Stratex Networks

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Stratex Networks
Case Study Stratex's New Automated Approach to
Supply-side Order Management

• Scott G. Snyder
• Assistant Controller

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What You Will Hear From Me Today

• Stratex Networks who we are and what we do
• System topology and metrics
• Our economic situation and initiatives
• Our solution
• Implementation
• Where we are today
• Where we are going

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Who Is Stratex Networks?

• Founded in 1984
• Headquartered in San Jose, CA with major
  manufacturing operations in Wellington (New
  Zealand), Cape Town (South Africa) and Taiwan
• We are one of the worlds leaders in providing
  high-speed wireless transmission solutions
• We design, manufacture, and market advanced
  wireless solutions for mobile applications and
  broadband access to enable the development of
  complex communications networks worldwide
• 157 million in sales for fiscal 2004

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Our System Topology

• ERP - Oracle 10.7
• Started on Oracle in January, 2000
• Use Oracle for finance functions, Purchasing,
  Order Entry, Inventory Mfg.
• Upgrading to Oracle 11i (11.5.9) in October, 2004
• Concur for web-based, automated expense reports
• Use ADP for payroll
• TE card American Express

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Current environment.
Pre-Sales
Order Submission
Order Fulfillment
Support
Customer Sales Cycle
Customers
Suppliers/Contract Manufacturers
Customer Online Ordering
Employees Sales
Customer Support Portal (Service)
Licensing Web Interface
Employees Management and Staff
Oracle 11i, Siebel 7.5, and/or Custom

• Order Management
• Items, BOMs
• Shipping/Logistics

• Service
• Contracts and Billing
• Installed Base
• Depot Repair

Supplier Portal
Data Management Systems

• Opportunity Management
• Items
• Configurator (node/site)
• Quotes
• MDS
• Product Ordering Guides
• Orders (pre-book)
• Pricing

Network Configurator Online Ordering Tool (sales
focused)

• Inventory Management
• Purchasing
• Manufacturing
• Planning

• Finance (GL, AP, AR, FA)

Vitria (EAI Framework)
Oracle 11i

• Forecasts
• TAS
• Approval

Siebel 7.5

• iProcurement
• Time and Expense

Data Warehouse/ Repository
PeopleSoft
Enterprise Portal (Employee/Exec/Business
Intelligence)
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Metrics (U.S. operations)

• 1,210 Average Invoices Per Month (2003)
• 18.3 M in disbursements (2003)
• 797,446 POs
• 1 60 Pages
• 1 80 Revisions
• 5 buyers
• 3 key receiving areas
• 2 AP clerks, 1 supervisor

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Economic Situation (Our Challenges)

• 418 million in sales in FY-01, down to 229
  million in FY-02, now 157 million in FY-04
• Cost reductions were required, decision to
  outsource manufacturing from San Jose to Taiwan
  other locations
• Outsourced model meant large portion of shipments
  to drop-ship direct from key suppliers
• Documents all paper and in various locations
  geographically around the world

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Economic Situation (Our Challenges)

• Reductions in force meant very lean accounting
  staff to get the work done (AP staff reduced to
  two clerks and one supervisor-including TE)
• AP staff were in constant fire-fighting mode
  with no time to address issues on a timely basis
• Turnover in receiving due to reductions in force
  and outsourced manufacturing
• Receiving worked in a reactionary mode, not a
  proactive mode

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Initiatives (Where we needed to go)

• Corporate Goals
• Reduce costs from anywhere possible
• Manage contract manufacturers
• Improve existing supplier interactions
• Finance Goals
• Automate wherever possible while keeping costs
  down (started as Evaluated Receipts Settlement
  (ERS))
• Make an impact on the company through change

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Solution Automate and Improve
Supply-Side OM

• Automate the routine matching of invoices to
  receiving documents purchase orders
• Migration to a paperless AP environment through
  integration of our paper (images) with the
  transactions (data) into one source
• Solve discrepancies within hours not days avoid
  fire drills to resolve invoice discrepancies
• Automatic sending of invoice images for approval
  of expense purchases (2-way match)
• Overcome our geographical problems
• De-Compartmentalize supply chain one team
  (receiving, purchasing accounting)
• Focus our employees on our core competencies and
  outsource the rest (AP clerks to issues analysts)

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Parts To Our Solution (In-House / Outsourced)

• In-House
• Supplier communication
• Receiving transactions
• Discrepancy resolution
• Payment
• Outsourced or Outtasked
• Data entry (routine matching)
• Data conversion
• Image archival and storage

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The Implementation

• We chose AcceLIM to meet our company goals and
  initiatives while keeping costs down
• We had to outline the handoffs in the process
  between Oracle and AcceLIM
• We identified what items would be our
  responsibility and what AcceLIM would do
• Required some work from IT, but not months of
  development

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The Implementation
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Implementation Flow of data

• Purchase orders (and changes to POs) and
  receiving data downloaded daily from Oracle to
  AcceLIM
• Receiving paperwork (packing slips, bills of
  lading receipt travelers) sent by fax or
  scanner to AcceLIM daily
• Invoices faxed directly from suppliers or from us
  to AcceLIM daily
• AcceLIM matches daily and provides daily
  exceptions reports
• Matched items are downloaded daily from AcceLIM
  back into Oracle as payables objects for payment
• Issues are highlighted daily for resolution

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rcarbajal_at_stratex.com
Just curious, who did we windup sourcing the
other wire from?
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There was problem with this suppliers data,
please reprocess tomorrow.
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Where are we Today

• Signed agreement in October 2003
• Pilot in November and December
• Started production in February
• Successes and struggles

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Our Successes - Accounts Payable

• Currently about 30 of invoices come through the
  automated AcceLIM system for payment
• Images of invoices are e-mailed for approval on
  expense POs
• Document images along with the data from invoice
  to packing slip to PO can be accessed while
  discussing with a supplier
• Proof of receipt documents can be easily accessed
  and printed during audit
• Better collaboration with purchasing and receiving

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Our Successes - Receiving

• Receiving used to have a complete row in the
  warehouse for receipts with various issues, this
  has been reduced to one shelf and now just a
  small pile
• Majority of receipt issues are resolved the
  following day, based on the exception report,
  rather than only when suppliers call
• Better collaboration with purchasing and
  accounting

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Our Successes - Purchasing

• Real-time resolution of purchase order issues and
  invoice issues
• Addressing issues on a daily basis rather than
  waiting for a crisis
• Access to all data related to a purchase order
  PO, order confirmation, receiving documents and
  supplier invoices
• Better collaboration with receiving and
  accounting
• Faster identification and resolution of problems

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Where we struggle(d)

• Initial buy in and acceptance from all
  departments involved
• Overcoming the challenge of defining and
  implementing the data flow in and out of Oracle
• Achieving supplier support for sending invoices
  directly to AcceLIM and the right method of
  sending that data
• Clearly documented training and help material for
  new users
• Lessons learned

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Lessons Learned

• Implementation timeline needs to be realistic,
  not too aggressive
• Involve all departments early in the process, do
  not wait to include any departments
• Clearly define what our I.T. department will do
  and what AcceLIM will do
• Have a clear method for discussing and resolving
  issues as they arise

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Where are we going

• Within the next 12 months have over 90 of all
  suppliers sending their invoices directly to
  AcceLIM, no paper coming to Stratex
• Have all key warehouse locations sending
  receiving documents directly to AcceLIM for all
  U.S. purchase orders
• Further develop purchasing and accounting
  departments as analysts and not data entry clerks
• Automate purchase order changes through AcceLIM
• Achieve over 50 of invoices on automated
  matching

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Questions

• Questions