ARIS EasySCOR - Supply Chain Council

Supply Chain AssessmentsWith ARIS EasySCORIntroduction & Case StudyBusiness Process ExcellenceBusiness Process Excellencewww.ids-scheer.comwww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reservedPresented by:Alexander LottererConsulting ServicesIDS Scheer, Inc.Mike CordevanoManaging ConsultantTunnell Consulting

AGENDAAbout IDS ScheerARIS IntroductionARIS EasySCORSupply Chain Case StudyQuestions & AnswersBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

IDS Scheer At A GlanceConsulting and software for business process management andE-Business.Analysis and improvement of business processes,implementation of standard business management software, anddevelopment of E-Business solutions.With the ARIS product line, we are the worldwide market leaderfor business process engineering software (Gartner Group).Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

International PresenceIDS Scheer is represented with subsidiaries and partnersin over 50 countries.Internationally present potentials are the basis for IDS Scheer's above-average growth.Internationalization strategy as a key to successBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Continuous Sales Growth2001 – 2002+ 13.2 % *181.3 *160.2125.887653144 461995 1996 1997 1998 1999 2000 2001 2002[EUR millions]* preleminary figuresBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Customers (Examples)Industry Sector• High Tech• Automotive• Capital Goods• Paper & Textile• Chemical & Pharmaceutical• Consumer Goods / RetailService Sector• Financial Services• Public Sector• Utilities• Telecommunication• Logistics & TransportationBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

The IDS Scheer ApproachA Holistic Solution ...Design ofbusinessprocessesIndustryknowledgeKnowledgeofapplicationsLifecyclesolutionsImplementation ofbusinessprocessesHolisticsolutionsTools/MethodologyContinuousoptimization ofbusinessprocessesBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

AGENDAAbout IDS ScheerARIS IntroductionARIS EasySCORSupply Chain Case StudyQuestions & AnswersBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

ARIS Collaborative Suite 6.1ARIS Collaborative Suite 6.1software for the design, analysis an improvement of businessprocesses and organizational structuresWorldwide market leader (confirmed by Gartner Group)about 37,000 licenses (as of February 3, 2003)over 3,000 customersin nearly 50 countriesWeb-based solutionsIntegration of E-Business technologiesARIS for mySAP.comARIS for HyperwaveARIS Integrator for VitriaARIS for INTERSHOP enfinityBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

ARIS Leading the Business Engineering MarketGartner Inc. study ranks IDS Scheer in worldwide pole position for business process management.Research June 2002 - http://www.gartner.com/gc/webletter/idsscheer/issue1/index.html(For legal reasons, we are unable to put the complete study instead of the link to your disposal.)Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

ARIS - Method and BPR ToolA framework for modeling the enterprisein a holistic manner so as to support allareas of the businessA repository based product-set that supportsmultiple modeling techniques and enables theapplication of the resultant enterprise modelsBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

ARIS - Architecture of Integrated Information SystemsOrganization ViewDataViewControl ViewFunctionViewOutput (Result) View(Products)Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Business Process Management with ARISBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

ARIS Product SuiteARIS Web DesignerARIS ToolsetARIS Easy DesignARIS BSCARIS EasySCORARIS SimulationBusiness Process ExcellenceARISforARIS formySAP.comINTERSHOP enfinitywww.ids-scheer.comARIS Web PublisherCopyright © 2003, IDS Scheer, Inc.All rights reserved

ARIS ArchitectureMS WindowsPlatformJAVAPlatformARIS ToolsetARISEasy DesignARISfor mySAP.comWeb DesignerARISSimulationARIS ABCARISWeb PublisherARIS Application ServerInternet/Intranet/ExtranetRDBMS(e.g. OracleSybase)3 tier ArchitectureWeb enablingBusiness Process ExcellenceDatabase systemwww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

AGENDAAbout IDS ScheerARIS IntroductionARIS EasySCORSupply Chain Case StudyQuestions & AnswersBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

SCM IntelligenceBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

What is ARIS EasySCOR?ARIS FeaturesEasySCOR Content• 130+ different model types• Reporting functionality• WebPublisher• Business Case Animation• Simulation• Activity Based CostingSCOR Model Version 5.0• SCOR Processes• Best Practices• Key Performance Attributes• Metrics• Data Input/Output• Training, learning, understanding• Configure your company specific supply chain basedon pre-defined SCOR processes• Define your performance measurement system usingSCOR metrics• Analyze, evaluate and improve your supply chainBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

