Moving to fully paperless, compliant, green processes is easy in concept, but offers many challenges in execution. Once the internal barriers and blocks are removed, there still is the dependency on suppliers to make the entire transaction a reality. While many suppliers may conceptually support such initiatives, they often don’t understand the reality that they will face.
In this insightful session SSAB will explore the journey, initiatives and pitfalls they have faced, and how their supplier management and coordination has become a lynchpin to continued success.
International Business Environments and Operations 16th Global Edition test b...
eProcurement Transformation for Buyers and Suppliers
1. eProcurement: From Dream to Delivery for Buyers and Suppliers
April 2014
Linda Folkesson
Manager Business Development, EMEA Business Services
2. Agenda
Brief presentation of SSAB
SSAB’s reasons to implement Ariba suite and eSourcing & e-Procurement tool
SSAB choose Ariba (and vision for green flow)
P2I project and implementation during 2013
SSAB and our Suppliers
– New supplier Registration and Enablement process
– Advantages for SSAB and suppliers with new way of working
– Challenges for SSAB and suppliers
Lessons learnt
Success factors and way forward for SSAB
2
3. SSAB
Formed in 1978 through a merger of the steelworks:
– Domnarvets Järnverk in Borlänge,
– Oxelösunds Järnverk,
– Norrbottens Järnverk in Luleå.
A global leader in value added, high strength steel.
– SSAB offers products developed in close cooperation with its customers to reach a stronger,
lighter and more sustainable world.
In 2013, SSAB sales amounted to almost SEK 35 billion i.e. 4 billion €.
– SSAB is listed on the NASDAQ OMX Nordic Exchange, Stockholm.
The Group’s steel operations consist of 3 business areas
– EMEA, Americas, APAC and
– 2 subsidiaries Plannja representing processing & Tibnor the group’s trading company.
3
“For a stronger, lighter & more sustainable world”
4. SSAB - Three Business Areas
• Producer and supplier of
high strength steel globally
(Q&T, AHSS)
• Standard steel products
(strip and plate)
• Commercial heavy plate in
North America
• High strength steel (Q&T)
• Sales and distribution of
high strength steel (Q&T,
AHSS)
• Kunshan finishing line
Sales SEK 20 258m Sales SEK 16 173m Sales SEK 2 138m
SSAB EMEA SSAB AMERICAS SSAB APAC
Note: Sales refer to 2012 net sales . Employees per 30 Sept 2013
TIBNOR
SEK 5 961m
• Distributor of steel in the
Nordic and Baltic region
No. of employees: 8 720
4
5. 5SSAB Corporate presentation - About SSAB
Towards global leadership in High Strength Steels
Five major production facilities and sales offices in 50 countries
7. SSAB industry applications examples
Increased strength and reduced weight
7
Docol 1400 MZE – the safest Ultra
High Strength, electro galvanized steel
for the automotive industry
- Automotive structural parts
- Automotive side impact protection
- Automotive bumpers
- Automotive seats
Less crane weight, same strength
9. SSAB EMEA
Luleå Steel Works
Borlänge Rolling Mill
Oxelösund Integrated Mill
Common Purchasing Organisation
formed in 2010
9
10. SSAB EMEA Purchasing organisation –
development towards highly set goals
10
•Implementation of Ariba
•Organizational
development
•Way of working
•Identify purchasing
synergies cross BAs
•Wave program
•Global Purchasing
Academy
•Improved cross-functional
commodity teams
•Advanced purchasing -
including value creation by
an extended value chain
perspective and supplier
relationship management
Limited ability High abilityAbility to capture potentials
Structure
& Way of
working
Capture savings
at a rapid pace
Value creation
11. SSAB EMEA Purchasing-short background
Organizational change
Lack of IT tools
– Different operational purchasing
systems at our main three
productions sites
– No support for the strategic
sourcing process
11
Business case for cost savings, development and knowledge management
12. SSAB’s reasons for an eSourcing & e-Procurement tool
12
SSAB
EMEA
SSAB
Americas
SSAB
