Cross Functional Team

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Cross Functional Team
LeighAnn Vernon Strategic Sourcing Supply Dan
Harmes Strategic Sourcing Supply Janet
Lenherr Information Systems Mike
McClary Strategic Sourcing Supply Mike
Powell Accounts Payable Robert
Walker Information Systems Don Willard Informatio
n Systems Mike Gorman eBusiness
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The Internal Sales Job

• Paves the Way With Executives
• Precursor for Funding
• Gets Team Members on Board

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The External Sales Job Out of the Shadows

• You will Receive Lots of
• Attention From
• Software Companies
• Consultants
• Content Service Providers
• Customers
• Suppliers

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No Such Thing as Cant
CANT
5
Phase 1 Implementation Completed in
8 Days
A 150 Year Old Company Moving at Internet Speed
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eProcurement Vision
Purchase Process Automation / E-Catalog
Auction
eRFP

• Commodity auction place
• Services auction place
• BNSF Surplus Sales
• Excess Transportation
• Capacity

• Request for proposal template
• E Z Format
• Digital formats
• Specification/Drawing
• attachment capabilities
• Security Encryption
• RFQ/RFP Analysis Capability

• Ease of Doing Business
• Point and click
• Shopping Cart Environment
• One stop shopping
• Workflow Approval Tracking
• Order Tracking
• Transaction Detail Capture
• Reporting Capabilities
• Expense Mgmt Automation

Communication

• Email Notification
• BNSF Supplier List/Contacts
• - Broadcast General News
• - Select RFP/RFQ recipients
• - Announce upcoming auctions
• Supplier Scorecards

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eProcurement Potential Benefits

• Decrease Maverick Spend

• Increase On Contract Spend

• Obtain Better Spend Data

• Increase Control of the Procurement
• Process

• Automation of TE and Forms

• Elimination of Non Value Added Tasks

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eProcurement What is it?
E-Procurement will allow the purchase of indirect
goods and services via the internet. By placing
orders in this user friendly environment, ease of
doing business is maximized while cutting costs
at the same time. By channeling more spend to a
specific supplier with which we have contracted
deep discounts with we can realize significant
savings. It is also a means by which structure
can be put into the procurement process. With
these controls in place, contributions to the
company's bottom will be obtained as well.

• eProcurement is
• Automation of the traditional purchasing process
• Easy Point and Click Interface
• Shopping Cart Environment
• Pre-Populated Accounting Information

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eProcurementHistory

• NOVEMBER 1999
• Developed Cross Functional Team
• Strategic Sourcing and Supply
• Accounts Payable
• eBusiness
• Information Systems

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Strategy Review

• Map Current Procurement Processes
• 3 views Business Process start to finish
• System Interaction
• Accounts Payable
• Market Research
• Understand Options and Ranges
• Develop Shopping List
• Develop Capability Matrix
• eProcurement White Paper
• ROI
• Roadmap

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Map Current Processes Purchase Order Process
Requisition in Millenium
Issue Request in Millenium
Replenishment Process
Issue Request Processing
Auto Clone
Approval Required?
Automatic PO Generated
PO is distributed via EDI or printout
no
B
yes
Match on Item and Vendor?
yes
Approval Confirmed Online
NO
Requisitions appear in clerks queue
A
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eProcurementHistory

• DECEMBER 1999 - FEBRUARY 2000
• eProcurement Education
• Began Supplier Evaluation
• Developed Business Case

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Business Case Development

• Market Research
• Understand Options and Ranges
• Develop Shopping List
• Develop Capability Matrix

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Market Research

• Shopping List
• Capability Matrix
• eProcurement White Paper

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Market Research

• After Supplier Discussions and Demos, Selected
• Three Suppliers Score
• - Ariba 158.0
• - Clarus 146.2
• - Commerce One 139.8
• RFQs Sent February 4, 2000
• Initial Price Ranges
• 5 - 7 million
• Includes Software, Consulting, Implementation,
• Hardware, Training, Maintenance and Catalog
• Setup fees.
• un-negotiated

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ROI Approach

• Determine Spend amounts and Annual
• Number of Orders for Each Commodity
• - Less than 1/3 Goes through Millenium
• - Remaining Goes through Misc. Spend

• 3 Initial Commodities Targeted
• Office Supplies
• Safety Equipment
• Computer Hardware/Software

• Supplier Furnished Tools
• Clarus Value Calculator
• TPN Register/GEIS Return Analysis
• Research Firm Methods
• Granada Research

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Potential ROI-Research Firm Methods and Vendor
Supplied Tools

• These methods produce figures that are inclusive
  of
• headcount reductions

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eProcurementHistory

• MARCH - APRIL 2000
• Narrowed Supplier List
• Executive Management Buy-In
• Final Negotiations
• Supplier Selection

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Business Case Development

• eProcurement White Paper - February 11, 2000
• ROI
• Roadmap

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eProcurement Partners
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eProcurementHistory

• MAY 2000
• Implementation Phase I
• Phase II Planning

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Clarus eProcurement Interface
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Commodity Mgr / Buyer Roles Responsibilities

• 1. Review Spending Prioritize Commodities
• High Volume Transactions
• Low Commodities
• Manual Intervention
• User Base
• Fits Catalog Environment
• Single Source
• Ecommerce Enabled?
• 2. Education of Supplier Community
• ID Suppliers
• Informative Letters
• Supplier Conferences
• On-Line Seminars
• 3. Enable Targeted Suppliers
• Electronic Catalog Creation
• Third Party Services

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Potential Commodities
Office Supplies Computer HW/SW Safety Equipment
Printed Forms Promotional Items Janitorial/Stat
ion Supplies Tools Contract Services Freight
Car Material Other Rolling Stock Mtl Roadway
Equipment Track Material Other
Phase 1
Phase 2
Phase 3
Supplier Initiation and Enablement
Future
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BNSF eProcurement Project
Phase 1 - Day 5
LeighAnn Vernon (BNSF) and Bill Engel(Perot
Systems) celebrate the Netscape Graphical
Interface Fix
Phase 1 - Day 8
The first order is placed