SCOR Hierarchy - Model Assignment1. Top Level (Process Types)With ARIS EasySCOR, viewing and customizing SCORis simple. The models are easy to understand and workwith.2. Configuration Level (Process categories)Easy SCOR gives you the flexibility to configure yoursupply chain, using SCOR as a template. The modelscan also be shared over your network to facilitatecommunication about supply-chain issues.3. Process Element Level (Decompose Processes)Easy SCOR facilitates customization, analysis, and finetuningof supply chain procedures with easy to usemodeling functionality. IDS can also support you inperforming process measurement, as well as static anddynamic simulation with the ARIS Toolset, our top-rankedprocess analysis tool.Business Process Excellencewww.ids-scheer.com4) Implementation Level(Decompose Process Elements)ARIS EasySCOR and the ARIS Toolset give you theability to quickly and easily expand the scope of theSCOR model. Take advantage of the world’s numberoneprocess modeling tools to help achieve a competitiveadvantage and adapt to changing conditions in yourmarket.Copyright © 2003, IDS Scheer, Inc.All rights reserved

SCOR Model in ARIS FormatSCOR Level One (Top Level)Level One in SCORLevel One in EasySCORSCORPlanSourceMakeDeliverReturnARIS Model Type: Value-Added Chain diagramThe Value-Added Chain diagram depicts those functions in a company or departmentwhich directly influence net output. This model type shows the general sequence inwhich high level functions occur.Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Process Elements with Additional InformationDescription/DefinitionInput/OutputReliabilityPerfect OrderFulfillmentProcess Element/FunctionAdvancedShip NoticeReceive andVerify Product atCustomer Site (m-t-o)D2.10ResponsivenessCustomer Receiptof Order to InstallationCompleteFlexibilityPerformanceAttributesBest PracticeAdvanced ShippingNotices & UCC128container labelingShipmentTrackingUpsideDeliveryFlexibilityDownsideDeliveryFlexibilityKey PerformanceIndicatorBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Benefits of ARIS EasySCOR Combination of leading BPR tool with pre-defined, standardized supplychain processes Easily navigate through the SCOR model to learn and communicateSCOR content drill-downs, object relationships, maintained attributes, Design company-specific supply chain processes using pre-definedSCOR objects model current (“AS-IS”) supply chain configuration model future (“TO-BE”) supply chain configuration Document business processes beyond SCOR processes outside SCOR scope (e.g. sales, product development, finance) processes below level 3 to further specify process detailsBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Benefits of ARIS EasySCOR (cont’d) Build a company-specific SCORCard based on pre-defined and standardized SCOR metrics, supported by theBalanced Scorcard Method Analyze and optimize your supply chain performance perform gap analysis based on identified best practices use ARIS Simulation to find out about process bottlenecks, resourceutilization and other supply chain use ARIS ABC (Activity-based Costing) to evaluate your supply chainprocesses from a cost perspective Prepare an SAP implementation use ARIS for mySAP.com to document your current SAP functionality orprepare a future SAP implementation Communicate supply chain knowledge ARIS WebPublisher helps you to communicate your documented businessprocesses efficiently through the internet or intranetBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

AGENDAAbout IDS ScheerARIS IntroductionARIS EasySCORSupply Chain Case StudyQuestions & AnswersBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

About - Tunnell ConsultingOur Company & Our People Founded in 1962 Employee Owned Headquarters in King of Prussia, PA Solutions that Exactly Meet Client Needs Experienced, Multi-disciplinary Staff Integrating Technical and OrganizationalChange Strategies Team Based Knowledge TransferBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

