Transcript Quadrem

THE GLOBAL eMARKETPLACE
Quadrem: eOTD and releasing Supply
Chain value
ECCMA Annual Conference
October, 2006
Agenda
 A little about Quadrem
 Buyer & Supplier Pain points
 How have we approached this
 Standards
– Education, Development, Management
 Systems Integration
 Some “Requirements”
 Benefits and Lessons learned
Company Overview
 Launched in 2000 by global natural
resources leaders to streamline
procurement and reduce supply chain costs
 Global Supply chain solutions leader with:
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Global MRO-Centric Supplier Network
XML Messaging Hub
Sourcing Solutions
Financial Solutions
Data Management Solutions
The Community as at September 2006
34
46,000
Active Buyers
Suppliers
635
Buyer Sites
XML
Transaction
Hub
516
Integrated
Connections
35,000
P2P Supplier Users
356
$12.5 billion
annualized transaction
volume
Integrated
Connections
Transaction and Throughput Record
Throughput
$1,300,000,000
2002
2003
2004
2005
2006
$1,200,000,000
425,000
400,000
375,000
$1,000,000,000
$900,000,000
$800,000,000
$600,000,000
2003-2006 Projected Order Value
Actual Order Value
Actual 'Procure-to-Pay' Transactions
$500,000,000
$400,000,000
$300,000,000
$200,000,000
$100,000,000
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525,000
500,000
475,000
450,000
$1,100,000,000
$700,000,000
Transactions
350,000
325,000
300,000
275,000
250,000
225,000
200,000
175,000
150,000
125,000
100,000
75,000
50,000
25,000
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Global footprint – Global customers
Toronto, Canada
Montréal, Canada
Paris, France
Amsterdam,
The Netherlands
Dallas, USA
Singapore
Seoul, Korea
Jakarta, Indonesia
Houston, USA
Brisbane, Australia
Mexico City, Mexico
San Jose, Costa Rica
Lima, Peru
Santiago, Chile
Sydney, Australia
Dubai, UAE
Rio de Janeiro, Brasil
Worldwide
Quadrem
Offices and
Partners
Johannesburg,
South Africa
Riyadh,
Saudi Arabia
Perth, Australia
250+ employees and associates worldwide
Key Strength - MRO Supply
 Largest community of industrial MRO suppliers
 Assets stand idle without these mission critical suppliers
 Leveragability - MRO suppliers cover many industries
 Standardized eOTD industry dictionary for more than 6,000
MRO categories
 Becoming the de facto standard for the mining, minerals and metals
industries
 Platform for expansion to related industries where technical
descriptions are key
 19 business process documents designed for MRO materials
and services procurement
 Appreciates the criticality of timing and availability of supply
 Need for machine to machine integration
Pain Points
Buying Organizations – Pain Points
Landscape
Results and Effects
Use different ERP applications (many
times within the same company)
 Each ERP requires content structured differently
 Segregated spend – requiring manual intervention
Use different catalogue schemas /
standards
 More than one schema within the same group
 Often inappropriate for business needs
Seldom have a well defined catalogue
strategy
 Find it difficult to pin down the business case and ROI for
content projects
 Decentralized buying and inventory functions have led to
decentralized content creation and maintenance functions
 Seldom pool content initiatives to take advantage of efficiencies
of scale that content
Don’t view catalogue creation and
maintenance as a core discipline
 No quality training and change management plans
 No clear understanding of the value of good content
 Data not being maintained ~ creating a perpetual cycle of data
cleansing projects
Carry legacy content data
 No structured approach to create and maintain content
 Does not unambiguously differentiate a material or service
 Duplicate content creates uncertainty ~ master to select
 Spend profiles and analytics are impossible or difficult
Supplying Organizations – Pain Points
Landscape
Results and Effects
Don’t understand complexities
associated with creating content
correctly
 Poor quality content,
 Content never in a state of readiness
 Create content to differentiate not to standardize
Suppliers supply same materials to
more than one buyer organization
 Those that have created catalogues to a schema often
unwilling to change or redevelop this content to a new
schema
Vary in size and capability
 Limited use of technology adding to the complexity of
content creation
 Limited resources or budget to pay for content to be
created according to numerous standards laid down
by different buying organizations
How have we approached this?
