Tc8-Overview SRM

Teamcenter 8
2009. Siemens Product Lifecycle Management Software Inc. All rights reserved
Page 1
Siemens PLM Software
Supplier Relationship Management (SRM)
Page 2
Supplier Relationship Management
Teamwork is Difficult in Todays Purchasing Environment

Information
Supplier A Supplier B
Buyer Emails RFQ
Buyer creates Letter of intent

Supplier A
Virtual Part File Recommendation
Supplier C
NPV Analytics
Are we there yet?

10 + Access Databases
Award
Supplier Signs LOI
Rationale
Purchase Order
Buyer Chases Approvals
Page 4
Integrated PLM/SRM Frictionless flow of information between Engineering, Procurement and Suppliers
Improves Profitability
Provides Access to Information
Delivers a Competitive Advantage
Source: McKinsey: Inventing the 21st Century Purchasing Organization
According to the Aberdeen Advanced Sourcing Benchmark report respondents believe product lifecycle sourcing drives innovation although only 35% report Sourcing involved in the product design phase
Page 5
Teamcenter for SRM
Synchronization with Product Development Integrated Sourcing Process
Integrated Supplier Management
Page 6
Synchronization with Product Development Engineering and purchasing data is fragmented & disconnected
Purchase Order Information Award Decisions RFQs
Designs
Analysis Supplier Capabilities Programs Supplier Scorecards Component Libraries Spend Data Delivery Data
BOMs
Buy to Specs
Quality Data
Page 7
Synchronization with Product Development SRM synchronizes engineering and purchasing data
Executives want their sourcing teams to create value through their relationships with key suppliers. Unfortunately the same study found that sourcing teams spend 70% of their time on tactical activities with little value added to those strategic relationships A. T. Kearney, Assessment of Excellence in Procurement
Spend Data (R2P systems)
P.O. Data (for ERP systems)
Purchasing
Award Decisions
Buy to Specs
Engineering
Delivery and Quality Data

Page 8
Synchronization with Product Development Benefits
Eliminates Buyers Chasing Data
Automates The Change Process
Consistent Information
Page 9
Synchronization with Product Development Eliminates Buyers Chasing Data Spend Management consolidates data into a common reporting structure for accurate, rapid and repeatable analysis
Demo
Page 10
Synchronization with Product Development Automates the change process Early cost capture in bill of material is critical to product cost management
Cost
Concept / Requirements
Cl os
Cost/Impact of Design Changes

ed W in do
BOM / Formulation
ws
of
MBOM / Lab Batch
Op po r
tu
ni
ty
Prototypes / Samples
Plant / Tooling Scale Up
Options
Source: Tech-Clarity, 2003
Source: Tech-Clarity, 2004
Time
Page 11
Synchronization with Product Development Consistent information Addresses complexity of data management Improves co-ordination among buyers, engineers and suppliers Closes loop for bill of material cost management
Demo
Page 12
Teamcenter for SRM
Synchronization with Product Development Integrated Sourcing Process Integrated Supplier Management
Page 13
Integrated Sourcing Process

Supports early involvement that drives cost savings
Product Development Timeline Best In Class Purchasing Involvement
Ability to control costs
Traditional Purchasing Involvement
Source: McKinsey
Time
Page 14
Integrated Sourcing Process The Value

Current Income Statement
s Revenue s Cost of Goods Sold s Gross Profit $1,000 $600 $400 $91 $140 $12 ($12) ($30)
TC SRM
Results
$1,000 $570 $430 $103 $128 43%
Balance Sheet Key Ratios
s Cash s Inventory
s Gross Profit Margin (BT) 40%
Reduce Cost of Goods Sold Increase accuracy of communication with suppliers Introduce low cost suppliers Re-use suppliers & materials to increase volume leverage
Reduce Inventory and Spares Cost Reduce inventory costs through reduced material costs Reduce inventory requirement through reuse. Improve Purchasing Productivity Reduce manual effort to gather critical data to make sourcing decisions Reduce administration costs of suppliers & materials
Page 15
Integrated Sourcing Process Benefits
Supports Multiple Business Models
Automated RFx Creation
Cost Breakdown Capability
Page 16
Integrated Sourcing Process Supports centralized or decentralized business model
Package and assign by location Reduces language and cultural challenges Delivers consistent, repeatable processes in a clear manner
Page 17
Integrated Sourcing Process Automated RFx Creation Automated transfer of visualization and specification files
Value to Organization
Integrated with PLM & SRM for Design-to-Cost
Automated RFx template selection based upon items Insures common data source
Competitive market & customer driven with NPDI process
Standalone /Ad-hoc Functional Team objective
Organizational Cost Management Maturity
Demo
Page 18
Integrated Sourcing Process Cost breakdown capability Rapid analysis of suppliers proposals Award decision automatically populated in Teamcenter costed BOM Total cost transparency
RFx process that supports commodity management are woefully inadequate.the best hope for leadership comes from PLM vendors.. IDC
"Companies are going to have to achieve at least a 10 to 15 percent productivity improvement over the next two to three years just to stay in the game. AlixPartners
Demo
Page 19
Teamcenter for SRM
Synchronization with Product Development Integrated Sourcing Process
Integrated Supplier Management
Page 20
Integrated Supplier Management The Need for Supplier Management How critical is effective supplier management to your organization?
AMR estimates up to 75% of a vehicles parts come from third party suppliers
Page 21
Integrated Supplier Management Benefits
Supplier Registration and Content Management
Categorize Suppliers and Their Capabilities Secure
Analyze Supplier Performance
Page 22
Integrated Supplier Management Achieving Value: The Supplier Integration Effect