About The ClientIndustry: Computer Hardware - Electronic Business EquipmentCapsule: The company - an American multi-billion Fortune 500company with approximately 40,000 employees - sells and leaseselectronic business equipment in an assemble-to-order distributionenvironment. The company also provides service such as documentmanagement outsourcing, electronic file conversions, facilitiesmanagement, and training. The company sells to large and smallbusinesses and government entities in North America (about 85% ofsales are generated in the US) and Europe.2001 Sales (mil.): approx. $6,0002001 Employees: approx. 40,000Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Background – Motivation, Scope & GoalsThe client is in the process of restructuring the supply chain network by reducing the number of distributioncenters. The future supply chain configuration including the corresponding product flow is depicted below.The scope of this business process improvement project was limited to the Assemble-to-Order DistributionCenter.VendorVendor-OwnedEquipmentScope430EquipmentRegionalDistributionCenterIn-Box/NewEquipmentATO/DCEquipmentCustomerReturnProductBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Approach to Analyze ProcessesBased on analysis and simulation results of the As-Is Process models; a list of issues, opportunities forareas of improvements, and recommendations was developed. Based on this list, different change scenarioswere created. In order to evaluate the impact of the recommended changes, the Interim To-Be simulationmodels were built and analyzed. This interim model was then compared to the Future State. Ourrecommendations are how to better align to ERP in the interim so to minimize the impact of change on theCompany organization.AnalyzeFuture ERPProcessesDevelopInterimProcessesGathered DataAnd DocumentedAS-IS ProcessesSimulationAs-IsProcessesQualitativeProcessAnalysisAssessGapsSimulateInterimProcessesDevelopRecommendationsBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Order Fulfillment Process ScopeCustomersRegional DCOrder Fulfillment - ATO/DCEnter andValidateOrderD2.2FillOrderM2.2Assembleand TestEquipmentM2.3Route andScheduleShipmentsD2.6SCORLevel 3SalesTransportationBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

