The Next Generation of
Demand Driven Global Supply Chains
Matt O’Malley
CEO/President
B-Global Technology
Agenda
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B-Global Introduction
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Dell Supply Chain Principles
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Dell Trade Engine for inbound material
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Dell Outbound Fulfillment Engine
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Technology and Architectural Challenges
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Key lessons learned
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Summary & Conclusion
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B-Global Confidential
Introduction to B-Global
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Solutions company for Global DDSN
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Business process optimization Focus
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Technology leadership
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Demand driven supply chain
B2Bi RosettaNet based
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Blue chip accounts
DELL, Hitachi, NEC,PANASONIC
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Connected 217 Dell’s suppliers
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Average B2B Implementation 13 days
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400 customers worldwide
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USP - High velocity solution creation
& deployment
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B-Global Confidential
Strategic Partnership : March 2003
Dell Computer Corp chairman and
chief executive officer Datuk
Michael Dell said the trade engine was
necessary to bring greater efficiency to
the Dell supply chain while giving greater
value to Buyers.
Michael said that the company
hoped to have a 100% participation
within the next 12 months.
Network & Datacenter
Infrastructure
“Best-in-Class”
RosettaNet Solution
and Implementation
Partner
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B-Global Confidential
Strategic Partnership: March 2005
•Ministry of commerce China
•Nationwide e-Business Network
• Data Center Infrastructure - 96 cities
• Unified e-Commerce Platform
• Worldwide leader in Supply Chain
• Trade Engine Solution
• Development Pioneer of Trade Engine
• Implementation Partner
B-Global Confidential
Procurement Solution for - China Telecom Sichuan
Used by 400 buyers around China
connecting with 2000 suppliers
POs and Contracts Volumes per year > $3B
Features include Demand Mngt., Bidding
Result, Purchase Order, Contract Mngt.,
inventory Visibility, Payment/Invoice, fully
Integrated with SC-Telecom Internal ERP
System
B-Global Confidential
Dell Supply Chain Principles and Challenges
Beginning and Ending With…The Customer
B-Global Confidential
Integrating the supply chain to support, build-to-order, direct for customers…
Suppliers
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Continuity of Supply
E-Business Collaboration
Technology leaders
Low-cost manufacturers
DELL
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Best Customer Experience
Low Cost Efficiency
Highest Quality
Partnering
Virtual Integration
Customers
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Product Quality
Price for Performance
Customization
Reliability, Service & Support
Latest Technology
B-Global Confidential
Strategic Challenges
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Manufacturing capacity expansion
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Complexity Of global shipments
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Increased range & complexity of product
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Business model shift to greater content of non Dell build
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Increasing logistics costs for inbound and outbound fulfillment
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Scale business without increasing cost base
B-Global Confidential
Dell Global Presence
Limerick,
Ireland
Penang,
Malaysia
Xiamen,
China
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Austin,
Texas Nashville,
Tennessee
3 Core Geographic
Business Regions
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Manufacturing Facilities
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Eldorado
do Sul,
Brazil
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EMEA :22%
APJ : 11%
Americas : 67%
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Revenue $10.8B*
OpInc 7.6%
Ranked #2
Revenue $5.5B*
OpInc 8.4%
Ranked #3
Revenue $32.9B*
OpInc 9.0%
Ranked #1
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Manufacturing Locations
Subsidiaries & Distributors
Asia Pacific
Americas
Europe
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Austin, Texas
Nashville, Tennessee
Raleigh NC
Eldorado do Sul, Brazil
Limerick, Ireland
Poland
Penang, Malaysia
Xiamen, China
Chennai,India
* FY05
B-Global Confidential
Supply Base Demographic Distribution
Czech
UK
USA
Ireland
Germany
Hungary
Korea
China
Japan
Taiwan
Costa Rica
Mexico
Thailand
Malaysia
Singapore
Hong
Kong Philippines
Indonesia
Over 200 Supply base > 18 countries
B-Global Confidential
Worldwide Fulfillment Facilities
Limerick
China/HK
Japan
EMEA
Xiamen
a
M’si
Nashville
Austin
Ship
t
c
Dire
Americas
Asia Pacific
Dell CCC
Penang
Brazil
Dell APCC
B-Global Confidential
Dell SCM Principles
“Push”
“Pull”
Buy-to-Plan
Build-to-Order
SLC
Customers
Suppliers
Material requested to build customer orders
Dell
Manufacturing
All material is tied to a customer order –
nothing is built without an order.