 Standards
 System Integration
Plan
Design
Build
Test
Deploy
1+1=3
Quadrem and Standards
 Wherever possible Quadrem bases its services and products on
open, international standards
 The philosophy being that it lowers the change management
effort and rework over time
 Quadrem facilitates two standards groups for its customers
 Integration Standards Council
– XML, document choreography coordination
 Content Standards Council
– Classification, Codification and industry templates
eOTD Management Methodology
 Close liaison with customer (and their data) to develop and
extend the eOTD to meet industry context
 Focus on “minimal” requirements to find, describe and buy in a
commercial perspective
 Put in place robust standards maintenance processes to ensure
adoption, consistency and reuse
 Once stabilized move relevant structure to public domain
 Lowers cost over time, increases adoption
System Integration Methodology
Stages
Plan
Summary Prioritize integration
Tasks
project based on
business needs,
benefits, & targets
Define Scope &
Implementation Phases
Define Business
Process & Workflow
Define Connection
Architecture
Design
Conduct Connection/
Document Training for
Trading Partner Tech
Exchange Connection
Info – IDs, Passwords,
e-mails, URLs
Provide Document
Standards & Samples,
Connection User
Guides & Test Script
Gather Data Mapping
Requirements
Specify Data Mappings
-transformation rules &
values
Decide Catalogue
strategy &
requirements
Collect Catalogue
Data
Establish Team &
Timeline
Set Up Integrated DDID
Create detailed Project
Plan
Build
Populate catalogue
for Quadrem
catalogue and/or
Buyer ERP
catalogue
Supplier or Quadrem
builds Document
Mappings in Dev
environment
Migrate Mappings to
UAT environment
Install & Configure
UAT environment
(routing rules, certs)
Test
Test Connectivity to
Quadrem in Test
environment
Conduct end-to-end
integration and
catalogue test with
Buyer & Supplier
Migrate Mappings to
Production
environment
Install & Configure
Prod environment
(routing rules, certs)
Deploy
Test Connectivity to
Quadrem in
Production
environment
Assist as needed with
End-User Training &
Communications
Quadrem monitors
initial production
transmissions through
marketplace
Gather feedback &
resolve issues
Some “Requirements”
 Classification - UNSPSC / Material Groups / Other
 Codification – eOTD / Other
 Use as is?
 Customize internally?
 Leverage existing process and customized templates? (QTAG)
 Business Rules required
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Special Characters
Units of Measure (Imperial and / or metric)
Valid Values (or free text)
Cleansing and standardization rules
– OEM Items
– Generic Items
– Mnemonics and Part Numbers
 QA guidelines and rules
 Descriptions
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Patterns leverage existing or develop / customize internally
Short Text (40 Characters)
Long Text
PO Text
Some real benefits delivered
KPI
Potential
Typical
Duplicates ID
5 - 20%
12%
Inventory Reduction
5 - 20%
8%
Deleted / Obsolete Materials
5 - 15%
11%
BOM Duplication / Rationalization
10 - 35%
15%
Poor Mnemonic Part Numbers
5 - 20%
3%
Lessons
 Get the strategy right, set expectations early and clearly
 Pick a standard and stick to it
 “All models are wrong some are useful”
 eOTD is useful !!!
 Interlocking “systems integration” and “catalogue”
standards saves time and plants seeds for long term
success
 Maintenance is just as important as creation
In Conclusion
 Recommend taking “baby steps” and understand catalog in
relation to larger Procurement strategy
 Need to decide on some standards!!
 There is no simple solution for some sourcing groups
 i.e. OEM catalogs
 Some Phases to consider:
 Phase 1
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Focus on small key group of Suppliers
Use common tool to maintain catalogue and pricing
Define simple load format / process for ERP Material Master
Put in place process to have items distributed from Supplier  Buyer
 Phase 2
– Catalogue management services for other spend groups or integrate as
part of Strategic Sourcing initiatives
 Phase 3
– Re-analysis of Content strategy in light of value released
THE GLOBAL eMARKETPLACE
Quadrem: eOTD and releasing Supply
Chain value
ECCMA Annual Conference
October, 2006