The document discusses IBM's Contract Savings system, which calculates savings from supplier contracts. It summarizes how savings are initially calculated using action plans but were later calculated using contracts to improve accuracy. The system extracts timeline records, calculates performance, and sends contract savings files to a reporting server weekly after contracts are posted. It has undergone several releases to address issues and enhance functionality such as tracking engineering cost changes and supporting multiple currencies.

1. Contract Savings
A Sub System of GPS
Siva Prasanth Rentala
IBM Global Services

2. GPS Contracts Savings
• Why GPS Contract Savings
developed and used for?
– Sourcing Decision Analysis
– Cost management (CoMa) Reporting
– Post-Knock Cost evaluation tracking
– Buyer/purchasing performance etc.

3. How GPS Savings
Calculated?
• Initially savings are calculated using
Action plans.
• Following problems reported due to using
Action plans to calculate Savings:
– Multiple Actions plans were created because
Standard blanket contract issued only for
Approved action plans.
– Creation of multiple Action Plans covering the
same effective dates, which artificially inflates
savings.

4. GPS Savings in GPS
Antwerp Release
• An enhancement was implemented
in the GPS Antwerp Release to
allow the creation and/or
maintenance of Standard Blanket
CLIs without an Action Plan.
– This causes savings (positive or
negative) to be underreported.

5. Contracts Savings
• To overcome the mentioned
problems World-Wide Purchasing
Cost Management and the Global
Business Process Owner proposed
to use ‘Contracts’ instead of Action
plan to calculate Savings.

6. Contracts Savings
• Advantages of using Contracts
– Savings are accurate.
– Total Price is used to calculate Savings
instead of ‘A’ price.
Ref:
Total price =Base Price + Total Base Material
Cost + Price Add-Ons + Taxes
‘A’ Price = Base Price + Total Base Material
Cost

7. Contracts Savings
• Advantages of using Contracts
– Savings for a contract can also be
allocated to the plants using the
contract, instead of all plants using the
part (as is done on Action Plans).

8. Contracts Savings
• Initially Contract Savings functionality was
part of Global Purchasing Reporting
System (GPRS).
• Later moved to Supply Chain Metrics
Reporting (SCMR).
• Finally detached from SCMR and
implemented as separate enhancement
in GPS.

9. 700
GPS
PLIPC1B
CSIDS
PLIPC1B
MMDB
PLIPC1B
GPDS
PLIPC1B
WPCS
PLIPC4B
Supplier Name & Address,
Supplier Contracts
DSM = D
WWP/PC&L
DS/DRM
06/01/98
PRIMO
PLIPC4B
MPS
PLIPC1B
GQTS
(SAMPLE/PPM)
PLIPC1B
Contract
DSM = S
GMTOPS
PLIPC4B
MGO-A
MGO-C
PLIPC4B
TMS
PLIPC1B
SPA
Contract
Supplier
Contracts
eFX
PLIPC1 B
Shadow File
DSM = D
DSM = D
Currency
Conversion
Rates
Part Cost
Organization
Name, Buyer,
Contract
DSM = D
DSM = D
DSM = D
Part Volumes
Part Validity
DSM = D
Parts per Million
Country, Supplier,
CISCO Supplier,
Quality Ratings
Part
Shared
Purchasing
Data
GPS
Datastore
Multiple IPCs
Steel
Parts
DSM = D
Tooling POs
Units Of Measure,
INCO Codes
EISIS
Contract
LEGACY
DATA
Parts, Volumes,
Suppliers, Contracts
Supplier
Quality
Ratings
SPDI, MPCE
Contract
Savings
Savings
GPS-Contract Savings

10. Contract Savings Architecture
Data File
TROY SQL
Server
CS Adjustment
GPS
DB2
TROY SQL
Server
Stored Procedure
For Merging
MDB files
MS IIS Server
ASP Pages
GPS APP Center
MS ACCESS
FTP
PLIPC1B
Mainframe at PLANO
USTRSGSCM025
CS Web Adjustment
CS Reporting
CS Batch Process
USTRSGSCM025

11. Contract Savings
Batch Process
CS-1
Extract and Prepare
Timeline records
(add Currency
Conversion Rate, add
GPS CLI info., break
into months, match
with Volumes, etc.)
CS-2
Calculate
Performance for
each monthly
record
CS-3
Add Action Plan
Information to each
monthly record
CS-4
Send Contract
Savings file(s) to
Reporting Server
CONTRACT
SAVINGS
BATCH PROCESS

12. When Contract Savings batch
process run?
• The creation of Contract Savings information is
expected to be a weekly batch process, which runs
after the jobs to post GPS and Legacy contracts to
Timeline.
• The Contract Savings Batch Process must run
immediately after Posting to Timeline because given
the way the Contract Savings Part trigger(s) are
created, this is the only time when the GPS Contract
data, Timeline Contract Data, and Contract Savings
Part trigger data is synchronized.
• The Contract Savings Batch Process relies on the
fact that this data will be synchronized to work
properly and to report correct, consistent results.

