Extranet Real-Time Forecasting and Supply Planning

Extranet Real-Time Forecasting and Supply PlanningBruce J. CutlerDirector, Global Alliance LogisticsBruce J. CutlerDirector, Global Alliance Logistics

AgendaAgendaAgenda

I. Why do we need improved supplier collaboration?

II. EDI to Web migration

III. Supplier Extranet and Collaboration functionality

IV. Linking planning to execution

V. Future - Public Exchanges (eHitex)

I. Why do we need improved supplier collaboration?

Supply Chain IssuesSupply Chain IssuesSupply Chain Issues

Multi-Tiered Supply Chain

Inventory

DemandChange

“Whipsaw Effect from The Beer Barrel Simulation”

Supply Chain SolutionsSupply Chain SolutionsSupply Chain Solutions§Collapse the supply chain

– Reduce number of tiers - alternatives:§ Sell direct§ Vertically integrate§ Co-locate

§Communicate across the supply chain without delays

– Supplier and Channel collaboration§ Integrated supply chain information

management tools§ EDI & e-Commerce

Our customers’ challengesOur customersOur customers’’ challengeschallenges

§ Always open

§ Their customer acquisition and retention

§Constant change

§Global opportunity

§Competition is a click away

II. EDI to Web migration

e-Commerce Evolution - Supply Sideee--Commerce Evolution Commerce Evolution -- Supply SideSupply Side§ EDI-based foundation

– Standard JIT raw material hub model (to factory)§ Forecast, inventory,

pulls, invoice– Standard direct ship

fulfillment model (to channels and customers)§ Forecast, SO/PO, Ship

notice, invoice– Common internal

shipment tracking tool§ All carriers inbound &

outbound

§ Adding Web-based: Supplier Extranet

– Technology data (engineering BOMs, ECNs, specs, roadmaps)

– Component approved vendor lists, part standardization tools

– Cost, quotes, contract management– Forecast/planning data (supply

changes, exceptions, alerts)– JIT and Direct Ship execution and

financial transactions remain EDI (and Web-EDI)

– Track & trace tool querying and reporting down to item serial #, with proactive alerts

EDI vs. Web DebateEDI vs. Web DebateEDI vs. Web Debate§ EDI

– One to One, System to System integration

– Very high transaction volume, reliable uptime

– Very sensitive/financial transactions, integrity

– High repetition, low content richness

– Matches Supplier capabilities

– “Batch” mode

§ Web– One to many, System to

multiple users (viewers)– Lower volume, downtime

acceptable– Less suitable for detailed

reconciliation– Rich types of information

(e.g. graphics)– Quicker startup for new

users– Near real-time mode

No one right answer - a mix of both, depending on application, may be optimal.

III. Supplier Extranet and Collaboration functionality

Extranet Framework & eServices

Framework (live 3/31/99)Proliant “Mansion” web farm Oracle databaseWeb pages in Visual Basic & ASPDynamic content promotion,access control

via user profile

Web Management - eServicesProcesses - supplier application, authorizationProcedures - security, supplier administration, content promotionSupport - Help Desk and Feedback

Supplier Integration to date86 Suppliers with access 703 internal supply professionals onlineWeekly hit rate : 1,100

Supplier Collaboration Tool OverviewSupplier Collaboration Tool OverviewSupplier Collaboration Tool Overview

§ SC Tool– Web-based collaboration with suppliers

– Near real time visibility and exchange of supply and demand information

– Exception based collaboration

– Interfaces with internal systems of record

– User friendly, low cost, supplier access to Mfg

planning systems requiring only a Web browser

What it is NOTWhat it is

1. It does not create a more accurate forecast

2. Does not replace all EDI signals

3. It does not replace forecast/commit system of record

4. It does not have full featured management reports

5. Is not an internally-tailored application

1. WEB communication tool between Mfg and Supplier

2. Near real time WEB visibility to all EDI signals

3. Alternate method for suppliers to commit to our forecasts via the WEB

4. Near real time exception notification of mis-matches in supply and demand, and HUB levels

5. It is 3rd party software

What the SC Tool is and is NOT

New MethodOld Method

1. Places entire demand/supply picture on Extranet: All planning and execution transactions in one place

2. Supplier can use either traditional EDI or use WEB SC Tool to receive and send demand & supply data

3 Mismatches in Demand and supply communicated real time 7x24

4. Supply commits can be for any point in time and passed upstream without any reformat

1. Send EDI 830 and receive 870 and piece together total supply picture from multiple sources; i.e., intransit, HUB, inventories, PO’s, etc.

2. Supplier receives EDI 830 and sends EDI 870 and pays transaction fees and software license

3 Mismatches in demand and supply communicated via batch process

4. Supply commits restricted to EDI bucketing format days, weeks and months

Benefits: Legacy EDI vs. SC Tool

Inte

rnet

/Ext

rane

tIn

tern

et/E

xtra

net

Option Vendor

RawMatl

Inte

rnet

/Ext

rane

tIn

tern

et/E

xtra

net

DemandDemandPlanningPlanningSupply PlanningSupply Planning

Transition PlanningTransition Planning

Where Supplier Collaborationfits into Supply ChainWhere Supplier CollaborationWhere Supplier Collaborationfits into Supply Chainfits into Supply Chain

CustomersCustomersDemand forecast can“flow through” to SupplierCollaboration Tool

First “bucket” (timeperiod) can be opencustomer orders

Implementation ChallengesImplementation ChallengesImplementation Challenges§ Scalability / Performance

§ Need to provide near real time performance on the Web to the entire supply base

§User Interface§ Need to provide very intuitive user interface that

can be used on browser§ Joint Development

§ Need to ensure users and software vendor are striving towards common goals

Details of FunctionalityDetails of FunctionalityDetails of Functionality§ Exception notification of supply problems via

email or pager§ Demand/Supply mismatches§ Notification of shortfalls in Hub inventory

§ Prioritization § Exception summary directs planners to the most

important problems§ e-mail notification of critical exceptions

§User Profiles§ Data attributes and exceptions can be

customized for each user

Current Release

Key Functionality/FeaturesKey Functionality/FeaturesKey Functionality/Features

§ Single view of supply and demand§ Provides one-stop-visibility into collaboration

activities§ Integrated with systems of record

§ Secure access control§ Ability to control access privileges to specific

information§ Low cost rollout to supplier base

§ Suppliers and buyers only need web browser to access application

Current Release