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Teamcenter 8

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Supplier Relationship Management (SRM)

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Supplier Relationship Management

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

Siemens PLM Software

Teamwork is Difficult in Todays Purchasing Environment


Information
Supplier A Supplier B

Buyer Emails RFQ

Buyer creates Letter of intent


Supplier A

Virtual Part File Recommendation

Supplier C

NPV Analytics

Are we there yet?


10 + Access Databases

Award

Supplier Signs LOI

Rationale

Purchase Order

Buyer Chases Approvals

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated PLM/SRM Frictionless flow of information between Engineering, Procurement and Suppliers

Improves Profitability

Provides Access to Information

Delivers a Competitive Advantage

Source: McKinsey: Inventing the 21st Century Purchasing Organization

According to the Aberdeen Advanced Sourcing Benchmark report respondents believe product lifecycle sourcing drives innovation although only 35% report Sourcing involved in the product design phase
2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Teamcenter for SRM

Synchronization with Product Development Integrated Sourcing Process

Integrated Supplier Management

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Synchronization with Product Development Engineering and purchasing data is fragmented & disconnected
Purchase Order Information Award Decisions RFQs

Designs

Analysis Supplier Capabilities Programs Supplier Scorecards Component Libraries Spend Data Delivery Data
2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

BOMs

Buy to Specs

Quality Data

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Siemens PLM Software

Synchronization with Product Development SRM synchronizes engineering and purchasing data
Executives want their sourcing teams to create value through their relationships with key suppliers. Unfortunately the same study found that sourcing teams spend 70% of their time on tactical activities with little value added to those strategic relationships A. T. Kearney, Assessment of Excellence in Procurement
Spend Data (R2P systems)

P.O. Data (for ERP systems)

Purchasing

Award Decisions

Buy to Specs

Engineering

Delivery and Quality Data


2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Synchronization with Product Development Benefits

Eliminates Buyers Chasing Data

Automates The Change Process

Consistent Information

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Synchronization with Product Development Eliminates Buyers Chasing Data Spend Management consolidates data into a common reporting structure for accurate, rapid and repeatable analysis

Demo
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2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

Siemens PLM Software

Synchronization with Product Development Automates the change process Early cost capture in bill of material is critical to product cost management
Cost
Concept / Requirements

Cl os

Cost/Impact of Design Changes


ed W in do

BOM / Formulation

ws

of

MBOM / Lab Batch

Op po r

tu

ni

ty

Prototypes / Samples

Plant / Tooling Scale Up

Options

Source: Tech-Clarity, 2003

Source: Tech-Clarity, 2004

Time

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Synchronization with Product Development Consistent information Addresses complexity of data management Improves co-ordination among buyers, engineers and suppliers Closes loop for bill of material cost management

Demo
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2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

Siemens PLM Software

Teamcenter for SRM

Synchronization with Product Development Integrated Sourcing Process Integrated Supplier Management

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated Sourcing Process


Supports early involvement that drives cost savings
Product Development Timeline Best In Class Purchasing Involvement

Ability to control costs

Traditional Purchasing Involvement

Source: McKinsey

Time

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated Sourcing Process The Value


Current Income Statement
s Revenue s Cost of Goods Sold s Gross Profit $1,000 $600 $400 $91 $140 $12 ($12) ($30)

TC SRM

Results
$1,000 $570 $430 $103 $128 43%

Balance Sheet Key Ratios

s Cash s Inventory

s Gross Profit Margin (BT) 40%

Reduce Cost of Goods Sold Increase accuracy of communication with suppliers Introduce low cost suppliers Re-use suppliers & materials to increase volume leverage

Reduce Inventory and Spares Cost Reduce inventory costs through reduced material costs Reduce inventory requirement through reuse. Improve Purchasing Productivity Reduce manual effort to gather critical data to make sourcing decisions Reduce administration costs of suppliers & materials

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated Sourcing Process Benefits

Supports Multiple Business Models

Automated RFx Creation

Cost Breakdown Capability

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated Sourcing Process Supports centralized or decentralized business model

Package and assign by location Reduces language and cultural challenges Delivers consistent, repeatable processes in a clear manner

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated Sourcing Process Automated RFx Creation Automated transfer of visualization and specification files
Value to Organization

Integrated with PLM & SRM for Design-to-Cost

Automated RFx template selection based upon items Insures common data source

Competitive market & customer driven with NPDI process

Standalone /Ad-hoc Functional Team objective

Organizational Cost Management Maturity

Demo
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2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

Siemens PLM Software

Integrated Sourcing Process Cost breakdown capability Rapid analysis of suppliers proposals Award decision automatically populated in Teamcenter costed BOM Total cost transparency

RFx process that supports commodity management are woefully inadequate.the best hope for leadership comes from PLM vendors.. IDC

"Companies are going to have to achieve at least a 10 to 15 percent productivity improvement over the next two to three years just to stay in the game. AlixPartners
2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

Demo
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Siemens PLM Software

Teamcenter for SRM

Synchronization with Product Development Integrated Sourcing Process

Integrated Supplier Management

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated Supplier Management The Need for Supplier Management How critical is effective supplier management to your organization?

AMR estimates up to 75% of a vehicles parts come from third party suppliers

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated Supplier Management Benefits

Supplier Registration and Content Management

Categorize Suppliers and Their Capabilities Secure

Analyze Supplier Performance

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated Supplier Management Achieving Value: The Supplier Integration Effect


50%

50%

Percentage of Change

40% 30% 20% 10% 0% -10% -20% -30% 30%

20%

-15%
-25%

-12%

Successful supplier integration into new-product and newprocess development activities can result in cost savings, increased quality and time savings. Teamwork affects more than cost.

Quality Time Cost Savings Improvement Savings


Most Successful Supplier Integration Efforts Least Successful Supplier Integration Efforts

Source: Michigan State Global Procurement and Supply Chain Benchmarking Consortium

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated Supplier Management Supplier registration and content management

Managing supplier records can be a huge resource drain Leaving less time to understand supplier capability And even less time to mange supplier performance

Example: 120,000 X 0.50 = 60,000 suppliers 60,000 X 0.20 = 12,000 suppliers 12,000 X 1 hours = 12,000 hours

12,000 hrs 2,000 hrs/yr =

6 work years

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Integrated Supplier Management Categorize suppliers and their capabilities

Identify Qualify Invite to Design

..category can't be managed to cost savings alone it needs a new approach that we refer to as Performance Based Procurement Demo
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Bob Parker, Manufacturing Insights


2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

Siemens PLM Software

Integrated Supplier Management Analyze supplier performance Optimizes supplier performance across a full set of characteristics Satisfaction of design objectives Quality Availability Traceability Cost evaluating performance measures is not a strength of either the procurement specialists or the ERP vendors. ..Look to your PLM software provider first.. Bob Parker, Manufacturing Insights
2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Before Teamwork

Information
Supplier A

Buyer creates Letter of intent


Supplier A

Virtual Part File Recommendation

Supplier C

Supplier B

Buyer Emails RFQ

NPV Analytics

Are we there yet?


10 + Access Databases

Award

Supplier Signs LOI

Rationale

Purchase Order

Buyer Chases Approvals

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

The Teamcenter Enabled Process

Supplier B

PLM SRM

Supplier A

Issue Purchase Order

ERP

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Supplier C

Summary

Integrated Supplier Management - essential for capability & performance based selection Integrated Sourcing Process - essential for strategic sourcing Synchronization with Product Development - essential for product cost management

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

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Siemens PLM Software

Thank You

2009. Siemens Product Lifecycle Management Software Inc. All rights reserved

Siemens PLM Software