Buy to Plan – Build to Order
Always have enough – Nothing left over
Precision Transitions
Forecast = Buy = Sell
Relentless Demand \\ Supply Balancing
Crisp Execution – Velocity (Dellocity)
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B-Global Confidential
Ensuring Continuity of Supply
Intense Focus:
• Separate internal organizations
• Supported by unique processes and systems
• Looking at a different parts of the inbound supply chain
• Dealing with different people at the supplier
ic
g
te
a
r
St
Beyond lead-time
Worldwide Procurement (6X)
Executive
ng
i
nn
a
Pl
3 days to order lead-time
Regional Materials (4X)
Operations
ec
x
E
0 to 3 days
Factory (X)
SLC
n
io
t
u
Time Horizon
Org (people)
Supplier Interface
Low Inventory Provides Operational Efficiencies and Cost Advantage…
B-Global Confidential
Dell Supply Chain Execution
Supply Chain
Planning
Forecast
Demand
Generation
Weekly
Daily
Efficiency
Factory
Scheduling
Supply Chain
Execution
Materials
Pull
Supplier Collaboration
2 Hours
Pull
Real Time
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B-Global Confidential
Approach for Dell Inbound Material
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Quick analysis of critical business needs
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Focus on elimination of manual processes
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Propose process optimization layer on existing ERP systems
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Develop suite of business applications & overlay on RosettaNet messages
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Return on Investment less than 6 months
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Phased delivery with first phase in 90 days elapsed
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B2B implementation must be less than 30 days
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Architect for global execution and highly flexible deployment
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Create highly scalable and easy to support ,robust environment
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B-Global Confidential
B-Global End State of Dell-Suppliers Collaboration
Invoices
Suppliers
Invoice Accept/Reject
Dell
Payment Advice
Purchase Order
Call off Daily Requirements
Suppliers Call Off Delivery Schedule
ASN Shipment
Materials Receipt
Materials Requirement Forecast
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B-Global Confidential
End to End Process Flow
Blanket PO
Blanket PO Ack
Blanket PO Change
Blanket PO Change Ack
Forecast Request 90 days
Forecast Commit
Inventory Snapshot
Inventory Status
Replenish Signal
2 Hour Pull
ASN Shipment to hub
Material Commit
Hub Material Receipt
Supplier
RosettaNet Server
ASN Shipment
Dell
RosettaNet Server
Material Receipt
ASN Shipment
3PL
RosettaNet
Server
Forwarder Material Receipt
Forwarder POD
3PL Material Receipt
Material Receipt
ASN Shipment
Forwarder
3PL Material Receipt
Invoice
Invoice Reject
Remittance Payment
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B-Global Confidential
Trade Engine Application Modules
DELL
Supplier
Trade Engine
• Purchase Order
• Shipment Schedule
• Forecast
• Invoice/Payment
• Part shortage Mngmt
• Production Planning
• Purchase Order
• Shipment Schedule
• Inventory Mngmt
• Invoice/Payment
• Forecast
•Process Optimization
•Platform Integration
•Information Management
•Application Management
•Discrepancy Management
•Collaboration Management
•Real-time Network Management
•Web Services
Synchronized View Points Between Manufacturers and Trade Partners
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B-Global Confidential
Trade Engine Host – Dell Side
Trade Engine Host
(Dell)
Buyer Module:
Finance Module:
• Purchase orders
• Forecast
• Shortage Management
• GRN Status View
• MV Spend Allocation
• Invoice validation
• Invoice rejection
• Payment management
Production Planning:
Logistics Module:
• Shortage Management
• Order Impact
• Parts ETA
• 3PL/VMI Hub Mgmt
• Inventory visibility
• ASN Views
• Goods receipt
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B-Global Confidential
Trade Engine Client - Supplier
Trade Engine Client
(Supplier)
Order Module:
• Purchase orders
• History of PO
• Quantity outstanding
Forecast Module:
• Latest Request
• History of commitment
• Audit of commit
Finance Module:
• Invoice Creation
• Invoice transmission
• Invoice rejection
• Remittance Notification
• Payment reconciliation
Logistics Module:
• 3PL/VMI Hub
• Goods sent
• Goods received
• Inventory Management
• Replenishment Mgmt
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B-Global Confidential
Functionality – Control Inside and Outside 4 Walls
3PL Trade Engine (Exceptional Pipeline Control)
3PL Network – Today Limited Outside 4-Wall Visibility
Dell Factory
Good Visibility / Dynamic
Dell Supplier
Forwarder
3PL
3PL
3PL SLC
Truck/Train
Shuttle
VMI Hub
n Tier Level
95WSP
Total Visibility Across: Production – In-transit – In-hub Inventory - Factory consumption
B-Global Technology Enables Comprehensive End-to-End “Track and Trace”
B-Global Confidential
Extending Data Visibility End to End
Logistics Data – Extended to provide end to end visibility
Global Event Management System
Visibility from Logistics providers
Land Freight
AIR & SEA Freight
Forwarder
Supplier
FF
Factory
FF
3PL SLC
Truck/Train
Shuttle
B-Global Confidential
Trade Engine Solutions & Infrastructure
Trading Partner A
Finance
PO
Good Receipt
Buyer
DELL
Call off sch.
