1. Quadrem: eOTD and releasing Supply Chain value ECCMA Annual ConferenceOctober, 2006

2. Agenda

A little about Quadrem

Buyer & Supplier Pain points

How have we approached this

• Standards

• • Education, Development, Management

• Systems Integration

Some Requirements

Benefits and Lessons learned

3.

Launched in 2000 by global natural resources leaders to streamline procurement and reduce supply chain costs

Global Supply chain solutions leader with:

• Global MRO-Centric Supplier Network

• XML Messaging Hub

• Sourcing Solutions

• Financial Solutions

• Data Management Solutions

Company Overview 4. The Community as at September 2006 XML Transaction Hub 46,000 Suppliers 35,000 P2P Supplier Users 356 Integrated Connections 34 Active Buyers 635 Buyer Sites516 Integrated Connections $12.5 billion annualized transaction volume 5. Transaction and Throughput Record 2002 2003 2004 2005 2006 Throughput Transactions 6. Global footprint Global customers Worldwide Quadrem Offices and Partners Santiago, Chile Lima, Peru Johannesburg,South Africa Dubai, UAE Riyadh,Saudi Arabia Perth, Australia Brisbane, Australia Sydney, Australia Rio de Janeiro, Brasil Mexico City, Mexico Dallas, USA Toronto, Canada Montral, Canada Houston, USA Seoul, Korea Jakarta, Indonesia Singapore Paris, France Amsterdam,The Netherlands 250+employees and associates worldwide San Jose, Costa Rica 7. Key Strength - MRO Supply

Largest community of industrial MRO suppliers

• Assets stand idle without these mission critical suppliers

• Leveragability - MRO suppliers cover many industries

Standardized eOTD industry dictionary for more than 6,000 MRO categories

• Becoming the de facto standard for the mining, minerals and metals industries

• Platform for expansion to related industries where technical descriptions are key

19 business process documents designed for MRO materials and services procurement

• Appreciates the criticality of timing and availability of supply

• Need for machine to machine integration

8. Pain Points 9. Buying Organizations Pain Points Landscape Results and Effects Use different ERP applications (many times within the same company)

Each ERP requires content structured differently

Segregated spend requiring manual intervention

Use different catalogue schemas / standards

More than one schema within the same group

Often inappropriate for business needs

Seldom have a well defined catalogue strategy

Find it difficult to pin down the business case and ROI for content projects

Decentralized buying and inventory functions have led to decentralized content creation and maintenance functions

Seldom pool content initiatives to take advantage of efficiencies of scale that content

Dont view catalogue creation and maintenance as a core discipline

No quality training and change management plans

No clear understanding of the value of good content

Data not being maintained ~ creating a perpetual cycle of data cleansing projects

Carry legacy content data

No structured approach to create and maintain content

Does not unambiguously differentiate a material or service

Duplicate content creates uncertainty ~ master to select

Spend profiles and analytics are impossible or difficult

10. Supplying Organizations Pain Points Landscape Results and Effects Dont understand complexities associated with creating content correctly

Poor quality content,

Content never in a state of readiness

Create content to differentiate not to standardize

Suppliers supply same materials to more than one buyer organization

Thosethat have created catalogues to a schema often unwilling to change or redevelop this content to a new schema

Vary in size and capability

Limited use of technology adding to the complexity of content creation

Limited resources or budget to pay for content to be created according to numerous standards laid down by different buying organizations

11. How have we approached this?

Standards

System Integration

1 + 1 = 3 Plan Design Build Test Deploy 12. Quadrem and Standards

Wherever possible Quadrem bases its services and products onopen ,internationalstandards

The philosophy being that itlowersthechange managementeffort and rework over time

Quadremfacilitatestwo standards groups for its customers

• Integration Standards Council

• • XML, document choreography coordination

• Content Standards Council

• • Classification, Codification and industry templates

13. eOTD Management Methodology

Closeliaisonwith customer (and theirdata ) to develop and extend the eOTD to meet industry context

Focus on minimal requirements to find, describe and buy in a commercial perspective

Put in place robust standardsmaintenanceprocesses to ensure adoption, consistency and reuse

Once stabilized move relevant structure to public domain

• Lowers cost over time, increases adoption

14. System Integration Methodology Plan Design Build Test Deploy Summary Tasks Stages Prioritize integration project based on business needs, benefits, & targets Define Scope & Implementation Phases Define Business Process & Workflow Define Connection Architecture Gather Data Mapping Requirements Decide Catalogue strategy & requirements Establish Team & Timeline Set Up Integrated DDID Conduct Connection/ Document Training for Trading Partner Tech Exchange Connection Info IDs, Passwords, e-mails, URLs Provide Document Standards & Samples, Connection User Guides & Test Script Specify Data Mappings -transformation rules & values Collect Catalogue Data Create detailed Project Plan Populate catalogue for Quadrem catalogue and/or Buyer ERP catalogue Supplier or Quadrem builds Document Mappings in Dev environment Migrate Mappings to UAT environment Install & Configure UAT environment (routing rules, certs) Test Connectivityto Quadrem in Test environmentConduct end-to-end integrationand cataloguetest with Buyer & Supplier Migrate Mappings to Production environment Install & Configure Prod environment (routing rules, certs) Test Connectivityto Quadrem in Production environmentAssist as needed with End-User Training & Communications Quadrem monitors initial production transmissions through marketplace Gather feedback & resolve issues 15. Some Requirements

Classification - UNSPSC / Material Groups / Other

Codification eOTD / Other

• Use as is?

• Customize internally?

• Leverage existing process and customized templates? (QTAG)

Business Rules required

• Special Characters

• Units of Measure (Imperial and / or metric)

• Valid Values (or free text)

• Cleansing and standardization rules

• • OEM Items

• • Generic Items

• • Mnemonics and Part Numbers

• QA guidelines and rules

Descriptions

• Patterns leverage exi s ting or develop / customize internally

• Short Text (40 Characters)

• Long Text

• PO Text

16. Some real benefits delivered KPI Potential Typical Duplicates ID 5 - 20% 12% Inventory Reduction 5 - 20% 8% Deleted / Obsolete Materials 5 - 15% 11% BOM Duplication / Rationalization 10 - 35% 15% Poor Mnemonic Part Numbers 5 - 20% 3% 17. Lessons

Get the strategy right, set expectations early and clearly

Pick a standard and stick to it

• All models are wrong some are useful

• eOTD is useful !!!

Interlocking systems integration and catalogue standards saves time and plants seeds for long term success

Maintenance is just as important as creation

18. In Conclusion

Recommend taking baby steps and understand catalog in relation to larger Procurement strategy