medtech b2b e-bonding with suppliers for gloco corporation joseph doud, scott kearney, dmitry...
TRANSCRIPT
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B2B E-BONDING WITH SUPPLIERSFOR GLOCO CORPORATION
Joseph Doud, Scott Kearney, Dmitry Rumberg, Deborah Watson
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Agenda
Introduction
Executive Summary
Business Requirements
Technical Specification and Prototype
Implementation Plan
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INTRODUCTION
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Roles and Responsibilities
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We are a consulting team, located in Cambridge, MA.
We specialize in business analysis and implementation of Supply Chain Management (SCM) platforms.
Our key expertise is in streamlining, integrating and automating inter-company processes by providing e-bonding solutions.
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GLOCO
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GLOCO is one of the world’s largest medical equipment manufacturers.
Based in the USA, GLOCO employs 29,000 people across 110 sites globally
Manufacture and provide support for medical equipment that it sells to customers in the hospital, medical service provider, and insurance industry.
In 2010, the company posted $7 billion in revenue.
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EXECUTIVE SUMMARY
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GLOCO Business Problem
GLOCO published an RFP to automate its procure-to-pay (P2P) processes via Business-To-Business (B2B) e-bonding with suppliers of medical equipment parts. GLOCO’s current work flow typically involves the following steps:
• Supplier selection research
• Negotiate individually with potential suppliers
• Email order info
• Verify order details over email
• Receive Invoice from Supplier, forward invoice to Accounting
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MedTech Proposed Solution
B2B e-bonding process between GLOCO and its suppliers. GLOCO and the suppliers will use an online portal as a communication channel for procure-to-pay processing. GLOCO’s new work flow will consist of the following steps:
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Select Supplie
r
Place Order
PO sent and
Invoicing
Automate
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BUSINESS JUSTIFICATION
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Simplifies ordering, issue reporting, status review, and inventory checks.
Provides managers real time and historical reporting.
Reduces manual data entry and associated labor costs.
Improves accuracy and timeliness of orders.
Cumulative cost savings from strategic sourcing.
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PART 1: BUSINESS REQUIREMENTS
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Business Requirements
1. SUPPLIER RELATIONSHIP ➠ 2. INVENTORY ➠
GLOCO’s Supplier relationship managers GLOCO’s Stockroom and Inventory clerks
● Maintain supplier contact records
● Pursue supplier contracts
● Track GLOCO’s relationship to supplier
● Track and provide inventory info
● Provide “inventory low” alerts
● Request part replenishment
3. ORDERING ➠ 4. COMPLETION
GLOCO’s Inventory Managers and Suppliers GLOCO’s Stockroom and Accounting
● GLOCO orders part via:
○ Existing contractual terms
○ Request for Quotation (RFQ)
● GLOCO creates Purchase Order (PO)
● Supplier ships part & provides invoice
● Part is received & receipt recorded
● PO reconciled with shipment
● PO reconciled with invoice
● Payment issued to supplier
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Business Features
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Streamlines Inventory Management
Streamlines Supplier Relationship Management
Streamlines the Ordering and Completion processes
Provides new Integration Benefits
Provides new performance metrics.
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As-Is Business Process
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To-Be Business Process
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SOLUTION COST
• SaaS e-procurement network license
• Amount of software customization
• Employees needed for planning, implementation, and maintenance
• Training materials
• Any hardware and IT infrastructure expenses
Solution Cost Component System Integration Cost Annual Maintenance Cost
Software $2,000,000 $500,000 (Support)
Consulting $2,500,000 $1,500,000
Misc. Items (i.e. Training) $50,000 $5,000
Total Costs $4,550,000 2,005,000
Total Year 1 Cost $6,555,00015
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SOLUTION BENEFITS
• Reduces spending• Drives compliance to strategic agreements• Speeds the process of invoice matching
• Example:e-procurement helps you to figure out what to order
and from whom. This can save up to 20% on purchases.
The proposed procure-to-pay solution will support and streamline the existing process, while at the same time providing completely new capabilities that were previously not feasible.
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SUCCESS METRICS
To declare success on an e-procurement project, success must be measured and declared along these four processes.
The spending analysis process
The purchasing process
The strategic sourcing process
The supply base management process Following the implementation of an e-procurement solution, every Key Performance Indicator (KPI) potentially improves.