High-level Process Design - ATO/DCsIn order to accelerate the initial phase of the As-Is analysis, the workshops with the executive team werefacilitated by using the standard process definitions of SCOR. In addition, the executive team identified majorissues for each core process area.Receive, Configure,Enter and ValidateOrder (m-t-o)D2.2Receive andValidateOrder (m-t-o)D2.2ScheduleProductionActivities (m-t-o)M2.1IssueProductM2.2OrderFulfillmentProcessAssembleand TestM2.3Route andSchedulesShipments(m-t-o)D2.6DeliverProduct (m-t-o)D2.9SCOR Level 3BackorderProcessConfigureProductReceiveReleasedOrderCreateOrder inAccessReceivePaperwork forOrder FillingGatherPaperworkScheduleOrder forDeliveryMatchOrder withManifestNotifyWH of ReceivedBackorderSubmitMachineRequest FormReceiveReleasedBackorderForwardDocumentation toAppropriate PartiesReceiveDCEquipmentMatchProduct withPaperworkScheduleTrucks forDeliveryPrepareOut-LogMatchReceived Equipmentwith BackorderEnterCustomer Order(Staging of Invoice)ValidateOrderAccuracyPrioritizeOrders (Rush vs.Normal)SpecialProgramsVerifyProduct andPaperworkUpdateOrder inOMS w/ DeliveryValidate Orderfor Product Accuracyand CompletenessCreateBackorder(x-Order) in OMSReleaseOrder toInventory AnalystResolveIssue withSales Rep.DetermineMissing EquipmentAvailable in WHCheckProductAvailability inDCInformSales Rep ofOrder StatusForwardOrder toProductionSchedulingIssueProductValidateShipment andComponentsInventoryAccuracyUnboxEquipmentPickEquipment fromStaging AreaBackordersForwardProduct toShopResolveIssue withInventory AnalystEscalateIssueDetermineProductTypeAssembleNewEquipmentVerifyDelivery withCustomerNotifyAppropriateParties of NextDay DeliveriesNotifyAppropriate Parties ofOrder CancellationUpdateOrder inOMSPlanRouteLoadTruckDeliverProduct toCustomerPick upReturn ProductPurchasingUpdate DailyOrder TrackingFileInformCSA of InaccurateOrderProcess IssuesForwardOrder Statusto Production SchedulingDamagedEquipmentTestNewEquipmentAssembleUsedEquipmentPreparePaperworkfor DriverUnloadReturnProductSubmitSignedPaperworkBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Detailed Process Design - ATO/DCsReceive, Configure,Enter and ValidateOrder (m-t-o)D2.2SCOR Level 3OrderFulfillmentProcessRoute andReceive andScheduleIssueAssembleSchedulesDeliverBackorderValidateProductionProductand TestShipmentsProduct (m-t-o)ProcessOrder (m-t-o)Activities (m-t-o)(m-t-o)D2.2M2.1M2.2M2.3D2.6D2.9Level 4ProductionSchedulingShipmentWarehouseReceived 7:00amCopy Forwardedfrom SDCto WarehouseReceiveReceiveDCOrderfillerHN (Invoice) Paperwork for OrderfillerEquipmentOrder FillingDC TruckPaperworkUnloadedReceivedPrioritizeHN (Invoice) Orders (Rush vs. OrderfillerNormal)OrdersPrioritized(Rush vs. Normal)less than 5% inaccurate shipmentsValidateOMDShipment and OrderfillerComponents0.300.70All ComponentsNot All ComponentsAvailable toAvailable toFill OrderFill OrderPickUnboxOrderfillerEquipment from OrderfillerEquipmentStaging AreaEquipmentUnboxedEquipmentPicked fromPreflight Staging AreaUnboxOrderfillerEquipmentForwardForwardProduct to Orderfiller HN (Invoice)Order Status OrderfillerShopto Production SchedulingEquipmentUnboxedUpdatedProductWarehouseAvailable in ShopCopy ForwardedStaging AreaForwardForwardHN (Invoice) Order Status Orderfiller Product to OrderfillerAssembleto Production SchedulingShopand TestUpdatedProductWarehouseAvailable in ShopCopy ForwardedStaging AreaAssembleand TestReceiveProductionHN (Invoice) Paperwork withSchedulerOrder StatusOrderStatusReceived• Detailed Process Design• Organizational Responsibilities• Equipment/Technical Resources• Application Systems• Document Flow• Preparation for Simulation:• Processing Times• Distribution• ProbabilitiesProductionScheduler(MS Access)UpdateOrder Statusin AccessProductionSchedulerOrder StatusUpdated inAccessOMDUpdateOrder inOMDProductionSchedulerOrder StatusChanged to3###Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Qualitative Analysis: As-Is ProcessesCriteriaGeneralLocation A• Good OrderTracking• Too Much Space• Push/PullScheduling• Good LayoutLocation B• PoorHousekeeping• Pre-flight checking• Push Scheduling• Paper-intensiveIT Supported Activities45%21%Automated0%0%Number of Org. Changes15-3524-36Media Breaks/Applications Systems1612Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Simulation of ProcessesEvaluation Dynamic interrelation of processes Quality check on simulated processes Throughput time of processes with givenresources Identification of process delays Identification and location of bottlenecks(weak points) Number of completed processes within adetermined period of time Resource UtilizationBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Simulation Scope: Key ParametersIn order to have realistic and comparable simulation results, the following key parameters (Fill Rates,Error Rates, etc.) were considered during the different simulation runs:Simulation Start: Mon 01/07/2002 12:00AMSimulation End: Fri 02/01/2002 11:59PMSimulation Duration:1 month (20 work days)Key ParametersAs-IsLocation AFill Rate – Regional DC% of OrdersFilled From ATO/DC70%30%% of OrderCancellations5%% of Inaccurate Orders5%% of InaccurateProduct Configuration15%Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Quantitative Analysis: Location A (As-Is)The throughput analysis revealed a very unstable process performance , which resulted in processing times forprocessed orders from 1 to 12 days.DistributionsThroughput Location A (As-Is)Oneway Analysis of Column 1 Interim (70% Fillrate) By Simulation Runs11109Throughput- Interim (70% Fillrate) [days]8765432101 2 3 4 5 6 7 8Simulation Runs0 1 2 3 4 5 6 7 8 9 10 11 12Throughput Time [days]Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Quantitative Analysis: Location A (As-Is)The following average values for key events within the As-Is processes for Location A are based on multiplesimulation runs.CriteriaLocation A(As-Is)# of Incoming Orders626# of Orders Complete (R-T-S)480# of Inaccurate Orders31# of Cancelled Orders29# of Inaccurate Configuration78# of BackordersThroughput Time(for Completed Orders)1663.73 dBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

