Mission

1
g
EDI Collaborative Extranets .. The EC
Evolution of Supplier Trading Partner
Relationships
Eric B. Lien VP - Manufacturing Industry GE
Information Services 301-340-4977
2
GEs Mission Into the 21st Century

• Information Technology
• Globalization
• New Products Services
• Installed Base Services
• Quality

3
Vision for Electronic Commerce

• Integrate Entire Supply Chain
• Apply Intra / Inter-business Work Flows
• Increase Legacy System ROI
• Provide End-to-End Enterprise
• Commerce Services
• Share Best Practices Globally on
• Intranets/Extranets

Create Electronic Commerce Centers of Excellence
4
EDI Extranets
Late 1990s-2000
Richness
Extranets
1980s-90s
Gateways
Late 1970s
EC Outsourcing
EDI
Reach
5
The Goal

• Increase market reach and revenue
• Shorten the inter-business value chain
• Increase productivity
• Improve customer service
• Reduce cost
• Disseminate information quickly

6
The Value Chain Challenge
Outdated pricing
Security concerns
Long turn around time
Legacy systems
Partners with small IS staffs
Customer service Issues
Large support staff
Need for real time information
Cumbersome communications
Incompatible information formats
High costs
Too much stock
7
Global Manufacturers Challenge
.. Move Productivity Beyond the Shop Floor
SUPPLIERS
Source
Integrate
Design
Distribute
Build
Assemble
Traditional Productivity Focus
CUSTOMERS
Plan / Forecast
Supply Chain Integration is the Competitive
Differentiator
8
Hidden Costs of Purchasing
Materials Cost
Typical Focus
Invoice Rework
Missed Volume Discounts
Hidden Costs
Just-in-case Inventory
Transaction Processing
Total E-commerce solutions Economically Tackle
Hidden Costs
9
GEs VISION - Virtual Global Trading Communities
Electronically Establish Virtual Global Trading
Communities to Drive Growth, Improve Quality, and
Expand Productivity
10
Supply Chain Component Definitions

• Industry Information
• Shipping Tracking Information
• Order Tracking

• Shared Catalog Information
• Industry Standards Compliance
• Electronic Funds Transfer

DISTRIBUTORS
DISTRIBUTORS

• Supplier Selection Identification
• Electronic Requisition Purchasing Process
• Information Exchange Updates
• JIT Manufacturing Delivery

• Product, Pricing Inventory Information
• Order to Remittance (OTR) Process
• Vendor Managed Inventory

Functional Units
11
Electronic Commerce Solutions
EC Productivity Focus
Source
Integrate
CUSTOMERS
Design
Distribute
Build
Assemble
SUPPLIERS
12
The Business Value of Electronic Commerce

• Order processing cycle times reduced by 30 to
  70
• Customer service levels improved by 5 to 25
• Inventory was reduced by 10 to 15 days
• Inventory turns increased by up to six fold
• Distribution personal productivity increased by
  25 to 30
• Demand forecast errors reduced by 50 to 60
• Profit improved 150 to 250

EC managers should pursue personal and
organizational alliances with business managers
responsible for process re-engineering strategies
since BMs are best-positioned to use EC tools to
the benefit of the enterprise
Source Gartner The Business Value of Electronic
Commerce
13
The EC Solutions

• Collaborative environments
• Easy for trading partners to use
• Leverage existing investments
• Supports business processes
• Provide secure transactions
• DELIVER Real time results

14
Multi-enterprise Design Collaboration
Value-added Suppliers and Manufacturers
Develoment Parnters and/or Customers
High-speed Lines
CAD/CAE Models E-mails
Design Data
CAD/CAM Models E-mails
High-speed Lines
Collaborative Environment
Technical Data 2D Drawings E-mails
Technical Data 2D Drawings E-mails
Internet
Internet
Distributors Customers
Piece Part Suppliers
Dramatically Decrease NPI Cycle Time While
Improving Quality
15
Retail Vendor Extranet solution