APAC
No common purchasing system
(3 not linked different ERPs)
No e-Sourcing tool
Current spend reporting tool only possible at very
high Supplier (no visibility at line item nor supplier
Supplier reporting)
No Contract management system at SSAB Americas
prior Ariba (sporadic vendor contract & price
compliance)
No supplier information & qualification management
tool
Very time consuming exercise to aggregate spend
data from all 3 systems in EMEA
13. Requester
PO confirmation
&
Delivery
confirmation
Chooses/Searche
s the good or
service
PO
approval
PO is sent
Supplier A
Supplier B
Supplier C
Supplier D
Supplier E
Catalogue
based purchase
E-invoice
Goods receipt
A
R
I
B
A
N
E
T
W
O
R
K
Automatic
3 way match
Payment
OK to pay file
sent to ERP
13
SSAB EMEA goal for the operational purchasing flow-
”green flow”
14. SSAB’s chosen Ariba suite
14
Supplier
Management
Visibility Procurement
Invoice
Pay
Sourcing Contracts
Best Practice Services Professional Services Helpdesk
Ariba Supplier Network
Implemented Implemented Implemented SIM Implemented
SPM: Not implemented yet
SIM: ImplementedImplemented
15. Ariba implementation at SSAB EMEA
3 years after the implementation started Q1 2011
15
SSAB
EMEA
SSAB
Americas
Common purchasing system – integration towards 1 ERP
Common global e-Sourcing tool available
Spend reporting tool now possible at ERP Supplier & line item
level. Dashboards available.
Common global contract management system at SSAB
Common global supplier information & qualification
management tool & instituted approval processes
Easy aggregated EMEA spend visibility
Greatly reduced spend data collection time
Visibility on
EMEA spend
16. From Sourcing to P2I flow in Ariba
16
Sourcing
Choosing
supplierEvaluation
Sourcing
project
Contract
Contract Management
RFP
Contract
Compliance
PO
Collaboration
€
PO/Approve
Pricing termsPR
Catalogues
Invoice
P2I
Recieving Invoice
18. Ariba Network
Ariba Commerce Cloud is a network for suppliers and customers get in
touch and enable:
– Answer request (RFP: Request for Proposal)
– Send purchase orders and invoice via Ariba Network
– Discover new business opportunities
Each registered supplier on Commerce Cloud / Network have their own
profile containing basic information about the company.
Specific information for SSAB in Ariba. Not available for other customers
or companies.
Ariba Commerce Cloud is a public network: http://discovery.ariba.com
18
20. Implementation of P2I for EMEA
Implement a unified “Procure to Invoice” solution for SSAB
EMEA
– Achieve a common way of working within SSAB globally and
with SSAB EMEA,
– Unify the 3 production units currently disconnected ERPs in
Sweden,
– Achieve an electronic ”green” touchless flow
Users in scope
– Approx. 5 000 requesters in EMEA
– 80 suppliers at start (with catalogues & contracts)
– ~20,000 invoices in 2012: 12% total nb invoices for EMEA in
2012
• Remaining suppliers to be on-boarded in the following
phases
20
P2I – Procure
to invoice
21. Deployment Timeline
Supplier & Catalog Enablement
Change Management
Project Management
Kickoff Testing Training &
Communication
Go-Live/
Wrap-up
Configuration &
Solution
Confirmation
Solution
Planning
(Pre-Kickoff)
Aug-Oct Project
kick-off
Oct 2012
Nov-Feb Mar-May Jul-Sep
Go-Live
Pilot
June (2013) Okt
2012 2013
Technical integration team
Functionality and business development team
22. 22
Dashboard and User Profile Catalog Views and Searchability Requisitioning (PR)
Ordering (PO)
Contracts Approval Rules Default User Preferences Default Notification PreferencesUsers & Groups Accounting
Receiving (RC) Invoicing (INV/IR)
Reporting
1 2 3
4 5 6
Configuring Supportiv Functionality
Deliverable – Functional team
23. Deliverable - Technical integration
23
IFS (Stina)
Ariba
SAP PI
Visma
Attestförordning
Användare
SSO
Streamserve
Active Directory
ReadSoft
Users
Authorisation rules
26. Product goals for the P2I implementation
26
Product Delivered
A new system (Ariba P2I) for operational purchasing across
3 sites
Integration with ERP (one only!)
