How Tesco Uses the Cloud to Work With Its Suppliers

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Agenda

• Introduction:Supplier community management and the Cloud

• Tesco Case Study:Simpler supplier lifecycle management, using cloud-based community management

• Wrap Up and Q&A

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Communities and B2B GovernanceAt the Core of Today’s Supply Chain

• Thousands of companies

• Tens of thousands of people

• Different systems

• Different (or NO) productivity tools

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Challenges with B2B Supplier Communities

Supplier Information and Process Management Often Manual

Many Departments Lack Visibility and Access to Information

Slowness to On-board and Set UpSupplier Impacts Profits

Legal, Regulatory and CSR Compliance Impact Your Brand

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Information Managementis a Critical Component

Trading Partners in a constant state of flux…

Every…14 secondsa judgment is filed against a supplier

60 secondsa supplier’s risk profile changes

2 minutesa directorship (CEO, CFO, etc.) change occurs

2 minutesa new business opens

4 hoursa supplier’s

ownership changes

8 minutesa supplier files

bankruptcy

3 minutesa supplier ceases

operations

Source: D&B

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Why the Cloud is Attractive to Procurement and Sourcing Executives

• Access to productivity and process management apps was traditionally out of reach for many procurement organisations

• Ability to unify departments and companies around a shared information profile

• Instant gratification

CLOUDSolutions

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Supplier Lifecycle ManagementCloud Style

Procurement & Sourcing Organisations

• Single information profile for suppliers:• Company• People (business, social)• Items, Products & Matls.

• Governance & Control• Information• Process

Suppliers

• Self-service Information Management

• Process Handshake

• Auditable Interactions

• Business Social Network

• Customer Engagement

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Case Study

Simpler Supplier Management

– in the Cloud

Stuart BlackeryTesco Group Corporate Purchasing

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Tesco Corporate Purchasing Environment

Major purchasing organisation –global, multinational, multi buyer environment

POs with over 3,500 suppliers, from a catalogue of > 12,000+

Rolled out new Oracle-based procure-to-pay solution

Standardising on a best practice operating model for global purchasing practices

Founded: 1919 (London, UK) HQ: Cheshunt, UK UK’s #1 Retailer 3rd Largest Globally Stores: 5,400+ 2010/11 Revenue:

£60.93 billion ($97.9 billion)

Employees: 400,000+

Company Snapshot

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Key Issues that led to Implementation of Supplier Lifecycle Management Automation

• Fragmented view of existing supplier information

• Difficult to communicate and govern massive community of existing suppliers around routine initiatives and rollouts

• Need for simplicity and paperless best practices in SRM

• Pressures to standardise and include supplier assessment and risk evaluation during supplier registration

• Same process for one-off “payees” as for major suppliers

• Unable to find cost-effective solutions from existing ERP and content management solutions

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Supplier Registration and Setup Before Our Cloud-based Solution

Group Corporate Purchasing

Manually intensive Difficult to control Poor visibility Long lead timesSuppliers

PurchasingFinance & ITLegal & Executive

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Tesco Selected GXS RollStream™Part of GXS Trading Grid ®

Focus

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After Registration RollStream acts as Supplier Governance Hub for Corporate Purchasing

UK / EuropeIrelandEtc.

Flexible data model Extensible collaboration Control of the process

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After RegistrationTotal automation of the workflow steps

Step Manual Process Before

GXS RollStream Registration

Search to see if supplier or product exists

Manual ✔ - Online

Request new supplier (if not found)

E-Mail Form ✔ - Online

Review new supplier request and send Application Packet to vendor

Manual ✔ - Online

Request more info from supplier E-Mail Form ✔ - Online

Supplier submits info / agreement E-Mail / Mail Form ✔ - Online

Request approved / declined Manual ✔ - Online

Supplier data entered into platform Manual ✔ - Online

Request approved / declined Manual ✔ - Online

Future supplier communications E-Mail ✔ - Online

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Impact of Automation

• Real-time Visibility • Dashboards with latest status, flexible ad-hoc decision

reporting, regular report feeds into KPI reports• Improved Productivity

• Automatic notifications and reminders, approval workflow • Improved Data Quality

• Data completeness, data validation, complete audit history• Flexibility

• Business users can easily change process, including new approval group

• Oracle Integration • Automated integration, less errors

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Solution Fly By…

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Tesco team Members have a Simple Automated New Supplier Request Process

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Internal Pre-approval Controls Ensure Governance over Supplier Addition

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Supplier Request Email

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Suppliers Self-Serve Their Log In

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Create Appropriate Company and Contact Profiles

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Simple, Comprehensive Information Collection

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Flexible Custom Field Maintenance and Self-Policing Completion Prompts

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Internal Tesco team of Requestors & Approvers has own To-Do list Dashboard

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Full Review and Approval ControlsFor Tesco team Members Associated with Request

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Management Information DashboardsEnable Visibility, Address Bottlenecks that Hinder time to On-Board

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Suppliers have a Simple Extensible Self-Serve Profile that is Created via Registration

Example Profile Structure:

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Configurability

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Configurability…contd

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RollStream API Enables Seamless data Exchange with ERP / Procure-to-Pay

RollStream enables simple exchange of data with ERP and Document Management systems(Import / Export/Flat File)

Or

Seamless exchange using our enterprise API interface

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Benefits

• Quickly reduced lead-time to register new suppliers by up to 60% and with end-to-end visibility• Now reached 70% – 12 days on average

• Deployed rapidly (approx. 12 weeks), compared to 9 to 12 months for traditional solutions

• Paperless best practice for Corporate Purchasing, now extended into other geographies

• Overall control and governance over the process• Total time, stage time, buyer level, data quality & visibility

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Summary

• Supplier lifecycle management is an ideal candidate for cloud-based tools

• Tackling supplier registration workflow now more strategic ever

• Applies to indirect and direct categories of spend

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Thank You for Your Participation!For More Information…

Contact GXS• Web: www.gxs.eu• Email: [email protected]• Phone: +44 (0)1932 776047