Transcript BENReps Welcome and Kickoff - University of Pennsylvania

Purchasing Made Easy:
Oracle and the Penn Marketplace
NAEB Annual Meeting
April 5, 2002
University of Pennsylvania
Ralph Maier
Presentation Agenda
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Procurement Overview
Our Vision
Business Objectives
Business Partners
Benefits of eProcurement
Supplier Recruitment
Catalog Content Development
Critical Success Factors
Lessons Learned
How Are We Doing
What’s Next
eProcurement Demonstration
Contact Information
Procurement Overview
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Annual purchase order activity of $415 Million & 148,000
transactions
Decentralized point-of-demand procurement environment
Oracle Financials (Release 11i of Purchasing, Payables &
General Ledger)
– 1,500 system users as of January 2
– 2,500 to 3,000 system users projected by June 2002
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MasterCard Procurement/Fleet Fuel Credit Card Program
– 1,400 current cardholders
– $18 Million & 105,000 transactions
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Procurement staff of 12 (10 professional & 2 non-professional)
Our Vision
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Integrated university-wide solution from requisition creation to
supplier payment
Delegate authority and responsibility for item selection and
purchase requisition creation to the employee desktop
Provide multi-supplier searching and product selection in a
single shopping session
Facilitate finding the desired item quickly and easily from
“preferred contract suppliers”
Shift procurement activity to suppliers that support Penn’s
strategic procurement direction
Enhance internal electronic marketing of procurement
information, initiatives and “preferred contract suppliers”
Business Objectives
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Reduce time & effort related to creating purchase transactions
Provide online access to “preferred contract supplier” catalog
content and Penn contract pricing in a private exchange
Create at least 75% of purchase transactions from online
contract suppliers
Leverage University buying power, consolidate supplier base
and identify new cost savings opportunities
Reduce maverick buying
Increase use of Electronic Data Interchange (EDI)
Streamline payment process by eliminating paper (invoices &
checks)
Maximize prompt pay discount opportunities
Business Partners
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Oracle Corporation - The backbone of Penn’s financial
management systems (Oracle’s Release 11i and Internet
Procurement Electronic Requisition IP 5.0 for seamless
integration with the Penn Marketplace)
TPN (subsidiary of GE Global Exchange) - Standardizes
catalog content and provides management and hosting services
for Penn specific supplier catalog content in the Penn
Marketplace
GE Global Exchange Services - Provides Electronic Data
Interchange (EDI) translation and mailbox services for Penn
Marketplace suppliers (Standard method of sending purchase
and change orders to designated suppliers and receiving
invoices)
Benefits to Penn Faculty and Staff
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Reduction in time and effort related to creating and approving
purchase transactions
Point-of-demand access to an electronic requisition via a web
browser
Online access to Penn specific supplier catalog content and
contract pricing
Delegated online purchase order approval for transactions less
than $5,000
Elimination of competitive bidding requirement for purchases
from “preferred contract suppliers”
Online access to procurement related policies, procedures and
suppliers
Benefits to Penn Suppliers
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Low cost annual subscription fee based business model
– One time catalog content transformation fee
– No transaction fees
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New “Preferred Contract Supplier” status
Opportunity to significantly increase market share
Direct access to all University faculty and staff involved in
procurement
Reduction in administrative effort for order processing
Improved cash flow due to timely payment of invoices
Opportunity for internal electronic marketing
Participation in Penn sponsored “Preferred Supplier” trade
shows
Supplier Database Analysis
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Approximately 25,200 suppliers in approved supplier database
5,252 suppliers received a purchase order during 12 month
period
1,871 suppliers (36%) received only 1 purchase order
484 suppliers (9%) received more than 25 purchase orders
(87% of annual purchase order transaction volume)
Supplier management and recruitment focused on strategic
suppliers
Supplier Recruitment Strategy
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Identify potential suppliers for participation in the Penn
Marketplace
Identify appropriate supplier contacts for eProcurement initiative,
contracting, catalog content development, and ongoing content
management
Identify opportunities for supplier consolidation
– Based on customer focus on product, not supplier
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Establish EDI trading partner relationships wherever possible
Negotiate new or renegotiate existing “Penn pricing” contracts
– Identify and track all negotiated product cost savings
– New supplier pricing agreements have resulted in cost savings of
$2.9 million.
Supplier Participation (as of March 29, 2002)
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Participating suppliers include but are not limited to:
-Beckman Coulter
-Bio-Rad Laboratories
-BOC Gases
-Fisher Scientific
-Graybar Electronic
-IKON Office Solutions
-Newark Electronics
-New England Biolabs
-Perkin Elmer
-Sigma Aldrich
-Staples
-Thermo Forma
-VWR Scientific (through -Unique Advantage
minority business partner)
-Xerox (copier paper)
-Contract Furniture Dealers (Steelcase, KI, Hayworth & Knoll)
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Marketplace content (325,000 products), available from 52
participating suppliers and approximately 1,800 manufacturers,
represents 49% of Penn’s annual purchase order activity
Catalog Content Development
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Partnership between supplier representatives, Penn
Procurement Specialists and eProcurement Manager
Complete supplier catalog or limited product offering based on:
– Penn purchase activity
– Cost to supplier
– Impact on content management
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Single supplier catalog for all University departments
University-wide Penn contract pricing for all supplier products
Penn and Supplier representatives use TPN’s online catalog
content management tools to review and approve production catalogs
Requires formal process, timeline and responsibilities (Supplier
& Penn) for ongoing management of catalog content
Critical Success Factors
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Consistent and on-going Senior Management support for
business initiatives
School and Center support for, involvement in the development
and implementation of enhanced business processes
Customer focus group sessions to identify Penn business
requirements
Customer advisory groups to test proposed functionality, assess
impact on processes, policies and procedures, and provide
insight on user training requirements
Collaborative effort among business units, IT organization, and
Financial Training Department
Support and participation from Penn’s targeted suppliers
Lessons Learned
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Impact on Staff Resources
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Participation in project teams and advisory groups
Supplier recruitment
Catalog contact development and management
Contract negotiations
Supplier Involvement
– Overestimated supplier capabilities
– Conflicts between corporate and local supplier representatives
during supplier recruitment and content development
– Effort required for initial content development and management
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Impact on the Department
– Enhances our image and credibility with internal customers and
senior management
How Are We Doing?
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Customer and supplier feedback has exceeded expectations
Training Department is adding 40 to 50 new users per week
Participating suppliers are realizing significant growth in
business
Suppliers are now approaching Penn for possible participation in
the Penn Marketplace
What’s Next
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Integrated punch-out solution for configurable products and
large volume/high product turnover supplier catalogs
“Favorite Lists” for most commonly ordered items
Electronic payment for Penn Marketplace suppliers
eProcurement Demonstration
Welcome to BEN Buys & the
Penn Marketplace
University of Pennsylvania
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Project Leader:
Ralph Maier, Associate Director
E-Mail: [email protected]
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Supplier Recruitment:
Vira Homick, eProcurement Manager
E-Mail: [email protected]
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Web Site:
www.purchasing.upenn.edu
Oracle Corporation
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Marketing: Theo Bosnak
Phone #: (703) 364-2881
E-Mail: [email protected]
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Web Site:
www.oracle.com
GE Global Exchange Services
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Marketing: Lou Ciccone
Phone #: (856) 401-2734
E-Mail: [email protected]
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Web Site:
www.gegxs.com