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PART 2: TECHNICAL SPECIFICATION AND PROTOTYPE
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Software Solution
Feature (Y = 1 pt) Cloud Hybrid LocalLocal, native DB Access N N YLocal DB access via ERP Y Y YApplication is globally availability Y Y YApplication consistent between GLOCO sites Y Y NCentralizes procurement data Y Y NApplication is available today Y N NDoes not require additional system administrators Y N NDoes not require maintenance and updates Y N N
Scores (highest is best) 7 4 3
Feature (Ranked 1 to 3 pts) Cloud Hybrid LocalImplementation simplicity 3 2 1Upfront cost (licenses) 3 2 1Ongoing cost (licenses) 1 2 3Ongoing cost (maintenance) 3 2 1
Scores (highest is best) 10 8 6
A cloud-based system was selected because it will provide a best-of-breed solution in the shortest amount of time with minimal impact on GLOCO's IT staff.
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TAKE OneSCM - a best-of-breed solution
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OneSCM • TAKE Supply Chain provides service to the pharmaceutical and health care industries.
Experience • Merit Medical Systems, an OEM at Merit.com and MeritOEM.com, used TAKE Supply Chain to implement a similar solution.
Benefits• More fixed costs• Schedule measured in months not years• Robust technology infrastructure,• Experienced with medical technology supply
chain solutions• Reduced chance of failure.
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Software Product Selection
Requirements Module
Supplier Relationship
Access supplier contact records Core Data
Pursue supplier contracts Procure-to-Pay
Track GLOCO’s relationship to supplier Core Data
Procurement
GLOCO orders part via existing terms Procure-to-Pay
GLOCO orders part via RFQ Procure-to-Pay
GLOCO creates Purchase Order (PO) Procure-to-Pay
Supplier ships part and provides invoice
Procure-to-Pay
Paying
Part is received and receipt recorded Procure-to-Pay
PO reconciled with shipment Accounts Payable
PO reconciled with invoice Accounts Payable
Payment issued to supplier Accounts Payable21
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Architectural Approach
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Work Flow Integration
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Prototype - Login screen
Login screen: the screen all users are presented with when they visit the OneSCM web address.
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Prototype - Supplier Registration
Supplier Registration Form: a look at the UI and sample fields, which are included in a supplier record. These fields can be customized to need.
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Prototype - Purchase Orders
Purchase Orders Center: Example listing of PO’s entered into the system. GLOCO would see a list of all PO’s it has issued, whereas a supplier would see only PO’s addressed to it.
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Prototype - Invoicing
Invoice Center: List of invoices delivered from suppliers. Again GLOCO has access to the complete list. Suppliers have access only to invoices they have created.
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PART 3: IMPLEMENTATION PLAN
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Project Governance Structure
Steering Committee and Change Board
(Zoya Kinstler, Takayuki Iida)
MedTech Project Team
Project Manager(Deborah Watson)
Executive Project Sponsor
(Zoya Kinstler)
Deployment Specialist
(Joseph Doud)
Senior Consultant(Scott Kearney)
Technical Architect(Dmitry Rumberg)
GLOCO Subject Matter Experts
GLOCO PMO
OneSCM Implementation Consultants
MedTech Subject Matter Experts
MedTech Resources
GLOCO Resources
TAKE Solutions Resources
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Project Management: Project Phases
The project management approach to be used is based on the Guide to the Project Management Body of Knowledge (PMBOK Guide) and has five standard phases including:
• Initiating• Lanning• Executing,• Monitoring and Controlling,• Closing
Initiating Planning Executing Monitoring Controlling Closing
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Project Management: Project Schedule
ID Task Name Start Finish DurationJan 2012 Feb 2012 Mar 2012
1/1 1/8 2/5 3/4 4/1
1 2.2w1/16/20121/2/2012Initiating
2 3.4w2/1/20121/10/2012Planning
3 9w3/30/20121/30/2012Executing
4 9w3/30/20121/30/2012Monitoring and Controlling
5 1.4w4/9/20123/30/2012Closing
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Project Management: Deliverables
Project Management Level Deliverables Project plan Resource plan Financial plan Quality plan Risk plan Communications plan Procurement Plan
Project Deployment Deliverables
Deployment process documentation Processes and procedures for onboarding suppliers Standardized OneSCM Computer Based Training (CBT)s Service Desk processes and procedures Knowledgebase data for process information
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Project Management: Project Issue and Risk Management
Issue and Risk management will be managed by the project manager using a standardized Issue and Risk log.
Due to the short timeline of the project, Issues and Risks will be reviewed formally on a weekly basis with the project stakeholders.
Any urgent issues will be addressed as they are identified.
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Number Risk/Issue Description
R001 Resource shortage
GLOCO resources are currently focused on other ERP activities and this could cause us to miss our initial schedules
R002 Pilot supplier Identification delay
GLOCO has not selected pilot suppliers - this must be done by the required date or project will be delayed
R003 OneSCM patching
We need to ensure we pay attention to the OneSCM patching schedule so that the roll-out date doesn't coincide with the OneSCM patch window
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Project Deployment
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Deployment will take place for a single, well defined region, the United States.