• Vendor report cards
• Shipment tracking
• Store locator
• Forecasting tools
• Sales projection tools
• Charge back records
• Commitment schedules
• In-stock positioning
• In-house application integration
• Integration with Internet Forms Based EDI

Adding interactive information access and
transaction processing to the EDI community
16
(No Transcript)
17
The Three Nets of Electronic Commerce
Your Electronic Marketplace
Your Business Partners
Your Company
Internet
Extranet
Intranet
18
The Three Nets of Electronic Commerce
Intranet Communicating within your Enterprise

• Business Benefits
• Reduce Time To Market
• Lower Costs
• Enhance Quality
• Gain Competitive Advantage

• Technology Drivers
• Electronic Messaging
• Workgroup Collaboration
• Process Automation
• Browser-Based Paradigm

19
The Three Nets of Electronic Commerce
Extranet Communicating with your Business
Partners

• Business Benefits
• Better Manage Supply Chain
• Tighten Partner Integration
• React Quickly To Changing
• Market Conditions

Your Business Partners

• Technology Drivers
• Internet Based EDI
• Secure Network Access
• Legacy System Integration

20
The Three Nets of Electronic Commerce
Internet Communicating with your End Customers

• Business Benefits
• Increase Revenue
• Expand Market Share
• Develop New Markets
• Improve Customer Service

Your Electronic Marketplace

• Technology Drivers
• Electronic Catalogs
• Content Management
• Secure Payments
• Robust Servers / Databases

21
Savings will grow...
as the electronic commerce implementation rate
increases for an organization
22
Documented Savings

• Significant mailing cost reductions depending on
  the level of electronic commerce implementation
  (For example, a 100-page document weighing
  approximately one pound can cost as much as 4.00
  for priority mail depending on the carrier that
  is used.)
• Reduced paper costs (currently approximately
  40.00 for 5,000 sheets)
• Reduced copying costs (currently 0.05 per copy)
  and labor costs associated with making copies
  (For example, 20 people paid at 12 per hour
  spending 15 minutes per day 20 work days in a
  month making copies can translate to a 1200.00
  savings per month in labor costs.)
• Reduced savings in labor to fax and mail
  documents
• Reduced paper document costs from 5.00 per page
  to 0.13 per page

Significant results from Industry studies
various other businesses and industry electronic
commerce efforts
Source EPA http//www.epa.gov/ec_edi/articles/edi
benys.htm
23
In Summary.EC, the Internet Collaborative
Extranets

• Drives Cost/Revenue Benefits
• Retool business processes
• Decrease transaction costs
• Find new revenue sources
• Shorten cycle times
• Add electronic trading partners

• Increases Affinity
• Better serve trading partners
• Build stronger relationships with customers
  and business partners
• Improve customer service

Business-to-Business Opportunities in Electronic
Commerce can be Revolutionized with Internet
Technologies!
24
Supply Chain Bottom Line i.e. Net . Net

• Purchasing and ordering
• Supplier management
• Electronic product catalogs
• E-Payments

• Hewlett Packard reduced cycle time from
• 2 months to 2 days and as little as 2 hours
• GE Lighting reduced cycle times from 10
• days to 2 days decreased costs significantly

• Advance ship notices
• Speed goods to floor
• Receiving point data collection
• Better Inventory Data

• Dayton-Hudson reduced cycle time
• from 3 days to 3 hours up to 98 in-stock
• position
• Tesco tripled inventory turns halved
  warehouse
• space needs

"We've been able to drastically improve cash flow
by reducing the collection cycle time between 5-7
days, and by reducing the invoice transmission
time from 5 days to 15 minutes. Ann Bullen
Manager Electronic Commerce Architecture Lockheed
Martin Corporation
25
Thank youfor additional informationwww.GEIS.co
m/manufacturing
Eric B. Lien VP - Manufacturing Industry GE
Information Services 301-340-4977