Innovation Expanding Order Automation Operational ... · PDF file− ASC X12 and UN...
Transcript of Innovation Expanding Order Automation Operational ... · PDF file− ASC X12 and UN...
Innovation
Operational Excellence
Financial Value
Expanding Order Automation Beyond B2B Nancy Fazzoni – Lead Architect, eBusiness Elemica Supply Chain Conference, September 2011
Agenda
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Dow Facts
Dow’s “Message Automation” Journey
Information Technology and Customer Groups
Order Automation Options
Dilemma: how to grow the automation numbers
The Elemica QuickLink Opportunity
Our Experience with QuickLink 2010-2011
Opportunity Pipeline and Implementation Recommendation
Summary of Benefits
Conclusion
Who We Are
Founded in 1897 by Herbert H. Dow in Midland, Michigan
Supplies a broad range of products and services to customers in approximately 160 countries
More than 5,000 products manufactured at 188 sites in 35 countries
Employs 50,000 employees worldwide
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Our Vision
To be the most profitable and respected science-driven chemical company in the world To passionately innovate what is essential to human progress by providing sustainable solutions to our customers
Our Mission
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Dow’s Operating Segments
Coatings & Infrastructure
Electronic &
Specialty Materials
Plastics
Basics
Chemicals & Energy
Hydrocarbons
Advanced Materials
Performance Products Performance Systems
Performance Products & Systems
Health & Agricultural Sciences
Health & Agricultural Sciences
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*Non-GAAP data; excludes certain items. See www.dow.com for more information.
2010 Full-Year Financial Performance
2009 2010
Sales (billions) $44.9 $53.7
Equity Earnings (millions) $630 $1,112
Earnings Per Share (GAAP) $0.32 $1.72
Earnings Per Share* $0.63 $1.97
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2010 Sales by Geographic Region*
North America
Sales: $19,427
Latin America
Sales: $6,153
Europe, Middle East & Africa
Sales: $18,464
Asia Pacific
Sales: $9,630
*2010 data; dollars in millions
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What is the goal of the Olympic
Movement?
To contribute to building a
peaceful and better world by
educating youth through sport
practiced without discrimination
of any kind, in a spirit of
friendship, solidarity and fair
play.
Our worldwide partnership allows
us to highlight the depth and
breadth of our specialty products
and the important role chemistry
plays in sports and everyday life,
while pursuing significant new
revenue opportunities.
We are leveraging our global
network to deliver chemistry- and
technology-enabled solutions to
help achieve a more sustainable
footprint for the Olympic Games
and for communities in the host
territories.
Why is Dow
involved?
How is Dow
involved?
Olympic Partnership
It’s official …
Dow is a Worldwide Olympic Partner and the “Official Chemistry
Company” of the Olympic Movement through 2020.
Dow’s Message Automation Journey
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1980’s and 1990’s
− EDI in the traditional sense of the word:
Standards and VANs
− ASC X12 and UN EDIFACT
Automotive Industry was a big driver
Chemicals and Plastics partners dipped their toes into the
water
Retail/Big Box joined the fray
Large partners were the norm
Late 1990’s
− What is this thing called XML? And why should we care?
2000-2001
− Dow is a founding member of Elemica
− Dow’s first connection using Elemica (BASF and Dow)
Dow’s Message Automation Journey - continued
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2001 - Present
− Elemica’s team builds the capability and flexibility to connect
partners with others who use different message standards.
A partner can standardize their internal message sets to one format
Elemica provides the ability to manage a variety of “quirks” related to
business processes variances or differences of interpretation in EDI
standards.
− Dow grows its partner connections with Elemica
Dow moved to “switch” existing “e” partners connectivity from
mainframe EDI processing to Elemica’s technology (on-going)
All new “e” partner connectivity is completed through Elemica
Partners can still use their preferred message standard and Elemica
manages the conversion to and from Dow’s preferred format
2008-2009: Info Technology & Customers
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In 2008-2009, we reached two primary groups of customers via our “e” Tools.
− Elemica/EDI: (Strategic Customers = ERP2ERP)
The connectivity of choice for customers with high order counts
12% of Dow automatable orders globally
Longer time to implementation often reducing Dow “ROI” for
connections with fewer orders
Not all partners have the IT systems to connect automatically end to end
− My Account @ Dow: (Valued Customers)
Dow’s web-based tool for customers with smaller order counts who still
desire automation to the extent possible
6% of Dow orders globally
Benefit is self-service for the customer but may mean customer has to
access multiple systems to order from multiple suppliers.
However….existing IT solutions missed the large group in the middle
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Core Customers
− Represent the majority of the customer base
− Existing order automation solutions were less suitable.
ERP linkages to EDI or XML message transformation are not in place
Priority for customer is something other than order automation
Order volume too high for self-serve order entry via supplier’s web portal
A large percentage of this group places their orders via email or fax.
The dilemma: how to grow automation to include that large core customer group?
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Automation numbers using the existing connectivity options have stubbornly remained well below 20% overall
And yet….
− Automation brings value to Dow and to customer:
Better order and invoice accuracy
Response time reductions
Increased productivity to both customer and Dow
So, what other ways can we reach a higher implementation and order count?