Firewall
Forecast
Hub
Logistic
Trade
Engine
Logistics
Firewall
PPIIP
P
PPIIP
P
Custom
Trading Partner B
PIP
PIP
PIP
PIP
Firewall
Finance
Manufacturing
Trading Partner C
Web
Interface
Trading Partner D
PO
Good Receipt
Trading Partner E
Call off sch.
Finance
Backend
ERP
systems
Forecast
Logistic
ASP Server
Trading Partner F
Custom
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B-Global Confidential
RosettaNet PIP Usage in Dell Trade Engine
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3A4:
3A7:
3A8:
3A9:
3A13:
3B2:
3B3:
3C3:
3C4:
3C6:
4B2:
4C1:
4D1:
4A1:
4A5:
Request Purchase Order
Notify of Purchase Order Update
Request Purchase Order change
Request Purchase Order Cancelation
Notify of Purchase Order Information
Notify of Advance Shipment
Distribute Shipment Status
Notify of invoice
Notify of invoice reject
Notify of Remittance advice
Notify of Shipment Receipt
Distribute of inventory report
Notify of Material Release
Release of strategic forecast
Notify of forecast reply
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B-Global Confidential
Trade Engine Achievement
Dell eProcurement system
Used by 200 buyers and
Handled $13B Purchase
Order volume 2006
Total of 217 trading partners &
1M invoices
Features include Purchase Order
Creation, Approval, Transmission,
Part Shortage Management ,
Integration with Invoices,
remittance notification &
Inbound logistics
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B-Global Confidential
B-Global RosettaNet Enabled Customers
B-Global Confidential
B-Global RosettaNet Enabled Customers
Konway
Federal Packages
YS Foam
B-Global Confidential
B-Global RosettaNet Enabled Customers
B-Global Confidential
B-Global RosettaNet Enabled Customers
Sunrise Paper
Delta Networks, Inc
Premier Image Technology Corp
TR Formac
HiPro Electronics
AU Optronics
B-Global Confidential
B-Global RosettaNet Enabled Customers
Broad Technology
Jazz Hipster Corporation
Hyundai Display
Toshiba Samsung Storage Technology
B-Global Confidential
B-Global RosettaNet Enabled Customers
HTC Corporation
B-Global Confidential
Trading Partners B2B Implementation with B-Global Velocity
New Supplier B2B Implementation:
Trading
B-Global Elapsed Time to
Go-Live
Partner (Mandays) (Average
Days)
(Mandays)
Electronics
Messages
No. of
Messages
DELL
(Mandays)
Trade Engine (Direct)
6
2
10
20
13
Trade Engine (ASP)
6
1
2
2
PIP 2 PIP
1
15
50
60
3
120-150
EDI
1
25
40
-
90-150
Process Change or New Additional Process:
Electronics
Messages
No. of
Messages
DELL
(Mandays)
Trading
B-Global Elapsed Time to
Partner (Mandays)
Go-Live
(Average
Days)
(Mandays)
Trade Engine (Direct)
2
1
3
10
5
Trade Engine (ASP)
2
1
1
2
2
PIP 2 PIP
1
15
50
60
120-150
EDI
1
25
40
-
90-150
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B-Global Confidential
Key Value Delivered
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High speed delivery and execution
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Trade engine 3 months from development to deployment
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194 suppliers live in less than 9 months
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New logistics hubs up and running in 3months
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Switched on 194 suppliers to new factory in 2 weeks
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Average B2B implementation 13 days best case 3 days
Provide compelling business benefits
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Invoice discrepancy reduced from 10% to 2.4%
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Significantly Reduced inventory levels
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Reduced cost of dealing with suppliers
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Positive ROI in less than 4 months
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B-Global Confidential
Outbound fulfillment
Dell Rosettanet-based Application for Globalized Outbound Network
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B-Global Confidential
Dell Rosettanet-based Application for Globalized Outbound Network
•
China Live November 2004 with China Post and EAS
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ANZ Live December 2004 with BAX Global
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Korea Live September 2005 with BAX Global
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MST Live on Jun 2006 with YCH
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India Live on June 2007 with YCH
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6M transactions per month
B-Global Confidential
Outbound Fulfillment Capabilities
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One Ring Order Fulfillment Management
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Intelligent Parts allocation and order fulfillment management
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Optimized for high margin orders/premier account orders
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Multi vendor same parts allocation management
