How to Use Supply Chain Management System to Elevate Efficiency

1
How to Use Supply Chain Management System to
Elevate Efficiency

• Louis Lam (???)
• Vice President of Operations
• Asia Pacific
• Avnet Asia (????? ??)
• June 25th, 2005 in Beijing

2
About Avnet Inc.

• Incorporated in 1955
• Listed at New York Stock Exchange since 1960
• NYSE AVT
• Headquartered in Phoenix, Arizona USA
• ? 10,000 employees
• 68 countries
• ? 300 Offices

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About Avnet Inc.

• FY04 Revenue US 10.2B (2.3B)
• Y2005 Business Related Ranking - 217 in Fortune
  500 - 1349 in Forbes Global 2000
• Enabling success from the center of technology
• Electronic components
• Avnet Electronics Marketing
• Computer products
• Avnet Technology Solutions
• Formerly Avnet Applied Computing
  Avnet Computer Marketing

4.35B
5.89B
1.45B
5.41B
3.38B
4
Asia Market Coverage

• INDIA
• New Delhi
• Bangalore
• Pune
• Bombay

• PLANNED
• EXPANSION
• Japan

• TAIWAN
• Taipei

• SOUTH CHINA
• Hong Kong
• Shenzhen
• Shunde
• Wuhan
• Xiamen
• Changsha
• Chengdu
• Ningbo
• Fuzhou
• Guangzhou

• NORTH CHINA
• Beijing
• Shanghai
• Suzhou
• Dalian
• Harbin
• Qingdao
• Tianjin
• Wulumuqi
• Xian
• Zhengzhou
• Hangzhou
• Nanjin
• Ningbo

• ASEAN
• Singapore
• Penang
• Kuala Lumpur
• Jakarta
• Bangkok
• Manila

• SOUTH KOREA
• Seoul

• AUSTRALIA / NEW ZEALAND
• Sydney
• Melbourne
• Brisbane
• Perth
• Auckland
• Christchurch

5
Avnet-Asia Value Proposition
Customer
Value Proposition
Channel
Integrated Materials Services
Local warehouses, Proximity Hubs
Sales coverage, Technical Support, Turnkey
Solutions, BOM Bundling
Regional Sales Teams, DCs IDHs,
Tier Two
Telesales Sub-Reps
Inventory
Tier Three
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End-To-End ConnectivityEDI, RosettaNet China
eHub
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Typical EDI Setup
Avnets Business Partners
VANValue Added Network
ORDERS EDIFACT
ORDERS SAP IDOC
ORDRSP EDIFACT
ORDRSP SAP IDOC
8
RosettaNet Architecture
Avnets Business Partners
PO request
Receipt acknowledgement or
Acknowledgement exception
PO acceptance or rejection
TradingNetwork(TN)
BackendSystem
SAP
(guarantee of delivery)
Integration Server
PIPS
PIPS
IDOC
Server Admin
Developer
TN Console
TNDatabase
Acceptance receipt acknowledgement
Order status update and
Advanced shipment confirmations
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Avnets RosettaNet History

• Late 1990s, Avnet invested in RosettaNet
• 2000, first in the industry to deploy order
  management using RosettaNet
• 2001, Price Waterhouse validated RosettaNets
  viability based on Avnets HP implementation
• 2002, Directed our focus on true revenue
  transactions with IBM Cisco, rather than
  non-vital informational transactions
• 2002, Avnet Europe deployed order management
  using RosettaNet
• 2003, first in the industry deploying RosettaNet
  Design Win
• 2003, Avnet integrated Asia into global
  RosettaNet infrastructure
• 2004, Avnet, China ECNet GXS deployed the first
  order management RosettaNet solution in Asia
  supporting FiberHome

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Design Win Generating Revenue in China
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Asia Order Cycle Time Opportunity
Traditional
RosettaNet
Employee Effort
Cycle-Time
Employee Effort
Cycle-Time
Quoting
30 min. to 3 hrs
4 hrs to 24 hrs
15 min.
15 min.
Order Approvals
55 min.
55 min.
0 min.
0 min.
PO Creation
30 min.
30 min.
0 min.
0 min.
PO Placement
0 min.
40 min.
40 min.
15 min.
Minimum
30 min. to 4.5 hrs.
40 min. to 24 hrs.
Total
15 min.
30 min.
Maximum
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Order Transaction Volume Change
13
RosettaNet Transaction Growth
14
RosettaNet PIPs Implemented
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Drivers for e-Commerce Business Objectives
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Relative Effect of Using RosettaNet Process
Standards
ROI 230
high
Manually intensive
Organizational impact
Proprietary VAN/EDI
Quantifiable benefits
low
high
low
Financial benefit
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Benefits From Several Perspectives

• Process benefits from eliminating redundant
  activities, eliminating manual data entry, and
  automating information processing
• Financial benefits from streamlining processes,
  reducing cycle time, and increasing data accuracy
• Business development benefits from increasing
  connectivity with key suppliers, partnering with
  key suppliers, and increasing responsiveness to
  customers

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RosettaNet Standards Produced Results

• Manual order processing was reduced by 90
• Order response time was reduced from 8-10 hours
  to 2 hours for exceptions that require manual
  intervention and less than 20 minutes for
  non-exceptions
• 7x24 and real-time ordering capability were
  achieved
• Inventory turns were doubled, freeing staff from
  manual order processing, and allowing more time
  for inventory management
• Order accuracy was improved, eliminating
  additional re-entry tasks and other costs

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China eHubA More Flexible Way To International
Standards on B2B Connectivity
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Avnets RosettaNet History

• Late 1990s, Avnet invested in RosettaNet
• 2000, first in the industry to deploy order
  management using RosettaNet
• 2001, Price Waterhouse validated RosettaNets
  viability based on Avnets HP implementation
• 2002, Directed our focus on true revenue
  transactions with IBM Cisco, rather than
  non-vital informational transactions
• 2002, Avnet Europe deployed order management
  using RosettaNet
• 2003, first in the industry deploying RosettaNet
  Design Win
• 2003, Avnet integrated Asia into global
  RosettaNet infrastructure
• 2004, Avnet, China ECNet GXS deployed the first
  order management RosettaNet solution in Asia
  supporting FiberHome

China eHub
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China e-hub Concept
SAP IDOC
Comm Gateway
ERP Format
PIPs 3A4
SAP IDOC
PIPs 3A4
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IMPLEMENTATIONPROCESS
GO-LIVE
Sign-Off
User Acceptance Testing
Connectivity/End-to-End Testing
Development
Specifications Sign-Off
Prepare PIPs Specifications
Reach consensus on PIPs usage and timeline
Understand Existing Order Processes
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Fiberhome Avnet's Strategic Focus

• Customer Excellent customer relationship
  improves customer loyalty.
• Velocity RosettaNet enhances data exchange
  accuracy and efficiency.
• Flexibility Ability to respond to upsides and
  downsides is very critical.
• Risk Minimize inventory liabilities and
  line-down situations. Provide value-added service
  such as Forecast Management.
• Visibility Control Balance of demand and
  supply, and use of KPIs to monitor/feedback.
• Franchised Lines Leverage on strengths and
  relationships with Franchised Suppliers (i.e.
  buffer stock, pricings, lead-times, etc.)

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China eHub Solutions
Interchange Services Mailbox
Business Partner
EDIFACT
Interchange Services Mailbox
User-Defined File
China eHub
Business Partner
ANSI
Interchange Services Mailbox
Interchange Services Mailbox
Business Partner
XML
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• ??!
• Xie Xie !
• Thank You !