Deployment will require the definition of a reporting structure, user roles, escalation clauses, as well as a release schedule.
Deployment will require the definition of supplier product lists and customer definitions.
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Project Deployment - Training
OneSCM was selected for its ease of use however users still sometimes benefit from guidance.
A “train the trainer” approach, with OneSCM consultants and trainers, is offered to key end users at client sites and at designated OneSCM Learning Centers.
If requested, the OneSCM team will create job aids and videos to teach the information necessary for deployment.
Each OneSCM user will receive information specific to their job role, including business processes specific to MedTech.
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Project Deployment – User Adoption
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OneSCM will work with us to encourage and facilitate user adoption, both internally and externally.
GLOCO will call the suppliers, suggesting the features and the savings of the OneSCM solution.
OneSCM’s experienced consultants will encourage and guide the supplier through the process of adoption, giving sound advice and access to a library of informative videos.
Guidance will help the suppliers to convert their catalogs and other data into the OneSCM system.
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Project Deployment – Pilot
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Gradual transition for suppliers and MedTech employees
Includes 10 key
suppliers
Post testing user survey
Key end users will be trained and monitored
Optimize release to the wider community of end users.
Feedback
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Project Deployment – Testing
Customized user acceptance tests, with defined the range of severity levels.
Suppliers and the MedTech employees, will participate in the user acceptance testing tests.
Acceptance tests will be designed to ensure that user requirement specifications, including any legal and contractual requirement are fulfilled.
Additional load and functional tests will ensure that the expected results and performance are appropriate for production use.
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Project Deployment – Rollback
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Rollback
• During the pilot, we will run the old business processes for 12 weeks alongside the new.
• All data will be synced into both systems using a customized script.
• If the transition fails, as indicated by our user feedback and acceptance test results, our roll out, limited to a specific region and a small pilot, will be undone, but the old business processes will remain.
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Post Deployment Activities – Measuring Success
KPI: Spending Analysis• Staffing Requirements - Reduce by 50%• Cost per Order -Reduce by 10%+• Number of Escalated Procurement Inquiries - Reduce by 80%
KPI: Purchasing • Order-to-Ship time - Reduce by 75%• Ship-to-Delivery time - Constant• Order-to-Delivery time - Reduce by 40%• Payment Render Time - Reduce by 80%• Order per Month - Improve peak capacity by 50%• Number of Corrections Made to Orders - Reduce by 50%
KPI: Strategic Sourcing• Time Required to Onboard Suppliers - Decrease over time• Percentage of Suppliers Onboarded - Reach 80%
KPI: Supply Base Management • Accuracy of Supplier Data - Increase over time
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Post Deployment Activities – System Upgrades and Maintenance
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Connectivity for procurement personnel
Workstation provisioning and patching
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Post Deployment Activities – System Upgrades and Maintenance (cont.)
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OneSCM upgradesPerformed by OneSCM
OneSCM will notify GLOCO
CAB review
ERP upgrades and DeploymentsVerify compatibility with OneSCM
CAB review
Support Considerations
Support Categories:
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Requirement: Supplier’s ERP systems must be up and running.
Fallback: Supplier monitors alternative contact methods such as email for incoming orders.
Requirement: GLOCO’s ERP systems must be up and running.
Fallback: GLOCO’s accounting team reverts to a paper PO/Invoice process; any PO’s or Invoices that require entry to into GLOCO’s ERP are filed until ERP functionality is restored.
Requirement: Email must be functional.
Fallback: GLOCO and/or its suppliers must resort to alternative communication methods such as fax, phone, or text messaging
Post Deployment Activities – Fallback Processes
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Post Deployment Activities – Disaster Recovery Plan
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• Fallback: GLOCO and its Suppliers must revert to a paper-based PO/Invoice system and file the paperwork. Once OneSCM service is restored, PO data will be manually entered into OneSCM. Invoice data will retrieved automatically via the database connector to GLOCO’s ERP system.
Requirement: The OneSCM portal itself must be up and running.
• Fallback: GLOCO and its Suppliers must take the combined actions of the previous two fallback measures: loss of email and loss of OneSCM functionality.
Requirement: Internet connectivity must exist.
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Post Deployment Activities – Recovery Processes
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GLOCO ERP recovery plans must account for:
• Restoration of ERP invoicing data from backup• Restoration of network and access privileges to enable OneSCM’s ERP
connector
OneSCM recovery plans must account for:
• Restoration of operational procurement data from backup• Reestablishment of ERP connections
Post-deployment Handoff
• Transfer of primary business contacts at OneSCM and/or Suppliers• Supplementary two-day review/training session after project conclusion
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Questions
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