(Procurement Engineering) - Engineering Introduction & Case study 2006. June 8 th Yoon-chang So / IBM GBS
Agenda I. What is SRM? II. Why SRM? Trend, III. Function / To-be - IV. V. Critical Success Factor 2
skill Transactional skill, Strategic skill Commodity Technical Knowledge Traditional Procurement Progressive SRM Specialist Strategy Specialist Order Clerk Commodity Specialist General Purchaser Field Tactical Purchaser 3
Introduction to SRM IBM Business Consulting Services SRM, ( ),,, SRM? SRM (Supplier Relationship Management : ), ( ),, /, /, System,,, Strategic / Global Sourcing / ( / ) / (Time /Cost) ( / ) Demand Collaboration (e-procurement, SCM-Planning ) Align Biz,, ( ) /Assembly (TCO) / Flexible / Speedy ( ) 4
Introduction to SRM IBM Business Consulting Services SRM SCM, PLM, How to achieve operational efficiency? How to achieve customer retention? Product Lifecycle Management (PLM) Product Development Customer Relationship Management (CRM) How to achieve product leadership? Supplier Customer How to achieve effective supplier management? Supplier Relationship Management (SRM) Manufacturing and Delivery Supply Chain Management (SCM) 5
SCM Enterprise Operation Time-to-Market, Cost Effectiveness, Time-to-Delivery SCM (, ) ( ) Supplier network SCM Time To Market Marketing Cost Effectiveness Integrated Supply Chain Customer network ( SCM) Customer service Time To Delivery 6
Agenda I. What is SRM? II. Why SRM? Trend, III. Function / To-be - IV. V. Critical Success Factor 7
SRM, SRM * Source: Gartner Research (Supplier Relationship Management: Why does it Matter?) 8
SRM Industry Segmentation High Market velocity Product Life Cycle Low Logistics Professional services Financial services Media Agriculture Industrial equipment Energy Raw materials Consumer packaged goods High-tech Plastics Retail Specialty chemicals SRM opportunities Aerospace Construction Healthcare services Motor vehicles Pharmaceuticals Heavy industry Source: Forrester, IBM BCS Internal diagnosis Low High Industry complexity Supply Chain Channel 9
Value Chain 21, Value Chain Value Chain, Value Chain Supplier Network Customer Network Supplier Network Customer Network S N 10
SCM Industry Trend Outsourcing, Brand Owner Value-Added Communities (VACs) Traditional Company Capital Structure Financial Accounting & Other Support Processes Supply Chain Decapitalization & the Formation of VACs New Business Model Brand-Owning Company Value-Added Community Outsourcing Financial Accounting & Other Support Processes Outsourced Industry- Specific Processes Supplier Management Outsourcing Supply Chain Alliance 11
Outsourcing trend,,,? /?? SRM?? Infra/System????? 12
MetaCapitalism Item,,, Supply Chain, ( ), Present State Future State Key Tasks Decision Support Control Reporting Business Partnering Common Processes & System Role Transformation Increased Efficiency Value Added Services Decision Support Control 50% Integrated Systems Transaction Processing Reporting Transaction Processing 13% 15% 22% Contract Management Value chain Management 13
I. Introduction to SRM Best Practice Strategy, Process, System Best Practice, SRM System Key Trend Strategy Value Chain Process,, - - - System Supplier Relationship Mgmt. System - Strategic Sourcing - Procurement Engineering - Supply Chain Collaboration - Design Collaboration 14
Agenda I. What is SRM? II. Why SRM? Trend, III. Function / To-be - IV. V. Critical Success Factor 15
Procurement Engineering 60~70% / (Procurement Engineering) % of Total Cost 100 90 80 70 60 50 40 30 20 10 0 *Technology Roadmap Total Material Cost Major Factors of Total Procurement Cost Inherent Costs 60%-70% Design Technical Knowledge / (T/R* Preferred Part /) Structural Costs 20%-30% Sourcing Execution Costs 10%-20% Fulfillment, Infra, Cost Spec Cost Cost,, 16