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Order Track and Trace
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In-transit merge management
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Total (all hubs/DCs) Inventory Visibility & Management
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Enable better customer experience by CA
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Electronic customer POD for revenue recognition
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B-Global Confidential
Process Flow
Order routing
processing
Merge hub allocation
3PP
3PP
FTY
VMI
3PP
Other
Services
Item order
filtering and
arrangement
Order from
Customer
Based on the order’s
channel and state
LSP
(Logistics Service
Provider)
Customer
3PP
POD
POD
VMI
Dell
Plant
Dell Inventory
POD
A : Canon Camera
B : Lexmark Printer
C : Desktop/Notebook
D : Norton Software
Revenue on Day 5
DTT on Day 5
1. Desktop/NB
2. Camera
3. Printer
4. Norton s/w
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B-Global Confidential
Total Visibility of Order Fulfillment Process
Ex-Factory
Uplift Report/Port
• Master Airway Bill No.
• Order No.
• System Quantity
• LOB
• Download Date
• Invoice Date
• Expected ETA
• Destination
• Shipping Mode (Air/Ship)
• Carrier Code
III
0
Manifest Report
• Order No.
• Qty (Cartons)
• Cust. No.
Local Warehouse/Dock
IA
Order Consolidation
7am Daily Report (ex-Warehouse)
• Order No.
• System Quantity
• LOB
• Download Date
• Invoice Date
• FDD
• Expected ETA
• Destination
• Shipping mode (Air/Sea)
II
I
Destination Air/Sea Port
IV
Global Fulfilment Engine
Destination
Airport/Port
V
XII
Track & Trace
XI
Customer
IX
VIII
X
VII
VI
2A
Order Status
Truck to Customer
Merging @ LSP Hub
Truck to DC Hub
Customs Clearance
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B-Global Confidential
Dragon Hub and LSP Client
LSP (without WMS)
Intranet
LSP
Client
Dell Back
End
Systems
LSP Network
• Web Server
• App Server
• DB Server
DMZ
Internet
gFE Hub
DRAGON
LSP (with WMS)
Users
LSP
Client
WMS
LSP Network
• Web Server
• App Server
• DB Server
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B-Global Confidential
Dragon Architecture & Information Exchange
DRAGON
Trade Engine
LSP DRAGON
Trade Engine
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B-Global Confidential
gFE Hub Trade Engine Architecture
Global
Fulfillment
Engine
LSP Fulfillment
Engine Client
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B-Global Confidential
DRAGON Hub Web Application – Main Screen
System
Fulfillment
Administration
•Fulfillment Detail
•Cross Reference
•Merge Loc
•Generic Routing
•Allocation Priority
•Part Deviation
User Administration
•User Maintenance
•User Group
Maintenance
•Master and Sub
Location
•Order Series
•New Order Series
•Carrier Code
•Non Merge Part
Inventory
Track and Trace
Exception
•Inventory Visibility
•Track and Trace
Details
•Exception Tracking
•PPID Search
•GRN Report
•VMI Report
•Box Code
•One Ring Order
Report
•Item Box
•Delivery Report
•Item Vendor
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B-Global Confidential
LSP Client Application – Main Screen
Administrative Tools
•User Maintenance
•User Group Maintenance
Dragon LSP Tools
•Sales Order Enquiry
•Pick List By Order Enquiry
Inventory
Exception
•Inventory Transfer
•Exception Tracking
•Inventory Adjustment
•Pick List By Part Enquiry
•Packing Slip By Order Enquiry
•Pending Pick List
•Pending Packing Slip
•Feed File Enquiry
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B-Global Confidential
RosettaNet PIP Usage in Dragon
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2A12: Distribute Product Master
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3A13: Notify of Purchase Order Information
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3B3:
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3B11: Notify of Shipping Order
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3B12: Request Shipping Order
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3B18: Notify of Shipment Documentation
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4C1:
Distribute of inventory report
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4D1:
Notify of Material Release
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Support Multi-byte languages in PIP messages
• Chinese Traditional and simplified
• Hangul Korean…..Indian…..etc
Distribute Shipment Status
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B-Global Confidential
Key Technology and Architectural Challenges
Trade Engine Architecture
No Single Point of Failure
PowerEdge 6650
Firewall/VPN
10/100/1000
Ethernet Switch
Dell |
EMC DS 8B2
Firewall/VPN
Client System
Dell | CX 400
SAN
Cluster Heart Beat
High availability
Wide Area Network
Dell |
EMC DS 8B2
PowerEdge 6650
Fibre Channel
Switches
PowerVault 132T LTO
Tape Library
Database Servers
B-Global Confidential
Architecture is infinitely scalable
Supplier Capacity per day- Scaling Up Vs Out
250000
222,025
S u p p lie r s p e r d a y
