Learn How You Can Do Business in China with the Cloud

© 2014 IBM Corporation

Session ABB-5602: Learn How You Can Do Business in China in the Cloud IBM InterConnect 2015 Mandalay Bay – Lagoon L February 26, 2015

Agenda

•  What are B2B Cloud Services? •  China Market Trends

•  Side effects •  Urgency to survive

•  Supply Chain Efficiency (via B2B / EDI / MFT) •  Internal & External

•  IntegraPng China Trading Partners •  How eCOM-‐IBM can help

•  Turnkey soluPon into China •  Same service, greater coverage

•  Case Studies •  Your Next Steps •  QuesPons

1

Modernize to the Cloud IBM Sterling B2B Integration Services

•  Document Process Management

•  Integration Services •  Transformation Services •  Process Enrichment

Services •  Synchronous B2B Process

Services

Your Company

Flexible small partner enablement solutions Web Forms

Fax Conversion

e-Invoicing

Validate signed invoices

Pre-connected Trading Partners

EDI/Non EDI

Global Connectivity Community Services Process Services Integration Services

•  Data Synchronization •  Supply Chain Visibility •  e-Invoicing

•  •  Supplier Portal / Web

Forms •  Community Development

Services •  Fax Conversion Services •  Trading Partner Help

Desk

•  Business Continuity •  Security Services •  Customer Support •  SLAs •  EDI and Content Routing •  Interconnects •  File Transfer Service •  China B2B Cloud

Browser Access

Sterling B2B Services

Synchronous B2B Process Service

2

China Market Trends BUYING & SELLING TO CHINA Largest import source*

2014 (19.8%) 2013 (19.4%), 2012 (18.7%) and 2011 (18%) 12% larger than Europe, 34% larger than Canada

China’s shic to E-‐Commerce** 2014: $9.34B VS. $4.16B 2013: $5.75B VS. $3.49B

*Source: U.S. Department of Commerce, Census Bureau, Foreign Trade Division **Source: Comsource, Adobe, Alibaba

THE BARRIERS CREATED High LogisPcs Cost

Buffered stock Long lead Pmes Educated guessing Higher labor costs

Order issues Invoice disputes Capped volumes

Looking to increase supply chain efficiency Manual supply chain management Limited JV’s IT knowledge

China business partners must meet global standards to survive

Rapid demand to capture market share MNCs form JVs with local companies LogisPcs outsourced to 3PL providers

CREATION OF MARKET SHARE IN CHINA

Supply Chain Efficiency

data integration

•  Foundation of Supply chain visibility

•  Reduced lead times, data errors

•  Improved goods receiving, payment cycles

most economical

•  Low hanging fruit •  High value •  China government

support: “logistics efficiency and information logistics”

“Supply-chain and operations improvements will be the most potent contributor to Internet-led value gains in autos.”

-Yougang Chen, McKinsey.com

The 12th of 5 years Plan in China

Government support and encouragement to streamline Supply Chain efficiency

Sustained compePPveness via reduced import and export costs

Promote “InformaPon LogisPcs” to be in-‐sync with “Physical logisPcs”

Major enterprises aligning with Government’s focus

Result: Easy to engage trading partners • B2B integraPon • B2B trading

The 12th of 5 years Plan in China: E-Commerce (Cross Border Trade)

2013.8 国办发[2013]89号 Nation Office [2013] No. 89 国务院办公厅转发商务部等部门关于实施支持跨境电子商务零售出口有关政策意见的通知自本意见发布之日起，在已开展跨境贸易电子商务通关服务试点的上海、重庆、杭州、宁波、郑州等5个城市试行上述政策。自2013年10月1日起，上述政策在全国有条件的地区实施。

确立5个跨境贸易电子商务试点城市 5 cities (Shanghai, Chongqing, Hangzhou, Ningbo, Zhengzhou) were approved to pilot cross-border e-commerce from Oct. 1st, 2013.

2013.10 海关总署公告2013年第58号 Customs Notice [2013] No.58

确立5+1+1试点城市方案 Establish 5+1+1 Pilot Cities Program

2013.12 海关跨境贸易电子商务进境商品监管办法（试行） Customs Regulation Approach on Imported Goods from Cross-Border e-Commerce (for Trial Implementation)

三流合一的监管方法 Three flows-into-One flow Regulation Approach

2014.1 财税[2013]96号财政部 Finance Office [2013] No. 96

确立出口相关退税安排 Confirm export tax refund operation

2014.5 国家质检总局关于支持跨境电子商务发展的意见 Comments on Supporting the Development of Cross-Border e-Commerce by State Quality Inspection Administration

合法查验及建立电商信用体系 Establish e-commerce credit system according to legitimate inspection

