Global Sourcing. Conquer the Supply Chain with PLM and Global Sourcing Solutions. Visibility Planning Collaboration Control

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1 ENOVIA Global Sourcing Conquer the Supply Chain with PLM and Global Sourcing Solutions Visibility Planning Collaboration Control

2 Direct materials sourcing (DMS) is seen as not just an important technology purchase, but as a strategic product lifecycle management (PLM) technology requirement... Enterprises that do not recognize this critical need to tightly couple design with sourcing will suffer from slower time to market, fewer new product ideas, and lost competitive advantage. They ll also encounter more product quality issues and potential damage to their brand reputations. Accelerating New Product Launch Success by Integrating Sourcing Into Product Lifecycle Management Jeffrey Hojlo, Mickey North Rizza, October 23, 2008, AMR Research, Inc. Business Trends From t-shirts to cars, globalization and outsourcing have changed how manufacturers produce, design, build, and distribute what they sell. Suppliers now play a larger and more complex role, including a growing involvement in product definition. This changing dynamic affects how manufacturers and suppliers interface and collaborate for a successful and cost-effective product launch. Even as the product development process improves to meet competitive demands, some fundamental business practices have remained the same. Figure 1 depicts the static processes, consequences, and impacts that occur when a manufacturer does not adapt fully to globalization and outsourcing. Strategies such as Product Lifecycle Management (PLM) offer a clear path for manufacturers to engage technology and improve competitiveness by integrating sourcing practices throughout the product development process. PLM Drives a Supplier Network with Visibility, Planning, Collaboration, and Control Ask manufacturers what they want to see most from their operations and they will reply Performance. Visibility across a global enterprise delivers the knowledge necessary for successfully identifying global opportunities, setting the strategy, maintaining compliance, and diagnosing performance. Executives need answers to how well teams collaborate globally, if suppliers are meeting contractual obligations, or what is the status of the spend number. Without such key information, daily decision-making is at best a coin toss. PLM manages the product data from conception to maintenance through recycling.with a PLM backbone, manufacturers have visibility into their supplier network, enabling enhanced planning, innovation through collaboration, and effective control. PLM is about business transformation and complements an Enterprise Resource Planning (ERP) system. While ERP focuses on transactions (accounts payable, receivables, etc), PLM delivers users information that affects product success, time to market, regulatory compliance, and product quality. With PLM, manufacturers can: Align supplier strategies to product and manufacturing platforms Maintain part and supplier masters in a common database for a single view Collaborate with suppliers in real-time for reduced iterations and cycle-time Aggregate demand across programs, increasing sourced parts and assemblies from strategic suppliers Negotiate with suppliers for reduced cost of goods sold (COGS) through increased volume pricing Improve supplier performance and product quality Accelerate product launches and ramp-up to volume production Leverage supplier innovation Practice Consequence Impact Invisible Walls & Barriers Between Organizations and Suppliers Suppliers Involved Too Late No Tracking, Definition of Supplier Quality Metrics Manual, Paper-Based Process Complex Sourcing Decisions Based on Narrow View Wasted Time and Effort Product Quality Delivery Issues Product Quality Delivery Issues Additional Unnecessary Costs No Standard Method for Decision-Making Higher Costs Product Delays Higher Costs Supplier Lacks Innovation Higher Warranty Costs Product Delays Higher Costs Increased Time to Market Missed Revenue and Opportunities for Profit Figure 1 2 Global Sourcing Solutions