200000
173,346
150000
111,012
86,673
100000
50000
1,845
1,845
3,580
3,469
6,938
6,522
2
4
8
13,877
12,261
16
27,753
23,051
55,506
43,336
0
32
64
128
256
No . of C PU
Scaling up
Scaling Out
B-Global Confidential
Pip Volume Comparison
PIP Volume for Dell
(May – July 2006)
2003336
1864830
1606834
1378890
229738 187062
1561060
1390316
175844 163604
204448
164672
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B-Global Confidential
B2B vs. Portal
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Direct Connection between trading partners
(Fixed IP to Fixed IP)
Automatic transmission of transactions
Highly Secure
Highly Scalable
Controlled secure access within organisation
Real time information
Push based not Pull based
Easily Integrated with backend and legacy
systems
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Fixed IP to Dynamic IP – Not Secure
Manual entry on all data via web screens
Not Secure
Restricted scalability
Delays especially country to country
Pull based not Push based
Not easily integrated with backend systems
B-Global Confidential
Hypothetical Scenario
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Supplier in China
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17 Hub locations in North America, ABC Hub operator
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3 in Asia, XYZ Hub operator
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2 in Europe, XLF Hub operator
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30 different part types in each hub, VMI operation
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Supplier responsible for managing inventory
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Supplier responsible for billing when inventory is pulled
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Hypothetical Scenario - Portal
Supplier
Hub 2
Hub 4
Hub 1
Hub 6
Hub 5
Hub 3
• 22 Hub Locations = 22 individual Web Portal Sites
• Lookup 30 parts per site time taken = 2 days
B-Global Confidential
Hypothetical Scenario – B2B
Hub 2
Hub 4
Hub 1
Supplier
Hub 3
Hub 5
Hub 6
• 22 Hub Locations real time inventory feeds consolidated into 1 system
• Global view of all inventory
• Lookup time seconds
B-Global Confidential
Characteristics of next generation supply chain
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Elimination of manual processes
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Event based architecture
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Alert based when events do not occur in correct time sequence
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Auto correction of possible
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Push based technology not portal based!
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Demand propagation in real time to suppliers
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Synchronization & triangulation of signals to reduce discrepancy
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Integration of logistics, payments and fulfillment processes
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RFID overlayed onto solid message backbone
B-Global Confidential
Key Lessons Learned
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Start with Business Process automation not PIPS or EDI messages
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Pragmatic approach
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Keep it Simple ---- phased approach with strategic goals
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High Speed Implementation ensure Fast ROI recovery
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Pilot with Small Group of Supplier to ensure Pilot success
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Key to success is trade partners engagement model adopted
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Used Open Standard – Recommend RosettaNet B2B
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Avoid Portal trap (portals not suitable for high volume supply chain)
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Executive Commitment
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Summary
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Rosettanet is an excellent standard for complex supply chains
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Deployment can be achieve in very short timeframes
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ROI can be less than 6 months if approached correctly
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Pragmatic approach is essential
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Understanding of business + technology is essential
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Leverage proven technology
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Understand scalability issues
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Take business driven application suite approach
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B-Global Confidential
Thank You