源头可溯 Source Traceable

质量可信 Quality Credible

⻛风险可控 Risk Controllable

责任可究 Responsibility Accountable

Integrating China Trading Partners

solution •  Flexible to meet best practices •  Global standards

•  ANSI X12, EDIFACT, VDA, etc. •  Domestic standards

•  Government and local language •  Easy to learn •  Scalable •  Tools

•  WebForms •  Fax/Excel-to EDI

supplier •  Extensive domain knowledge and

experience •  Proven track record

•  Network infrastructure capabilities •  Implementation and follow through

capabilities •  Local Support / Community Management

•  Time zone •  Language and cultural affinity •  Workshops •  On-site capability

BUYING Just-in-Time / VMI

eCatalog Scan Pack

SELLING Cross Border Trade Increase Order Capacity Supply-Chain Finance

business need

How eCOM-IBM Can Help: Global Sponsors to China TPs

eCOM-‐IBM B2B Cloud Services (VAN/Managed Services)�

sponsor company

trading partner

trading partner

trading partner

•  Interna>onal EDI VAN •  Transla>on to trading partner format, Web EDI,

CSV, Excel, Fax etc. •  On-‐boarding service •  Educa>on and workshops •  24/7 Go Live support, local >me zone, local

language, local technology and local culture

B2B Analytics & Reporting Dashboard

How eCOM-IBM Can Help: Turnkey Solution into China

•  IBM as your 1-‐stop Shop: Single commercial agreement, consistent pricing, single invoice, single vendor

•  RESULT: SIMPLE Turnkey SoluPon into China = VISIBILITY & CONTROL OF THE GLOBAL SUPPLY CHAIN NETWORK –  FAST ROI Rate –  Boqom-‐line & Top-‐line Revenue Increase & Cost Savings

•  Same IBM services in China with enhanced on-‐site capabili>es through eCOM

•  RESULT: Increases and simplifies EDI AdopPon Rate = FULL ENABLEMENT, MANAGEMENT, & SUPPORT CHINA TRADING PARTNERS –  Removes trade barriers –  Ensures compliance with laws and regulaPons –  Exchange QUALITY & CRITICAL business data and automate business processes between Chinese customers and suppliers

RETAIL

Situa>on and Requirements §  Remove Barriers for overseas Manufacturers to sell into China

§  Complex CerPficaPon process (CIQ); Food product 3 to 6 months; CosmePcs 12 to 18 months

§  Many taxes; Import Duty, VAT, etc. (Ocen paid up-‐front) §  Lengthy Customs declaraPon process §  RESULT: importers reduce number of SKU’s to simplify

process & exposure to China

Solu>on (CROSS BORDER TRADE) §  CBT: 1-‐Stop end-‐to-‐end plauorm to shorten import process, reduce import cost, and increase exposure to China

§  SOURCING: Helping Importers through CIQ, Tax and Customs processes.

§  IMPORTING: Providing Bonded Warehouse services §  SALES: Providing offline stores and online E-‐Marketplaces to sell under CBT regulaPons

§  MARKETING: Unique Customer Shopping Experience §  FULFILLMENT: Order processing, delivery, tracking, returns

§  eCOM VAN & IBM Sterling B2B CollaboraPon Network

eCOM-‐IBM Cloud provides minimal investment in supply-‐chain logis>cs, increasing >me and resources available to focus on core competencies (i.e. selling more products to China) Maximize revenue by selling in all channels (online, mobile) Capture customer informa>on to provide mul>ple marke>ng exposure across various media & programs Get immediate feedback from the end consumers through direct order fulfillment

value + Case Studies

CPG

Situa>on and Requirements §  High supply chain costs in China §  Prevent over-‐stock or out-‐of stock of materials supplied to the producPon line within China, warehouses and gradually migrate to the VMI process.

§  Help China suppliers to on-‐board global EDI programs in order to adopt VMI

§  Educate suppliers in China on the processes and benefits of VMI through EDI implementaPon

§  Provide regional Pme-‐zone with local language support to China suppliers

Solu>on §  Provide Web EDI portal and EDI on-‐boarding services to Wrigley suppliers

§  Implement a very clear global strategy to streamline SCM processes and lower operaPng costs


U>lize on-‐boarding services from IBM B2B SCN SaaS/VAN to lower Wrigley’s IT cost and speed up the EDI on-‐boarding process

Increase the opera>onal efficiency for both Wrigley’s factories and suppliers

Lower opera>onal costs, 37% average stock reduc>on

Reduce 90% of out-‐of-‐stock or over-‐stock problems for produc>on lines

value +

Case Studies

CPG Situa>on and Requirements §  Large MNCs’ China DMC (55% of total China business) aims to grow to USD5 Billion in the future

–  Limited by current infrastructure –  System crashes results in 2,800 lost orders, 3,000 MSU, and over

2,000 hours to reprocess orders §  Migrate MNC’s China B2B traffic from local China EDI provider §  PO and ASN data must be transferred using AS2 §  Onboard and go-‐live for 98 Chinese distributors in 12 weeks §  Coordinate and support MNC’s China teams, socware vendors, and distributors in the local Chinese Pme-‐zone and language