50%
50%
Percentage of Change
40% 30% 20% 10% 0% -10% -20% -30% 30%
20%
-15%
-25%
-12%
Successful supplier integration into new-product and newprocess development activities can result in cost savings, increased quality and time savings. Teamwork affects more than cost.
Quality Time Cost Savings Improvement Savings

Most Successful Supplier Integration Efforts Least Successful Supplier Integration Efforts
Source: Michigan State Global Procurement and Supply Chain Benchmarking Consortium
Page 23
Integrated Supplier Management Supplier registration and content management
Managing supplier records can be a huge resource drain Leaving less time to understand supplier capability And even less time to mange supplier performance
Example: 120,000 X 0.50 = 60,000 suppliers 60,000 X 0.20 = 12,000 suppliers 12,000 X 1 hours = 12,000 hours
12,000 hrs 2,000 hrs/yr =
6 work years
Page 24
Integrated Supplier Management Categorize suppliers and their capabilities
Identify Qualify Invite to Design
..category can't be managed to cost savings alone it needs a new approach that we refer to as Performance Based Procurement Demo
Page 25
Bob Parker, Manufacturing Insights

Integrated Supplier Management Analyze supplier performance Optimizes supplier performance across a full set of characteristics Satisfaction of design objectives Quality Availability Traceability Cost evaluating performance measures is not a strength of either the procurement specialists or the ERP vendors. ..Look to your PLM software provider first.. Bob Parker, Manufacturing Insights
Page 26
Before Teamwork
Information
Supplier A
Buyer creates Letter of intent

Supplier A
Virtual Part File Recommendation
Supplier C
Supplier B
Buyer Emails RFQ
NPV Analytics
Are we there yet?

10 + Access Databases
Award
Supplier Signs LOI
Rationale
Purchase Order
Buyer Chases Approvals
Page 27
The Teamcenter Enabled Process
Supplier B
PLM SRM
Supplier A
Issue Purchase Order
ERP
Page 28
Supplier C
Summary
Integrated Supplier Management - essential for capability & performance based selection Integrated Sourcing Process - essential for strategic sourcing Synchronization with Product Development - essential for product cost management
Page 29
Thank You

Tc8-Overview SRM

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Teamcenter 8

Siemens PLM Software

Supplier Relationship Management (SRM)

Siemens PLM Software

Supplier Relationship Management

Siemens PLM Software

Teamwork is Difficult in Todays Purchasing Environment

Buyer Emails RFQ

Buyer creates Letter of intent

Virtual Part File Recommendation

Are we there yet?

Supplier Signs LOI

Buyer Chases Approvals

Siemens PLM Software

Provides Access to Information

Delivers a Competitive Advantage

Source: McKinsey: Inventing the 21st Century Purchasing Organization

Siemens PLM Software

Teamcenter for SRM

Synchronization with Product Development Integrated Sourcing Process

Integrated Supplier Management

Siemens PLM Software

Siemens PLM Software

P.O. Data (for ERP systems)

Delivery and Quality Data

Siemens PLM Software

Synchronization with Product Development Benefits

Eliminates Buyers Chasing Data

Automates The Change Process

Siemens PLM Software

Siemens PLM Software

Cost/Impact of Design Changes

MBOM / Lab Batch

Plant / Tooling Scale Up

Source: Tech-Clarity, 2003

Source: Tech-Clarity, 2004

Siemens PLM Software

Siemens PLM Software

Teamcenter for SRM

Siemens PLM Software

Integrated Sourcing Process

Ability to control costs

Traditional Purchasing Involvement

Siemens PLM Software

Integrated Sourcing Process The Value

Balance Sheet Key Ratios

s Gross Profit Margin (BT) 40%

Siemens PLM Software

Integrated Sourcing Process Benefits

Supports Multiple Business Models

Automated RFx Creation

Cost Breakdown Capability

Siemens PLM Software

Integrated Sourcing Process Supports centralized or decentralized business model

Siemens PLM Software

Integrated with PLM & SRM for Design-to-Cost

Competitive market & customer driven with NPDI process

Standalone /Ad-hoc Functional Team objective

Organizational Cost Management Maturity

Siemens PLM Software

Siemens PLM Software

Teamcenter for SRM

Synchronization with Product Development Integrated Sourcing Process