600 users trained in the new P2I application
50 enabled suppliers with contracts/ACC/free text
New governance organisation (System Development and
Administration)
Instructions of new way of working, process maps for
purchasing process in Ariba
P2I – Procure
to invoice
27. SSAB and our suppliers
-processes
27
Suppliers yet
to be
discovered
Potential
suppliers
Suppliers in
sourcing
process
Supplier
contract
Suppliers
SSAB do
business with
28. Tools supporting Supplier process -THEN
28
Suppliers
Potential
suppliers
SSAB EMEA
supplier list
ERP (3 different)
29. New way of working: internally and for suppliers
29
Supplier
Possible
suppliers
Suppliers in
sourcing
Supplier
Contract
Suppliers in
Purchasing
Supplier
Registration
Supplier
Enablement
SIM-
Supplier Information
Management
Contract
Management
Sourcing
P2I – Procure
to invoice
30. Supplier process and tools with Ariba
30
Suppliers yet
to be
discovered
Potential
suppliers
Suppliers in
sourcing
process
Supplier
contract
Suppliers
SSAB
purchase from
Supplier
registration
Supplier
enablement
Ariba
Network
”Anywhere
else”
Approve
suppliers
Register
new
contracts
Create ACC,
Catalogue
SIM-
Supplier
Information
Management
ContractsSourcing
P2I – Procure
to invoice
31. 1. Supplier creates his cloud profile
2. Supplier answers SSAB’s profile questionnaire
Supplier
Self-registration
invite via email
Supplier Registration
31
Buyer
SourcingContract
Management
Strategic buyer
APPROVES
the supplier
SIM-
Supplier Information
Management
Supplier
registration
SIM
Supplier
responsible for
own profile,
updates and
changes
32. 1. Supplier accept trading request via existing Ariba
Network account
2. Configuration of account (Ready To Transact status)
Supplier
Trading Relationship
Request E-mail
contaning URL to
landing page
Supplier Enablement
32
Supplier
Onboarding
Team creates
Vendor
Upload File
SSAB decision to transact
Purchase Orders and
Invocies with supplier on
Ariba network
P2I – Procure
to invoice
Supplier
Enablement
P2I – Procure
to invoice
Expectations on Supplier
- Recieve and confirm orders on AN
- Invoice on AN
- Update supplier profile
- Create and update Catalogs via AN
Ariba Supplier
Enablement team
recieve Vendor
Upload file and send
Trading Relationsship
Request on behalf of
SSAB
33. Supplier Enablement -Then and Now
Then
– Manual work for SSAB to approve and register supplier
– With correct information this took about 10-15 min
– Many new suppliers each week, little or no control over
preferred supplier list
Now
– Supplier self-registration
– Supplier invitation to transact with SSAB on Ariba Network
– Several weeks or more in calender time
33
34. Philosophy for new Purchasing process
(applies to all activities of all modules)
Prepare
– Purchasing organisation
– Supplier enablement team
Right from the start
– 3-way matching
– Catalogues with pre-decided content to
Supplier participation
34
35. New way of working has many advantages for SSAB
Control of suppliers
– More active in our choice of suppliers
– Approval process of suppliers in place
– Structured information on aspects such as CSR, quality and
environmental issues
Support and tool for strategic sourcing
– Realize cost potential
– Common structure, transparency and knowledge
management
Reduced administration
– Green flow –e-transactions
– Less time answering questions regarding payment, trace
invoices etc
Contract Compliance
– Catalogue content
– Easy to use tool for requesters
35
36. Advantages for suppliers
Find new and maintain existing customers on Ariba
Network
Shorten sailcycles and increase customer
satisfaction
– Faster handling of orders and order quality
Increased sails
– Visibility of content trough catalogues
Advantages of E-invoice
Lower cost with E-invoices
Get paid on time and less invoice errors
– Increase cash flow
Invoice status updated on Ariba Network
36
37. Supplier enablement process was insufficient
– Suppliers had not understood
– SSAB had not understood
– Ariba had not understood
We had to restart with many of the suppliers that we thought were
“ready to transact”
– Find the correct people to talk to
• Not only the KAM
– Support on technical issues
– Integration projects
We had to restart with Buyers and internal stakeholders
– Catalogue content
– Change Management
37
P2I Go Live in october 2013 –How did it go?
