Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances 1998...

The Role of Global Information Standards inElectronic Commerce

•Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances

•1998 Sales of $10.3 billion

•Marketed in 170 countries worldwide


•Production versus MRO

•Global versus U.S. only

•Internet versus VAN versus “Extranet”

•Integrated Supplier Management (ISM)

“EZ-ISM”

Update

manufacturing

schedule

Receive

and update

MRP/OM

Build

to

schedule

Receive, scan

and match to

ship notice,

process ERS

Drivers• Total system cost reduction.• Continuous daily production requirements.• Suppliers as an extension of Whirlpool.• Just-in-Time material delivery.

Drivers• Total system cost reduction.• Continuous daily production requirements.• Suppliers as an extension of Whirlpool.• Just-in-Time material delivery.

Predicted benefits:

• Reduce inventory-raw & inprocess (suppliers).• Simplify receiving.• Reduce manual releasing.• Reduce obsolescence.

Predicted benefits:

• Reduce inventory-raw & inprocess (suppliers).• Simplify receiving.• Reduce manual releasing.• Reduce obsolescence.

Whirlpool Supplier

Integrated Supplier Management Process

J I T

Schedule

Material

Releases

Ship material

Shipment

notification

Consignment

Receiving

Advice

Process

accounts

receivable

Integrated Supplier ManagementIntegrated Supplier Management

Rollout Strategy

Follow through

Supplier Conferences (ECRC)

Team with Manufacturing and Procurement

EC Infrastructure Improvements

Supplier “WEB Page” (Internet) “EZ-ISM”


EC at Whirlpool: Transaction Sets in Use

ANSI X.12Type

EDIFACTType

Name Description

830 DELFOR Material Release (PlanningSchedule w/ Release Capability

Created by buyer from MRP II system to order supplies;specifies required date & quantity, and past receipt information.

856 DESADV Advance Ship Notice (ShipNotice / Manifest)

Sent from trade partner with complete shipping data to facilitate receiving process. Can reference many packing slips and barcodes.

861 RECADV Receiving Advice Created by buyer MRP II system to acknowledge material transfer ofownership.

862 DELJIT JIT Info (Shipping Schedule) Schedule from buyer to trade partner covering hourly quantities required at each assembly line for next three days.

864 GENRAL Text Message Sent by buyer to: 1) broadcast message to all trade partners;2) describes errors with an 856 message;3) report discrepancies between received materials & 856 message.

997 Functional Acknowledgement Sent to confirm that message was received by trade partner.

New EC Infrastructure

Existing EC Infrastructure

New EC Infrastructure

New Application Architecture

SAP

Existing Application Architecture

Varies

Existing EDI ArchitectureMainframe

EDI Network

VAN

New EC Server

Whirlpool ECIntranet / Extranet

Whirlpool EC Intranet

InternetExtranetse.g. ANX

EC Business - Supply Chain- Selling & Marketing- Buying- Order Fulfillment- Logistics- Many more

EC Partners- Trade Partners- Suppliers- Commerce Partners- Internal Partners

This New EC Infrastructure Provides:- Many-to-Many paths to the existing and new applications infrastructure- Leverages the current EDI infrastructure and provides the EC partners and Whirlpool a migration path- A lower cost to support and implement new EC partners (esp. low volume partners)- The ability to supply the applications real-time EC processing- Many types of documents (EDI, HTML forms, e:mail, excel sheets, fax)

First Time Registration

Archive

Bin

Whirlpool.XX

Draft

Read

Sent

Unread

Unsent

During registration, the following file structure is created on the supplier’s pc. All programs necessary to run the application are stored in the Bin directory.

Example of the Desktop

Click Return to go back

Click on the back function to return

Print by clicking on the browser’s Print function

Enter ASN No, Packlist No, use drop down box for Ship To Name

Load Release Data: Highlight part then import to form

Click Calculate, box information appears. Box line items may be edited.Print Labels and click save.

Example of Barcode Label

ECRC Locations

ECRC Core Functions

Outreach

Education & Training

Technical Support

Consultation


Trends in establishing the global supply chain Move towards “global” suppliers

Automotive Whirlpool

Many large companies using EC with globalpartners

Reduce inventory Improve market share Faster revenue collections Speed timing on exchange of business

documents EDI/EC initiatives


Trends in establishing the global supply chain Technology issues

Methods VANs Forms-based over the Internet FTP Could easily be outsourced

Different levels of infrastructure


Trends in establishing the global supply chain Business issues (most important): need top

management support Different languages

Same words have different meanings indifferent cultures

Non-Americans may know English, butdon’t understand nuances

Different cultures and time zones Not just holidays, vacations and dress What does “No problem” mean? Good to have local people as initial point

of contact Different legal requirements

Whirlpool Evaluated Receipts Settlements(ERS) won’t work in Mexico becauseinvoice legally required.

Stereotype of the “Ugly American”


Integrating regional policies into the globalsystem External

ANSI versus EDIFACT


Integrating regional policies into the globalsystem

VANs versus Internet versus ANX What is ANX?