Solu>on §  Rapid on-‐boarding process -‐ enabled 98 distributors within 12 week project Pmeline (including end-‐to-‐end tesPng)

§  Reliability of local eCOM network (high-‐volume capacity) using SI as the backbone to handle high-‐volume traffic. Current China B2B Services providers cannot meet capacity

§  Extended Chinese language and local Pme-‐zone support to P&G China, vendors, and distributors


Single point of contact for global consolidaPon of B2B Services Global on-‐boarding and support coverage backed by Mandarin language and China Pme-‐zone support Always ON system with no system crashes Increased DistribuPon channel order capacity by 20% USD 7MM supply chain incenPves to help increase distributor’s annual margins more than 10% Secure Data transfer by replacing FTP with AS2 protocol for PO and ASN data

value + Case Studies

AUTOMOTIVE

Situa>on and Requirements §  Global strategy to streamline the SCM processes

§  Force suppliers to employ MMOG Level A compliance

§  Measure SDP (Supplier Delivery Performance) via EDI processes

§  Educate suppliers in China about the processes and the benefits of EDI

§  Provide regional Pme-‐zone and local language support to China suppliers

Solu>on §  Web Portal for China suppliers


Right materials with the right quan>>es are delivered to the right user plant at the right schedule

Just in >me process for produc>on

Measure Supplier Delivery Performance

Lower opera>onal costs

value +

Case Studies

RETAIL

Situa>on and Requirements §  Suppliers need to manage and update product informaPon (price, descripPon, discounts, etc.)

§  Over 7,300 suppliers (from MNCs to SMEs)

§  On-‐board China suppliers to global EDI system

§  Educate suppliers in China on the processes and benefits of implemenPng EDI.


Solu>on §  Integrated and Web SoluPons (Direct EDI & WebForms)

§  Rollout to 7,300 suppliers in last 2 years §  eCOM VAN & On-‐boarding Team of 8 people in Shanghai to create streamlined on-‐boarding process

§  Contacts; EducaPon; IniPal Product Load; Ongoing Helpdesk

Supplier’s products immediately updated to retailer’s back-‐end systems Secure & Electronically exchanged informa>on Lower opera>onal costs of managing thousands of SKUs Ensure the right product, right quan>>es at the right place and right >me

value +

Case Studies

RETAIL

Situa>on and Requirements §  Suppliers need to provide direct-‐to-‐store service to Kmart in order to cut operaPng costs of the DC in Australia

§  On-‐board China suppliers to global EDI system

§  Educate suppliers in China on the processes and benefits of scan-‐pack through implemenPng EDI.


Solu>on §  Provide scan-‐pack and EDI on-‐boarding services to Kmart suppliers in China


Electronically exchanged informa>on Ensure the right product, right quan>>es at the right place and right >me Lower opera>onal costs Retailer can efficiently verify shipments

value +

Case Studies

Your Next Steps

Your first step: Global Sponsors to China TPs

eCOM-‐IBM B2B Cloud Services (VAN/Managed Services)�

sponsor company

trading partner

trading partner

trading partner

•  Interna>onal EDI VAN •  Transla>on to trading partner format, Web EDI,

CSV, Excel, Fax etc. •  On-‐boarding service •  Educa>on and workshops •  24/7 Go Live support, local >me zone, local

language, local technology and local culture

19

Your next steps: Achieving global B2B Integration and EDI

Activities •  Develop a B2B Vision & Strategy: Based on

a client’s strategic vision, eCom-IBM’s industry expertise/benchmarks and the client’s business environment

•  Identify Inefficiencies and Bottlenecks: Investigate current B2B processes to identify areas for improved efficiency and cost improvement opportunities

•  Define Technology Requirements: Envision a B2B technical solution that supports process improvement

•  Describe the Business Value: Estimate reductions in cost and/or time and business value improvement in the envisioned "to-be" environment

Artifacts •  Current State Assessment

•  Future State Opportunities

•  Business Architecture and Solution

•  Business Case

3. Current and Future- State Gap Analysis 4. Future-State Design

2. Business Goals and Requirements

Typical Business

Value Assessment

5. Business Impact Analysis and Actions

1. Current-State Analysis

Business Value Assessment (BVA) – B2B Focus

Your next steps: A Call to Action

•  Contact your IBM RepresentaPve Today! •  Schedule BVA •  Scheudle one-‐on-‐one webinars/meePngs to determine specific

requirements and define strategies, goals, next steps •  Download the new whitepaper -‐ “EDI in China: Developing a Strategy

for B2B Integra>on Success” •  Currently available at the following link:

hqp://public.dhe.ibm.com/common/ssi/ecm/zz/en/zzw03194usen/ZZW03194USEN.PDF

•  Contacts •  Ryan Fong [email protected] •  Steve Travis [email protected] •  Lori Brofford [email protected]

Questions?

Thank You

APPENDIX: China E-Commerce Spending

*Source: Comsource, Adobe, Alibaba

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