38. Challenges internally
Way of working
– Great change for ALL involved (SSAB and suppliers)
Method of enabling suppliers and creating catalogues
– Constant learning process, evaluation and development
Organisation and governance
– Roles, decisions, escalation and coordination need to be
improved within SSAB
Functionality in Ariba P2I
– Technical issues with for example punch-out catalogues
38
39. Response from suppliers
Different challenges depending on size and
branch of supplier
– Large suppliers –integration
– Middle sized suppliers
– Small suppliers
– Very small suppliers – positive if “IT-mature”
Wish to receive POs by e-mail, can easily
change own process with moderate effort
39
This is where we have
most challenges
40. Challenges for Suppliers
Double work
– Due to requirement of two invoice
(suppliers ERP and on Ariba Network)
Integration process requires resources and
time
Outsourcing of invoicing in Nordic countries is
wide spread and increasing
Competence at supplier
Catalogue content unclear–common issue for
SSAB and supplier
40
41. Our lessons learned implementing P2I
Do not underestimate implementaion
internally
– Change management on way of working
for Buyers and requesters needed again
and again
AND
Do not underestimate the role of suppliers
Do not focus on the system, changes in way
of working and on all parts of the
purchasing process has a greater impact
41
42. Advice to get supplier onboarded
Start with fewer suppliers
– Choose suppliers thourogly
Decide criterias (strategy) for wich suppliers to start with
– IT-matureness
– Already Ariba users
– ”Way of purchasing”
Start enablement as early as possible
– Written letter is not enough!
– Physical meeting; explain and listen to suppliers
– A close cooperation with fewer suppliers from the start
• Get all the way
• Good examples and refernces
Clear strategy towards suppliers
42
43. Which Suppliers to Enable?
43
Ease of enablement
HARDER EASIER
BenefitsReceivedLOWHIGH
Lowest Priority
Low volume, low importance suppliers
• Enable gradually over time
• Use image conversion
• Leave on paper (easily entered into AN
by buyer)
Medium Priority
High Volume or Strategic Suppliers with
low technical capability
• High Volume – support cXML or EDI
enablement
• Moderate Volume or non-PO - Use file
upload (.csv)
• Low Volume – Use PO Flip
Medium Priority
Low volume or low importance suppliers
who are already on the Ariba Network
• Second Wave enablement, bring into
network rapidly as resources permit, using
preferred creation method
High Priority
High Volume or Strategic Suppliers who
are already on the Ariba Network
• First Wave enablement, bring on as soon
as possible using their preferred creation
method
44. Success factors
CHANGE MANAGEMENT
– Strong management mandate needed
– New ways of working effect everyone within
Purchasing
• Get Purchasing organisation involved
New system drives changes in way of working
– Keep a holistic view of purchasing process
– Operational purchasing is the outcome of
strategic work!
44
45. The way ahead
Continue implementation and increase
scope
Common maintanence system on all three
production sites in Sweden
– Expansion of Integration
Continue learning and develop way of
working
45
46. The way ahead with suppliers
-a lynchpin to master
SSAB are close to mastering Supplier registration and enablement
through
Developed supplier enablement process
and
Enhance communication (both internal and external) on the long term
benefits
– E-commerce and green flow
– Compliance
– More active choice of suppliers
– Suppliers records and SRM (+ CSR process)
Patience in overcoming short term obstacles
– Understanding, Technique, Willingness, Resources, Matureness
46
47. Reflecting on the future of cloud solutions
what do you think?
When and how will organisations like SSAB be more ready?
When and how will Suppliers be more ready?
47
SSAB has achieved global leadership in the development and production of highstrengthsteels. By replacingtraditionalsteelswithadvancedhighstrengthsteels, end productscan be madelighter, stronger and more durable. Thisassures the end user of better overall economy, whilealsoreducing the environmental impact by lowering the fuelconsumption, for instance.
We needed, wished and dreamed for Strategic tool and GREEN FLOWP2I enabling the green flowTouchless flow - E-transactions with suppliers Catalogues and ACC contractsE-invoicingThis is what SSAB Hög andel av köp i GRÖNT FLÖDESkapa möjligheter för elektroniskt flödeGemensamt arbetssätt över orternaFlexibilitet inom InköpTransparant statusinformation till SSABs leverantörerAvtalstrohet