Supplier Portals How VW saved process costs in procurement
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1 Supplier Portals How VW saved process costs in procurement Mentor: Prof. Dr. Sokianos Course: ITTM - Logistics Participiants: John Beschnidt, Heiko Boelter, Andrea Frase
2 2 Overview Introduction Supplier Portal in the Supply Chain Concept of a Supplier Portal Concept of VW Portal Experiences with VW Portal Summary and Outlook
3 3 Introduction There are about 1100 electronic Marketplaces Worldwide, 200 located in Germany. The Presentation will take the VW-Portal as example, because of the successful concept and some personal information available.
4 Improving the Procurement Process
5 5 Procurement Process All Yellow functions are not Value adding!!!
6 6 Improvements Information Flow Are only exchanged by Database Predefined Formulas, Data Storage... Inquiry By Database Negotiation, Logistics Data Exchange Via Internet, EDI
7 The VW Supplier Portal
8 8 Project VW Portal Former Process No Integrated approach IT-Support by Stand Alone Systems Telephone, Telecommunication, Postal Goals Optimized Processes More Efficient Collaboration
9 9 Strategies Strategy A: Merging of service providers e.g.: Commerce One / Intershop Strategy B: Merging of market dominating producers e.g.: Covisint (Ford - General Motors - DaimlerChrysler Peugeot / Citroen - Nissan/Renault) Strategy C: Marketplace of single producers e.g.: BMW (b2b.bmw.com), VW
10 10 Decision for single producers Portal Make or buy decision Covisint in theory available technology services company providing b2b-applications and communication services Started in January 2001 in U.S. and in July 2001 in Europe, Asia-Pacific and Latin America Arguments Against Covisint: Avoid "Lowest Common Denominator" Safety of Data
11 11 Technical Background Database Information Storage Middleware Access, Input of Data Internet Communication
12 Communication and Processes in the Supplier Portal
13 13 Forms of Communication possible Catalogue Buy Auction VW PORTAL Direct Buy Capacity Buying
14 14 Process for Supplier Dun and Brandsted Number Register Plausibility Check B2B Contract Procurement Process
15 15 Experiences with VW Portal The biggest share of savings comes for lower process cost (about 60%), followed by savings in stocks and deliveries. A smaller profit goes to the suppliers, since VW had a strict buyer politics before (Sr. Lopez) Advantages Process Costs Logistic Costs Same Purchase Costs
16 16 Evaluation and Outlook Evaluation Make or Buy decision was Right Covisint Short before Closing Goals were met process Costs Future View No Further development resources into other IT Projects
17 Purchasing Process Step Traditional 1. Demand form Manual word-doc 2. Formal test for plausibility Manual check 3. Obtain offers Manual (letter, , paper-based) 4. Assessment of offers Manual (db-check) 5. Supplier assessment Manual (db-check) 6. Final negotiations Manual (personal meeting) 7. Purchase order Via EDI 8. Order confirmation Via EDI 9. Schedule monitoring SAP 10. Incoming goods reception and testing SAP / CAQ 11. Invoice auditing Manual / SAP Disadvantage: manual editing of forms and transfer of data costs time and makes failures possible. Paper based communication and meetings are time consuming. 17
18 Why did Volkswagen Group decide to create a private supplier platform in the B2B area instead of joining a public one? 18 Joining a public initiative generally means that numerous participants have to find the "lowest common denominator" and thus the own processes cannot be displayed in a satisfactory way any more. Thus the Volkswagen Group decided to create a private Supplier platform in order to further optimize the already established processes between you and us via Internet. In this way we want to guarantee a more transparent and efficient collaboration. Furthermore we want to be sure that sensitive data are only exchanged between your and our company.
19 The DUNS number and Dun & Bradstreet are mentioned very often. What or who is this organization? 19 Dun & Bradstreet is the world s leading provider of business information. D&B has the largest company database available, with information on 75 million companies worldwide from more than 200 countries and customers. With this database companies can administrate and assign their customers and suppliers much better. The DUNS number which is also used by the United Nations, the European Commission and the ISO plays a key role. The Duns number is a nine character identification key which is valid worldwide and has global standards and a central administration.
20 20 The future of electronic market places? Quellen:
21 Thank You! 21
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