To-Be Assumptions – Interim Process Implement Order/Equipment Configurator prior to ERP/SCMimplementation (web-based) Release orders only with signed sales agreement, approved creditand within 5 day delivery window (standard equipment) Inventory allocation should take place at the Regional DC versus atthe ATO/DC during the interim for equipment not at the ATO/DC Fill rates at 80% Ship equipment from Regional DC to ATO/DC only if 2nd daydelivery Implement bar-coding system to track orders at the ATO/DC Eliminate redundant validation stepsBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Interim - Business ProcessesThe interim business processeswere modified to reflect thefollowing process changes:ShipmentReceivedfrom SDCReceiveDCEquipmentDC TruckUnloaded7:00amOrderfillerHN (Invoice)ProductionSchedulingWarehouseCopy Forwardedto WarehouseReceivePaperwork forOrder FillingPaperworkReceivedOrderfiller• Redundant steps eliminatedHN (Invoice)PrioritizeOrders (Rush vs.Normal)Orderfiller• Non value-adding stepsOMDOrdersPrioritized(Rush vs. Normal)less than 5% inaccurate shipmentsValidateShipment and OrderfillerComponentseliminated0.70All ComponentsAvailable toFill Order0.30Not All ComponentsAvailable toFill Order• Order/product validation stepUnboxEquipmentEquipmentUnboxedOrderfillerPickEquipment fromStaging AreaEquipmentPicked fromPreflight Staging AreaOrderfillermoved to the beginning ofprocess• Improved order accuracyForwardProduct toShopProductAvailable in ShopStaging AreaAssembleand TestOrderfillerHN (Invoice)UnboxEquipmentForwardOrder Status Orderfillerto Production SchedulingEquipmentUnboxedUpdatedWarehouseCopy ForwardedForwardHN (Invoice) Order Status Orderfillerto Production SchedulingUpdatedWarehouseCopy ForwardedReceiveProductionHN (Invoice) Paperwork withSchedulerOrder StatusOrderfillerForwardProduct toShopProductAvailable in ShopStaging AreaAssembleand TestOrderfiller• Improved fill ratesProductionScheduler(MS Access)OrderStatusReceivedUpdateOrder Statusin AccessProductionScheduler• Bar-codingOMDOrder StatusUpdated inAccessUpdateOrder inOMDProductionSchedulerOrder StatusChanged to3###Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Qualitative Comparison: As-Is, Interim and ERP/SCMCriteriaLocation A Location B ERP/SCM InterimGeneral• Good OrderTracking• Too Much Space• Push/PullScheduling• Good Layout• PoorHousekeeping• Pre-flight• Push Scheduling• Paper-intensive• Capacity• Elimination orPlanning/RedundantScheduling Validationcould be issue • Pull• Pull System • Bar-coding and• Visibility to Order TrackingInventory Limited• Barcode IntegrationIT Supported Activities45%21%56%54%Automated0%0%36%0%Number of Org. Changes15-3524-361313-32Media Breaks/Applications Systems1612116Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Interim - Organizational StructureInterimOrganizationMarketplaceDCATO/DCWH ManagerSales ManagerDC ManagerInventoryManagementProductionDeliverySales Rep.DC InventoryAnalystWH InventoryManagerShop ManagerDelivery ManagerCSRWH InventoryAnalystOff-Demo/UsedTechniciansDeliverySchedulerOrderfillerNew EquipmentTechniciansDrivers/InstallersReturnEquipmentCoordinatorBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Simulation Scope: Key ParametersThe previously mentioned assumptions for the Interim solution have the following impact on key input parameterof the simulated process models. Only the Regional DC fill rate and the accuracy of the product configuration hasbeen changed:Simulation Start: Mon 01/07/2002 12:00AMSimulation End: Fri 02/01/2002 11:59PMSimulation Duration:1 month (20 work days)Key ParametersFill Rate – Regional DC% of OrdersFilled From ATO/DC% of OrderCancellationsAs-IsLocation A70%30%5%Interim80% Fill80%30%5%% of Inaccurate Orders5%5%% of InaccurateProduct Configuration15%10%Only Orders that are relevant for Shop (No Pickups, Moves, etc.) were considered.Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Quantitative Analysis: As-Is and Interim ProcessesAs-IsTo-BeOneway Analysis of Column 1 Interim (70% Fillrate) By Simulation Runs11109Oneway Analysis of Throughput Interim (80% Fill Rate) [day By Simulation Runs1110Throughput- Interim (70% Fillrate) [days]876543Throughput Interim (80% Fill Rate) [days]9876543221101 2 3 4 5 6 7 801 2 3 4 5 6 7 8Simulation RunsSimulation RunsDistributionsThroughput Location A (As-Is)DistributionsThroughput Interim (80% Fill Rate) [day0 1 2 3 4 5 6 7 8 9 10 11 120 1 2 3 4 5 6 7 8 9 10 11Throughput Time [days]Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Quantitative Analysis: As-Is and Interim ProcessesCriteriaLocation A(As-Is)Interim(80% Fill Rate)Improvementvs. As-Is# of Incoming Orders626625-# of Orders Complete (R-T-S)4805116.5%# of Inaccurate Orders312035%# of Cancelled Orders2929(0%)# of Inaccurate Configuration786023%# of Backorders1369033%Throughput Time(for Completed Orders)3.73 d2.9 d22.3%Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

