Presentation from the Sourcing Breakout session hosted by Wayne Boss, Director of Sourcing at Elemica.
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Sourcing Sourcing Breakout
Session – inSIGHT 2013 Presented by Wayne Boss
Presenter
Presentation Notes
Good morning, my name is Wayne Boss, I am the Director of Sourcing Services at Elemica. It is my responsibility to make sure that our sourcing services are delivered to our customers effectively, and professionally so that they receive the maximum value and ROI. I have worked at Elemica for about 12 years, and have been involved with strategic sourcing throughout my entire career at Elemica. I am happy to be here today with you. We will spend the next 45 minutes talking about Network Powered Sourcing and how the new Elemica Quicklink network will help your company to more effectively source indirect good and services. While I have set aside some time at the end of the presentation for questions, please feel free to stop me to talk about anything that would want me to clarify or discuss.
Overview
What are the challenges with data and spend visibility for indirect goods and services What is Elemica’s solution?
What are the advantages of network powered sourcing? What are the benefits for network powered logistics sourcing?
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Presentation Notes
Challenges- these are problems that need to be solved in your organization. Hopefully you will see how Elemica can help you with solving these problems when we are done today. Elemica’s solution- What is our plan to help your company tackle these challenges. Advantages-let’s look at 3 advantages that Elemica’s solutions will provide Logistics sourcing- Logistics sourcing is different from other indirect goods and services. However, the new Quicklink network will offer some benefits here also and we will spend just a few minutes looking at this at the end of the presentation
Background
– A strong business case due to process improvement, inventory reduction and very high ROI
Elemica’s Supplier Management has focused on Direct Materials
The value proposition for Indirect Suppliers was not as strong – Impacts a smaller spend
– Issues with data – Lower ROI
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Presentation Notes
A strong business case was built for Direct Materials rather easily. The value was clear and worked for many Elemica customers. High dollar value suppliers Relatively low number of SKU’s Very clear specifications and well developed master data Mostly machine to machine connections - portal usage occasionally Extensive use of Vendor Managed Inventory programs Indirect Business Case Significantly lower dollars Significantly higher SKU counts Master data is much weaker-not as clear, not as much detail
Direct/Indirect Materials
High # of Suppliers
Low
High $ Value of Transactions Low
Direct Materials vs. Indirect Materials
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(Slide is animated. Make sure to hit return to activate) The hockey stick graph. A lot number of high dollar transactions (direct materials) A large number of suppliers who have much lower dollar transactions (indirect materials)
The Problems
Indirect materials have a large number of suppliers-even for those companies who have worked hard to consolidate their supplier base.
The transactions for these suppliers are smaller in terms of total dollars.
At the same time they can be significantly higher in terms of line items.
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Presentation Notes
These are challenges for every company. It is a matter of cost effectiveness of onboarding these suppliers onto a network.
More Problems
Master data for indirect materials is less accurate than master data for direct materials.
Unlike direct materials, many indirect purchases are not tied to widely published indexes making it difficult to know how close your price is the best price in the market.
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These problems are different in nature. The first one is a matter of business intelligence. Where can you find this benchmark information.
Elemica’s Solution
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So now that we have identified the challenges, let’s take a look at how Elemica’s solution of Network Powered Sourcing can address these problems. many, many suppliers many, many transactions lower dollars than direct materials hard to find market data
The Elemica Supply Chain Operating Network
Analytics
Universal Business Concepts BI
Applications
Universal Business Concepts Rules Apps
Apply the Right Process
Derive Insight
Document Stream
Document Stream
Enterprise Systems of
Record
Enterprise Systems of
Record
Universal Business Concepts Network Master
Data Management Connectivity
Network Speak the Same Language
Automation Value
$
Process Enablement
$$
Market Insight
$$$
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Hopefully this picture will help you to understand how the Elemica SCON works. �The network is all the connections. Computers transmit data across the network and we capture the data, and store it in a manner that allows us to access it later for our applications and analytics The network is the access point to all the applications. Here is where the Elemica applications reside. These applications create the perfect purchase orders, the correct invoices and enforce the business rules that you need to keep your company running effeciently. This is also where the sourcing applications live and where my team works to help you buy the best products, with the best service at the best prices. On top of all this will sit the analytics. The universal business concepts will allow us to mine the data to give us the business intellegence that is needed to make informed puchaseing decisiions.