In 2009, Elemica introduced QuickLink
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A fax and E-mail automation capability which allows a partner to increase order automation with small/medium enterprises (SME Customers)
− The QuickLink solution digitally “reads” customer’s fax and/or e-
mail orders (PDF, Excel, Formatted Word Documents)
− Using the customer’s format as a guide, Elemica’s team “maps”
the customer’s data into Dow’s standard (CIDX/idoc) order
message
− Elemica process sends the order messages to Dow’s system in
seconds just as with fully connected partners
− Dow returns the order response message in XML and QuickLink
creates and sends an email order response to customer
Customer faxed or emailed orders which were always manually entered could now be received, built, and confirmed automatically to the customer, within seconds.
Elemica QuickLink Opportunity at Dow
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Elemica QuickLink opened up a new, untapped global “opportunity” for automation
− At the time, ~60% of our orders (primarily from core customers)
were previously considered out of reach for automation
QuickLink can require significantly less implementation effort than ERP2ERP for both Dow and the customer.
− Because Elemica manages the “mapping” from the customers’
purchase order documents and uses Dow’s messaging format
This lowers the threshold for the number of orders required for a
positive “ROI” down to 100 orders per annum
Can generally be implemented in days
Opportunity Analysis on QuickLink
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“Market size” – Significant Potential
− ~60% of all customers orders were faxed or emailed
Technical fit with Dow I/T – Excellent
− Uses the CIDX XML standard messages and processes
Dow has already implemented with “fully connected”
customers
“ROI” – Good
− Pre-Assessment is Key to Success
Customer benefits – Fair to Good
− Limited impact to customer
Dow benefits – Excellent
Our Experience with QuickLink
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In late 2009, we ran a pilot with 5 email and fax partners
In early 2010 based on the pilot’s success, we chartered a team dedicated to implementing QuickLink opportunities
− Started with 2 individuals
− Implementations started slowly in 2nd quarter 2010
− Added 2 individuals to the team in 3rd quarter 2010
Team’s efforts are totally focused on orders and order responses
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Region Number of Customers
North America 42
Europe 28
Asia 1
Latin America 2 implementations underway
QuickLink Customer Count
QuickLink Orders (P2X) in 2011
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Orders via QuickLink in 2011 (Jan-July)
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10,500 Customer Orders received via QuickLink
− Largest growth to date is in our North America region,
followed by Europe
500 Customer Service hours saved
− Assumes an average manual order entry time of 3 minutes vs
the automated order
2010 Automatable Order Mix
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How Customers Placed Orders NA LA PA EU GLOBAL
Fax 15% 1% 23% 36% 22%
E-mail 41% 47% 7% 32% 31%
Telephone 4% 2% <1% 1% 2%
Other 16% 21% 64% 18% 28%
How Customers sent in their e-Orders
EDI 3% 9% 2% <1% 2%
Elemica 18% 2% 1% 11% 10%
MA@D 4% 19% 2% 2% 4%
2011 Automatable Order Mix (Jan-Aug)
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How Customers Placed Orders NA LA PA EU GLOBAL
Fax 12% <1% 23% 33% 20%
E-mail 42% 54% 9% 35% 34%
Telephone 3% 1% <1% 1% 2%
Other 16% 26% 64% 18% 28%
How Customers sent in their e-Orders
EDI 2% 11% 2% 1% 2%
Elemica 22% <1% 1% 12% 12%
MA@D 2% 8% 2% <1% 2%
Opportunity Pipeline
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Global “sales forecast” with hundreds of fax and e-mail customer opportunities across the globe
All opportunities are assessed for “good fit” with the automated process before proceeding to implementation.
− This “good fit” review is based on what we have learned over the years with our ERP2ERP implementations.
Our “pipeline of opportunities” is being filled weekly as opportunities are implemented
Tracking metrics are in place to measure our progress and improve the on-boarding process
“Lessons learned” categories are also in place serving as CIP to help improve the assessment and analysis process.
Implementation Recommendations
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Use a pre-qualifying checklist with your customer service and business team to determine good fit opportunities.
Actively engage your customer service reps and sales reps throughout the implementation through continued communications, updates, training.
Positively manage the resistance to change within your service organization
When you run into an apparent roadblock, ask questions, questions, questions. Seek to understand.
− Remember that what on the surface may appear to be a “poor fit” can be an opportunity to remove a barrier or improve a process
− BUT, sometimes it is a “poor fit” so move on……
Keep a “lessons learned” log so you can add to the qualification checklist or the “things I wish I’d known before I tried that” list.
QuickLink – Customer Benefits
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Customer can send orders at any time of day and 7 days a week
Decreases vendor’s response time for customer order confirmations
Reduces potential for vendor key stroke errors
Reduces potential for order entry delays due to vendor CSR
workload, meetings, absences.
No need for customer to manually fax orders
For email, customer simply changes email address for vendor
orders
For customers with multiple ordering methods, QuickLink can
present an opportunity for process standardization
QuickLink – Dow Benefits
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Improves Dow’s order entry accuracy
Orders can be received and confirmed 24/7
Increases overall Dow order-to-cash productivity
Increases usage of existing eBusiness infrastructure and
technology
Can lower implementation effort and costs as focus is
specifically on the order and confirmation process
Conclusion – Elemica QuickLink
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QuickLink is well positioned between ERP2ERP and Dow’s web-based self service offerings
The solution works well and delivers value to Dow and our customers
Dow is investing further in this capability
We now have a valuable automation offering to reach our CORE Customers