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Customer StoryLeggett & Platt’sEnterprise Procurement System
Page 2
Business Profile
• 120 year old diversified manufacturer• Residential Furnishings
• Commercial Fixtures & Components
• Aluminum Products
• Industrial Materials
• Specialized Products
Page 3
Sample Products
Residential Furnishings
Commercial Fixtures & Components
Aluminum Products
Industrial
Materials
Specialized
Products
Page 4
Business Profile
• $5.5 Billion revenue
• 30 divisions
• 300 branches
• 33,000 employees
• Significant acquisition growth• 160 in last 10 years
• Very decentralized• Operations
• Culture
Page 5
Challenge with legacy environment
• Distributed transaction system• Inability to share information across branches
• Inconsistent reference data• Multiple vendor masters
• Non-standard UOM codes, terms codes, etc.
• Inability to get actual price paid• Paper-based system of record
• Manual matching of PO, Receipts, Invoices
• Undisciplined and inefficient business process• Distribution of 6 part PO forms
• Branch manager signs every PO and Invoice
Page 6
Program Mission & Objectives
Establish a disciplined purchasing process and implement a single technology solution to enable Leggett & Platt branches to achieve cost savings through leveraged Strategic Sourcing and elimination of non-value-added activities.
• Streamline and automate the business process
• Improve quality of procurement data
• Share purchasing information across the enterprise
• Increase Strategic Sourcing productivity
• Improve implementation of supply contracts
• Lower COGS – direct and indirect materials
Page 7
PeopleSoft Enterprise 8.8 Modules
• Strategic Sourcing
• eProcurement
• Purchasing
• Accounts Payable
• eSupplier Connection
• eSettlement
• EPM Supplier Rating System
Page 8
Implementation Challenges
• Integrations R Us
• Branch Setup• Business Units
• Vendor Locs
• Ship To
• Item Rationalization
• Subcontract POs
• Automotive Release Schedules
• Strategic Sourcing Distribution
• Query Strategy
Page 9
Rollout Strategy
• Roll out to branches by Division
• 1-2 branches scheduled per week, every week, except major holidays and quarter ends
• Implementation and Support staff• 8 – Implementation
• 5 – Administration and Support
• 9-week conversion project plan• Business process review – 2 weeks
• User role definition and setup – 3 weeks
• Data scrubbing and conversion – 3 weeks
• Training and go-live – 1 week
Page 10
Implementation progress
April 2006, approximately:
• 28 Branches converted
• 30,000 PO’s dispatched
• 120,000 invoices processed
• $200,000,000 paid to 3,600 suppliers
• 750+ users• 525 Requestors
• 130 Purchasing users• 70 actively creating PO’s
• 150 Accounts Payable users• 45 actively creating vouchers
Page 11
Results
• Purchasing data is available across the enterprise.
• Data accuracy has improved.• Actual paid price, by item, is easily captured and available.
• Consistent units of measure allow for aggregation of volume data.
• Vendor master is being rationalized.
• Business process has been streamlined.• Online workflow approvals
• Electronic PO dispatch
• Automated A/P 3-way match
Page 12
Next steps
• Take it to the bottom line• Leverage improved data
• Form commodity teams
• Strategic Sourcing events
• Organizational change• Consolidated procurement activities
• Accounts Payable shared services
• Supplier portal – PO collaboration and acknowledgement
• Electronic invoice settlement
Page 13
Lessons learned
• Organization• Project team dedication
• Transition to support model
• Off-shore development• Explicit detail in requirements documentation
• Extensive QA
• Testing• Discipline and dedication
• Increase complexity of test cases
• Change Management• More about business process than software
Questions?