13. Contract Savings Release 1.0,
December, 2000
• This release implemented when the
GPS Contract Savings Batch
Process to calculate Contract
Savings finalized.

14. Contract Savings Release 2.0,
Currency Conversion Release,
December, 2001
• Released when the Currency Conversion
method for Contract Savings was
modified to:
– Report contracts for European receiving
plants in EUR instead of USD. Approximately
95% of European contracts now have a
currency of EUR. Reporting these contracts
in EUR instead of USD will lessen
inaccuracies due to currency conversion from
European performance data. USD and EUR
are the only valid destination currencies etc.

15. Contract Savings Release 3.0,
Part Relationship Release July,
2002
The original design of Contract Savings only looked
back one generation of replaced parts and then only
at confirmed replaced part relationships.
This led to many parts having no performance
calculated or performance being calculated against
Costbook because an Old Price could not be
determined.
A great deal of manual effort was then spent to track
down what the performance for a part should have
been and add the resulting information into the
Contract Savings Adjustments application.

16. Contract Savings Release 3.0,
Part Relationship Release July,
2002
• This led to many parts having no
performance calculated or performance
being calculated against Costbook
because an Old Price could not be
determined.

17. Contract Savings 3.1, Net Material
Performance Release, March
2003
• An issue was discovered with the Option
Adjusted Forward (OAF) rates
maintained by NYTO and the algorithm
defined for currency conversion.
Because of this issue the currency
conversion algorithm for future months is
being modified to use the rate most
recently provided by NYTO for that
month.

18. Contract Savings 4.0
• Client: GM WWP IS&S
• Customer: GM WWP Cost
Management
• Other Stakeholders:
GM WWP
GMASB
GM Supply Base
GM Platform Management Team
GM SMTs

19. Contract Savings 4.0
1.Commercial Savings: Part relationships are not confirmed in
GPS in many cases. These relationships are crucial to
calculating savings as part numbers change due to
EWO’s. Contract Savings compares today’s price to the
price on year ago to measure part performance, then
tracks how engineering changes have affected that price in
order to derive purchasing performance.
2.Contract Savings will be used as the GMNA common
system to track material cost. This means that
Engineering Performance (Technical Savings) will be
tracked from the system as carefully as Purchasing
Performance (Commercial Savings). This will require
enhancements to the system to allow adjustments to
Engineering Performance, and perhaps other changes
(Web Adjustment tool).

20. Contract Savings 4.0
3. Need to be able to track savings (Commercial and
Technical) by product line. Currently, volume records do
not have required product line information.
4. In order to globalize the system, enhancements will be
required due to Brazil’s savings calculation against an
index of inflation and devaluation. Similar issues may exist
in Asia Pacific.

21. Contract Savings 4.0
Goals of Contracts Savings
The two primary goals of the project are:
• Reduce the amount of manual reconciliation
required to provide accurate Material
Performance Tracking Information
• Utilize a common Contract Savings reporting
process for GM

22. Contract Savings
Adjustment (CSA)
The Contract Savings Adjustment (CSA)
module enables users to enter, maintain,
and view adjustments for Contract
Savings in the Contract Savings process
in GPS.
The users of the CSA module will interact
with it through multiple pages and through
graphical data selections.
The Contract Savings Reporting Database
merges the contract savings adjustments

23. Contract Savings Adjustment
Maintenance

24. Contract Savings Adjustment

25. Contract Savings Adjustment

26. Contract Savings Adjustment
Selection

27. Contract Savings Adjustment
List

28. Contract Savings
Adjustment (CSA)
The CSA module is comprised of the
following page types:
1.Adjustment related
– Enables adjustment inquiries, modifications and
additions. This first page enables entry and viewing
of key adjustment information.
2.Security related
– Login, User Maintenance, Change Password Etc.
3.Feedback
– The Feedback module provides all General Motors
users the ability to send written feedback to the
System Owner via E-Mail regarding the CSA

29. Contract Savings Reports
The Contract Savings Reporting Database
merges the contract savings adjustments with
the contract savings from GPS.
Using Contract Savings Reporting Database
following reports are created
– Detail Report
– Summary Reports
– Variance Reports
– Left Side Report
– Exception Report
Analysts use the Reports to identify which
records has changes in their performance
(savings) from one reporting cycle to the next.

30. Contract Savings AppCenter
Exception Report

31. Contract Savings AppCenter
Exception Report