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Kevin Dioquino, Procurement Manager, Lowe’sRajesh Rajagopalan, Lead Consultant, InfosysSeptember 25,2013
Advanced Procurement Solutions at Lowe’s A Success Story
Table of Contents2
Introduction
Lowe’s Overview
Program Scope & Challenges
Advanced Procurement Benefits
Advanced Procurement Needs
Implementation Approach
Hidden Gems
Advanced Procurement Solutions
Business benefits realized
Key Take Away
Conclusion & Discussions
4
Lowe’s - Overview
Heritage
• Founded in North Wilkesboro, NC
• Helping customers improve the places they call home since 1946.
• Headquarters in Mooresville, NC
Retailing
• 16th Largest retailer in the World
• Over 245,000 employees
• Serves more than 15 million customers a week
• Operates 1,750+ stores in the United States, Canada, Mexico
5
Lowe’s – Overview
Financial 2012
• 2012 Revenue $50.5 Billion
• 2012 Net Earnings of $2.0 Billion
• Ranked #20 on 2012 Global Powers of Retail List
Awards
• 4th Consecutive Energy Star Partner of the Year – Sustained Excellence Award
• Lowe’s Corporate Leadership Award from NABEF
• #1 in J.D. Power Appliance Retail Customer Satisfaction
6
Program Scope
• Standardize business process by embracing industry
best practices
• Instigate control and compliance across business
processes to reduce duty violation and risk
• Align business process and rollout new process for
Canada operations
• Re-Implement PeopleSoft 9.1 to instigate automation
and utilize new features across P2P business process
7
Program Challenges
• Opportunities to reduce Procure to Pay life cycle time
• Non Standard business process
• “Maverick” spend and exception handling
• Increased business opportunities for supplier enablement
• Opaque procure to pay process forcing business critical resource’s time
• Disparate procurement systems
8
Lowe’s Procure to Pay
Identify Needs
Source Vendors
Negotiate Contracts
Upload Catalogs
Create Req
Create PO
Receive POA
Receive ASN
Receive
Electronic Invoicing
Make Payments
Indirect P2P
Sourcing Supplier Contracts
Catalog Management
eProcurement Purchasing eSupplier
eSettlements Payables Workflow
Supplier Relationship Management (SRM)
Indirect Goods and Services
9
Advanced Procurement Benefits
Supplier Enablement
Supplier Competition
Contracts to Control
Spending
Self Service and Workbench
Audit Trail
360 Degree view of P2P
Managing Rebates
Spend Analytics and Dashboards
• Collaboration with supplier
• Source more from spend
• Drive contract compliance
• Ensure traceability
• Track full life cycle
• Proactive control
• Free cash flow
• Focus on strategic activities
Analyze
Evaluate
Benefits
10Advanced Procurement Needs
• Non standard processes
• Unapproved spend
• Prolonged P2P lead times
• Manual communication and status updates
• Enhanced spend control, reduce cost
• More automation, improved productivity, efficiency
• Improved compliance and simplified auditing structure
• Improved transparency and reduced lead time
11Re-Implementation Approach
Non Standard business process
Benchmarking assessment, best practice usage
“Persona” based business requirements
Prolonged P2P lead time, automate business process
Value based governance framework
“Maverick” Spend and Exception control
Preventive vs. Reactive Control
Dashboard analytics, Auto provisioning
Opaque P2P Process
Employee empowered, transparency built in processes
Disparate Systems
Re-Implement P2P business process
12
Hidden Gems at Lowe’s
Enhance Collaboration & Automation
Extend & Enhance Sourcing
Drive Contract Compliance
End to End Life Cycle Visibility
Improve Compliance & Reduce Risk
Better Cash Flow Management
Analyze
Identify
GEM’s
Improve
Best Practices
13
Advanced Procurement Solutions – Powered by Technology
• Enhance Collaboration & Automation
• Implementation of Advance Shipment Notifications
• Purchase Order Acknowledgements driven change
orders
• Electronic Data Interchange solution for driving
business growth
• Right order from the right vendor
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Advanced Procurement Solutions – Powered by Technology
• Extend & Enhance Sourcing
• Identified opportunities for sourcing across the
different Lines of Business (LOB)
• Empowered LOB to use and utilize sourcing
• Driving optimal results by re-using best practices
• Sourcing templates
• Bidder groups
• Sourcing workflow
• Bid factors
• Notifications
• Source of truth for all transactional contracts
• Automatic enforcement of contract compliance on
Requisitions and Purchase Orders
• Contract expiry date and spend threshold
notifications
• Agreement notification to automate work trigger
• Automation of recurring payment vouchers
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Advanced Procurement Solutions – Powered by Technology
• Drive Contract Compliance
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Advanced Procurement Solutions – Powered by Technology
• End to End Life Cycle Visibility
• Leverage delivered dashboard to develop pagelets
• 360 degree view of the transaction enabling timely
decisions
• Mass requisitions by end users with advanced
notifications reducing lead time
• Streamline transfer of requestor information across
P2P process
17
Advanced Procurement Solutions – Powered by Technology
• Improve Control & Reduce Risk
• Preventive Control • AWE workflow for spend control & exception
• Pre-check commitments
• Proactive vendor based matching control
• Auto provisioning
• Detective Control• Spend analytics
• Performance evaluation
• Commitments tracking
• Legal entity accounting
18
Advanced Procurement Solutions – Powered by Technology
• Better Cash Flow Management
• No Po, No Payment
• Improved automation to reduce payment lifecycle
• Dynamic discounting framework
• Automatic spend threshold control
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Business Values Derived
Enhanced Collaboration & Automation
• 15 % of EDI transactions increased • 200 vendors moved to EDI enabled• P2P Lead time reduced by 48 hrs
Extend &
Enhance Sourcing• # of Sourcing events created in PS tripled
Drive Contract Compliance
• 32 % increase in Supplier Contracts Volume• Proactive notifications for all Voucher Contracts
End to End Visibility
• 60 % of time savings for Buyer• 25% P2P lead time saved
Improved Control & Reduced Risk
• 30 % reduction in Reconciliation Effort• 70% of time savings for Buyer & AP Clerk
Better Cash Flow Management
• 30 % savings on P2P lead time
Customization Governance: 52% customizations reduced
20
Key Take Aways
Business Requirements
• Infosys “Persona” based requirements
Workshop & CRP • CRP0 – Product exploration
• CRP1 - Lowes business process
• CRP2 - Day in Life View – Train the Trainer
Customization Decision
• Infosys Value based Governance Framework
Stakeholder engagement
• Proactive communication to end users
• User Communities – Lowe’s Connections
Deployment
• Fool Proof Go-Live rehearsals
© 2013 Infosys Limited, Bangalore, India. All Rights Reserved. Infosys believes the information in this document is accurate as of its publication date; such information is subject to change without notice. Infosys acknowledges the proprietary rights of other companies to the trademarks, product names and such other intellectual property rights mentioned in this document. Except as expressly permitted, neither this documentation nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, printing, photocopying, recording or otherwise, without the prior permission of Infosys Limited and/ or any named intellectual property rights holders under this document.
Thank YouKevin Dioquino - Kevin.L.Dioquino@lowes.com
Rajesh Rajagopalan - rajesh_rajagopalan@infosys.com
Sudharsan Srinivasaraghavan - sudharsan_s@infosys.com