The Results Improved customer satisfaction through cycle time reduction byover 45% Improved resource utilization by 25% Improved communication and document flow Reduced square footage requirements by improved flow and leanmanufacturing principles Aligned corporate objectives with pre-defined SCOR metricsBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Lessons Learned SCOR very helpful during initial project phase Understanding Scope definition Best practices as “checklist” Quick results through strong tool support As-Is Processes Process evaluation To-Be processes Reusability and Standardization Process improvement Process standardization Standard KPIs RolloutBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

AGENDAAbout IDS ScheerARIS IntroductionARIS EasySCORSupply Chain Case StudyQuestions & AnswersBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

More InformationIDS Scheer, Inc.Phone: +1-610-854-6800Fax: +1-610-854-7382e-mail: info@ids-scheer.comweb: www.ids-scheer.com/usSupply Chain World North America I Atlanta, GA I April 07-09, 2003 I Visit us at booth 110Tunnell ConsultingPhone: +1-610-337-0820Fax: +1-610-337-1884e-mail: tunnell@kwtunnell.comweb: www.tunnellconsulting.comSupply Chain World North America I Atlanta, GA I April 07-09, 2003 I Visit us at booth 216Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

BackupBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Competitive Environment of a Supply ChainProduct/ServiceTexas Raw Material SupplierMATURE LINECustomerSupplierCustomComponentAlphaDistributorNEW LINEOther RM SupplierAntique LineCompanyBeta CompanyCompetitorBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

SCOR Geography MapAlphaChemicalsOtherSupplierElectronicsMATURE LINETexasSupplierAsian RegionalWarehouseSouth AmericanRegional WarehouseAustralianRegionalWarehouseBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

BSC - Cause-and-Effect DiagramRel. perspectivesCause-and-effectPerspectiveStrate gy Pe rsp ective Persp ective Pe rsp ectiveFinancial perspectiveCustomer perspectiveObjectivesKPIsAchieve World Class Supply Chain PerformanceMinimizesupply chaincostsImproveSupply ChainReliabilityMaximizeAssetUtilizationStrategyStrategic ObjectiveImproveFlexibility&ResponsivenessInternal process perspectiveBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Objective DiagramMinimizesupply chaincostsObjectivesReduceDefectiveProductReturnsProcessesReduceInventoryCostsImproveResourceUtilizationManufactureand Test(m-t-s)NEW LINEBalance DeliveryResourceswith DeliveryRequirementsBalance SupplyChain Resourceswith SC RequirementsPackage(m-t-s)NEW LINEReserve Inventoryand DetermineDelivery DateManufactureand Test(m-t-s)StageProduct(m-t-s)ProductsBusiness Process Excellencewww.ids-scheer.comManageFinished GoodsInventoriesCopyright © 2003, IDS Scheer, Inc.All rights reserved

Level 1 Metric Calculations – ExampleEXTERNALSupply Chain Scorecard v. 3.0Overview Metrics SCOR Level 1 Metrics ActualDelivery PerformanceTo Request Date 93%Supply ChainReliabilityResponsivenessFill RatesPerfect OrderFulfillmentOrder Fulfillment Lead times91%95%37 daysObjectives + KPIsImproveSupply ChainReliability0.20Delivery Performanceto Customer RequestDate0.20Fill RatesFlexibilitySupply Chain ResponseTimeProduction Flexibility97 days45 days0.60Perfect OrderFulfillmentTotal SCM ManagementCost19%INTERNALCost Warranty Cost NAValue Added EmployeeProductivity$122KAssetsInventory Days of SupplyCash-to-Cash Cycle TimeNet Asset Turns (WorkingCapital))119 days196 days2.2 turnsBusiness Process Excellencewww.ids-scheer.comKPI AttributesCopyright © 2003, IDS Scheer, Inc.All rights reserved

