Path to Enablement History and Lessons Learned

Safety Tip

Trips and Falls Don’t cross barriers

Take special care at corners and intersections

Don’t text and walk

If you stray from the main path, there may be a few bumps

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Content Summary

My Bio

ARCO Alaska lessons

Path for COP Our experience

Our direction

Lesson Learned Challenges

Best Practices

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My Path to eLightenment

ARCO Alaska IT Systems Support Supervisor - Project to bring in electronic POs from EPCs

Assigned to Special Projects Group* EDI POs, ERS, EFT, Freight, Contract Labor

Koch Industries eCommerce Supervisor

EDI POs, Petnet, Debits, Lockbox, Wires, GISB, FTTF

PGP, DMZ, https, Beef

Consulting Back to Alaska (and JIBE, 832) 2001

On to Bartlesville 2002

ConocoPhillips Supervisor, P2P Management

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Basic Automation Goals from ARCO Alaska

Remove paper

Timeliness - Remove mail & the mail room

Eliminate rekeying errors

Eliminate GR / IR errors with ERS

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Early Lessons Learned (ARCO Alaska)

Plan for the process

Broad Collaboration - Supply Chain, AP, IT, Treasury, Auditors, Tax

Defining the value proposition up front

Achieve critical mass before moving to next phase

Success in one area builds interest in other areas (Freight, AP)

Early detours

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The ConocoPhillips Experience

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Change Drivers in COP’s business

Challenge sustaining the current solution Growing support requirements

Limited IT resources

Cost of just keeping up with technology - Application Gaps

Additional Pressures Speed of company growth

Pressure to improve metrics

Process Gaps

Decentralized entrepreneurship – improvement opportunities

New SC Strategy and Technology Group and Leader

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Value Proposition is Broad

Supply Chain opportunities Systematic rate validation

Spend capture available to Category Management

Workflow to approvers / substitutes

Accounts Payable On time payments

Leverage discounts

Dynamic discounting someday

Eliminate paper handling

Treasury Eliminate checks

Tax determination

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Ecommerce Capabilities Supported by Supply Chain

Various invoicing solutions - ERS, consignment, VMI

Multiple invoicing technologies ANSI EDI Invoicing

Manual entry via the COP Web Invoice

Integration via PIDX XML Invoice

Support of invoice features Attachments with Invoices

Vendor Part numbers (VPNs) or Service Numbers (ESNs)

Complex Pricing (PIDX)

AS2 (PIDX)

Communication standards POs - ANSI EDI PO’s, PO Changes and PO Acknowledgements

Freight support - ANSI EDI BOLs, ASNs, Invoicing

Price / Catalogs (ANSI EDI) - Spreadsheet upload

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Prior 12 Months of Invoicing

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1.5 Million Invoices – over 50% are electronic (blue)

Sustainability Requires a Commitment to…

Manage Master data

Establish & maintain contracts & pricing agreements

Monitor & publish Metrics

Maintain contacts

Ensure a customer support attitude

Evangelize the value proposition – why, who and how to being successful

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The Growing and Evolving Support Model

Project Team becomes the Support team

AP Invoice Processors

Field Invoice Handlers

Supply Chain Systems Support

IT 1 3 preprocessor systems

Multiple technical elements EDI

Managed File Transfer

Help Desk

Firewall

Tech Architects

GIPA security protocols

SAP PI Interface

SAP MM and Applications

Web Applications

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Data Overload Needs to be Addressed

Excess vendors - Parent/Child relationships missing

Excess material & service masters Duplicates due to poor governance and merger/acquisition

Failure to remove obsolete data

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Gaps in COP’s Existing Solution

Compliant but incomplete XML Invoice Response (insufficient detail)

Unhelpful / confusing error messages

Material PO limitations on matching: either by Vendor part number - single material per PO line and requires managing VPN

Specific line item number from vendor invoice – not always present

Adding items above current PO detail level

RNIF was not supported previously

PIDX’s Recent complex pricing model

Rate tolerance is $0. Rejects for $.000001 delta

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Why COP Chose to Use a 3rd Party

Keeping up with technology more efficient across many customers Robust Web

PO Flip capability

Browser transparency

PIDX XML for POs (and beyond)

Connectors for SMEs (e.g. Quickbooks)

1st and 2nd level support

Speed of implementation

Business rule customization

COP Support can focus on data issues & supplier relationships

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Lesson Learned

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Metrics / Analytics

Use metrics to set goals on what is important To reward efforts to progress

Sustainability measure

Internal Collaboration Meetings

Use metrics for sustainability BUs

Suppliers

Need to be able to manage through turnover (internal and external)

Watch for metrics traps Creative minds and workarounds to “meet the metric”

Increased Management requests for analytics

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Challenges & Myths

Challenges Communication in a large organization

The Influence model

Developing a strategy from the Center

Achieving buy-in to that strategy

Myths Automation is easy

Standards setting is simple & solves all

Hubs can just tell spokes what to do

Materials and Services are handled the same way

Moving from paper to electronic is a panacea

Without conversation & collaboration bad data remains bad data

Without a push for rigor, sloppy invoicing remains sloppy

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The Devil is in the Details

Technical Details

Units of Measure disconnects (ZZ top)

Character sets (UTF-8 vs ISO-8859-1)

UNSPCC codes

Complex pricing models

100% discount items

CSI Triage

Getting to the root cause

Post Mortem

Attachments What do you do if your supplier’s

suppliers are electronic?

Please include a scanned version of the paper invoice

Your rep signs the field ticket on an IPAD

Lost attachments

Supplier mergers/acquisitions Changes to Federal Tax IDs

Managing two sets of ESNs

Reconciliation when M&A isn’t communicated between stakeholders

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Materials versus Services

Materials 90% of invoice data is on the PO

Restricted process

Quantities come from Goods Receipt

Services 90% of invoice data is on the PO /

OLA combination

Open process

Hybrids

Quantities come from Service Receipt

Field Ticket

Time Card

Delivery Ticket

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Being a “Spokes-Person”

You may be the hub, but that doesn’t mean you’re the boss

JIBE (sometimes operator, sometimes co-owner)

Government (GISB, State Royalties)

Banks and Railroads sometimes act like hubs

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Best Practices

PIDX Standard used Globally Following but not adhering

Exceptions

Participate to understand

Standard COP maps used Globally

Lower the barrier to suppliers to support you Offer different technical options to vendors

Minimize COP data requirements

PO, PO Line number, COP Vendor # (or an EVN?)

Collaboration between Supply Chain, IT, and 3rd Party

Open Conversations with Suppliers

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Reality Checks

Participate in local eCommerce organizations

Participate in a Standards Making Organization (PIDX)

Network (Peers), Network (Suppliers), Network (Technology vendors)

Seek benchmarking opportunities

Attend conferences (Sometimes outside of the industry)

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Never Lose sight of the Vision

Supply Chain to be recognized as a competitive differentiator Supplier Enablement a key contributor

A Global Supplier Enablement Team collaborating on new innovations

With Social Media, your company image & knowledge-sharing can be a competitive advantage as well

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Questions?

Thank You

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