A multi-provider, virtual private network;formed by Automotive Industry ActionGroup (AIAG)

Providers compete for customers, butdeliver same service quality, e.g.performance, security

All customers share same physicalinfrastructureof ANX certified providers, but eachelectronic conversation occurs via secure,private connection between customers



VANs versus Internet versus ANX Public Internet versus ANX

Public Internet “Best Effort” performance Decentralized administration Inconsistent security Unpredictable

ANX Service

Guaranteed performance Centralized administration (via ANX

Overseer: Bellcore) Standards-based, network-level security Reliable



VANs versus Internet versus ANX ANX geographic direction

ANX Release 1 - North America Initially United States, Canada

(September 1, 1998) Eventually Mexico

ANX Release 2 - Europe Memorandum Of Understanding (MOU) ANX pilot projects - Germany, France,

England Timetable - no earlier than Q3/Q4 1999

Discussions Underway/Expected Japan: Japanese Automotive

Manufacturers Association (JAMA) Australia: Federal Chamber of

Automotive Industries (FCAI) South America



Automotive industry strategy (1998 “AutoTech”Conference) GM - Electronic Commerce Strategies

Electronic Data Interchange (EDI) Require EDI for QS9000 certification Migrate from X12 to EDIFACT

International standard Explore use of ANX for EDI Encourage small suppliers to use EDI,

Web-based forms over the Internet / ANX,or Third party provide



Automotive industry strategy (1998 “AutoTech”Conference) Ford - Electronic Commerce Strategies

Common Global Supplier ElectronicComm.

Electronic Data Interchange (EDI) Direct Data Link (DDL)

Explore use of browser- basedtechnology

Use TCP/ IP technology Use ANX

CADCAM Data Exchange (CDX) Ford Supplier Network (FSN) Supplier E- Mail Automotive Network eXchange (ANX)

Vision



Automotive industry strategy (1998“AutoTech” Conference)

Vision Chrysler - Electronic Commerce

Strategies EDIFACT - after 2000, maybe 1998 EDI over the web Electronic Funds Transfer

Part of overall Supplier ECRequirements

Payment Terms plus 3 days Final nail into paperless vision

Paper No Longer an Option


Implementing global sourcing Paul Dittman, Whirlpool’s VP of Global Logistics,

commented on some global implementationissues in the March 1999 issue of PM Network You don’t commute to China

30 hour trip At least three weeks at a time

There are translators and there are translators Can fit only so many granola bars in a suitcase

Is language a barrier? Logistics


Specific considerations for designing a globalnetwork management

EC documents; specifically ASN’s Other than Europe and North America



VANs versus Internet versus ANX Principles of the ANX vision

User-centric Consolidated network services Lower-than-legacy costs Higher service quality levels Managed evolution Continuous improvement Standards-based technologies


Implementing global sourcing Ways to reduce inventory (Purchasing

professionals surveyed by Supplier Selection &Management Report in February 1999) Shifting the inventory to the suppliers (supplier

takes responsibility for inventory reduction) Building a stronger supply chain Shortening leadtimes (better information flow) Reduce storage space requirements Improving the cash flow situation (JIT, EFT) Establishing a consignment inventory protocol

Leadtime reduced to zero Inventory carrying costs reduced to zero. Lost production time waiting for incoming

quality approval is eliminated. Lower pricing negotiated in exchange for the

long term supply agreement


Implementing global sourcing Implementing EDI/Electronic Commerce Electronic commerce activity — specifically on

the Internet — has exceeded the expectationsof business analysts, but its true potential torevolutionize the procurement process remainsa distant goal. Department of Commerce: April 1996; 1998

Internet-based purchases $200 million in1995 to an estimated $5 billion

Cambridge, Massachusetts-based ForresterResearch's latest estimate is even higher:$3.2 trillion in sales over the Internet by 2003with 85 percent of that being business-tobusiness buying.


Internet-based electronic commerce procurement stillnot reaching its potential

First target will be maintenance, repair,and operating (MRO) expenses, anindustry worth an estimated $1.3 trillionannually in the United States. But MROprocurement is just the tip of the iceberg.

Purchase of direct materials will reallycatch on in the next millennium. Othernoteworthy trends include theestablishment of interconnected supplygrids versus vertical supply chains, andthe relatively new concepts of "transactive"e-catalog content, and "reintermediation,"or new-age intermediaries.


The Internet will become a critical medium foraccessing critical information and by the wayinformation can be transferred between supply chainmembers.


Using better forecasting tools Reducing the supplier base (“global” suppliers)


What business problems can the new technologiessolve for small companies?

Some OEM’s are thinking about ‘Push’ asopposed to the current ‘Pull’ model. PROBLEM: Many SME’s don’t operate 24

X 7 Technologies to guarantee delivery are just

being developed Will SME’s be able to afford permanent ANX

connections?


Emerging trends EDI over Web and/ or HTTP

Currently a replacement for Rip & Read EDI No integration of data into SME’s internal

systems HTTP based technologies still being

developed Problem with guaranteed delivery


Emerging trends E- mail based EDI

Possibility of Store and Forward Could solve the ‘lights out’ condition for

many SME’s Timeliness could be a problem Guaranteed Delivery solutions are being

developed Storing material at point-of-use Focusing on “A”, “B” and “C” inventory Introducing vendor managed inventory

Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances 1998...

Documents

Transcript of Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances 1998...