Key Performance Indicator Allocation DiagramPersonStrategic ObjectiveMeasureR. MillerKey PerformanceIndicatorImplementQuality ImprovementProgramMinimizesupply chaincosts0.700.10Total SupplyChain CostsWarrantyCostsBPR InitiativeSAPQMQM DatabaseChangeManagementTeamGroupApplicationSystemDatabaseBusiness Process Excellence0.20Value-AddedProductivitywww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Supply Chain ScorecardStrategy Perspective Perspective Perspective PerspectiveRel. perspectivesFinancial perspectiveCus tomer perspectiveInternal proces s perspectiveCause-and-effectAchieve World Class Supply Chain Performanc eMinimizesupply chaincostsImproveFlexibility&ResponsivenessImproveSupply ChainReliabilityMaximizeAssetUtilizationImproveSupply ChainReliability0.20Delivery Performanceto Customer RequestDate0.20Fill RatesSupply Chain Scorecard (BSC Report)0.60Perfect OrderFulfillmentBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Example of Product/Service TreeAlpha ProductLineMATURE LINENEW LINECase Kit MLCase Kit NLMotherboard MLMotherboard NLCPU 1GHzCPU 1.6 GHzMemory 128MBMemory 256MBCD ROM 16xFloppyDriveHarddiskDrive 20GBRW CD ROMDVDFloppyDriveHarddiskDrive 60GBMonitor 15'Monitor 17'CustomComponentCustomComponentBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Organizational Chart (Incl. Location Overview)LocationLocationsAmericasUSAMexicoAtlanta Philadelphia Austin, TXPhoenixLas PedrasSAFDTMPOEMINSSCIFHVLMDC04DC02SMTDHDC01HMLVOrganization UnitsDC05DC06Business Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

Material Flow (Product Exchange Diagram)LocationPenangLAMATURE LINEPhiladelphiaCustomComponentProductAustin, TXPhoenixNEW LINEAtlantaBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

High-level Supply Chain ThreadPlan Supply Chain(Suppliers)P1'PlanSupply ChainP1Plan Supply Chain(Warehouses)P1''Plan Source(Suppliers)Plan Make(Suppliers)Plan Deliver(Suppliers)Plan SourcePlan MakePlanDeliverPlan Source(Warehouse)Plan Deliver(Warehouse)P2'P3'P4'P2P3P4P2''P4''Source Make-to-OrderMaterial (Texas)S2''Make-to- Order(Texas)M2''Texas RM SupplierDeliver Make-to-Order Product(Texas)D2''SourceMake-to-OrderMaterialS2Make-to-StockM1DeliverStockedProductsD1Source Materials(stocked,Warehouses)S1'''Deliver StockedProducts(Warehouses)D1'''Source Materials(stocked,Other Supplier)S1'Make-to-Stock(Other Supplier)M1'Deliver StockedProducts(Other Suppliers)D1'eEPCSimulationeEPCR/3 Reference ModelData ModelKey Other RM SuppliersALPHAAlpha Regional WarehousesBusiness Process Excellencewww.ids-scheer.comCopyright © 2003, IDS Scheer, Inc.All rights reserved

SCOR-based Process Flow (eEPC)OrganizationalUnitsSalesU.S.CustomerInquiryReceivedProcess Inquiryand Quote(stocked)D1.1WWWSAP R/3SDApplicationSystemsCustomerReplenish SignalReceivedCustomerContract TermsDeliveredCustomerOrderReceivedInquiry andQuote (stocked)ProcessedFunctions(SCOR)OR operatorReceive, Enterand ValidateOrder (stocked)SalesdataData ModelR/3 Reference ModelD1.2SAP R/3SDData ElementsProcessInterfacesPlan SourceDetailedSourcing PlanReleasedPlan MakeDetailedProduction PlanReleasedPlanDeliverDetailedDelivery PlansReleasedOrder (stocked)Received, Enteredand ValidatedLogicalOperatorsEventsAND operatorReserve Inventoryand DetermineDelivery DateD1.3SAP APOATPAA-2 MOSMOSBusiness Process Excellencewww.ids-scheer.comOR operatorInventoryReserved andDelivery DateDeterminedSourceReplenishmentCopyright © 2003, IDS Scheer, Inc.Signal SentAll rights reserved