Yes Yes October 2003 Invoicing Yes Yes Yes Yes October 2003 Sales Update Yes Yes Yes Yes October 2003 Sales Reports Yes Yes Yes Yes October 2003 Inventory Mgmt. Yes Yes Yes Yes March 2007 Transportation Setup - - - Yes October 2003 Transportation Process - - - Yes October 2003 Credit/Debit Adjustment - - Yes Yes October 2003

Example (QRC) Quick Reference Card 3.2.1 – QRC’s

3.0 - Needs vs. Wants 3 .3 – General Q & A

3.3.1 – Job Costing Feature Question: What does the Job Cost feature do and can we use it? Answer: The set up of the Job Cost module is quite light and the benefits are well worth it as it offers an online, multi-year (inception to date) overview of costs associated with transactions for a Business Unit or Business Units with the a robust G/L interface. The Job Cost module can be used rather broadly to support the accounting and reporting of Inventory and Labor related expenses for extensive multi-task manufacturing jobs. Simpler capital expenditure-type (building /construction) projects are also supported. The Job Cost Module is a robust module that is seamlessly integrated with the general ledger, and therefore integrated with the other JDE modules including Accounts Payable, Procurement and Accounts Receivable, Billing, etc. Job Cost in general, supports the reporting of accruals, budgets, projections, and commitments. It also offers various methods to recognize costs and revenues. But you must keep in mind that … The Job Cost module shares the same Chart of Accounts and balance file as GL and therefore account numbers are treated in a reverse way.. Subsidiary account first, object account second…Meaning that, - You’ll need to have already set up your chart of Accounts to get the full benefit from of the module. So it is best to complete your Go-Live and then return to set up this module. I have been involved in several JDE Finance implementations in my 10 years of consulting and I always recommend to set up Job Cost in addition to the other Finance modules, whatever the business requirements are, just because it enhances the online query possibilities on financial data.

MFG Questions: What is the distinction between the BOM and a Parts List? What is the Current Cost vs. the Completed Cost? Why is the Completed Cost more than the Summary Costs the Parts List? Answers: 1) The distinction between BOM and Parts List is that the BOM is defined as follows: The “ingredient quantity of material going into the manufacture of an FG end item or batch.” 2 ) The Current Cost (F4105) is the cost as is stated in the BOM components. The Completed Cost is the valuation cost as per the parts list (x) the completed quantity. The Parts list is simply a listing of the materials (and their cost valuation) going into the manufacture of the end item or batch on a single Work Order. The Valuation of an Item, Material, or Part is not the same as the Cost.

AAI Items in the System control the following financial details: Determine which accounts will be (+/-) affected Determine when transactions are recorded. Calculation of Amount variances Numerous Advanced Price Features Inter-branch settlements Branch plant adjustments & write-offs Every AAI is a unique combination of 3 keys values: Company Number Document Type G/L Class Code

Set Up AAI’s General Ledger AAI’s 4220 Cost of Goods Sold 4230 Revenue 4240 Inventory

Important AAIs to be Aware of Interbranch Revenue SI Doc Type 4260 AAI Table, Interbranch Revenue Advanced Pricing SO Doc Type 4270 AAI Table, Adv. Price Adj. 4280 AAI Table, Adv. Price Accrual Ship and Debit Accrual SO Doc Type 4234 AAI Table, Ship and Debit Accrual End Of Day Sales Update SO Doc Type 4220 AAI Table, COGS 4230 AAI Table, Sales/Revenue 4240 AAI Table, Inventory 4245 AAI Table, A/R (Trade) RC AAI, Accounts Receivable 4250 AAI Table, Sales Tax Liability

THAT's ALL FOLKS !! Thanks for Attending !

Caribbean JDE Strategy Meeting

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