The Power: QuickLink Network
Mapping time
The new QuickLink Network changes the fundamentals of the game!
On-Boarding
IT resources
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Previously making all the key connections depicted in this picture were time consuming, expensive and required considerable IT resources from your side. The new Quicklink network changes that. Key cost drivers are reduced exponentially: 1. The time to develop the necessary mapping between supplier and buyer is significantly reduced 2. Suppliers can self register on the portal making supplier onboarding quick and easy 3. The IT resources required from your company for supplier onboarding are reduced to practically nothing
Transaction Value
$-
$50,000,000,000
$100,000,000,000
$150,000,000,000
$200,000,000,000
$250,000,000,000
2008 2009 2010 2011 2012 2013
Proj
ecte
d
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Presentation Notes
Take a look at the value of transactions that are going through the Quicklink network. We are growing at 20-30% annually. As this continues to grow the more valuable it will be for you our Elemica customers.
The Advantages of Network Powered Sourcing
The Advantages: Data, Data, and more Data
As Elemica’s network grows, our data repository grows with it.
Elemica will be in the position to leverage this data for several possibilities such as comparative pricing analysis, spend visibility, and supplier discovery.
When utilizing Elemica’s supplier management products for indirect materials all the key data points will be captured.
Presenter
Presentation Notes
We anticipate that the new Quicklink network is going to see rapid growth-at the rate that I talked about earlier. As more and more suppliers are onboarded the amount of data that flows through our network will grow right along with it. So the first advantage that we will have more and more data. We can leverage this data for pricing analysis, spend visibility and supplier discovery. The next slides will show you 3 specific advantages that this data will provide.
The Advantages: Benchmarking
Information sharing
Elemica will be able to provide benchmarking information for indirect materials.
Examples of potential opportunities:
• MRO items (bearings, motors, belts, safety and personal protection equipment) • Temporary labor rates • IT equipment • IT contractor rates • Fleet costs
Collaboration
Benchmarking Opportunities
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Elemica has consistently promoted information sharing, collaboration and benchmarking opportunities with its customer base. We do this today and the new Quicklink network will help us to provide better business intellegence, and benchmarking information going forward. For those companies interested in information sharing and collaboration, Elemica will be able to provide benchmarking information for indirect materials Examples of potential opportunities: MRO items (bearings, motors, belts, safety and personal protection equipment) Temporary labor rates IT equipment IT contractor rates Fleet costs
The Advantages: Spend Visibility
Many companies need better tools to understand what and where their indirect purchases are conducted.
As your transactions increase through the QuickLink network, Elemica will be able to assist you to gain insights into how your company spends its dollars.
Presenter
Presentation Notes
Many companies need better tools to understand what and where their indirect purchases are conducted. As your transactions increase through the QuickLink network, Elemica will be able to assist you to gain insights into how your company spends its dollars in this area. You may be familiar with spend analysis tools from Ariba or SAP and our vision will be a competitive but improved product to these offering.
The Advantages: Supplier Discovery
Access to new suppliers and their profiles
Commodities offered
Duns number
Geographies served
Contact information
Short company overview
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Presentation Notes
Access to new suppliers and their profiles Commodities offered Geographies served Short company overview Duns number Contact information
Logistics Sourcing
Logistics Enhancements
Benchmarking possibilities for logistics: Full truckload
Rates Transit times Accessorial charges
Ocean freight
Rates Transit times
Lane optimization
Backhaul possibilities Combined shipments
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Presentation Notes
Again, this will be the power of the data. As the data repository grows we will capture more shipping points of origin, more destination, and more rates. By capturing date of shipment data and delivery date, we can have transit times. Our extra cost capture logistics product will allow us to compare and contrast accessorial charges. The same if true for ocean freight rates and transit times The origin and destination information will allow us to conduct lane optimization. We may be able to discover opportunities for backhauls allowing for better equipment utilization, and reduced rates
Wrap Up
The foundation is built to support you.
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Presentation Notes
This has been a little glance into the future of sourcing. The new Quicklink network will offer many opporutnities for growth and will bring additional value. We are working hard every day to make these new products a reality.