Procurement Engineering? / To Be Image / / / ( KPI / ) AA BOM AA-1 AA-1-1 AA-1-1-1 AA-1-1-2 AA-1-2 AA-1-2-1 Pool ( / / ) Single Workspace BOM Cost Innovation SPEC/ / / / / / Time-to-Market 17
Procurement Engineering - Overview,, Process, System TCO* saving (TQRDCE) TCO* saving (PE**) / / Strategy Process Organization System (PEP*) SPEC Lifecycle / Lead Time / (PIM*) / Advanced Development (EPI*) Concept BOM PS Workspace BOM / DIA DCP Plan Development DV BOM PV BOM PR BOM BOM / Pool / Workflow / / BOM * Total Cost of Ownership : ** Procurement Engineering : 18
I. Process & System IBM Business Consulting Services Procurement Engineering - Process / / / - / - / / I. * Early Procurement Involvement * Decision Check Point EPI* $ $ II. / - - BOM - (DCP) (Production) (Development) (Plan) (Concept) DCP* DCP DCP 19
I. Process & System IBM Business Consulting Services ( ) /,,, Solution 4 / ( ) ( ) MI / Advanced Development Concept Plan Development Process BOM Organization / ( Group R&R ) & System PES 20
I. Process & System IBM Business Consulting Services / ( ) To-Be Spec.,,, Supply Chain / As-Is To-Be T/R* - TR,, Spec ( Spec) POOL x x / Customized T/R Supplier Samsung Spec ( ) POOL, / ( MI**) Spec. /, /, Spec,, Supply Chain,. * Technology Roadmap ** Market Intelligence, e-sourcing 21
Active Risk Project initiation Develop ment Council Risk Commod ity Council / ( ) N? Y N Council Y Support? N(2nd Time) Risk PS Y Project? N Council Escalatio Y n? N N Risk O.K? N Risk Risk O.K? Y Y SPSS I. Process & System IBM Business Consulting Services ( ) To-Be BOM / Critical Path As-Is To-Be LL LL LL M H Process Deviation Process (EPI) Process -BOM BOM / / Process BOM / BOM / Deviation Process 22
I. Process & System IBM Business Consulting Services System To-Be, / / / As-Is To-Be CAD PDM SAP E-BOM M-BOM / IS 1 IS 2 IS 3 CAD PDM SAP E-BOM M-BOM SRM PES IS 1 IS 2 IS 3 / / / Work space ( ) (BOM ) Syst 1 Syst2 code Syst 4 SAP Syst 1 Syst2 code Syst 4 SAP / / Workspace / / / / / 23
I. Process & System IBM Business Consulting Services To-Be / As-Is To-Be As-Is To-Be (Best Practice ) 47% 15% 22% 16% ( ) ( ) ( ), Skill-Set / ( ) (CFT ) / 24
I. Process & System IBM Business Consulting Services (IBM ) IBM 10 Transformation, (Skill Based) Supplier 1995 10% 2004 50% 0% 2% 8% 20% 70% 15% 18% 7% 25
II. Pilot Execution IBM Business Consulting Services Pilot,, BOM Review 1., / Process 2. Pilot :?? 1. ( Direction ) 6? model 2. ( Execution )? model BOM Review 26
Agenda I. What is SRM? II. Why SRM? Trend, III. Function / To-be - IV. V. Critical Success Factor 27
Procurement Engineering Procurement Engineering, -, Time- to-market Project / Image Market-Mirroring BOM - ( ) ( ) / L/T L/T BOM / Simulation cost Life Cycle,, -, Life cycle, 28
Procurement Engineering Process, System, / Long Term Spend Saving / Quick Win Quick Win ( 05) * Pilot : AA 10% 50% 60% : As-Is : - : 10% * 2005 10% :AAA / - 50% 60% - : 10% - 5% 7% * IBM, ( ) (IBM : 9% 10% ) / Process / SRM PS System / Work space /, Time to Market TCO ( ) BOM 29
Agenda I. What is SRM? II. Why SRM? Trend, III. Function / To-be - IV. V. Critical Success Factor 30
Critical Success Factor ( ), Process Design, 1 2 3 4 5 Top Commitment ( ) --,, Critical Top Commitment (ex- )) Change Management ( / ) -- Quick Win,,( Cost saving )) -- // -- Performance Monitoring / Process Innovation -- Process Process Design ( )) --,, Process // -- Process --,, Input,, --, (e-procurement) System Transformation Starting Point --,,,, -- / Road map Design,, 31
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