3 Supply for Design Award the Business Multiple BOM RFQs Components Purchasing Manager Create 3. Design 6. Configure BOM Parts Catalog Design for Supply Global Sourcing solutions allow companies to extend their capabilities by integrating supplier expertise while minimizing overhead. Companies and suppliers of all sizes can speed development and maintain quality by communicating in more detail, more frequently, and with more accuracy. The goal is to manage the suppliers master data in a single repository and enable secure supply chain collaboration. A supplier master record contains all the information associated with a supplier, providing the detail for creating development and quality plans. By securely involving the supply chain throughout the product lifecycle, Global Sourcing solutions enable efficient team collaboration between engineering and other business functions. Global Sourcing solutions, built on PLM, help manufacturers realize a design for supply strategy with repeatable and standardized direct material sourcing processes. ing gains an advantage with valuable supplier quotation input and access to the latest supplier design information. Procurement can engage in supplier development by designing, implementing, and tracking performance plans and scorecards. In short, Global Sourcing through PLM 3 Global Sourcing Solutions 7. Quality CAD Quality Purchasing 4. Assess Against Contract / Product Requirements Manage to Latest Revision Manager Evaluate Quotes Make Recommendations Manager Volume Production Figure 2 provides a successful means of building supplier trust and mitigating risk. A PLM vision enables a more effective Global Sourcing strategy because of the visibility, planning, collaboration, and control that PLM affords manufacturers (see Figure 2). By aggregating, in very granular detail, all the information which business and engineering teams use on a regular basis. Global Sourcing solutions provide the complete picture of a supplier s activities. Quality Managers, Enterprise Sourcing Managers, and ing departments, for example, have access to a common view of supplier dashboards, key metrics reporting, and scorecards enabling collaboration, integration, and supplier performance analysis. Sourcing professionals who practice Direct Material Sourcing (DMS) and Component Sourcing use Global Sourcing solutions to capture the entire product development picture. By enabling change early on in the development process, PLM boosts global collaborative innovation and strategic decision-making.

4 Supply Chain Network With PLM-based Supply Chain Network solutions, manufacturers can collect the data that defines their Supply Chain Network. Key to this data collection is a PLM system that delivers a single version of the truth regarding supplier information. This single source eliminates duplicate data, reducing costs associated with unreliable and inaccurate information. A well-defined Supply Chain Network includes supplier responsibilities, contact information, regulatory/ quality compliance and security protocols. Once in place, a Supply Chain Network facilitates issue resolution, resulting in more accurate product development and higher quality, all leading to greater market acceptance and increased profit potential. Business Impact: PLM-integrated item-sourcing software enhances a manufacturer s leverage when negotiating with suppliers, which leads to reduced material and service costs by linking ongoing supplier performance firmly to the inclusion of supplier parts in new products. Moreover, by identifying currently used components included in new designs, manufacturers can reduce inventory levels and respond with greater agility to shifts in demand. It streamlines the process of identifying alternative parts when standard parts are not available. User Advice: All manufacturers should investigate and employ these capabilities to reduce the number of suppliers used across the organization, and they should identify opportunities to improve pricing and service levels through increased purchasing power. As a prerequisite, manufacturers must define processes and relationships that integrate sourcing with the roles of engineers and designers in product development. Procurement must understand design considerations and the use of the parts it buys to communicate more successfully with suppliers. s must be trained to understand the cost sensitivities and factors that influence the success of relationships with suppliers. PLM-Integrated Item Sourcing, Analysis by Marc Halpern, Gartner Group Procter & Gamble is the world s largest consumer packaged goods company that today markets in more than 180 countries. The company developed its centralized, data-driven Corporate Standards Systems on the ENOVIA solution for PLM collaboration. The benefits included: $250 million in initial annual purchasing savings 99% right-first-time specifications performance 50% time reduction in qualifying suppliers and handling bids Collaborative Sourcing Collaborative Sourcing solutions reduce operational costs and increase profit margins by leveraging components, bills of material (BOM) and related data to improve time to market when building request-for quotes (RFQs). Automating the global sourcing process helps to standardize sourcing practices, improve operational efficiencies, and reduce costs by eliminating paper based processes and cutting travel time and expenses. Ultimately, Collaborative Sourcing solutions provide suppliers with the tools to become the customer s development partner. Collaborative innovation occurs when supplier and buyer can actively discuss, for example, engineering changes that will reduce costs. Supplier Performance Monitoring Supplier Performance Monitoring solutions enhance the supplier partnership by designing, implementing, and tracking part qualification plans, supplier development plans, and scorecards. Quality Managers create part Quality plans from Work Breakdown Structure (WBS) Templates, allowing Quality-planning methodologies to be standardized, customized, and measured with a combination of control and flexibility. Before product delays occur, dashboards and analysis tools inform managers of areas in need of attention. Part quality issues get faster visibility and suppliers and ing maintain ongoing access to the latest part revision levels. Business Value Assessment To determine the business and financial value of implementing PLM-based Global Sourcing solutions, we recommend a Dassault Systemes Business Value Assessment. Our Business Value Assessment process enables you to evaluate and link your unique business drivers and strategies to our solution capabilities with supporting benefit metrics and their associated improvement values. 4 Global Sourcing Solutions

