Clarus eProcurement

1
Clarus eProcurement

• Institute of Supply Management 4/18/02

2
Overview

• Supply Department Overview
• Integration with Legacy Systems
• Implementation Schedule
• Warehouse Sourcing Strategy
• Supplier Enablement / Catalog Management
• Challenges and Opportunities
• Future

3
Union Pacific Railroad
Union Pacific Fast Facts Miles of Track
38,654 Employees 48,300 Annual Payroll 2.8
billion Purchases Made 4.1 billion Locomotives
Owned 6,921 Freight Cars Owned 153,272or
Leased Revenue 12 billion Daily
Trains 2,000 Fortune 500 Top 1/3 Oldest Listed
Company on NYSE
4
Supply Department Statistics

• 334 Warehouses
• 356 MM Inventory
• 4.1 B Purchases
• 40,100 Active SKUs
• 6,427 Consignees
• 7,000 Primary Suppliers
• 93,000 Stock POs / Year
• 54,000 Non-Stock POs / Year
• 16.2 MM Transactions / Year
• 285 Employees

5
Desired Results from Clarus eProcurement

• Provide a seamless easy to use requisitioning
  front end for our in house developed legacy
  systems. This is in contrast to our legacy
  Online Requisition System (ORS) that was a stand
  alone system
• Reduce Transaction costs associated with
  generating a Purchase Order (PO).
• Enable our users to make full use of both our MMS
  catalog and Vendor Non-SKU catalogs to streamline
  the requisitioning process.

6
eProcurement Console
7
The Shopping Basket is the heart of eProcurement

• Search through the catalog for items on your list
• Put the items in your Shopping Basket
• Submit your order (check out)

8
Search the Catalog

• The eProcurement catalog allows you to view all
  items from all Suppliers in a single location.
• You can search the catalog using either keywords
  or the item number.

9
STAPLER
H109901
Enter a Keyword in the Keyword field,

or if you know the item number you
can enter that in the Item Nbr field.
10
(No Transcript)
11
Integration with Legacy Systems

• Challenge - existing mainframe systems use IMS,
  DB2 and Focus Databases while the Clarus uses SQL
  Server on an NT platform.
• Integration was accomplished by using data copy
  methods from SQL Server to DB2 and from the
  mainframe to SQL server. The file copy intervals
  vary from near real time for the finished
  requisitions to MMS, to every five minutes for
  the Supplier table MMS to Clarus, to once a day
  for files like the User table.
• In addition to Clarus generated emails, our
  mainframe processes use email to notify users,
  Purchasing Managers and Customer Service of
  events and or work that needs to occur.

12
UP eProcurement System Flow
13
Mainframe generated email example
14
Implementation

• Phased cut-over to 40 UP Departments/Organizations
  
• New Technology a training issue for
  requisitioners
• Departments have different requisitioning needs
  which continues to drive changes to our MMS and
  Clarus Systems
• User Acceptance has been positive
• Issues
• Non-catalog processing efficiency
• Consistent training experience

15
Implementation Schedule
16
Warehouse Sourcing Objective

• Provide a single MMS Stock Catalog view to our
  Clarus eProcurement users.
• Provide a automatic determination of the
  warehouse or direct to vendor while loading the
  requisition into the MMS System.
• Inform the user (via email) as to which
  warehouse(s) were selected to source the request.
• Honor warehouse standard issue package quantities
  for selected warehouses / direct to vendor MMS
  orders.

17
Warehouse Sourcing Specifics

• All stock items (MMS) are assigned a commodity
  code.
• A commodity code belongs to either a default
  warehouse or a network
• A network is a collection of unique regions that
  covers the USA.
• A region is a collection of prefix zip codes
  belonging to a network and specifying only one
  warehouse.
• A network can used by one or more commodities.
• A warehouse can be specified by the item number
  and kind, for special cases like drinking water.

18
Warehouse Sourcing Network
Consignee Delivery Zip Code Region Code 020
Network Commodity Code C01
Warehouse Code PV01
19
Commodity Code Listing
20
Warehouse Sourcing Item Inquiry
21
Warehouse Sourcing Network Inquiry
22
Supplier Enablement - Focus

• Identifying and enabling suppliers with high
  non-stock transaction volume
• Suppliers with a contractual agreement in place
• Goal of reducing non-catalog transactions

23
Supplier Enablement - Focus

• Ensuring contract compliance with e-Catalog
  Management Reports
• Contract Compliance Report
• Item Duplication Report
• Catalog Variance Report
• Non- Catalog Frequency Report
• A better shopping experience for our end- user
  customers with web- enabled supplier content

24
Supplier Enablement encompasses much more than
simply loading a catalog
1
2
Supplier Enablement -6 Week Process- 5 Supplier
Catalogs 1 dedicated FTE

• Change Leadership
• Train on new processes
• Requisitioners
• Assistant Buyers
• Purchasing Managers
• Identify organizational impacts

5
3

• Content Strategy/Development
• Determine content approach
• Tapout
• Buyer Managed Catalog-CCF
• Catalog development/loading
• Ongoing Maintenance

4
25
Catalog Progress - 20 loaded
Benchmarks Supplier Catalogs
20 Supplier Catalogs MMS Catalog Work
Equipment Mechanical Office Supplies/Forms IT
(peripherals/hardware) Signal Electronic
Components Tools Transformers

• Nearly a year after the No. 1 direct-sales
• computer vendor began its implementation
• of Ariba Buyer, Ariba's flagship E-procurement
• suite, Dell has supplier catalogs for just
• nine of the 1,400 suppliers it deals with.
• InformationWeek.com, E-Procurement
• Problems Behind the Promise, 11/20/00

• A year after MCI WorldCom implemented Ariba
• Buyer, a total of 90 supplier catalogs were
  enabled.
• Carl Konecek, Deloitte Touche LLP, 10/15/2000

26
Type of Clarus eProcurement Items

• 6002 items YTD

27
Challenges and Opportunities

• Software Limitations - Continuing need for
  enhancements to Clarus and MMS
• Upgrade to 6.5 NT - Server OS and database
  upgrade required.
• Managing capacity as we grow from 1000 to 3000
  system users
• Continuing need for training and communication,
  especially as we evolve.
• Supplier Enablement
• Tap-outs
• More catalogs
• Visa Card

28
(No Transcript)