5 Solutions ENOVIA Sourcing Central is a negotiation and request-for-quote (RFQ) management application for engineered products and services companies to use with their suppliers. ENOVIA Quotation Central makes it possible for a company s suppliers to participate in the electronic negotiation and request-for-quote (RFQ) process. As a result, the supplier can more accurately and quickly respond to customer opportunities as well as become an integral development partner. ENOVIA Supplier Central allows companies to manage supplier relations effectively throughout the product lifecycle. Supplier Development Managers can work with suppliers in developing their capabilities and manage performance through scorecards. ENOVIA Buyer Analytics reduces total-cost-to-source by allowing buyers to make bid-award decisions considering several attributes of quotation at once. Buyers can specify comprehensive quote evaluation criteria by choosing the attributes to compare and their relative importance. In addition, the evaluation criteria can be optionally made visible to suppliers to provide transparency in the request-for-quote (RFQ) process. Upon receiving quotations from suppliers, buyers can rank order the quotations using this criteria and make critical bidaward decisions. Buyers can also conduct reverse auctions for standard items by offering suppliers visibility into their bid s relative position and allowing them to improve bids before the RFQ expires. ENOVIA Supplier Management Supplier Performance Monitoring ENOVIA Sourcing Management ENOVIA Quote Response Collaborative Sourcing ENOVIA Collaboration Platform 5 Global Sourcing Solutions

6 ENOVIA V6 PLM 2.0 or PLM Online for All enables all users to imagine, develop, share and experience the products in the universal language of 3D while harnessing the collective intelligence of online communities. Experience PLM 2.0 with V6! Define products, process and resources within an online virtual world that behave exactly as they would in real life. V6 truly brings to life the entire product lifecycle knowledge, from ideation to engineering, production, consumer usage, maintenance and disposal. Take advantage of V6 s single, open and web-based scalable platform and fully engage in global collaborative innovation practices! Discover how easy it is to simulate how your products will perform, be built and experienced by the customers before you make any capital investment so you can hit the right market with the right product faster, and with lowest costs. About ENOVIA ENOVIA is a recognized leader in delivering collaborative PLM solutions. We enable companies from a broad range of industries to dramatically accelerate innovation, time-tomarket and revenue generation by collaboratively developing, building and managing products. Our solutions facilitate the sharing of concepts, content and context across product lifecycles and throughout value chains of employees, customers, suppliers and partners. ENOVIA collaborative PLM solutions help global enterprises bring together people, processes, content and systems to achieve a compelling competitive advantage. Our interoperable solutions unify and streamline processes across the product lifecycle, enabling companies to easily and cost-effectively work on projects within and outside of their enterprises. Our adaptable, scalable technology is built to accommodate the ever-changing marketplace. About Dassault Systèmes As world leader in 3D and Product Lifecycle Management (PLM) solutions, the Dassault Systèmes group brings value to more than 90,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes develops and markets PLM application software and services that support industrial processes and provide a 3D vision of the entire life cycle of products from conception to maintenance. Our offering includes integrated PLM solutions for product development (CATIA, DELMIA, ENOVIA, SMARTEAM ), mainstream product 3D design tools (SolidWorks ), 3D components (Spatial/ACIS ) and SIMULIA, DS open scientific platform for realistic simulation. Dassault Systèmes is listed on the Euronext Paris (#13065, DSY.PA) stock exchange. For more information, visit 3ds.com.